Proposal 1: A Way To Improve Citizen's Employment

The Current Issue:
Many local citizens loss their jobs from Private Sector, from professionals, managerial and executive positions and ended up driving taxis or become self-employed. Corporate employers prefer Foreign Talents (FT) than the local citizen not merely because FTs have the skills set they need, but more importantly - they are cheaper.


We know the key objective of a company is to make profit. To maximize profit they will strive to maximize their revenue and at the same time minimize their cost, including labour cost. Naturally, cheaper FTs will become more attractive than the local talents. This explains why citizens, even with the right skill sets and experiences, still loss their jobs to the foreigners. When they reach middle age, with incomes raised to higher level, companies are more likely to replace them with cheaper FTs during “Re-organization”. At that age, it is even more difficult for them to compete with FTs to find new jobs. Many ended up driving taxis to make a living.


The Cost of Living and Standard of Living in Singapore is a lot higher than many other Asia countries. The local citizens need higher income to sustain their living. It is not fair for them to compete with talents from less developed countries with the same price tag.




Propose Policy: Tie Corporate Tax Rate with Proportion of Citizen's Employment 


Approach:
As Profit Maximization is the main objective in Business, this approach is to tie the citizen's employment rate with the Profitability of the business. If companies find that hiring too many Foreign Talents will hamper their profit instead of improving it, they will turn around to hire more citizens.


Our current Corporate Tax Rate is cap at 17% (if I'm not wrong).


Propose Changes:


Apply to all companies which total staff strength of Executives + Managerial not less than 50 persons.


- If employment of Citizens in this Category is 90% or more, give 10% discount to their Corporate Tax. That means if they are currently paying 17% tax, after change, they pay only 7%.


- If employment of Citizens in this Category is 30% or less but greater than 10%, add 10% to their tax. That means if they are currently paying 17% tax, after change, they have to pay 27%.


- If employment of Citizens in this Category is 10% or less, add 20% to their tax. That means if they are currently paying 17% tax, after change, they have to pay 37%.






The advantages:


- This change encourages companies to employ more citizens for those positions which are more desirable. We should train our citizens to help them to attain to executive level and above.
- Companies setup in Singapore, part of their responsibilities is to help us to improve our employment. This change punishes those companies which do not assume this responsibility while encourages those fulfill the responsibility.
- Companies will not be cornered by quota. They are free to decide how many foreign talents they want to employ and they have free timeline to make the adjustment. If they really cannot find enough citizens with the right skills set they can continue to hire foreigners. We will know what skills set is in high demand and train more citizens to meet the needs.
- Local citizens will still need to work hard and remain relevant for the jobs. Their contributions to the companies will still be the main consideration for the jobs.
- If companies decide to move out of Singapore because of this measure, let them go. It would not hamper our employment anyway.
- We do not need to inject money for this measure. It is self-balancing in budget, or might even generate some surplus.




* The above Rates and employment Ratios is to be reviewed and adjusted from time to time to suit our employment condition and the business needs.