Fair Consideration Framework: Good for now
The Fair Consideration Framework is a good new development, even if it’s another example of the government playing catch-up on a problem Singaporeans have been facing for years. While it is true that errant companies can still get around the rules quite easily, it is still better than nothing. We will see how it goes. Anyway, more stringent checks can always be added later if necessary.
In case you haven’t realised, this government doesn’t do major revamps. It prefers timid little steps because everything is about not upsetting investor confidence. Just look at how many rounds of property cooling measures we have had — bit by bit, a tweak here and there. You could deal with it for the time being or die waiting for them to fix the problem.
I find it absurd that some people used to say that companies should be allowed to hire the best worker they can find, no matter the nationality, and we shouldn’t be protecting Singaporeans like this. Going by this logic, most Singaporeans will soon be out of a job since by sheer probability with large numbers there will definitely be more talented and hard-working workers among the 7 billion people out there in the rest of the world compared to 3.3 million Singaporeans. The funny thing is many of the people (even employers!) who once said this now says the new framework is a great idea. It’s like their opinion changed once the government rubber-stamps on the new direction it is heading.
Still, there are those who are quick to warn that we risk spoiling Singaporeans. This framework merely brings us more in line with regulations in various other countries. Are they suggesting that workers in UK and Hong Kong, both very competitive markets, are pampered?
One other strange reason I’ve read to justify the hiring of foreigners is that the work is so niche or specialised no Singaporean can take it on. If it’s early stages of a new industry, then fair enough; we just have to make sure the skills are subsequently transferred to locals to take on. But if it’s a long term problem we must wonder why on earth (literally) they are setting up office here and not somewhere else. It’s like opening a ski school in Singapore and then complaining that you can’t find any good local instructors.
Besides the concern that companies could pretend to assess local candidates before proceeding to hire foreigners, companies can also get around it by getting their employees on employment passes to take up permanent residency after getting hired. After all, there is no minimum period before doing so after they have landed jobs in the country. I believe they only need to show six months of payslips. Once they become PRs, they get lumped into the big “residents” group with citizens and the company can say: “Oh look, 90% of our employees are local residents!”
According to the latest population statistics, the number of permanent residents in Singapore is largely unchanged with only a slight drop from 533,100 last year to 531,200 at end-June this year. The number of PRs granted is about 30,000 each year since 2009. Also, about 20,000 people were granted citizenship each year in the last five years.
Since we can pretty much assume that almost every newly granted citizen was previously a PR — the only exception being a foreign-born child with a Singaporean parent, which can’t be that many — this implies that about 10,000 PRs leave the country each year to make the total number remain constant.
Over the last ten years or so, the number of PRs granted each year has ranged from the recent lows of about 30,000 to as high as 79,167 in 2008. Let’s say the average over the last ten years was about 40,000-50,000. This means that about 20-25% of PRs leave the country eventually instead of taking up citizenship (many are also known to stick around as PRs for entire lifetimes). Is that a high or low rate compared to other countries?
While we can’t expect every PR to stay forever, it will be useful to know if we have been giving out too many to those who never had any intention of staying long term. There were the years of 2006-2009 when the criteria were so lax we might as well have handed out blue ICs instead of landing cards the moment foreigners step off the plane. Immigration controls have been tightened in recent years but they are targeted more at possible scam marriages involving certain nationalities and dependants who are not contributing economically. For foreign PMEs with decent qualifications and good incomes, I believe it is still easy to obtain PR status.
If the PR route is used to get around this new framework, we shall see if the number of PRs granted and the number leaving increase significantly in subsequent years.