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5 Jun 2012, 4.38PM
REACH Administrator
by REACH Administrator

The high COE prices in April and May had contributors all abuzz about the Certificate of Entitlement (COE) supply crunch. Some of them called for the Government to tweak the COE system and supply, to address the issue of high COE prices. 

After Transport Minister Lui Tuck Yew revealed that the Land Transport Authority (LTA) is looking into easing the COE supply crunch, contributors responded enthusiastically with many suggestions, such as reviewing the transport system holistically to encourage car owners to give up their cars, limiting one COE per family and exempting taxis from COEs. 

On 30th May, the LTA shared the measures that will be taken to slow down planned cuts to the growth rate in Singapore, which are:-
  • Decreasing vehicle growth rate to 1% per annum from August 2012, instead of the planned 0.5 %. LTA will then further reduce it to 0.5 per cent per annum from February 2013 to January 2015. It had originally planned to cut the vehicle growth rate more quickly, from 1.5 per cent to 0.5 per cent per annum, starting August.
  • Deferring clawbacks of COE over-projections from the quota years 2008-2009. The claw-back will resume from August 2013 to January 2015. This will make available 266 more COEs per month, or about 7% of the current monthly quota, from August 2012 to July 2013.
  • Gradual reduction of number of COEs for the Open Category, from the current 25% to 20% August and to 15% in February 2013, for a more stable supply of COEs
In an interview with Straits Times (Steering clear of roller-coaster COE cycle) after LTA’s announcement, Minister Lui Tuck Yew spoke of further tweaks to the COE system being considered, of which one change could be to have flatter supply pattern over the long term, instead of the current ‘roller-coaster’ trends since the quota system started in 1990. 

LTA is also looking at other ways to make cars more accessible to Singaporeans such as car-sharing, Minister shared as he acknowledged that there are times when public transport or event taxis will not do.

 comments & replies
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15 Jun 2013, 10.52AM
Firstly, LTA should have a sound strategy to keep road and maintenance work that adds to traffic congestion on a need and priority basis. At the moment, there are congestion everywhere and everyday because of road works making Singapore into one big construction site. There has to be a sensible balance. Not make our roads a daily nightmare. We still need to live life sensibly in the meantime. Best time to do road works is after midnight. As for COE prices, let true market forces work. Too much government intervention creating artificial supply and demand. Let everyone who can afford a car have one. Pay as you use system. The more you use, the more you pay. Improve public transport so that there are real alternatives. Tell parents not to pick up children from school. All go home on school bus. Stagger office work hours and school schedules. Develop alternative transport system-bicycles and electric powered vehicles etc. Get serious.
10 Jun 2013, 11.02AM
Speaking on behalf of small business owners who run a business using small vans like Kangoo and Caddy.

Why are commercial vehicle category not being refined? Small vans like Berlingos and Caddy have been affected by rising COE price in the main category under "Commercial Vehicle", which also includes large buses and lorries.

For small business owners, getting a decent small business transport like a van less than 2000 cc has become a huge problem. We urge the LTA to refine the categories so that small business owners can still carry on the business without paying so much for the mini-van?  In 2004, COE cost $3500, now its averaging $60,000 for the same type of van. Can you imaging how much the business cost has risen over the years? Not to mention rentals... 

Of course we understand that there will be inflation, but for a small van to cost form $35000 to $100000 now, just because of the bidding exercise, is really too much to bear. And the COE only last 10 yrs?

$60,000 COE may not mean much to a big commercial lorry, but it is definitely more than half the price of a small tiny van owned by a single sole proprietor or just a small office.

There must be a fairer method to handle this. Please... LTA ...please look into this problem.

Small business owners cannot charge customers triple or quadruple the selling price of goods overnight, just because they are facing rising transport cost at an alarming rate.  Surely there must be a control somehow?

We hope you take our plight into consideration and review your car control system. We as consumers  and small business owners are already the victims here due to your COE bidding system.

23 May 2013, 11.10AM
The problem with the COE system is that it unfairly favors the very rich.

It can be made fairer. For example, half of the COEs based on the 50th percentile of car prices could be balloted supported with anti-speculation measures and loan restrictions to ensure that the ballot is not abused.

As for the problem of the rich buying multiple cars and driving up COE prices, this can be solved by a progressive ARF based on a percentage of income, with income defined as including capital gains.

So, in this model, buyers of luxury cars would still need to bid for their COEs.

However, the ARF payable in addition to COE would be equivalent be a percentage of their income. 1% for the first car; 2% for the second car; 3% for the third car; and, so forth. So, if you want to own 50 cars, you would need to pay up to 50% of your income for the 50% car as ARF. 

To prevent abuse, the persons bidding for cars would need to provide their income tax assessments to show that they can actually afford the cars that they are bidding for.

