October 2026
(Based on a lot of dinner conversations)
“I am not evading tax in any way, shape or form. Of course I am minimising my tax, and if anybody in this country doesn’t minimise their tax they want their heads read, because as a government I can tell you you’re not spending it that well that we should be donating extra.”
– Kerry Packer, to a Senate inquiry
“There’s no such thing as a free lunch.”
― Milton Friedman
Whenever I’m at a dinner in Singapore, at some point someone finds out I live in Australia and asks me some version of the same question. Why would you live there? The taxes are brutal. Singapore has basically no taxes, you should live here. And on the headline numbers they’re completely right. If you earn $120,000 in Australia, the tax office takes about $30,000 of it between income tax and the Medicare levy. Medicare is Australia’s government run medical system. If you earn $120,000 in Singapore, the tax takes about $8,000. Less than a third.
Earn $300,000 and the gap gets even more absurd, roughly $110,000 in Australia against about $40,000 in Singapore. Australia’s top marginal tax rate is 47%. Singapore’s is 24% and you have to be earning over a million dollars before you even see it. There’s also no capital gains tax in Singapore while Australia’s is soon to be 47% after the latest budget. On paper it’s not a comparison, it’s a massacre.
But these are the headline numbers and I think if you look beneath the headline, you’ll slowly start to discover that actually Singapore has higher taxes than Australia. They’re just not called taxes. They’re incidental expenses that you incur throughout your life living there. Nobody mails you an assessment notice. You pay them at the car dealership, at the property launch, at the hospital admissions desk, in the maternity ward. By the time you’ve finished paying all the things that aren’t called taxes, a normal family in Singapore has handed over more of their income than the same family hands the Australian Tax Office. The low tax country is actually a sort of accounting illusion.
The first thing you have to understand is what a tax actually is. I’ve written before that a government is essentially a business, a type of two sided marketplace where taxes are how it makes revenue and its main product is the society it creates for its citizens. So a tax is simply the price you pay for the society product. Australia charges one big scary price, printed clearly on the label, and then almost everything inside is included. You get cancer, it’s included. Your baby arrives 10 weeks early, it’s included.
Singapore charges a tiny entry price and then bills you separately for each item as your life consumes it. Neither country is lying to you. They’ve just chosen different pricing models. But if you only ever compare the entry prices, you’re going to get the answer spectacularly wrong, and almost everybody only compares the entry prices. So let’s put some numbers on this, item by item, and see where a family actually ends up.
Cars
In Australia, a Toyota Corolla costs about $40,000, you own it outright, and it’s yours until it dies, which is never because Toyotas last forever. In Singapore, before you can own any car at all, you must buy a Certificate of Entitlement at a government auction. The COE is literally a piece of paper that says you are permitted to own one car for ten years. That piece of paper is currently trading at around $100,000. Not the car. The permission.
Then you buy the actual car, which attracts an Additional Registration Fee of 100% or more of the car’s market value, plus excise duty, plus GST. Stack it all together and the same Corolla lands somewhere around $200,000 on the road. A ten year old certificate expires and you start again. There is no version of this where you escape, because the fees scale with the car. A modest family SUV runs well over $300,000. The kind of German sedan that a moderately successful Australian professional buys without thinking hard about costs more than most Australian houses did in 2005.
Now to put it on a per year basis, because big sticker numbers hide the arithmetic. The Australian Corolla costs roughly $4,000 a year to own in depreciation terms if it lasts the same decade that the COE lasts for. The Singaporean Corolla costs roughly $20,000 a year. The difference of about $16,000 every single year, is a tax. It doesn’t matter that it isn’t called one. It’s money extracted by the government, at auction, as a precondition of ordinary family life. And I want to give the system its due, because it’s honestly the most elegant tax ever designed. There’s no tax office chasing anyone. The citizens line up voluntarily and bid against each other to pay more of it. Somewhere, an economist wept with joy.
