Migrant workers should be supported by GSTV Fund and other social subsidies
Parliamentary Speech, Goods & Services Tax Voucher Fund (Amendment) Bill, 26 March 2020
Anthea Ong on Goods and Services Tax Voucher Fund (Amendment) Bill
Migrant workers should receive some form of support under the Goods and Services Tax Voucher Fund (Amendment) Bill. NMP…
Mr. Speaker, thank you for the opportunity to speak on this Bill which seeks to expand the GSTV Fund’s beneficiaries as the Government plans to cushion the impact of the GST hike for nearly every household in Singapore, whether they are in need of relief or not.
The Government recognises that GST is a regressive tax. It hits low earners the hardest. The GSTV Fund was established to help lower-income Singaporeans cope with their GST expenses, mitigating GST’s regressive nature. It is an ingenious institution. But I have two questions. First, why is the policy limited only to Singaporeans, when GST hurts all low-income residents? Second, why expand the scope of beneficiaries to those who don’t need the relief when there are people in our midst who need it but don’t get it?
Mr Speaker, our migrant worker population is one of the most vulnerable in Singapore. They will suffer from the GST hike, but are being offered no relief. It seems counterintuitive to give money to individuals who don’t need the relief while denying those who do. In fact, when we consider migrant workers’ centrality to the building of our nation, it seems almost perverse.
The Role of Migrant Workers in Singapore’s Success
Singapore relies on an enormous foreign workforce to sustain the construction, marine, manufacturing, and domestic work sectors.
As of June 2019, there were 1.4 million foreign workers in Singapore. 70% of them were work permit holders. That’s about 17% of the population and 26% of our resident labour force. They most commonly come from India, China, Bangladesh, Indonesia, and the Philippines. Low-wage migrant workers are most commonly employed in construction, shipyards, sanitation services, manufacturing, and domestic work. These industries touch the everyday lives of every Singaporean in one way or another. Including making sure our facilities and surroundings are properly cleaned and disinfected during this Covid-19 crisis.
Our progress these last two decades would not have been possible without their labour. The Marina Bay skyline, Gardens by the Bay, The Jewel and many more would not exist without our foreign workforce. The Building and Construction Authority or BCA reported that net operating surplus for the Construction sector grew by a CAGR of 9.3% per annum (in nominal terms) between 2005 and 2017. I think it is fair to deduce that the economic contributions of our migrant workers are more than significant.
The same can be said of foreign domestic workers or FDWs. According to a 2019 regional study, FDWs contributed SGD 11.1 billion to the economy in 2018, or 2.4% of Singapore’s GDP. This contribution is a combination of the FDWs’ direct personal expenditure and indirectly from the real value of “paid” domestic work and value of freed-up time. For example, freeing mothers to participate in the labour force added SGD$3.5 billion to the Singapore economy. This includes savings of SGD$675 in monthly childcare costs per Singapore household.
Despite these significant contributions, our migrant workers often go unrecognised when we celebrate key milestones of Singapore’s development, be it SG50 or Bicentennial bonuses that were distributed.
Migrant Workers Need GST Relief
Mr Speaker, our migrant workers need relief from the upcoming GST hike. The financial pressures on them are immense. Let me highlight three main factors.
The first is low, stagnant wages.
The second is debt and remittances. The workers are fettered to extortionate recruitment debt, and most of their remaining wages go to supporting their families in their home countries.
And the third is expenses arising from inadequate legal protection. Many workers spend their earnings on food because their employers are not obligated to provide them with food, or fail to meet their obligations.
First, the wage factor. The Ministry of Manpower reported that the median monthly salary from 2005 to 2019 of work permit holders (excluding foreign domestic workers) increased by 2.2% per annum (in nominal terms). A 2017 TWC2 survey of 910 work permit holders employed in non-domestic sectors showed that basic salaries for first-time workers from India and Bangladesh have flatlined since 2006 — averaging under S$600 per month. When adjusted for inflation, average basic salaries for first-time construction workers seem to have declined by about 20% since 2006. The same survey found foreign domestic workers earned an average of $597 a month in 2016.
TWC2 informs me that Bangladeshi workers were typically paid a basic rate of $18 a day in 2004, and that rate remains unchanged to this day. This was largely consistent with HealthServe’s and HOME’s casework observations of Bangladeshi migrant workers, wherein $16 to $18 daily basic remains normal. One worker was paid a daily basic rate of $13. For another, his monthly salary was $158, as declared by the employer.
To understand the extent of the stress such low wages exert on our migrant workers, we must understand where their income goes. This brings me to the second factor which is that a large chunk of their salary goes toward paying their recruitment debt.