Such a system would retain the revenue aspects of the present system while equalizing the playing field between the richer and poorer bidders. It would also emphasize that the COE system is a tax on luxury; but, because it is proportionate to one's income, it is a fairer tax than one where the buyer of a Camry has to compete on an level playing field with the Ferrari or Bentley buyer for a COE.
29 Mar 2013, 5.01PM
Just to reiterate again, we really need to re-look into the introduction of COE in the first instances; say  to calibrate our car population to "optimum" numbers in support of our economic activity function and at the same time to provide citizenry ownership aspiration(car ownership being our local citizen's luxury and mark of social achievement)
However, the current state is problematic owing to numerous causes; changes to economic intensity/center of business activities/human population/road infrastructure network expansion/distribution of activities imbalances.
We can only assume that this policy have not been well managed during the past few years, and although this mess is not created in days; we hope any amends can be all rounded in keeping to ordinary citizens aspiration and needs which continues to uphold our motivation. 
We really don't need to "rock the boat" too much, but the person responsible should take the "beat" and faded off quietly.

24 Mar 2013, 1.40AM
1)      We should change the COE ownership to attach to car owner, not to the vehicle.
One can still change car frequently so that we can keep the car sales healthy in return provide good TAXES. COE still stays for 10 year with the same person. Make it non-refundable except when one chooses to give up owning car for life. Heavy levy (10 times the new COE) if he own car again. This is to prevent people from abusing the system, by giving up their high COE and bid for one when the COE is low.

2)      Allow the car owner to bid for COE, instead of g the dealer bid for them. The bidder has to pay for the price he bids, if successful. e.g. A person submits a bid of $50,000 and the final outcome is only $20,000. The bidder is required to pay $50,000 based on his original bid.
The Dealer just wanted to sell car's. This unfair practice jacks up the price of COEs unnecessarily and contradicts what car dealers in the rest of the world does - earning profits from the sales of cars alone, not profit from COE prices!

3)      Implement one owner per car policy.  Max 4 cars for owners of Good Class Bungalows and max 2 cars for the rest of population staying in landed property, condo and HDB with a valid/available parking lot. Currently they are a hundreds or many thousands of rich owners register more than 2 cars under the same name. This will help to free up more COE into the markets in near future.

4)      Restrict Company to own any car. Companies can only have commercial vehicles. Make no loopholes for people to make use of their companies to register cars for personal use.

5)    Encourage Off-Peak/weekend car. Create a COE category for this group for car less than $45k OMV.
Start gradually with 50 cars per bidding and up to 5% of the car population.
Add a $50/Day Licence for driver drive from 7am. Change the current $20/Day Licence for usage from 9.30am onwards and reduce the Day Licence usage to max of 10 Licences/month. Offenders will be fined $1,000 or more.

This will help to further curb the CEO price and reduce vehicles from congesting the road during peak hours and prevent the rich from abusing the system through the loopholes.
27 Dec 2012, 10.44AM
the key here is the drastic cut or reduction in the supply of coe (cut to 0.5%) initiated by the transport minister lui. this, couple with the road's capacity design by lta (jam often occurs whenever a lane is obstructed/closed, delays in expanding/widthening roads) results in the sky-rocket coe price biddings. where the coe growth rate of 1.5% would be adequate and balanced to manage the vehicle population growth.
6 Aug 2012, 3.21PM
Hey LTA, you are really "Late To Act".

Minister Khaw already hint about need to be prudent. Stop allowing COE to be lumped together with car loans. Get back to basics with a pay-as-you-bid for COE bidding.

Once required to deposit full reserve bid amount into LTA with cash will definitely see demand drop like a stone. Very few have cash to spare.

Please let us face the true affordability of cars issue. No more easy credit and loans. Don't allow the car dealers to bid on buyers' behalf anymore.

Or is there some agreement with the local financing houses to help them grow their loans business?
20 Jun 2012, 12.40PM
Dear Minister Lui, aren't the Japanese and Korean car distributors crying foul over the present private car COE categorisation?

European brands such as Mercedes, BMW, Volvo and Volkswagen will continue to release small-engined sedans that compete all too well with the small-engined basic japanese and korean cars. And the continental cars get a discount on their selling price because of Cat A's lower price than Cat B.

Let's move to categories by OMV: "Low OMV" and "High OMV", with a dividing line of about $20,000. This will keep buyers of luxury brands in the "High OMV" category.

Give lower income buyers a chance. Give those japanese and korean brands a chance.

Will also give you a reason to move Taxi COEs into the Commecial Vehicles category or something else. Just stop muddying up the private car categories.

Please fix this situation soonest. Don't wait.
20 Jun 2012, 12.16PM
Let's make a radical change and allow new COEs lifespan to be 20-years from 2013 onwards. 

