At the heart of the Campaign for Asset Based Taxation is the belief that a country’s taxation system should be targeted at the protection of Wealth, all of which has roots in True assets. The proposals are two-pronged:
- The proposal to adopt the CHADs principle (that the most rational taxes are those on Consumption, Health protection, Asset ownership and Degradation)
- The establishment of government-owned provident funds, Personal (PPFs) and Business (BPFs)
In essence they are two separate ideas, though the vision of how the CHAD proposals could be implemented has been presented in a way that assumes the adoption of the latter.
To understand why I have felt it so important to advocate for the provident funds, I think it might be helpful to look at where the idea originates: in Singapore’s Central Provident Fund (CPF) system. (I have added an AI-generated document that can provide a summary of the key parts as well as I can)
The origins
Singapore’s legal and governmental structures are modelled heavily on the UK’s. (It might be said that it’s what the UK system would be like given the opportunity to think about it!) A good example of this might be the UK’s National Insurance system, which whilst it does technically support and maintain a fund it does so in a way that makes it little different in essence from income taxation.[1]
In Singapore, the same employer and employee contributions occur, but are credited to each individual’s CPF account. Singaporeans do not see the deduction as an additional tax (though businesses may) and are made more directly aware of the connection between the contribution and their medical care and support in old age[2].
Some benefits of the CPF system
When I bought my first home, I was shocked to discover that I might end up paying for my property three times over by the time I completed the mortgage term. I pondered that it was a pity I could not simply conjure up the money for the loan for myself then pay it back over time. But as I began to learn more about money and credit, I realised that the lending institutions who provided my loan were effectively doing just that!
Under the Singaporean system a CPF member can borrow their CPF savings for property purchase (therefore borrowing from themselves), both to help fund a deposit and to meet monthly payments. Although there are restrictions and the interest charged may at times exceed that available commercially, all the interest charged is repaid back to the individual’s CPF account which ultimately becomes their pension. In effect, an individual by borrowing from their pension fund rather than from a third party retains a larger proportion of the cost of borrowing. And also, because the state offers loans through the same mechanism, it generates revenue for Singapore’s social housing system.
Fundamentally
Such proposals on the funding of housing loans are not a part of these proposals here, but they are things that could be considered, as also should approaches taken in other countries. Nevertheless, I do consider the CPF system to be one of Singapore’s crown jewels and something that UK policy-makers should study.
Beyond the specific benefits highlighted here, there’s a key general feature of the scheme that is often overlooked: this scheme is a more or less closed money circulation system operating between the Singapore government and its citizens and permanent residents. It helps individuals ensure that their labour provides an income throughout both their working lives and in retirement that is stable and predictable. Prior to retirement, most Singapore citizens and residents are heavily invested in Singapore. The S$677 billion CPF pool (Aug, 2026) contributes to a sovereign wealth fund that has historically returned 3.8% above global inflation and both helps bolster Singapore’s balance sheet and directly fund government spending[3].
There are only about 2.1m people paying into the Singapore CPF system at any time. So if the UK’s working population is around 34.5 million[4], would the UK be capable of generating a fund that’s 16 times larger? That would be around £6.26 trillion.
Singapore Central Provident Fund
[1] See https://commonslibrary.parliament.uk/research-briefings/sn04517/
[2] Critics might argue that the UK provides more even support for rich and poor. It’s a separate point, though fairly made. Singapore does have a number of safety nets for its citizens, and it could be argued that if the UK’s blanket approach operates at about the same level then the extra pension benefits that richer Singaporeans enjoy are just those that richer UK citizens obtain through their private pensions.
[3] See https://www.cpf.gov.sg/member/infohub/reports-and-statistics/cpf-statistics
[4] See https://www.ons.gov.uk/employmentandlabourmarket/peopleinwork/employmentandemployeetypes/timeseries/mgrz/lms