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

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.