Singapore could lose good investments and jobs if it imposes tighter restrictions on global companies' ability to employ the talent they need, Finance Minister Lawrence Wong said yesterday.

He called out the Progress Singapore Party (PSP) for its "fatally flawed" thinking that reducing the number of foreigners here will allow Singaporeans to automatically fill those jobs, and said locals will ultimately pay the price if overly restrictive policies lead to companies relocating elsewhere.

The data and evidence are clear, he said: Singapore's economic policies have helped to raise living standards across the board and create many good jobs for citizens.

Mr Wong had tabled a motion in response to a separate motion filed by PSP Non-Constituency MP Leong Mun Wai to categorically set out the Government's position on jobs, why Singapore has to remain open and connected to the world, and how it is managing foreign worker numbers.

"If we were to take a politically craven approach and impose many stringent conditions on their ability to operate here, we will lose out on many good investments," he told Parliament.

"We would have fewer foreigners for sure. But many Singaporeans will also be deprived of good jobs and career opportunities. It is like cutting off one's nose to spite one's face."

In a strongly worded speech, the minister took on the PSP's criticism of the Government's foreign talent policy.

The opposition party has repeatedly highlighted the Comprehensive Economic Cooperation Agreement with India (Ceca) to suggest that Singaporeans have lost out to foreigners, noting that debate has been marred by an undercurrent of racism and xenophobia.

"Let me be clear: We are bringing in investments and growing the economy, not as an end in itself, but as a means to an end," Mr Wong said. "Our aim is to create good jobs and improve the lives of all Singaporeans."

International companies will hire Singaporeans, but there are not enough Singaporeans to fill all the jobs available, he said, adding that most companies want a diverse workforce.

Mr Wong noted that from 2010 to 2019, median income in real terms grew by 3.2 per cent yearly for Singapore residents.

Between 2010 and last year, local PMET (professional, managerial, executive and technician) employment grew by about 300,000. In contrast, the number of Employment Pass and S-Pass holders went up by around 110,000 in that time period. But the PSP wants to sweep these achievements aside, he said.

Singapore already has more than 25,000 vacancies for PMETs. "With so many companies having difficulties filling these vacancies, how would we find people with the relevant skill sets to take on the additional 'tens of thousands' of jobs that Mr Leong thinks can be created by getting rid of the foreigners?" he asked.

Those who wish to see fewer foreign work pass holders may be holding to "a sense of nostalgia" about how things were in the past, when Singapore was less developed as a hub economy, Mr Wong added.

In the 1990s, for instance, foreign PMETs were around 10 per cent of the PMET workforce - although living standards were lower.

Singapore's per capita gross domestic product is now more than $80,000, compared with around $35,000 in 1995. Median salaries of residents were less than $2,000 then, but are now around $4,500.

"Is that what we want? Stagnate in the 1990s, while the rest of the world progresses around us?" Mr Wong asked, making reference to a speech made by founding Prime Minister Lee Kuan Yew one month after Singapore gained independence in 1965.

Then, Mr Lee had told his audience: "Ten years from now, this will be a metropolis. Never fear."

"What do Mr Leong and the PSP promise?" Mr Wong said. "Don't worry, 10 years from now, we will go back 30 years?"

No business hub can avoid global competition, he added. But by combining and complementing local and foreign professionals, the country can attract more investments and grow the pie for Singaporeans.

An open economy has its downsides, the minister acknowledged. But rather than impeding progress by protecting every job - including those that have become obsolete - Singapore has to shift its focus to protecting every worker.

He urged the PSP to stop making "misleading and false" claims and cease its anti-foreigner stance, which has raised concerns among the business community as well as ordinary Singaporeans, and could deepen fault lines between Singaporeans of different races.

Mr Wong quoted an e-mail sent to the Government by an Indian Singaporean, who was concerned that potential employers would think he was a foreigner from India, and thus pass over his job applications. "I decided to indicate on the header of my resume on each page 'Singapore Citizen', but does this help? I don't think so," the man wrote.

"I seek your assistance that our Government put a stop to the PSP campaign, which is truly racist and is hurting Singapore Indians, and we are splitting Singaporeans along racial lines," the man added.

Mr Wong wrapped up his speech by reiterating that the People's Action Party Government will continue to place Singaporeans' best interests at the heart of its work.

It will continue to deliberate difficult issues carefully and be upfront with Singaporeans about the challenges and trade-offs, he said.

"During bad times, we do not quarrel and fight over a shrinking pie. Instead, we rally as a team to solve our problems, and grow the pie for all to benefit."