Parliament was the venue this week for an explication of the "Singapore way", a people-centred approach to planning for the long term that involves various stakeholders in a partnership. The approach is reflected in the way Singapore funds its spending. Fundamentally, each generation is expected to pay for its own needs so as to not burden future generations. To behave otherwise would be to create a standard of living for citizens today that would be high only because it would come at the expense of future generations. Patently unfair, this nevertheless is a problem many welfarist systems face. However, they are unwilling or unable to reverse course because it is politically difficult for governments to withdraw benefits that citizens have got used to enjoying.
By contrast, the Singapore way makes fiscal prudence the cornerstone of public finance so as to sustain the national standard of living over time. For example, the Net Investment Returns Contribution framework allows the Government to spend half of the long-term expected real returns generated by the Monetary Authority of Singapore, Temasek and GIC, the three entities that manage and invest the nation's reserves. Spending up to that amount and ploughing back at least 50 per cent, to make the principal grow and generate more returns, ensures that both current and future generations benefit from the reserves, which therefore become a strategic asset.