“We all are aware of how certain sectors do practice churning and I will be looking at clamping down on that through the EFMA (Employment of Foreign Manpower Act) measures,”said Acting Minister for Manpower, Tan Chuan-jin, in parliament on 14 March 2013 during the budget debate.

However, the specific change he announced was only for work permit holders in the services sector  — which includes hospitality, catering and healthcare. He announced that “Work Permit holders who have worked in Singapore for four years or more, and who earn at least $1,600 a month, can qualify to become skilled Work Permit holders.”

He said the aim was to encourage employers “to retain their Work Permit holders, train them up, so they are more skilled, more settled down in Singapore, more comfortable and familiar with the environment, and in the process this also increases productivity. This is important, rather than churning.”

These are exactly the arguments that TWC2 have made for some time. However, TWC2 was particularly concerned about churning in all industries, especially construction, which employs a large number of people and which, as even MOM acknowledges, is in dire need of productivity improvement.

The Straits Times reported that when a Work Permit holder is classified as a skilled worker, the government levy will become relatively lower. Service firms will have to pay progressively more in levies for unskilled Work Permit holders by 2015, while the levies for skilled work permit holders will remain the same. By 2015, services firms will have to pay $450 to $800 in monthly levies for each unskilled work permit holder. The monthly levies for skilled work permit holders will remain between $300 and $600.

The newspaper added that about 7,800 work permit holders in the service sector are expected to be upgraded to skilled status when the new criteria comes into effect on 1 July 2013.