Singapore Budget 2015: Temasek to be included in net investment returns framework

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Singapore will include the total expected returns from Temasek Holdings in its net investment returns (NIR) framework, said Tharman Shanmugaratnam, Deputy Prime Minister and Finance Minister, on Monday.

The current NIR framework - implemented in 2009 - permitted the government to spend up to 50 per cent of the expected long-term real returns on its net assets managed by the Government of Singapore Investment Corporation (GIC), and the Monetary Authority of Singapore (MAS).

"Including Temasek in this framework would enable us to spend based on its total expected returns, including realised and unrealised capital gains, and not just actual dividends paid by Temasek to the government," said Mr Tharman.

"The move will bolster our fiscal resources at a time when we have to fund long-term critical infrastructure and develope the human talent and capabilities to secure our future."

Mr Tharman said Temasek's inclusion in the NIR framework was deferred in 2008. One reason was that there were no established methodologies for projecting the long-term expected real return on its portfolio. This is in light of Temasek's investment approach of taking concentrated stakes and making direct investments.

"Temasek's investment strategy was still evolving, having begun to invest in more geographies and sectors since 2002," he added.

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