I just spoke about the need for MOT to review the COE system in the parliament. Below is an excerpt of my speech. -- “Singapore is a land scarce city state. No matter how you change the COE system or replace with other vehicle control measures, it will not satisfy everyone. However, we look forward to a comprehensive review so that it does NOT come a day when only a CEO can afford to buy a COE. The COE system needs to balance with social equity so that ordinary Singaporeans who need just a basic car can have a fair chance.” --- 1. Mdm Chair, I call upon MOT to do a comprehensive review of the COE system. Let me give three main reasons for doing so. 2. Firstly, the latest tweak by MOT to change the definition of Cat A COE in February is not working well enough. According to LTA’s latest data, 42% of the cars registered under Cat A last month have OMV (Open Market Value) above $20,000. Of which, close to 40% have OMV above $25,000. That is, many luxury cars are still competing for Cat A COEs. As a result, not only has the price of Cat A COE not decreased significantly, the price gap between Cat A and B has also narrowed. 3. Secondly, the number of Cat C COEs has shrunk over the years even as we grow our economy. The supply of Cat C COEs for the 3 months between February to April this year is only 1,571 although more than two thousand commercial vehicles were scrapped for the 3 months period before February. The shrinking number of Cat C COEs has driven up the price of commercial vehicles and increased SMEs’ business cost significantly as shown by the latest COE tender results in March. 4. This is an anomaly unless MOT is of the view that there are too many commercial vehicles in the market. The current Early Turn-Over or ETO scheme to encourage early scrapping of old commercial vehicles is not attractive enough. MOT will be improving the ETO scheme and I hope it will not be a case of “too little and too late” again. 5. Thirdly, we are expecting a bumper supply of COEs come end 2014 and 2015 because more vehicles are reaching their 10 years life span. This bumper supply of COEs offers the best opportunity for MOT to revamp the system. 6. When MOT reviews the COE system, I hope that the following suggestions can be considered: (1) Redefine Cat A so that it is exclusively for car models with OMV of $20,000 or less, i.e., only for mass market models. (2) Split the Cat C COEs into two, with one catering for light commercial vehicles and another for heavy vehicles. In this way, SMEs that need to buy light commercial vehicles do not have to compete with the “Big Boys” that buy heavy vehicles. (3) Conduct a trial to experiment with the concept of banning car dealers to bid for COEs by taking half of the quota from each category to only allow car buyers to bid for themselves. Some believes that the car agents are responsible for driving up the prices of COEs but we could never be sure of the actual cause unless we do a trial. (4) Consider a “reset”, that is, to redistribute the number of COEs for each category based on current needs assessment. This will give MOT a chance to re-balance the number of COEs across the different categories based on parity as well. 7. Singapore is a land scarce city state. No matter how you change the COE system or replace with other vehicle control measures, it will not satisfy everyone. However, we look forward to a comprehensive review so that it does NOT come a day when only a CEO can afford to buy a COE. The COE system needs to balance with social equity so that ordinary Singaporeans who need just a basic car can have a fair chance. Thank you.
Posted on: Tue, 11 Mar 2014 07:03:28 +0000
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