The standard reply is that you don’t need a car in Singapore, and for a single 28 year old that is genuinely true. The MRT is magnificent. It’s one of the best public transport systems anywhere in the world. But I’d invite anyone making that argument to try getting a feverish toddler, a pram, and a grandmother with a bad hip to a paediatrician across town in the rain, on the train, and then say it again. Families converge on cars in every country on Earth because small children convert transport from a preference into a dependency.
Which means the COE isn’t really a tax on luxury. It’s a tax on having a family, levied at the precise moment you become one. About $20,000 a year of it, for roughly the twenty years your kids need ferrying around, call it somewhere between a quarter and half of a million dollars over the parenting arc of one household. That’s not a rounding error. That’s more than most Australians pay in income tax over a decade. And it’s inescapable. If you want a car, and everyone wants a car eventually, you have to pay it. And forget about 2 car households which is the norm in Australia, that’s prohibitively expensive for Singaporeans.
Housing
I’ve written before that for a married Singaporean citizen, the HDB system is straight up the best housing product in the world and I stand by that. A new BTO flat sold at a subsidised price to a young couple is a genuine wealth transfer from the state to its citizens and 90% of Singaporeans own their home because of it. If the comparison were HDB versus the Australian housing market, Singapore wins and it isn’t close. But look at the gates around the deal.
It’s about a 5 year waitlist till you get one. You generally have to be married to buy one or you can’t till you’re 35+. There are income ceilings. There are citizenship requirements. You can’t own overseas property, a rule I’ve personally run into, since my wife is Singaporean and we wanted to buy an HDB and live there part of the year, and we can’t, because we own property in Australia. So everyone who doesn’t fit through the gates, the unmarried, the higher earners, the foreigners, the returnees with a life abroad, gets pushed into the private market. And the private market is where the second invisible tax lives.
Private property in Singapore runs at some of the highest prices per square metre on the planet, roughly $2 million for a three bedroom condo that would be an unremarkable suburban house in Melbourne. And then there’s the stamp duty. An Australian buying a $2 million house in Victoria pays about $100,000 in stamp duty and considers it a national scandal. We write furious opinion columns about it. We hold elections partially about it.
A foreigner buying the same priced property in Singapore pays Additional Buyer’s Stamp Duty of 60%. That is $1.2 million of tax on a $2 million purchase. Even a Singaporean citizen buying their second property pays 20%, and a permanent resident buying their first pays 5%. The country with no taxes charges eleven times more property tax than the country that’s supposedly a high tax hellhole, and everyone just nods along because it’s called a “duty” and an “additional buyer’s” something something rather than a tax.
What this also does is remove the ability for a population to use property investing as an asset class to create wealth because the taxes are so prohibitive it distorts the market. You don’t really have a choice of property vs shares so it’s always just the stock market for Singaporeans to build investing wealth from.
And the sticker prices actually understate the gap because the two countries are selling completely different quantities of house. The comparison that matters isn’t price, it’s price per square metre of life. A $2 million budget in Melbourne buys a detached family home, call it 300 square metres of house standing on 500 square metres of land that you own forever and pass on to your children.
The same $2 million in Singapore buys a 100 square metre three bedroom condo, no land, a 99 year lease ticking down in the background before the government seizes it back from you so there’s no intergenerational family asset. Melbourne comes out around $4,000 per square metre of home, Singapore runs about $20,000 per square metre and up. The same dollar buys a fifth of the space before you even factor in the land component, which in Australia is the entire appreciating engine of the asset but in a leasehold condo is, strictly speaking, borrowed from the government which comes and takes it back from you even after you’ve paid it off.
I’ve written an essay on why you should always buy more space than you need, because space is the thing that says yes to the second child, to the grandparents moving in, to the boomerang kid, the business in the spare room. All the things that you may not think you need but also might. Lives have a habit of growing in to the space that you have for it and if you have more space, it lets you have more life around you. And life is the point of life.
