Construction industry subcontractors have come together to urge the Government to extend a waiver on foreign worker levies as they have been badly affected by the GOVID-19 pandemic. The subcontractors pointed out that they cannot fork out money to resume payments this month because most of their workers have not returned to work yet.
“The original intention of the levy is to control the (number of) workers. Now, when our workers are no longer under our control and we are not having any productive work to generate revenue, why does the Ministry of Manpower (MOM) still have the basis to ask us to pay for levy?” Peh Ke Pin, director of construction firm PQ Builders told TODAY.
Mr Peh’s company is one of the 120 subcontracting firms that banded together and sent a letter to the authorities on 30 June to raise their issues.
The charges for foreign worker levies in Singapore range between S$250 and S$950 per worker a month. Due to the unprecedented COVID-19 pandemic, the levies have been waived since April. However, the payments are expected to resume soon as authorities are planning to allow workers quarantined in dormitories back into the workforce.
Manpower Minister Josephine Teo said in a Facebook post on 25 June that she received requests from employers asking for an extension of levy waivers for a few more months as they have workers who live in the migrant worker dormitories.
In her post, Ms Teo said that she “will seriously consider their requests, and do what I can to help SMEs (small-and medium-sized enterprises) in particular get back on track”.
Two days after her post, on 27 June, the Building and Construction Authority (BCA) announced the S$1.36 billion construction support package which will help the construction industry deal with the impact of the pandemic.
The package also gives construction companies a foreign worker levy rebates of S$90 a month for each work permit holder, and this will be made available from August 2020 until December 2021, MOM said.
Despite the rebates, Mr Peh pointed out that the given that there’s an uncertainty to when the migrant workers can resume work, as well as delays in payments from the main contractors, this results to the subcontractors not earning any income for a number of months now.
They added that the scant amount of S$90 a month is nothing compared to the waiver of the levies.
“What is S$90 versus S$900 or S$600? I’d much rather the levies continue to be waived now when we have no income. Once things are back on track, we don’t need that S$90,” Mr Peh said.
Uncertainty in when workers can return to work
Education Minister Lawrence Wong, who is part of the COVID-19 governmental taskforce, announced on 24 July that all migrant worker dormitories will be cleared of COVID-19 by 7 August, except for 17 standalone blocks in eight purpose-built dormitories that act as quarantine facilities.
Responding to this, Nick Tay, director of Hiap Huat Demolition Contractors, told TODAY that exact timing of when the migrant workers can get back to work is not confirmed.
“At first we were told that all dorms would be cleared by the first half of July, then the second half of July and now it’s August. If things are so uncertain, they should extend the waivers and rebates until the point that the workers are cleared to work,” he said.
He added, “It’s not fair to put this pressure on us while there’s no movement, no income.”
During the Solidarity Budget speech on 6 April this year, Deputy Prime Minister Heng Swee Keat said that the migrant worker levy due in April will be waived, and companies will receive a rebate of S$750 that month for each work permit or S pass holder.
After the Government announced an extension of the circuit breaker for an additional four weeks, the waiver and rebate were extended by a month.
Then, while speaking about the Fortitude Budget (fourth national budget), Mr Heng, who is also Singapore’s Finance Minister, extended the levy rebates for another two months — waivers of 100 per cent in June, and 50 per cent in July, with rebates of S$750 in June, and S$375 in July.
To this, Mr Peh said, “Though the Government has thrown up money to support some of the costs, most of it has been passed to our workers and staff. So the company has been taking care of all the accommodation costs, vehicle maintenance and things like that.”
He continued: “For my company alone, from April to June, we are in the negative by about S$400,000. Now that we have to start paying the levies with no income, how will we survive?”
Safe distancing measures raise costs
If that’s not all, a number of other subcontractors told TODAY that practicing safe distancing measures in the workplace lead to an increase of costs to the company.
Jackson Tay, the chief operating officer at building supplies firm Hafary, which has about 150 migrant workers, said that although he understands that some safe distancing guidelines must be adhered to, but added that transporting small group of workers at a time “does not make sense”.
“If you can’t even keep people 1m apart in the MRT or buses, what’s the difference here? What’s the difference between a foreign worker living in a dormitory and an MRT passenger?” he asked.
Mr Tay went on to say that this requirement will “cause a lot of stress on the transport industry”.
“If every company is going to need to rent 10 buses on a day-to-day basis to and fro, is that readily available? And what about the added costs?”
Netizens reaction
Upon reading this request, a bunch of online users penned their support towards the subcontractors by urging the Government to extend a waiver on foreign worker levies during this tough time. They said that the subcontractors must be helped as they deserve it, given that the Government “messed up the containment of the virus in the first place”.
Kevin Loh stated that if subcontractors are affect, it will take a toll on the general public as “housing and renovation will become more expensive with all these added costs due to safe distancing measures”.
Others added that it’s sad to see that many contractors and subcontractors are using their own money to pay these workers when they didn’t make any revenue for the last few months. They also pointed out that when contractors suffer losses, this will impact many families, urging BCA and the Ministry of Manpower to help.
Facebook user Joanne Lim said that this is a “great opportunity” for the cabinet to show “the outcome from their soul-searching”.
Although a large group of netizen opine that the Government should help these subcontractors, others disagree. They explained that prior to the pandemic, these contractors spend lavishly by going to entertainment outlets, vacations and purchase high-end properties. However, after the pandemic, they now want the Government to help them.
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