We bring on emissions-based surcharges and set up national plan for environmental protection. Yet we refuse to acknowledge the wastefulness of forcing car owners to accept a 10-year lifespan for cars.

We need to reuse and recycle. Let's get used to maintain and repair. And it will grow the local repairs and recycling industry too, give jobs to local technicians and business owners. Will teach URA how to zone for clean-tech auto repair businesses too.

New car demand will fall because buyers will learn to choose more reliable cars and keep them longer. Loans burden will also reduce because cars are depreciating over longer time.

Can think of only benefits, unless we have all been lied to and the govt merely wants the import of new cars with the regular export of used cars to contribute to the GDP numbers growth, and prop-up the tax base.
10 Jun 2012, 5.17PM
The COE system is purely a money printing policy and is not effective in managing car ownership and traffic congestion.

There are already too many taxes in transportation, import tax, ARF, road tax, COE, ERP, GST, petrol tax and yearly inspection not counting insurance + GST on the insurance and petrol.

Cars are also more well made today than the early days when COE was implemented. Why is COE limited to 10 years only ? Scrapping a good car at 10 years is a waste and environmentally unfriendly and defeats the purpose of the annual vehicle inspection for cars over a certain age.

11 Jun 2012, 3.58PM
Minister, are you listening to the silent majority? We don't want to let car dealers bid for us any more. We don't want to fight with Taxi companies during bidding. We want more regulation of car loans. We want more protection from greedy and unscrupulous used car dealers. We want COE lifespan for new cars from 2013 onwards to be 20-years. Stop the wastage and the loans bondage.

My family have been PAP supporters since the beginning. But now, rethinking our position. PAP must stop its collusion with Big Business. Think of citizens' well-being.
7 Jun 2012, 2.42PM
Government policy needs to take into account that there are many Singaporeans who exist and work outside the world og big business. These Singaporeans may not contribute to GDP in a big way but sell and perform many essential goods and services that keep the economy functioning properly. The country cannot only serve big business and big money.
8 Jun 2012, 10.47AM
Agree. Seems like to heavily ProBusiness means govt policies will help businesses maximise profits over the well-being of people. Increase well-being definitely need to spend to build out infrastructure. No business will spend first without asking for bigger profits ultimately. Be careful whom we sleep with.

For example now, COE scheme is right but the bidding mechanics is obviously outdated. Please stop allowing dealers to bid. They have deeper pockets and sole intention is to sell more cars. Is'nt that contrary to govt aim of seriously slowing car growth? Force the buyers to bid only with Pay-as-you-bid and it will be effective to eat the disposable cash of buyers.

Also get those Taxi bids out of Cat A. Bowing to pressure from ComfortDelgro?
7 Jun 2012, 6.55AM
Whatever the Government does, please ensure public transport and small businesses are looked after. One cannot expect these two to go head to head with wealthy individuals in the COE bidding process and win. And if they have to accept such COE levels, then it will only fuel inflation.

We do accept that some industries have to upgrade and increase productivity. But there must be avenues for people to start and run successful businesses. And it is all the more important in an increasingly volatile world with poor job security. These people must start somewhere and one cannot expect them to all be tech wizards, be given this line, forced to accept COEs at these levels and pushed to fight the large and established juggernauts. We will always need plumbers, locksmiths, delivery services, etc. Sustaining COEs at these levels might amount to plumbers and locksmiths going from client to client on foot, channeling business to mega retailers and generally limiting options in many ways. Singaporeans understand there are policy trade offs. But these people need to be looked after.

It is for our highly talented public sector to find those solutions. Even if it means some form of COE carve out for these categories. The playing field just isn't level and the free market and laissez faire approach has its limitations.
7 Jun 2012, 10.09AM
yes Minister Lui, please be aware of how your policies affect costs of small businesses.
COE increases is raising the price of used vehicles. Used vehicles are supposed to be a financially prudent transportation choice for small business owners.

For eg. tweak the private car COE categorisation. Now Cat A is being driven up by small-engined luxury cars from Volvo, BMW, Merc. Affluent buyers are taking advantage of the loophole and bidding up COE prices.

Try re-categorising by OMV instead. Basic cars do have low OMV below $20,000.

Also, please move Taxi bids out from Cat A. It just doesn't make sense. And it's a case of juggernaut with deep pockets raising prices. Taxis are bought by large companies such as ComfortDelgro. Their depreciation, scrapping schedules are different. These are commercial vehicles.

Really frustrating when there are illogical policy regulations.


Post-Budget Forum 2013 – Opening Remarks by Dr Amy Khor and Mrs Josephine Teo


Policy Study Workgroups Appreciation Lunch on 23 September 2009 - Opening Speech by Dr Amy Khor
REACH's Chairman, Dr Amy Khor announced the formation of three new Policy Study Workgroups

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