Now look at what Singapore’s pricing does to that advice, it converts space from a thing you buy a bit extra of into a luxury good with a waiting list. The fourth bedroom that costs an Australian family $100,000 of construction costs a Singaporean family half a million dollars, if the floor plan even exists, which it usually doesn’t. You frequently hear the complaints that there are no 4 bedroom or 5 bedroom HDBs.
So families compress to fit the economics, the grandparents stay in their own flat across town, the third kid becomes a spreadsheet conversation, and everyone lives beautifully, efficiently and small. That compression is a cost. It never appears on any receipt, there’s no line item for the bedroom you didn’t have and the parent who couldn’t move in, but it’s as real as the COE, and it’s levied on exactly the same people. Families, at the moment of becoming one. That is a tax by another name.
There’s a deeper mechanism underneath this that I find genuinely fascinating. The low income tax doesn’t disappear, it capitalises into the assets. When a jurisdiction charges residents very little tax, the privilege of living there gets bid into the price of the scarce thing you must buy to live there, which is property. Monaco has no income tax and the most expensive apartments on Earth, and these two facts are not a coincidence, they are the same fact.
Singapore runs a milder version of the same machine. You don’t pay the government on an annual basis clearly defined in a tax return. You pay the developer at the launch, and the seller at the resale, with the tax folded invisibly into the price per square foot. The government then collects its share through land sales, because the state owns most of the land in Singapore and leases it to developers at auction. Follow the money far enough and the biggest line item in Singapore’s revenue isn’t income tax at all. It’s taxes from land. Which is to say, it’s housing costs, which is to say, it’s you, because you live in that housing.
Healthcare
Now we get to the part of this essay where the numbers stop being amusing, because I’ve spent some time inside Singaporean hospitals. My brother in law was young, in his 30s and treated for stage 4 cancer there before he passed away. Because of this I got to watch up close how the machine works. Singaporean healthcare is excellent. The doctors are world class, the hospitals are gleaming, the queues are short. Nothing in this essay is a complaint about the medicine. It’s about the billing.
Singapore runs healthcare on a philosophy of co-payment, the idea being that if patients pay something out of pocket at every step, they won’t overconsume care and thereby discourages the consumption of the medical system. I understand that from a systems perspective. But you know something, if I’m the sick person, I want to overconsume care because my consumption of care is directly proportional to my chances of recovery and having a great life.
Australia conversely makes healthcare free and people can see the doctor as often as they want so people regularly do so and do so with volume and at scale. This obviously puts more pressure on the medical system but it’s built into the taxes. Healthy citizens well taken care of can work more and earn income and then pay income taxes. That’s the philosophy. The health insurance also is regulated to not be able to not insure you because you’re sick.
In Singapore, your Medisave account covers some things up to caps. MediShield covers bigger things, after deductibles, up to limits, in certain ward classes. Private integrated shield plans cover more, if you bought them early enough, at premiums that climb steeply with age, with exclusions for anything that was ever wrong with you before. And whatever falls between those nets, the family pays for out of pocket. When the treatment is long and modern, what falls between the nets can be enormous.
The new generation of cancer drugs, the targeted therapies and immunotherapies, run from $5,000 to $15,000 a month at list prices. Some are subsidised, for some patients, in some wards, on some lists. The word “some” is doing cruel work in that sentence. Family are doing spreadsheet work, comparing drug prices and ward classes and subsidy tiers, at the exact moment in life when no family should be doing spreadsheet work.
This is not necessarily what happens to poor Singaporeans who get sick. The system catches them and catches them well. Public hospitals run subsidised ward classes, and a Class C bed, an open ward, same doctors, same machines, less privacy, carries government subsidies up to 80%. Still 20% out of pocket but then their catastrophic health insurance called MediShield Life can step in and save you, it’s a universal and compulsory health insurance plan for all Singaporeans, nobody can be refused, pre-existing conditions included.
And underneath everything sits Medifund, a government endowment with a committee in every public hospital that simply pays the bills of patients who can’t, with approval rates near 99%. Essentially no Singaporean citizen goes untreated or gets bankrupted in a C-class ward, and the whole machine produces world-class outcomes at about 4% of GDP while Australia spends 10% of GDP on healthcare for a much better societal outcome but at double the cost.
