Minister for National Development Khaw Boon Wan said in Parliament Monday that there is “no turning back” to relax quotas on foreign workers and said reducing numbers was the way to go.
This was in contrast to Khaw’s predecessor, Mah Bow Tan, who said in February this year that the government should bring in more foreign labour in the coming years – as much as the country’s resources are able to sustain.
Responding to a query by Nee Soon GRC MP Lee Bee Wah, Khaw said that the man-year-entitlement (MYE) quota for new projects will reduce by 15 per cent in July this year. This makes the cumulative cut in since 2010 to 45 percent.
The man-year-entitlement is a quota imposed on companies, which allocates the number of man-years required to complete awarded projects, with one man-year equivalent to a year on a work permit. This quota determines the number of foreign workers the company is allowed to employ.
The foreign worker levy is also set to increase further in phases over 2014 and 2015, with an exception towards higher-skilled workers that fall into the MYE quota. No exact numbers were given by Khaw.
Tightening labour ‘necessary’
Khaw highlighted that the construction sector is an industry that takes in the bulk of lowly-skilled foreign labour and stressed that tightening the influx of labour is necessary.
Khaw said that the 45 percent MYE cut was “doable” and that his ministry monitors the utilisation of foreign workers outside of the MYE quota, which is in a “single-digit percentage”.
He explained that the Housing Development Board (HDB) may feel the impact of the tighter policies, but emphasised that 60 to 70 percent of HDB’s projects are made with prefabricated components, thus reducing on-site labour needs.
In a separate answer to Hougang MP Png Eng Huat on price ranges of new Build-To-Order (BTO) flats in new and old towns a year before and after prices were delinked from the resale market in 2011, Khaw said BTO prices are steady, even though resale prices have risen.
He gave the example of a three-room BTO flat in Punggol which maintained prices in all three years, ranging from $150,000 to $210,000.
In Punggol, Sengkang and Tampines, prices also did not increase after the delink. In fact, price ranges for a three-room BTO flat in Sengkang decreased from a maximum of $210,000 in 2011 to $190,000 the year after.
Answering a question by West Coast GRC MP Foo Mee Har, Khaw said that cost increases from Build-to-Order flat construction will be absorbed by the government, to ensure flats remain affordable.