Mr Speaker Sir,
The Certificate of Entitlement (COE) system was introduced in 1990 to manage the growth of the car population in Singapore. It does so by allocating a limited supply of COEs via a bidding system. Those with the highest bids win the right to own a vehicle in Singapore.
The COE system currently is based on purely economic considerations, on the belief that economic efficiency is optimized by allocating resources to those most willing and able to pay. This has meant that car ownership has also become a goal that is only achievable by the wealthy, without regard for who has a greater need for a car.
PSP is of the view that public policies should not be based on economic optimization alone. Social considerations must also be taken into account for fairer and more holistic policies.
In the case of commercial vehicles, PSP has no objection to the current system of allocating based on those most willing and able to pay. However, for private vehicles, PSP believes that even though not everyone in Singapore will be able to own a car, we should also consider the needs of certain groups in society in deciding who gets to own a car.
We would therefore like to propose a hybrid COE system that takes into account both economic and social factors in the allocation of private vehicles, which will only apply to Category A, B and D COEs. This also means that PSP will support the creation of a separate COE category for private-hire cars. We look forward to the Transport Minister sharing an update on this during the Budget debate in February.
Alternative COE System
In 2023, I urged the Government to consider adjusting our COE system to take into consideration needs factors such as families with persons with disabilities or children. However, then Minister for Transport Iswaran cited various practical difficulties incorporating needs into the system. Therefore, today I would like to propose a feasible COE system that takes into account needs factors for the Government’s consideration.
We propose that instead of bidding for Category A, B and D COEs using cash, bids should be placed using COE credits.
What are COE credits and how do we get them?
COE credits will be distributed by Government to adult Singapore Citizens and PRs each month. The number of COE credits received by each person will depend on various factors such as nationality, the number of children, age, disability etc.
For illustration purposes, let me give some examples of how we can distribute the COE credits. For example, we can distribute 100 credits to each adult Singapore Citizen and 70 to each adult PR. Those with children aged 12 or below get an additional 200 credits per child who is citizen, and 140 per child who is PR. Senior citizens above the retirement age gets an additional 100 credits. Those who have mobility impairment, such as those who qualify for Class 1 or Class 2 car park labels for the disabled, can get an additional 200 credits. In recognition of the contributions of those who served National Service, we can also distribute additional credits to them. These examples given are not exhaustive, but serve to illustrate how we can use this system to take into account needs and social contributions, and make it less costly for those with greater need to own a vehicle.
These COE credits will be transferable.
Families can pool their COE credits together to bid for a vehicle. Larger families will thus find it less costly to get a car.
COE credits can also be traded. Those who want to own a vehicle can buy the COE credits from those who do not, in order to submit a higher bid. This sets up a system of transfer from vehicle owners to those using public transport. Foreigners residing in Singapore who wish to buy a car will also have to buy COE credits from Singaporeans and PRs.
Under this system, unavoidably, those who are financially better off would still be better able to acquire a COE, although it is ameliorated to some extent by distributing COE credits based on needs factors. It is also accompanied by a redistribution of wealth from vehicle owners to non-car owners, and from foreigners to Singaporeans and PRs. It is thus not only a tool for controlling the number of vehicles, but also a tool for redistribution that is self-adjusting based on different economic conditions. For example, when the economic gap between the upper segments and the rest widens, the transfers automatically increase with the additional purchasing power of the top, and vice-versa.
The intention of PSP’s proposed system is to:
- Lower the cost for those with greater need compared to those with less
- Lower the cost for those willing to wait and accumulate their COE credits as compared to those who are less patient
- Reward those who choose not to own a car and help them better cope with the rising cost of public transportation
Gift COE Credits
In addition to the normal COE credits, we propose the introduction of Gift COE credits which can only be gifted to others, not sold.
While we try to formulate public policies to cater to different circumstances as best as we can, it is not practical to expect all scenarios to be covered. As individuals, we are better able to see the circumstances of the people around us, and make our own judgement on who has a greater need. We can transfer our gift COE credits to those with greater needs, or simply just to whoever we wish to help.
For example, in addition to the 100 COE credits for each adult Singaporean, we can give 10 Gift COE credits. To prevent abuses, we can put certain safeguards in place. For example, Gift COE credits cannot be used by people who live at the same address. Also, once A has gifted B with credits, B or anyone from B’s household cannot gift credits to A or anyone from A’s household for the next 1 year.
This system allows us to plug some of the gaps that is sometimes unavoidable in public policies, and fosters a climate of mutual help in the community. We believe that the bonds in our community will be the stronger for it.
Gifting tends to be a one-way flow from the richer to the poorer. With the gift credits, even the poorest amongst us will have opportunities to gift something to their friends.