A 2014 study reported that Bangladeshi workers earn the lowest salaries (between $350 and $800) yet they could pay up to $15,000 in recruitment fees which are 26 to 51 times their monthly wage that leaves them in crippling debt. They take an average of 16.5 months to repay those fees According to HOME, the entire salary of foreign domestic workers goes toward paying their recruitment fees for the first four to eight months.
Aside from debt-servicing, HealthServe informed me that the non-domestic migrant workers they serve would remit at least half of their income back home, even up to 80%. HOME also shared that the average foreign domestic worker remits about 80 to 90 percent of her salary. When a migrant worker is unpaid, underpaid, or injured, one of their major worries is how to send money back to their families.
Last but not least, after paying off a portion of their recruitment debt and remitting monies home, migrant workers must also pay for their own food, phone and transport bills out of whatever remains of their low wages.
Employers of non-domestic migrant workers are not required to bear the cost of food for their employees. As a result, a significant amount of migrant workers’ earnings go toward a basic necessity: food. I am given to understand that many dormitory dwellers do not have a say in the type of food catered, even though they have to pay for it. Many have experienced food that they feel is of poor quality and inadequate for their nutritional needs, confirmed in a 2015 survey by NUS and HealthServe of 500 Bangladeshi workers, 80.6% indicated, “the food I get from the caterer is of poor quality”.
Foreign domestic workers spend on food, too. Employers are required by law to ensure they have adequate food yet insufficient or poor quality food remains a top complaint among cases seen at the various migrant support centres. In one case that I know of, the helper was given a pack of rice containing weevils to cook and eat from! If food provided to the workers cannot sustain the physical demands of their labour, we shouldn’t be surprised that our migrant workers have to purchase their own food.
Yet, like all lower-income groups, migrant workers suffer from rising food prices in Singapore. Overall price of food has increased approximately 7 percent faster than inflation over the past 10 years. Certain food essentials have become at least 60 percent more expensive.
Conclusion: What is SG in #SGTogether
Mr Speaker, as much as I am also deeply concerned about the lower-income households in Singapore, the benefit of GST and public transport vouchers along with other social schemes such as COMCARE are at least in place to hopefully cushion the impact of inflation and GST.
Our migrant workers have no such help. Given their low wages, high debts and rising expenses, coupled with the high-risk nature of their jobs, they worry every day whether they will be able to provide for themselves and their families. Their circumstances leave them vulnerable and deeply stressed on a daily basis — and even more so in a crisis like Covid-19. Financial support for migrant workers will go a long way in helping them manage their overwhelming financial and mental health challenges.
Will the Minister consider distributing GST Vouchers to migrant workers as well as reviewing social support schemes for them?
Mr Speaker, I don’t think any of us can deny that migrant labour is Singapore’s great enabler. Without migrant workers, our buildings would not be built, our estates would not be cleaned, and our women would not be able to go out and work. Our economy blossomed on the backs of these foreign men and women. We cannot talk about #SGTogether or #SGUnited if we don’t include and care for these 1.4million men and women in the most tangible ways.
This Bill is an opportunity for us to ask ourselves the kind of society we want to be. This Covid-19 crisis is also an opportunity for us to dip into our common humanity and ask what is Singapore in Singapore Together? Surely, before we extend financial assistance to individuals who do not need the relief, we should extend it to those who do in our midst? Thank you.
~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~Anthea Ong is a Nominated Member of Parliament. (A Nominated Member of Parliament (NMP) is a Member of the Parliament of Singapore who is appointed by the President. They are not affiliated to any political party and do not represent any constituency. There are currently nine NMPs in Parliament.)
The multi-sector perspective that comes from her ground immersion of 12 years in different capacities helps her translate single-sector issues and ideas across boundaries without alienating any particular community/group. As an entrepreneur and with many years in business leadership, it is innate in her to discuss social issues with the intent of finding solutions, or at least of exploring possibilities. She champions mental health, diversity and inclusion — and climate change in Parliament.
She is also an impact entrepreneur/investor and a passionate mental health advocate, especially in workplace wellbeing. She started WorkWell Leaders Workgroup in May 2018 to bring together top leaders (CXOs, Heads of HR/CSR/D&I) of top employers in Singapore (both public and private) to share, discuss and co-create inclusive practices to promote workplace wellbeing. Anthea is also the founder of Hush TeaBar, Singapore’s 1st silent teabar and a social movement that aims to bring silence, self care and social inclusion into every workplace, every community — with a cup of tea. The Hush Experience is completely led by lovingly-trained Deaf facilitators, supported by a team of Persons with Mental Health Issues (PMHIs).
Follow Anthea Ong on her public page at www.facebook.com/antheaonglaytheng