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Budget 2020: S Pass sub-DRC tightened for construction, marine shipyard and process sectors

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The manufacturing sector will, however, be exempt from this round of tightening given the economic uncertainties.

The S Pass sub-Dependency Ratio Ceiling (DRC) of the construction, marine shipyard and process sectors will be reduced from 20 to 15 per cent in phases from 2021 to 2023, Deputy Prime Minister and Finance Minister Heng Swee Keat said in his Budget speech on Tuesday.

The manufacturing sector will, however, be exempt from this round of tightening given the economic uncertainties, Mr Heng said.

"But we do want manufacturing companies to make the effort to recruit local skilled workers and technicians too. Therefore, when conditions allow, we intend to tighten the S Pass sub-DRC for manufacturing too," he said.

The cuts to the construction, marine shipyard and process sectors will be done in two steps. The first will be from 20 to 18 per cent on Jan 1, 2021, and the second will be to 15 per cent on Jan 1, 2023.

This follows a round of DRC and S Pass DRC threshold cuts for the services sector last year.

Mr Heng said the latest changes are being announced a year in advance to give time for enterprises to adapt.

The number of S Pass holders in the construction, manufacturing, marine shipyard and process sectors has grownat a rate of 3.8 per cent per year over the last two years.

Mr Heng said the number could increase significantly over the next few years as the construction and marine shipyard sectors recover and the process sector begins work on projects in the pipeline.

The growth in S Pass holders must be sustainable, however, and the government has been working closely with industry and educational institutions to build up a pipeline of local manpower, including mid-career workers, Mr Heng said.

He added: "We want them to have fair opportunities to grow, while supporting the manpower needs of enterprises."

For more Budget 2020 stories, visit bt.sg/budget20.