But notice the design philosophy, Singapore’s safety net is conditional and applied for with a market driven, individual responsibility model with higher out of pocket patient costs where individuals bear a larger share of direct medical expenses. Australia’s is automatic and universal, primarily a public system backed by government tax revenue, supplemented by private health insurance, that everyone gets without having to do anything but get sick and show up at a hospital.
The poor Singaporean is caught after means testing, ward class triage and a Medifund application, a system that makes you ask, prove need and accept whatever is offered to you. The poor Australian is caught without ever filling in a form, in the same ward as everyone else because there is only one queue and no case by case basis for any of it. And the precision of Singapore’s targeting is exactly what creates the squeeze, the subsidies are aimed at the genuinely poor, the low tax paradise is aimed at the genuinely rich, but the ordinary middle class family which is too rich for the C ward, too mortal for the private system, is helped by nobody and billed by everybody.
Now run the same catastrophe in Australia. You get cancer. Medicare pays for the oncologist, the surgery, the scans, the hospital. The $120,000 a year drug is listed on the Pharmaceutical Benefits Scheme so you pay about $30 a script. Your family never sees an invoice. Someone close to me lives on one of these drugs, a biologic for an autoimmune condition that costs the health system something like $20,000 a year and what she pays at the chemist is like $100 a month, the same as everyone else in the country, whether they’re a billionaire or a bus driver.
That drug is the difference between a working body and a failing one and in the entire time she’s been on it, the thought “can I afford this” has never once entered the clinical conversation. She’s dealing with the cost of the disease in a life way not in a money way. That absence of a thought is what the brutal Australian taxes buy. It’s one of the most expensive things in her life and it has never appeared on a single statement because it’s included in the high taxes of everyone who lives there.
Babies
Having a baby is the single largest collision between an ordinary family and the healthcare system and it’s compulsory. You can decline to own a car. You cannot decline to be born. I have friends who have delivered babies in Australia where the total out of pocket bill for the delivery was approximately the cost of hospital parking. That’s the whole joke of the Australian system, you walk out of a million dollar facility having consumed tens of thousands of dollars of obstetrics and the thing you’re angry about is the $100 of parking. The same private hospital delivery might run $2,000 with health insurance. A private delivery in Singapore runs $25,000 once the obstetrician, the ward and the inevitable extras are tallied. That’s the good scenario, the one where everything goes right.
Now take the scenario where it doesn’t. Roughly 1 in 12 babies arrives premature and premature babies go to the NICU, which is the most expensive part of any hospital with machines that cost more than houses whose entire job is to keep babies alive who otherwise wouldn’t be. The stay length is based on the baby. From Australia’s guidelines: Extremely Preterm (under 28 weeks): Typically stay in the NICU for 3 to 4+ months, Very Preterm (28 to 32 weeks): Often stay for 6 to 10 weeks, Moderate to Late Preterm (32 to 37 weeks): Usually stay for 1 to 4 weeks (or just a few days if they are stable around 34–36 weeks). The outcomes can vary wildly.
In Australia the NICU bill is $0. Two days or two months, $0. In Singapore’s private system, intensive neonatal care runs on the order of $3,000 a day. A 4 week NICU stay, which is an utterly ordinary premature baby story, is a $100,000 event. Insurance may cover a good chunk of it, if you bought the right plan, before the pregnancy, and the pregnancy wasn’t excluded, and the plan’s limits hold. Those are a lot of ifs to be checking while your child is in a humidicrib and Reddit is full of stories of young middle class Singaporean parents who have received NICU bills in the hundreds of thousands of dollars that they had no choice to pay because the alternative meant losing their child. I used to read these stories when my wife and I were thinking about where to deliver our daughter, Singapore or Australia. Free definitely beat the probability of a potential mortgage.
