The annual budget debate speech discussed a wide variety of topics ranging from GST vouchers to the different government sanctioned workplace changes. This 2022, we've compiled a list of 6 major key takeaways and insights from Singapore's recent budget debate speech in
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Key Takeaway 1: Work Permits for Manual Workers
Currently, some employers hire manual workers on an S Pass instead of a Work Permit due to certain constraints. One of them being due to the country where the workers are hired from. In any case, by September 2023, some of these restrictions will be lifted. Thus, the Ministry of Manpower (MoM) will allow workers in seven industries to be ranked under a Work Permit.
These industries include food processing workers, sheet metal workers, welders and flame cutters; metal molders and coremakers; riggers and cable splicers; and structural metal preparers and erectors. In addition, Indian restaurants will now be able to hire cooks under the Work Permit scheme.
The refined EP framework will also include a point system that will be considered according to:
Sectoral input
The employer’s hiring history (specifically, whether or not the employer has been hiring and developing Singaporean workers)
How diverse the nationalities within the company is
Additionally, Singapore will also be introducing the NTS Occupation List beginning September 2023. This means that firms within the Services and Manufacturing sector can hire employees under the Work Permit scheme. As such, companies within the Services and Manufacturing sector will be able to hire workers from South Korea, China, Hong Kong, Macau, Taiwan and Malaysia under the Work Permit scheme.
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Key Takeaway 2: Minimum Qualifying Salary Set to Increase
Another change announced during the Budget 2022 meeting is that salary increment for S Pass permit holders. The S-Pass is a work permit that allows skilled mid-level staff to work in Singapore. Currently, candidates employed under the S-Pass work permit earn S$2,500 a month.
The announcement states that the minimum qualifying salaries will be raised to match the salaries of local associate professionals and technicians. For the uninitiated, the S-Pass salaries will go up to S$3,000 in September 2022 and more increments are planned for 2023 and 2025. Employers of individuals in occupations that do not meet this criteria can apply under the reinstated work permit scheme. The exact salary increment will be announced closer to the month of September.
On the other hand, the minimum qualifying salary for employees hired under the Employment Pass (EP) is also set to increase. The minimum qualifying salary will increase to S$5,000 instead of the usual S$4,000. For employees in the finance sector, the minimum qualifying salary will be raised to S$5,500 from S$5,000.
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Budget 2022: Salary thresholds for new Employment Pass, S Pass applicants to be raised
S Pass qualifying salaries to be raised, but workers in some jobs can switch to work permits
Key Takeaway 3: Reduction in the Number of Foreign Employees
Beginning 2024, there will be a reduction in the number of foreign employees that firms can employ. According to the Straits Times, the number is set to reduce from 87.5 percent to 83.3 percent.
Key Takeaway 4: More Support for Companies Affected by Covid-19
A Business Support Package amounting S$500 million will be offered to firms badly affected by the Covid-19 pandemic. Small and medium businesses affected by Covid-19 will receive a minimum of S$1,000 to S$10,000 per employee. In order to qualify, firms must have an annual revenue of less than S$100million as well as less than 200 employees.
This Business Support package will be applicable for SMEs in the food and beverage, retail, performing arts and arts education, tourism, hospitality, conventions and exhibitions businesses industries. Additionally, operators of sports facilities, cinemas, museums, art galleries, historical sites, indoor playgrounds and other family entertainment centers can also benefit from this business support package.
Employees who’ve lost their jobs due to the pandemic will also be able to apply for a Covid-19 Recovery Grant. Those applicable will receive S$700 a month for three months.
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Key Takeaway 5: Pay Increments will be Co-Funded by the Government
Finance Minister Lawrence Wong announced that S$2 billion will be set aside to aid with pay increments for local employees. The wage increase is set to occur sometime in 2022. A wage increase of 30% is set to occur in 2022 and 2023. Employers are required to add a minimum of S$100 increment to their worker’s salary for that year.
Key Takeaway 6: Support for Mature PMEs
A 2020 survey conducted amongst mature Singaporean PMEs (Professionals, Managers and Executives) found that:
1. More than 60% of PMEs felt that they need most help with job security
2. More than 70% of PMEs felt that they need help with employment opportunities
3. 55% of PMEs felt that they require help with job trainings
As such, the Jobs Growth Incentive (JGI) will extend its support to encourage employers to hire local candidates from March 2022 to September 2022. This will be done to encourage firms in Singapore to hire and upskill mature talents.
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Check out the BGC Group blog for more information on Singapore’s changing job market and trends.