Mr Leon Perera asked the Minister for Trade and Industry of the 1,000 companies that qualify under Condition 1 of the Manpower for Strategic Economic Priorities scheme, what is the breakdown of the number between foreign companies and local enterprises.
The Minister for Manpower (Dr Tan See Leng): All Manpower for Strategic Economic Priorities (M-SEP) beneficiaries are locally incorporated or registered business entities. They would need to be as such in order to hire Work Permit or S Pass holders to benefit from the M-SEP scheme.
Mr Speaker: Let us keep the ball rolling. Mr Leon Perera, please.
Mr Leon Perera (Aljunied): I thank the Minister for his concise answer. My question was really, of the 1,000 or so who are qualified, how many are locally owned businesses as opposed to foreign MNCs?
I have another supplementary question, which is relating to the press release that was put up by the Ministry of Manpower (MOM). The press release said that “at the end of the two-year period, firms would have to demonstrate that they maintained their local workforce share during this period”. So, the M-SEP scheme is actually allowing firms to hire more work pass and S Pass holders during the two-year period.
I just wanted to clarify, what that sentence is referring to: at the end of the two-year period, firms would also have to maintain their local workforce share. Because, if you are allowed to hire more of these work pass and S Pass holders, by definition, would your local workforce share not go down at the end of that two-year period? Unless you are not exercising as a company, the ability to hire more of those, which would also defeat the point of the scheme. I just want to clarify that.
Dr Tan See Leng: Mr Speaker, I beg your indulgence because this needs a bit of time to go through.
To the Member’s first supplementary question, the actual proportion depends on the firms which successfully apply for the initiatives listed, which is under Condition 1. Under Condition 1, in terms of fulfilment of the M-SEP scheme, there are 16 programmes that are listed. For me to go through the exact details of the M-SEP scheme itself, perhaps the Member could separately file a Parliamentary Question. I am happy to walk the Member through.
So, that is the qualifying criteria.
Of the firms today that are currently eligible for M-SEP, about 40% of them have local shareholding of at least 30%. Having local shareholding is not a prerequisite for M-SEP. What is more important in the entire M-SEP scheme is that they contribute to our growth and they create opportunities for Singaporeans. Hence, these firms must be locally incorporated or registered.
In this particular way, M-SEP is very selective in targeting firms or investments which will grow our economy and our competitiveness. And to be part of these programmes, the firms would have been working closely with our economic agencies like Economic Development Board (EDB) or Enterprise Singapore (ESG).
To the Member’s second point in terms of the end of the two-year period, it should not be taken in isolation. If you look at the overall flow in terms of the scheme from the fulfilment of Condition 1, then the two-year mark in terms of a higher concentration of foreign workforce or that potential should not be any impediment whatsoever. Because the ultimate fulfilment of the conditions is really about growing our economy, our competitiveness and at the same time, making sure that our locals continue to be put up front in terms of training and in terms of upskilling.
Mr Speaker: Mr Perera.
Mr Leon Perera: I thank the Minister for his reply. Just a very quick one on the second supplementary question. In terms of this reference “at the end of the two-year period where you have to maintain your local workforce share”, if I understand the Minister correctly, I suppose that is referring to just maintain the absolute number of locals that the firm is hiring, rather than the share of locals as a percentage. Is that the correct understanding?
Dr Tan See Leng: I thank the Member for his persistence in trying to extract some measure so that he can come back in two years’ time and put a check. The entire focus as I have spent over an hour yesterday in my Committee of Supply (COS) speech doing, is to focus on levelling up our competitiveness, maintaining our lead against the whole business world.
Therefore, it is important that in the scheme that we put up – and today given where we are, we have actually very tightly scoped these companies that qualify under the M-SEP scheme.
So, you should look at it from that context.
In the broader macroeconomics of how we look at our workforce, and the overall change, the one-third to two-third ratio will still maintain. If you are going to look at one particular aspect of the entire plethora of schemes that we have available and say that this particular scheme is going to result in over-concentration, that is not going to happen. I hope that gives you enough reassurance.
This is again very tightly scoped. These are companies that EDB and ESG work very closely with and the number of work passes that is going to be awarded through M-SEP would not move the needle significantly. It is really meant to see how we can provide these companies to have a leg-up to fulfil our strategic economic priorities.
Ministry of Manpower
2 March 2023