What is the Net Investment Returns framework?
Under the Net Investment Returns (NIR) framework, the Government can spend up to 50% of the long-term expected real returns (including capital gains) on the relevant assets. The expected long-term real rate of return refers to the investment rate of return that can be expected to be earned over the long term, after netting off inflation. Expected (as opposed to actual) rates of return are used to provide some smoothness over the years in the amount of NIR that can be spent. (See question on "https://ask.gov.sg/questions/1152 (Why did the Government introduce the NIR framework, and what are the differences between NIR and NII?) ") Spending up to 50% of expected returns strikes a balance between the needs of current and future generations of Singaporeans. It allows us to take in some investment returns for spending, while continuing to grow our reserves. Relevant assets are defined in the Constitution as the net assets invested by GIC, MAS and Temasek7, minus the liabilities of the Government (which include SGS and SSGS).  The constitutional amendment to include GIC and MAS in the NIR framework was passed by Parliament in 2008. The constitutional amendment to include Temasek in the NIR framework was passed by Parliament in 2015.
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