Budget 2021: S$5.4 billion for SGUnited to support hiring of 200,000 locals, but S’pore will continue to welcome expats for skills transfer

The Singapore government has allocated an additional S$5.4 billion to a second tranche of the Jobs and Skills Package to support the hiring of 200,000 locals this year, and provide up to 35,000 traineeships and training opportunities, said Deputy Prime Minister and Finance Minister Heng Swee Keat on Tuesday (16 Feb).

In his Budget 2021 speech, Mr Heng noted that close to 76,000 people have been placed into jobs, traineeships, attachments, and skills training opportunities as of end-December last year.

Of the S$5.4 billion boosts, the bulk of S$5.2 billion will be channelled to extend the Jobs Growth Incentive (JGI) up to end-September this year.

“With the extension, companies hiring eligible locals will be given up to 12 months of wage support from the month of hire, while mature workers, persons with disabilities and ex-offenders will be given more support – up to 18 months of enhanced wage support,” he noted.

Moreover, Mr Heng said that the Government will also allocate support for the extension of the SGUnited Skills, SGUnite Traineeships, and the SGUnited Mid-career Pathways Programmes up to March next year to provide workers with additional support before landing a job.

The stipend for ITE traineeship positions will be increased to a range of S$1,600 to S$1,800, from S$1,100 to S$1,500, starting from April onwards to encourage take-ups.

Additionally, the stipend for diploma traineeship positions will also be raised to a range of S$1,700 to S$2,100, and from S$1,300 to S$1,800. But the allowance for university traineeships remains unchanged.

It was also stated that the maximum duration of each traineeship will be reduced from nine to six months from 1 April this year, in line with economic recovery and to encourage employers to offer trainees full-time jobs.

Mr Heng also announced that the Government will enhance the salaries for nurses and other healthcare workers.

He noted that this will apply to workers across public healthcare institutions and publicly-funded community hospitals and long-term care service providers, adding that more details will be revealed at the Health Ministry’s Committee of Supply debate.

Singapore government welcomes expats because there are certain sectors where Singaporeans may be “short of skills”

While the Minister acknowledged Singaporeans’ concern about the country’s reliance on foreign labour, he pointed out that businesses and trade associations have also expressed difficulties in hiring locals and have requested migrant worker quotas not be further tightened.

“The way forward is neither to have few or no foreign workers, nor to have a big inflow. We have to accept what this little island can accommodate,” he remarked.

To address this, the Wage Credit Scheme (WCS) – initially announced in Budget 2013, extended in Budget 2015 and Budget 2018 – will be extended for another year to help employers co-fund 15 per cent of wage increases given to local staff.

Mr Heng added that the Government will also extend the Capability Transfer Programme (CTP), which supports foreign-to-local skills transfer, until end-September 2024.

He explained that the Government “welcomes expatriates with the right expertise to complement Singaporeans”, and extended the CTP because there are certain sectors where Singaporeans may be “short of skills”.

“This will allow us to add vibrancy to the local market, better serve international and regional markets, and enhance Singapore’s attractiveness to global investors,” said the Minister.

Mr Heng highlighted that more than 140 companies and over 970 locals have either benefitted or are expected to benefit from the 40 projects as of the end of last year.

Meanwhile, the Sub-Dependency Ratio Ceiling (sub-DRC) – the proportion of S Pass holders that a company can employ – for the manufacturing industry will be reduced to 18 per cent in 2022, and then decreased to 15 per cent in 2023.

“To achieve our vision of being a global advanced manufacturing hub, firms must make it a priority to develop a strong, highly-skilled local core in their workforce.

“We cannot do without foreign workers, especially those with deep skills, but we should moderate further our reliance on them, so as to focus on creating good jobs on locals,” said Mr Heng.

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