Budget 2020: S Pass quota cut to 15% by 2023 in construction, marine shipyard and process sectors

In his budget presentation yesterday (18 February), Deputy Prime Minister and Minister of Finance Heng Swee Keat announced a reduction in the ratio of S Pass holders in construction, marine shipyard, and process sectors of 5%.

S Pass workers, a subset of the country’s foreign workforce, are mid-skilled foreign workers earning at least S$2,400 a month.

This reduction, said Mr Heng, will happen in two steps starting with a drop from 20 percent to 18 percent on 1 January 2020. The second drop to 15 percent will happen on 1 January 2023.

“We are announcing the changes about a year ahead to give time for enterprises to adapt,” said Mr Heng during his speech.

He added, “These are skilled jobs, many of which can be done by locals, such as polytechnic diploma holders.”

“We created the S Pass category because despite our best efforts, we are not producing enough of such skilled locals. S Passes enable enterprises to top up their workforce with more skilled workers, and to recruit workers with particular skills that locals may lack.

“But S Passes should not be a means by which enterprises hire low-cost foreign workers when qualified locals are available.”

Mr Heng also noted that the number of S Pass holders in these sectors have grown by 3.8 percent a year in the last two years, with a possibility of significant increase over the next few years and the construction and marine shipyard sectors recover and the process sector starts working on new projects.

Explaining that the growth of S Pass holders should be “sustainable”, Mr Heng said the government has been working closely with industry and educational institutions to build up a pipeline of local manpower, including mid-career workers.

As for the manufacturing sector, it will not have to worry about such cuts for now due to economic uncertainties, said the DPM.

However, he did add that cuts would be implemented once conditions improve.

Mr Heng said, “But we do want manufacturing companies to make the effort to recruit local skilled workers and technicians too. Therefore, when conditions allow, we intend to tighten the S-Pass sub-DRC for manufacturing too.”

Cuts to S Pass for services sector last year

Last year, the government announced a reduction of the S Pass ratio for the services sector, from 15 percent to 13 percent in 2020, and a further reduction to 10 percent in 2021.

The growth in S Pass holders in the services sector has also increased, said Mr Heng during last year’s budget presentation, climbing by 3 percent a year in the past three years. Mr Heng described this upward trend as “unsustainable”.

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