Workers’ Party calls for rethink of Singapore’s economic strategy

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SINGAPORE - More must be done to make the Singapore economy more equal and inclusive, with opportunities for entrepreneurs to experiment, and for households and businesses to succeed, said WP MP Kenneth Tiong (Aljunied GRC).

Moving a motion on Aug 5, Tiong said the economy can be reshaped for the fair distribution of wealth to be built into the country’s growth strategy instead of being distributed later in the form of vouchers or rebates.

He outlined the opposition party’s ideas for Singapore’s future economy, beyond existing economic plans.

Singapore, he said, needs an updated growth model that cares about “the structure of growth” and not just headline growth figures and gross domestic product.

He said: “It is acceptable as an exigency to grow first and then redistribute by vouchers and rebates.

“But over the medium and long term, we should be building an economy where a fair distribution is produced by the growth itself, rather than repaired afterwards out of the proceeds.”

On tackling enterprise and innovation under constraints, Tiong said Singapore should market land value as a natural price for every socially productive use of land.

He suggested creating a university-centred special zone where state land is priced at development cost rather than a value based on scarcity, with a system that prioritises young people.

This includes having a place to live near where the work and the research happens, at a price that someone on a starting salary can afford, said Tiong.

He added that the Nanyang Technological University is a good choice for the experiment because it has an existing research cluster, a large number of labs on campus and room for expansion.

“A district that is both pro-worker and pro-business, built around the needs of young people and young companies. And this experiment is reversible. If it does not work, we can revert to the masterplan,” he said.

Tiong also touched on what he called the “indigenous share of national income”, which captures the contribution of Singaporeans as workers, owners and entrepreneurs to national income.

Also ripe for closer study is whether Singaporeans can still afford the city they built, and what variety of experiences can ordinary Singaporeans on an ordinary wage enjoy, he added.

WP MP Jamus Lim (Sengkang GRC), who supported the motion, said Singapore must evolve from the traditional reliance on foreign multinationals or MNCs as drivers of growth, in favour of small and medium-sized enterprises to create a homegrown economic engine.

While the Government’s Economic Strategy Review includes both planks as economic drivers, Lim said the ruling party’s strategy “betrays somewhat an implicit bias” towards MNCs.

In June, a ministerial committee tasked with carrying out an Economic Strategy Review issued recommendations aimed at preparing Singapore’s economy for the future.

The committee’s report made 32 recommendations across eight focus areas to navigate global shifts like AI and tariffs.

In his speech, Lim said: “We need a conscious shift from not too much fixation with tax competition, an undervalued exchange rate and a wooing of footloose multinationals.

“We must instead promote bottom-up formation and growth of our indigenous companies and unleash the innovative and entrepreneurial spirit of our local workforce.”

To enable this transformation, Lim said Singapore needs a domestic body of medium-sized enterprises that can grow to become the next wave of national corporate champions and drive a 21st-century, innovation-led economy.

While there are existing government support schemes for SMEs, such as the Productivity Solutions Grant and the Enterprise Development Grant, the issue is whether there are other structural roadblocks, he added.

These can hamper businesses from transforming from small local firms to globally competitive medium-sized ones.

The Government has invested in research, innovation, and enterprise funding, but Singapore needs to accelerate private research and development not just with more public funding, but with more funding from private capital markets as well, added Lim.

He suggested a few ideas, such as broadening the type of research and development activities that qualified for tax deductions, and a coherent innovation pathway for all SMEs and not just those leaning towards cutting-edge fields.

He also suggested setting a cap on annual rental increases to help support SMEs by tackling "sky-high business costs”.

On land costs, fellow WP MP Louis Chua (Sengkang GRC) said the Government’s role as a landlord for state land will hinder plans for enterprise and innovation set out in the ESR.

Maximising revenues from land and buildings should no longer be a primary consideration of land policy, he added.

Instead, for strategic and community-related sites, land sales can be awarded on the quality and value of what is built, and not simply to whoever bids the most.

In the same vein, households that grapple with big home loans leave Singaporean workers with insufficient capital for entrepreneurship.

He called for a “meaningful public rental option” for young and middle-income Singaporeans, with tenure security and rents that are set based on income instead of market value.

“If we want a generation of founders, we should stop shackling them to mortgages in their twenties and thirties,” he said.