To be fair, Singapore hands out a Baby Bonus of around $11,000 plus matched savings accounts which is real money and more than Australia’s equivalent. But a baby bonus is denominated in the good scenario. The Australian system is denominated in the bad one. One system gives every family a cheque while the other stands behind every family as a catastrophe insurer with unlimited cover. Which one you’d rather have depends entirely on which kind of luck your family is about to experience and nobody gets to choose that in advance. If you’re in the good scenario, Singapore wins, if you’re in the bad scenario, Australia wins.
Then childcare. Australia’s Child Care Subsidy covers up to 90% of fees for ordinary families, scaling by income. Singapore subsidises citizens meaningfully too, but full fee infant care for anyone outside the subsidy net runs well over $2,000 a month. Add the kindergartens, the tutoring classes that are functionally mandatory in a system where your child is academically sorted at 12, and the famous tuition industrial complex, and the cost of creating one school aged Singaporean child starts to look like a tax bracket of its own.
Whole Life
So let’s assemble the whole thing because this is the part nobody at the dinner party ever does. Take the same family in both countries. Two parents with one household income of $150,000, one baby, one modest car, and across the decade, one single piece of ordinary bad luck. Not a tragedy. Just the regulation issue bad luck that one in several families gets, a rough birth, a parent’s cancer scare, an autoimmune diagnosis. Statistically, something that most of everyone will experience some version of at some point in their lives.
The Australian family pays roughly $40,000 a year in income tax on $150,000 of income. Over a decade they will pay $400,000 in income tax on $1,500,000 of earnings, nearly 1/3rd of all their money, a horrifying number, I agree. Their car costs $4,000 a year. The birth costs $0, the NICU costs $0, the cancer scare costs $0, the chronic illness drugs cost $500 a year. Decade total, call it $450,000, and crucially, the total is the same in the bad luck years as the good ones. The whole point of the design is that the number doesn’t move when your life does.
The Singaporean family pays roughly $15,000 a year in income tax on the same $150,000 of income, $150,000 for the decade on $1,500,000 of earnings. Then the car, $20,000 a year, $200,000 for the decade. Health insurance premiums for the family, a few thousand a year, call it $50,000 over ten years. The delivery, $25,000 per child, let’s say 2 children so $50,000 total. The NICU after a decent insurance payout, $25,000 out of pocket.
The cancer scare’s gap payments and the drugs the subsidy list didn’t love, tens of thousands more. Childcare gap versus the Australian subsidy, easily another $50,000 across the early years. I’m being conservative everywhere and the decade total is already past $500,000, and that’s without buying property, where a single stamp duty event can exceed an Australian’s entire lifetime of income tax. But so far we’re sort of on par here, the Australian pays $450,000 in explicit income tax per decade while the Singaporean is paying $500,000 in implicit hidden taxes per decade. The Singaporean definitely feels richer because they see more of their income in their bank accounts before it goes out the door via hidden payments.
The housing is where we really start to go off balance. At some point both families buy a house, the Singaporean family buys a large 80sqm, 3 bedroom HDB for $1 million and pays $50,000 in stamp duty while the Australian buys a 240sqm, 4 bedroom townhouse for the same $1 million and pays the same $50,000 in stamp duty. They both spend the same and are taxed the same while the Australian gets 3 times more house for the same cost and the same taxes. If you fast forward 100 years of this house purchase, the Australian has paid it off and leaves it to their child. While the Singaporean has paid it off and needs to give it back to the government.
The lifetime in paying off the house results in a $1 million asset that is paid off for the Australian while the Singaporean has paid off the same $1 million asset and has nothing at the end because the government leasehold turned on and they take it back. If that’s not a hidden tax that eats that $1 million over 100 years at a rate of $10,000 per year, I don’t know what you’d call it. Yes the Singaporean HDB is bought at cost in a wealth transfer from the state to the individual while the Australian property includes developer and builders margins. But 100 years later the government comes and takes it right back as it does for most condos too.
