Workers' Party MP Jamus Lim discusses the impact of high rental and land prices on businesses, inflation, and the wider Singaporean economy.
In a social media post on Wednesday (March 19), Workers Party Member of Parliament Jamus Lim (Sengkang GRC) shared his observations from conversations with residents, highlighting the persistent challenge of rising living costs. He emphasized that this issue affects not only households but also businesses, citing the example of a small business owner in the IT retail sector who lamented the impact of high rental costs on her industry.
Assoc Prof Lim underlined that these high rental rates and real estate prices, common in Singapore, contribute to inflation, not just through increased consumer prices but also by impacting business operations.During his interactions with residents at 259B Compassvale and 351A Anchorvale over the past week, Lim encountered a businesswoman expressing concerns about her company's financial health in the face of escalating rental costs. He argued that the government's stance, which suggests that rental and real estate costs are a minor factor in total business expenses and therefore cannot drive inflation, overlooks a crucial aspect. According to him, while labour costs are variable, land costs are fixed, requiring continuous payment regardless of profitability. Even in unprofitable periods, businesses often strive to maintain operations to recover these fixed costs.Lim further elaborated on the complex interplay between land costs, inflation, and wages. He posited that high land costs, contributing to higher rent, force businesses to increase prices, leading to worker demands for higher wages to cope with the rising cost of living. This creates a ripple effect across the economy. Lim concluded that effectively managing land costs is essential for maintaining a healthy and competitive business environment. His post sparked a considerable online response, with some users commending his advocacy and others challenging his perspectives. Some praised him for staying connected with residents, raising crucial issues, and questioning established narratives. Others expressed concern about the wider systemic issues of income inequality and limited wage growth contributing to affordability challenges
Jamus Lim Singapore Politics Cost Of Living Inflation Land Prices
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