RAS urges government to review curbs on foreign workers

By Hetty Musfirah, Channel NewsAsia, 12 Feb 2013

The Restaurant Association of Singapore (RAS) has urged the government to re-assess curbs on the inflow of foreign workers or businesses will face dire consequences.

It added in a statement that if nothing is done, Singapore may also lose its reputation as a global city with a vibrant food and beverage (F&B) sector.

The association was responding to the Population White Paper, which was recently endorsed in Parliament. The paper charts the roadmap for Singapore's future policies on population and immigration.

The association, which has more than 300 members accounting for over 1,300 restaurant outlets, also called for a review of the Foreign Worker Levies (FWL), in view of what has been described as "the severe labour shortage faced by the F&B sector".

It said the sector is facing a dire situation because many Singaporeans tend to shun F&B jobs, leaving the industry with little choice but to rely on foreign workers.

It added that the White Paper should be viewed objectively by all parties and policies need to be realistic.

The association then listed various scenarios that may happen, under the current labour shortage. They include businesses shutting down or moving out of Singapore, as well as consumers facing higher food prices.

It said: "Businesses may be forced to shut down or move their operations to other countries, a situation which will deprive the Singapore government of tax income; consumers can expect food prices to increase, due to high operating costs caused by artificial wage inflation, high-cost productivity drive and high rentals.

"Consumers can expect higher food prices without a concomitant increase in quality and service standards due to lack of manpower. In fact, quality and service may decline."

"The government cannot benefit if businesses are unable to sustain themselves, as this will have a chain reaction," the association added.

It has also suggested several measures for the government to consider. Among them are adjusting either the Foreign Worker quota or the levy quantum; channelling the levy collected to further help businesses enhance their productivity; and considering alternative sources of labour.

The association said: "In reviewing the White Paper, the RAS is of the view that, in general, a larger population can have a positive impact on the economy and the government which derives its revenue primarily from various forms of taxation, such as Consumption Tax, Income Tax, and Property Tax.

"But for business to be able to pay tax, they must be profitable. It is, therefore, imperative to have sustainable business activities, and for our population and workforce to be able to support our economy.

"This justifies the need for more manpower. If the dire situation persists, not only will revenue be channelled abroad, the reputation of Singapore as a global city and its F&B/restaurant sector as one of the most vibrant, could be severely affected."