The Budget should be lauded for achieving its social aims, but it "completely ignored" the important issue of rising costs facing all companies, said Ang Mo Kio GRC MP Inderjit Singh.
"We are at a critical stage and I feel the government has under-estimated the impact of high business costs on our future economy," said Mr Singh during the Budget debate in Parliament on Tuesday.
"The reality is that cost and cash flow are bigger problems in our business landscape than some of us may imagine to be."
All companies - not just small- and medium-sized enterprises (SMEs) - are facing a "triple whammy" of rising rentals and utilities costs, labour costs and a shortage of workers, he added.
"We are just trying to do too many things too fast and this is hurting many companies," said Mr Singh. Some multinatinal firms have said they might be forced to move out of Singapore, he said, and warned that the government consider the risk that the economy might be 'hollowed out'. He called for the establishment of a cost competitiveness committee to examine these issues.
On a recent visit to Iskandar, Malaysia - an increasingly popular destination for Singapore SMEs in search of lower costs - Mr Singh was "shocked" to see many factories already in operation. He warned that multinational companies might also choose to move there to be close to their SME suppliers and subcontractors.
"I urge the government not to take this for granted as we have a huge threat next door," he said.
The government should "tackle the root cause of the problem" and look for permanent solutions to the issue of rising costs, instead of spending large sums on helping firms offset these costs, Mr Singh said.
Industrial rents are a major component of these costs, and this is a result of the government's land divestment policy, he added.
He said the government should consider buying back some Real Estate Investment Trusts (Reits) to regain its influence over industrial rental prices.