Sengkang MP Highlights Impact of High Rents on Business Viability and Inflation
Workers’ Party MP Jamus Lim (Sengkang GRC) has raised concerns over the rising rental costs affecting businesses, describing them as a significant challenge for small business owners.
In a social media post on Wednesday (Mar 19), Assoc Prof Lim shared insights from conversations with residents, including a small business owner in the IT retail sector who expressed frustration over escalating rent. He noted that the cost burden is not only affecting businesses but also being passed on to consumers through higher prices.
During community visits to 259B Compassvale and 351A Anchorvale, Assoc Prof Lim encountered multiple concerns related to the cost of living. This led him to reiterate his stance on Singapore’s land pricing model, which he believes plays a critical role in driving business expenses and inflation.
He pointed out that while the government maintains that rental costs form only a small portion of overall business expenses—dominated by wages—he sees this as an oversimplification. “Unlike labour costs, rent is a fixed expense that must be paid regardless of profitability. If a business has pricing power, it will increase prices to cover rental costs,” he explained.
He further elaborated on the multiplier effect of high land costs, stating that when businesses raise prices to cover rent, workers in turn demand higher wages to cope with increased living costs. This, he warned, could accelerate inflation. “Keeping land costs manageable is key to maintaining a competitive and sustainable economy,” he wrote.
Public Reactions
Assoc Prof Lim’s remarks sparked a wave of discussion online. Some commended his approach, applauding his direct engagement with residents and his efforts to address pressing economic issues in Parliament.
“A real MP listens to the people and speaks up. He raises difficult questions and proposes solutions,” one commenter wrote, while others criticised policymakers for failing to address rental affordability.
However, not everyone agreed with his assessment. One netizen argued that lowering rents would not necessarily lead to reduced prices, pointing out that businesses would likely maintain current pricing to maximise profits. Another highlighted deeper concerns about income inequality, suggesting that high-earning individuals and investors continue to drive up property prices.
As Singapore grapples with inflation and affordability concerns, the debate over land pricing and rental costs remains a key issue for both businesses and residents.
