Singapore will probably force companies to further reduce their reliance on foreign labor in the 2013 budget, after a public backlash against the influx of workers led to the biggest demonstration in more than a decade.
Finance Minister Tharman Shanmugaratnam may cut the ratio of overseas workers companies are allowed to hire, according to Credit Suisse Group AG. To counter any labor shortfall, there may also be incentives to boost productivity, economists at Citigroup Inc. and Oversea-Chinese Banking Corp. said ahead of the Feb. 25 budget presentation.
Thousands gathered in a rare political protest on Feb. 16, signaling concerns that foreigners are taking jobs from locals and driving up housing costs haven’t abated even after Prime Minister Lee Hsien Loong tightened hiring rules in recent years. Lee has warned that the labor curbs will slow economic growth, while rising costs are bedeviling businesses such as The King Louis restaurant, where all the full-time waiters are foreigners.
“I’m worried every time the budget comes around,” said Sebastian Teow, marketing manager at the medieval-themed restaurant. Teow is already struggling to fill positions at the outlet and coping with higher taxes for hiring overseas workers in recent years, he said. “We are really hoping there won’t be higher levies as they are eating into the profits.”
This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds.