I think you're close to the mark, but I suspect it's not the spa industry which represents a very small aspect of the economy here, and a very troubled one.. look at some of the problems of spas closing down suddenly etc.
I think the government is putting pressure on SPF but I think it has more to do with election jitters than anything else.. cleaning up foreigners who are here working in jobs they are not supposed to is seen as a way to address many concerns about the influx of foreigners here.
I suspect after elections things will calm down. This happened during the run up to the last election too. After all, I think the more SPF raids, arrests and deports, the more they have to review numbers of illegal workers in SG. That number will not reflect well on them.
I won't be surprised if the government is putting a lot of pressure because for the first time in its history, it might face true competition and must give the impression of cleaning up crime (including illegal foreigners) or voters won't be happy.