SINGAPORE'S largest business grouping yesterday sounded its loudest alarm yet over the Government's tighter labour policies.
The Singapore Business Federation (SBF), representing more than 18,000 firms, warned that the foreign worker policy could stifle economic growth, drive some businesses to the wall and others overseas.
It said the Government's goal of higher productivity could not compensate for labour shortages in the short term.
The SBF also warned that the official 2 per cent to 3 per cent a year productivity growth target may not be achievable in a developed nation such as Singapore.
The Government has progressively imposed tougher restrictions on foreign worker numbers and urged firms to focus on productivity.
"Given the shortage of local workforce, foreign manpower is integral to the workforce," SBF said. "Singapore should continue to keep its door open to them. This approach will enable the Singapore economy to remain competitive and dynamic to fuel higher standards of living for all Singaporeans."
It said the "foreign manpower policy should be calibrated in a targeted approach".
The Government has acknowledged the tight labour market.
In a blog post yesterday, Acting Manpower Minister Tan Chuan-Jin said that overall, the labour market will continue to remain tight, if not become tighter, next year. "The pressure on businesses to expand through product innovation and making their workforce more productive will be more intense," he said.
The SBF held a briefing to present its wide-ranging position paper on population issues. It had been invited to give its views by the Government's National Population and Talent Division.
SBF chief operating officer Victor Tay warned of the side effects of the tighter foreign labour policy such as higher costs for businesses and residents.
Innovation will be hampered, and the service sector could suffer from a lack of manpower, leading to a drop in service standards at hotels and restaurants.