Ministry of Finance Are we paying for the cost of relying too much on foreign workers?
To answer this question, I like to estimate the cost of the relief measures caused by the economic downturn and more specifically the circuit breaker measures. 

I draw reference to this budget statement.  

The Resilience Budget, which was presented to Parliament on 26 March, set committed a budget of "$48 billion to support workers, protect livelihoods, and help enterprises overcome immediate challenges."

The additional measures in the Solidarity Budget presented a few days introduced additional measures that  cost $5.1 billion "for the additional support for businesses and workers, and .... for the Solidarity Payment".

There is no announcement of the cost of the relief measures to cover the extension of the circuit breaker for another four weeks to end of May. 

I have made a estimate that the total cost of the two budgets plus the additional cost will be $60 billion. 

I suspect that a large part of the total cost is due to the circuit breaker measures that were introduced when the ministerial task force found that many of the foreign workers living in dormitories had been infected. If this did not happen, we probably did not need to introduce these measures. 

Let me make a guess that half of the $60 billion is due to the circuit breaker measures and the other half is due to the global economic downturn caused by the pandemic. Even if we did not have the circuit breaker measures, our businesses would be impacted by the sharp drop in international travel and tourism.

I will now compare the foreign workers' levies collected by the government against the estimated cost of $30 billion for the circuit breaker measures. How many years of the levy is wiped out by this loss of $30 billion?

The finance minister reported, for 2019, a revenue of $6.8 billion in "other taxes" which include foreign worker levies, water conservation tax, development charge and annual tonnage tax. It does not breakdown the figure for foreign worker levies. 

I estimate that we have 500,000 foreign workers who are subject to an average annual levy of $8,000. This would probably contribute to $4 billion a year. The estimated loss of $30 billion would probably wipe out 7 to 8 years of the levy.

I hope that the government will reflect on the wisdom of collecting so much revenue from foreign worker levies which can be quickly wiped out by a calamity of this kind.

Tan Kin Lian

Vote - should we change our policy towards the use of foreign workers?
 

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