No new COE category for first-time car buyers: Josephine Teo

[Aces]

SINGAPORE: Minister of State for Transport Josephine Teo said tweaking the Certificate of Entitlement (COE) system to favour first-time car-buyers may induce people to get around the arrangement.

Mrs Teo was responding to a question in Parliament on Tuesday on whether the ministry would consider creating a different COE category for first-time car buyers.

Mrs Teo said this will be a policy which will be quite easy to circumvent.

She said: "If a family was forced to register a car in the name of a first-time car owner, it would be quite easy for him to get a relative to stand in as a first-time car owner. Similarly, a business could set up a subsidiary to own just a car so there is a practical difficulty in implementing a policy of this nature.

Mrs Teo said it is difficult to justify who deserves a car more than another, whether it is a growing household which needs a second vehicle or singles getting their first car.

She cited the needs of bigger families and growing businesses that may need more than one vehicle.

Mrs Teo said: "To this family, a COE system which favours first-time buyers would not be fair. They would argue that their needs are greater than first-time buyers who are singles, or who have no children, or have no elderly members in the household.

She added that it is also important to consider the needs of businesses that have built up a customer base which needs a second vehicle to service.

"To such business owners, their purchase of an additional vehicle is no less deserving than for a start-up buying its first vehicle," explained Mrs Teo.

Mrs Teo said the government is open to reviewing the COE categorisation system.

She said COE prices are determined largely by demand, which is in turn influenced by many factors like interest rates and the economy's state.

However, she added it is important to look closely at the various suggestions put forward to tweak the COE system, to see if they would really be effective in promoting lower prices without distorting the market.

Mrs Teo said: "The government is mindful that some businesses have a critical need for vehicles and that is why several concessions are in place to help businesses with their transport costs. Businesses bid for COEs for commercial vehicles in a separate category "C" and do not have to compete with private car-buyers in categories "A" and "B".

"In addition, the additional registration fee (ARF) for most goods vehicles is set at five per cent of the vehicle's open market value instead of the 100 per cent OMV applicable to cars."

Mrs Teo however, did not reject suggestions for COE categories to be redefined and not be based on engine capacity.

MP for Jurong GRC, Ang Wei Neng, had suggested that Category A be pegged to the Open Market Value (OMV) of the car rather than just engine capacity.

In response, Mrs Teo said: "Indeed, we recognise these are valid ways in which we can rethink how the COES re-categorisation can be done and we are open to reviewing them, so I would urge the member to be patient."

On the trend of the car population in Singapore, Mrs Teo said it has increased by an average of four per cent per annum over the last five years.

At the start of 2008, there were some 515,000 cars.

At the end of last year, there were about 618,000, with nearly one in two households owning a car.

In 2008, two in five households owned a car.

The Ministry of Transport estimates that currently, fewer than one in 10 households own more than one car.

Mrs Teo said, "Our Vehicle Quota System aims for sustainable growth in our vehicle population. Today, our road infrastructure already takes up close to 12 per cent of our land space. Going forward, given our land constraints, we must endeavour to moderate further growth.

"Hence we decided to reduce the allowable vehicle growth rate from three per cent per annum, which was the rate since we introduced the vehicle quota system in 1990, to 1.5 per cent per annum in 2009, and we have further reduced it to one per cent per annum in 2012 and to 0.5 per cent per annum in February 2013."

Mrs Teo said given Singapore's land scarcity, the country does not have the luxury to allow everyone to own a car and that car ownership also cannot be put in the same category of basic necessities such as housing.

"In land scarce Singapore, unfortunately, we do not have the luxury of letting everyone own a car. We also cannot put car ownership in the same category as housing, health, or education, which are basic necessities. Our current vehicle quota system is not a perfect system, but still, the most appropriate way to allocate a limited and non-basic resource," she said.

Mrs Teo said the solution lies in improving the public transport system and taxi services.

- CNA/de/fa
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I know some may disagree like her.. but I just dislike her as an MP and the way she discount this.. yes, maybe some people will abuse the new system but then others who have a family or babies or who need a car.. only those damn rich deserve a family car??

[aromatix]

as much as i sympathize with the less to do, imo, car ownership is a luxury.
we should all live within our means. our public transport is really good enough; not the best - still room for improvement - but good enough.

do not begrudge the car owners, they have earn it. about time you earn yours too if tat's your priority - dun ask the govt for help.

[bobbysayang]

Originally Posted by aromatix

as much as i sympathize with the less to do, imo, car ownership is a luxury.
we should all live within our means. our public transport is really good enough; not the best - still room for improvement - but good enough.

do not begrudge the car owners, they have earn it. about time you earn yours too if tat's your priority - dun ask the govt for help.

I still believe it will be fairer to control usage of cars, not ownership.

[dzylim]

Mrs Teo said: "To this family, a COE system which favours first-time buyers would not be fair. They would argue that their needs are greater than first-time buyers who are singles, or who have no children, or have no elderly members in the household.

She say one lor. so those family with elderly AND young children should have priority to buying an affordable car and it has to be a family car and not fanciful car.

For me, I would question the very basis of COE. Isn't it merely another way for the PAP government to gain revenue. Where does all this revenue (plus the millions or billions they collect every year from other taxes and income-generating businesses) go to? Why can't the revenue be used to truly benefit citizens (and not just give token aid or token handouts), and in that way return it to society?

[therat]

I don't agree on create a category just for first time buyer.
Like that.. should we have BTO, resale too?

when wan to import trash, land is enough.. houses are built to cater for everyone

when comes to car popularion.. land is scarce

wtf is this shit?

[Flavs]

Originally Posted by DarkMind

For me, I would question the very basis of COE. Isn't it merely another way for the PAP government to gain revenue. Where does all this revenue (plus the millions or billions they collect every year from other taxes and income-generating businesses) go to? Why can't the revenue be used to truly benefit citizens (and not just give token aid or token handouts), and in that way return it to society?

If no COE, then what to regulate the car population? COE price high, is as a result of demand, enough Singaporeans still can afford it( whether 10 year loan or not).

The idea technically isn't wrong.

[AlvinLeong]

When bread and butter Jap/Kor cars fall out of the top 10 list, something is seriously wrong.

[byfun]

Originally Posted by ilovechilired

when wan to import trash, land is enough.. houses are built to cater for everyone

when comes to car popularion.. land is scarce

wtf is this shit?

When population increase, demand for car will also go up. But our pm lack 20/20 foresight....

Increase of population suppose to help improve quality of life for Sporeans but apparently not so... now many Sporean need change to take bus instead of owning a car due to hi price.

No doubt car is a luxury item.. but this fast spike up in price of car also because of a sudden surge in population within a short time span.