Question to Readers: What is the purpose of the foreign worker levy?

I often need info for my policy research that I can’t find in government publications and websites. I could, of course, email the relevant ministry to ask them, but knowing civil servants (of which I was one before), they are likely to give me cut-and-paste answers, which don’t really answer my question. I’ve been told that the best way to get info sometimes is for MPs to ask them in Parliament. But since I’m not an MP, I don’t have the benefit of that channel. Unfortunately Singapore also lacks a Freedom of Information Act, which ordinary citizens can use to get information from their government.

I have therefore decided to start a new category of posts on my blog, tentatively titled Question to Readers. The purpose is to solicit answers from readers who may be in the know about that particular area. It would be great if readers could answer either by posting a comment, or by emailing me directly. My email address can be found on my About Me page. Thank you!


My first volley of questions concerns the foreign worker levy:

The Ministry of Manpower (MOM) website explains that the Foreign Worker levy “is a pricing control mechanism to regulate the demand of foreign workers in Singapore”, while the EnterpriseOne website says that the levy “is a pricing mechanism to control the number of foreign workers (including foreign domestic workers) in Singapore”.

I understand from the MOM website that the Foreign Worker (FW) levy and Foreign Domestic Worker (FDW) levy ranges from $50 to $470, depending on the industry and skill level of the worker.

Q1.    Since MOM is the ministry that issues Work Permits (WP), is it not possible for MOM to control the number of foreign workers in Singapore by controlling the number of WPs it issues? Why is there a need for a levy to serve this purpose?

Q2.    For FWs, there is already a Dependency Ratio for each industry, that requires that, say in the case of the construction industry, one local must be hired for every seven FWs. Doesn’t this ensure that companies don’t simply hire only FWs to the exclusion of Singaporeans?

Q3.    What is the FW and FDW levy monies collected used for? Do they simply supplement the operating budget of MOM, or its reserves, or are they specifically allocated to certain development expenses like worker training?

Q4.    What is the total amount collected in FW and FDW levies in FY2008 (or FY2007 if FY2008 figures are not available)?

Do any readers have the answers to these questions? Any info would be much appreciated.