The Singapore government will continue to encourage state investment firms Temasek Holdings Pte and GIC Pte to review how much more information they can share with the public, Second Minister of Finance Lawrence Wong said Friday.
Both have been publishing more details on their performance, investment approach and outlook over the years, Wong told Parliament in response to questions on succession plans and disclosure practices of the two firms.
“We will continue to encourage the two entities to review and examine what additional information they would like to put out in their annual reports,” said Wong, who is also Minister for National Development. The boards of both entities are ultimately responsible for their operations, performance and leadership succession, Wong said.
“Our key consideration is this — whatever disclosure requirements that the two entities put out should be part of an overall system which enables the two entities to maximize their abilities to secure long-term returns for the benefit of Singaporeans,” he said.
Income from national reserves and investments managed by GIC, Temasek and the Monetary Authority of Singapore is one of the largest contributors to government revenue. The issue of compensation of top executives at both entities has been raised with calls for disclosure of these numbers.
“If we are insistent on them disclosing indicators of fees and expenses to a great level of detail, it may lead these entities toward minimizing expenses, potentially eroding capabilities or diminishing their talent pool, which would also not be in our interest,” Wong said.
Under the Net Investment Returns Contribution framework, the government can spend as much as half of the long-term investment returns generated by the MAS, Temasek and GIC — which also manage the country’s reserves. The contribution from the framework is estimated at S$18.6 billion ($13.4 billion) for 2020, 9.3% higher than last year, according to the latest budget.
Wong warned of pressures from factors including U.S.-China tensions and lower productivity associated with aging societies that could hit long-term returns under the NIRC framework, the Straits Times reported, citing his additional reply in Parliament.
“So, if you think about these long-term trends, then indeed there will be continued pressures on our long-term expected returns,” Wong was cited as saying. “We are very mindful of that, we stay vigilant, we do not assume that our NIRC will always be able to keep pace with our spending needs.”