The no tax country costs more. Not for everyone but for the family I’ve just described, which is most families, the arithmetic simply flips once you count everything the tax was secretly buying. If you run this napkin math over 5 decades from 30 till 80, a lifetime of working, the Singaporean has paid nearly $2.5 million in secret taxes while the Australian has paid nearly $2.3 million in overt taxes. Slightly higher but still within striking distance of each other.
When the government comes to take back the Leasehold property that subtracts the $1 million property asset from the balance sheet of the Singaporean vs the Australian. But here’s the important distinction, nothing seriously bad has happened to this Singaporean to get to these numbers whereas many seriously bad things might happen to this Australian and this is a fixed rate. One is a ceiling price the other is a floor price.
Plus what I’d describe as a qualitative lifestyle tax the whole way through that comes from living in 1/3rd the house size for the same price and all the health and happiness costs that come with that. It’s well studied how more space generally equals more happiness. That’s why generally people who live in houses are happier than people who live in apartments.
Who Wins
There are people for whom Singapore genuinely is the lower tax country and it’s worth being precise about who they are because the precision is the insight. If you’re rich, Singapore is cheaper and not slightly. No capital gains tax and a 24% top marginal tax rate. If your income comes from assets rather than labour or you’re earning millions per year, Singapore is one of the best deals on Earth.
Which is exactly why it has such a high concentration of family offices and intergenerational family wealth. The car money, the housing money and the hospital money are rounding errors at that altitude. I’m an investor, I feel the pull sometimes, I’m not pretending otherwise. For the very wealthy, Singapore wins hands down. Because the absolute quantums of tax takings is way less than the absolute costs of even the most catastrophic outcomes.
And if you’re a healthy, married Singaporean citizen in an HDB flat who takes the MRT and doesn’t need a car, you’ve threaded every needle. You got the subsidised housing, you skipped the COE, you haven’t yet needed the hospital or you may never need it, some people do just experience nothing but health. For you the system is magnificently cheap, and the national statistics will happily average you in. So also for the very healthy, Singapore wins hands down. But notice the shape of who’s left paying full price.
It’s the middle class family that needs the car and outgrew the flat. The foreigner. The couple whose baby came early. The household that drew the short straw on illness or accident or bad luck. Singapore’s hidden taxes concentrate on family formation and misfortune while Australia’s visible taxes concentrate on income. One system charges you for earning. The other charges you for living and charges most at the moments you’re least able to argue with the system invoicing you. If you’re not in the very wealthy or very healthy, Australia wins hands down.
That’s the real difference between the two countries. It’s not about tax rates at all, it’s actually about risk and it’s about who carries the tail risk. Australia taxes your income. Singapore taxes your bad luck. An Australian pays a big fixed premium every year and in exchange the catastrophic tail of ordinary life, the NICU, the oncology ward, the chronic illness, is capped at approximately zero. A Singaporean keeps the premium and self-insures the tail.
It’s the index fund versus the concentrated portfolio. One has a guaranteed, painful looking annual cost and no blowups. The other looks brilliant every single year right up until the year it doesn’t. And just like in investing, everyone believes they’ll be the lucky ones because the people the system worked for are at the dinner party telling you about it, and the people it didn’t work for are busy working to earn the money they need to pay for it.
So these days when someone tells me Singapore has no taxes, I agree with them completely. It has no taxes the way a casino has no entry fee. I say that as someone who loves the place, married into it, tried to move there but failed and keeps going back multiple times a year to visit family. I just finally know what I’m buying in each country. In Singapore I’m buying brilliant infrastructure and keeping my own tail risk. In Australia I’m buying the world’s most boring insurance policy, and like all good insurance, it’s priced so I’ll resent it every single year that I don’t desperately need it.
I find something strange about this which is that the collectivist Asian culture has built an individualistic self coverage system. While the individual Western culture has built a collectivist we all cover everyone system. Australia’s taxes aren’t actually high, they’re a sort of prepayment of every outcome with every variation of outcome priced in, the good and the bad. In Singapore, your expenses are exposed to the volatility of what life throws at you on a pro rata basis with no option to opt out once you’re on that train, wherever it takes you.