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Letter to Acting Minister of Manpower from Chambers of Commerce endorsing SBF Position Paper on Population

4 February 2013 [Singapore]

Dear Acting Minister Tan,

The undersigned Chambers of Commerce write to you as a result of our desire to provide a collective voice towards the current debate on the Singapore population issue and perhaps more importantly the resulting impact on the available workforce in Singapore. Our members are concerned with the revision of government policies pertaining to the employment of foreign workers in Singapore and the resultant potential impact on the operations of foreign and local companies and the overall economy.

The quality of Singapore's manpower resources has been a cornerstone in developing its national competitiveness. Foreign workers and foreign MNCs and SMEs located in Singapore have played a significant role in contributing to Singapore's extraordinary success since achieving nationhood and will continue to do so in the years ahead. Singapore's openness to foreign labour has enabled it to attract, retain and absorb the best of foreign talent providing it with a clear competitive advantage over its neighbours.

While Singapore continues to attract significant foreign investment we nevertheless fear current implementation of revised labour policy risks negatively impacting Singapore's economy and reputation as an open economy.

We do acknowledge Singapore's challenge in managing the competing interests between productivity driven economic growth with improved jobs for Singaporeans and limiting the size of a foreign workforce despite the need to supplement a small national workforce.

In summary our concerns relate to certainty in the ability to employ candidates with the necessary skills, knowledge and experience required and also to be able to tap into a larger labour workforce than is available in Singapore. Following the change in criteria for S and Employment passes, The Dependency Ratio Ceilings in the Services and Manufacturing sectors and Dependent's privileges, anecdotal evidence from constituents has indicated inconsistency in the granting of passes against published criteria.

We commend the work of the Singapore Business Federation ("SBF") and the views expressed in the document Position Paper on Population released in December 2012. The SBF clearly outlines the dire consequences of a constrained workforce.

As it explains, the ageing of Singapore's population exacerbated by low fertility rates with more restrictive labour policies can lead to inflationary wages and increase in business costs which in turn will be passed on, impacting citizens and business alike. While the Government's aim of increased productivity and innovation is to be admired, SBF points to research that productivity and innovation is higher in populations where the median age is less than 35. This further supports the case for attracting increasing numbers of younger foreign workers to drive the required diversity. The point is well made that service levels, long a source of competitive advantage in many key industries, are being affected.

Singapore's rapid economic development has resulted in increasing levels of education throughout the population. This education has brought renewed expectations of employment opportunities and a decline in those seeking non-PMET positions as well as negative attitudes towards service. This further supports the case to increase foreign workers in nominated service, construction and manufacturing sectors or risk serious service deterioration.

As with the SBF, we as Chambers support the pursuit of productivity driven growth, but implementing such change takes time and investment and is more difficult in some industries than others. lt is our belief that policy objectives can be met but need a staged process and flexibility to ensure an effective transition that does not sacrifice business results.

We would be pleased to meet with you to express our views in person; however in the meantime we ask that consideration be given to the opinions expressed both in this letter and in the referred SBF paper. We look forward to the opportunity to be able to positively contribute to the debate on foreign labour policies and other issues affecting our members and the business environment in Singapore.

Yours sincerely,
Graham Lee
President, AustCham Singapore

The American Chamber of Commerce in Singapore
The Australian Chamber of Commerce, Singapore
British Chamber of Commerce, Singapore
The Canadian Chamber of Commerce in Singapore
EuroCham Singapore
French Chamber of Commerce in Singapore
Japanese Chamber of Commerce & lndustry, Singapore
New Zealand Chamber of Commerce, Singapore
Singapore-German Chamber of Industry & Commerce

Letter by Acting Minister of Manpower, Chambers of Commerce

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