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This year's budget harsh to some businesses: Liang Eng Hwa

MP for Holland-Bukit Timah GRC, Liang Eng Hwa said this year's budget is seen as harsh to some businesses, with SMEs directly impacted by the further tightening of foreign labour.

This year's budget harsh to some businesses: Liang Eng Hwa

File photo: Liang Eng Hwa

SINGAPORE: MP for Holland-Bukit Timah GRC, Liang Eng Hwa said in Parliament on Tuesday that this year's budget is seen as harsh to some businesses, with SMEs directly impacted by the further tightening of foreign labour.

He said that some enterprises will experience severe margin compression, some may no longer be viable or choose to relocate.

Mr Liang noted that the higher foreign workers levy is also expected to increase wage cost by 20 to 25 per cent.

And escalating business costs would impact a company's bottom line if productivity improvements can't make up for the cost increases.

And if labour costs have to go up, Mr Liang suggested that other costs be held down - in particular, cost of land.

"If land costs continue to rise at such a rate, our international competitiveness would be eroded even without this round of labour cost increases," he said.

"At the heartlands industrial workshops, where many of the small businesses operate, they are experiencing higher lease renewal costs and sharp rental increases. Just like hawker centres, these industrial workshops offer to businesses no-frills, practical and budgeted workspace to operate. And these businesses in turn offer low costs and small job repairs to residents living in the neighbourhoods."

Source: CNA/cc

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