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Will RMGS increase the amount of Net Investment Returns Contribution (NIRC) available for spending? Can this offset planned tax increases?


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The transfers of OFR not needed by MAS to the Government (for longer-term investment by GIC) enabled by RMGS should have a positive impact on NIRC. This is because we are investing such foreign assets with GIC, which has a higher return-seeking portfolio, than that of MAS.

  • Such transfers have been a longstanding practice. This was why GIC was set up in 1981.

Nevertheless, long-term returns take time to materialise and we need to recognise that there are external factors beyond our control that could affect returns and NIRC.

  • For example, global financial markets remain volatile and uncertain investment returns are expected to face significant headwinds.

  • There is no guarantee that the Net Investment Returns will always be increasing every year.

We cannot just rely on reserves/NIRC for our growing needs.

  • The Governments budget is about 19% of Singapores GDP. Of which, 15 percentage-points are from taxes and fees, and the remaining 4 percentage-points are from NIRC.

  • NIRC is currently already the largest single contributor to our revenues.

  • Going forward, even with RMGS, we expect the contribution by NIRC to the budget to remain stable as a percentage of GDP.

We will need additional revenue measures to meet increasing fiscal needs.


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