Impact on Government Revenue
COE is a significant revenue source for Government, accounting for an estimated $4.66 billion in revenue in FY2023, or about 4.5% of total Government revenue.
PSP is aware that if the Government foregoes all COE revenues, there will be a big hole in public revenue that will have to be filled through other means.
Thus, to reduce the impact of the new COE system on Government revenue, we propose that the Government collect a base fee per COE. In other words, in order to get a COE, you will need to pay a base fee to the Government, plus COE credits, which can be accumulated for free or bought from others.
We would like to suggest two ways to determine this base fee:
- Option 1: A flat fee of say $50,000 per Cat A COE and $70,000 per Cat B COE. The flat fee can be determined by taking reference from historical COE prices and then indexed to inflation thereafter.
- Option 2: A percentage of the car’s open market value, which is how the Additional Registration Fee is calculated. This will make it more expensive to own luxury cars while those who need a car solely for transport will find it easier to own cheaper cars. This makes for a more equitable car ownership policy. In fact, for this option, we can do it via raising the ARF to make up for the lost revenue.
Even with the implementation of a base fee, there will still be some loss of revenue for Government, as these monies are transferred from vehicle owners to public transport users instead of to Government.
PSP is thus mindful of the need to ensure prudent Government spending. It has always been a priority for PSP to ensure that the Government’s policies do not over-burden the public purse. For example, we have previously questioned the Government’s grants to SPH, expenditures by the People’s Association, and spending related to the Sports Hub.
It is also our view that the Government needs to re-assess how we are spending or collecting money in some areas of public policy to ensure greater fairness for Singaporeans. Housing is one example. COE policy is another.
Additional Levy for Additional Car Purchases
In 2023, I asked the Minister for Transport in this House if the authorities would consider introducing a levy for additional vehicle purchases, similar to the additional buyer’s stamp duty (ABSD) used in the housing market. At the time, the Minister said that high COE prices were not explained by multiple car-owning households.
However, PSP believes that there is a need to send a signal against the accumulation of multiple cars by ultra-wealthy households for pleasure when these scarce COEs could be more useful in the hands of another household that does not currently own a car. Thus, we continue to feel that an additional levy should be imposed on any additional car purchases by a household.
However, in order to be fairer to multi-generational families residing together or larger families, exceptions can be made where the household size is such that the ratio of household members to each car is 5 or more before such additional purchase.
Mr Speaker, Mandarin please.
议长先生，
我国于 1990 年推出拥车证制度。多年来，拥车证制度虽然有效的控制了新加坡的汽车数量，但也为人诟病，因为在现有的制度下，价高者得。这使得拥车成为富人的专利，完全不考虑到私家车对有需要的家庭，例如有老人、小孩、或残障人士的家庭，所能带来的好处。
前进党认为，公共政策不应该仅仅考量经济效益。我们必须考量社会普罗大众的需要, 以制定更公平、更全面的政策。
在2023年，我曾在国会呼吁政府考虑以大众的需要为考量，调整拥车证制度。当时的交通部长易华仁推拒了这项建议，道出了一些执行上的困难。因此，我今天要提出一个能够考量需要，并可执行的拥车证制度，供政府考虑。
对于商用车辆，我们认为可维持现有的价高者得的制度，并且应该为私召车另设一个新的拥车证组别。我们期待交通部长下个月向国会分享这方面的最新进展。
前进党提议，停止使用现金投标私家车和私家摩托车的A组、B组和D组的拥车证，并创立一个新的投标制度，以“拥车证投标积分”投标这些拥车证。
在这个制度下，政府每个月向所有成年新加坡公民和永久居民发放“拥车证投标积分”。例如，我们可以向每位成年新加坡公民发放 100 个积分，每位成年永久居民发放70 个积分。有年幼小孩、超过退休年龄、残障、和国民服役的人士都可以获得额外的积分。
人们可以累积这些积分，也可以买卖这些积分，然后以这些积分投标拥车证。
在我们提议的拥车证制度下，拥车需求较大的人有机会以较低的成本买车；愿意等待和积累积分的人也有机会以较低的成本买车；选择不买车的人也可以出售自己的积分，来抵消乘搭公共交通的费用。这将形成一种从拥车者到非拥车者的财富转移。
我们也提议发放一些只能用来送人，不可买卖的礼物积分，以鼓励社会上互相帮助的风气。有了这些礼物积分，即便是困苦家庭也有更多机会和能力馈赠友人。
来自拥车证的收入是一笔可观的数目，若全数放弃，将是财政上的一个大窟窿。因此，我们提议，除了用积分来竞标，拥车者必须支付一笔拥车证基本费。我们提议，可以通过两种方式制定这个费用。
- 我们可以参考历来A组、B组和D组的拥车证价格，制定一个固定的费用。例如每个A组拥车证的基本费可设在五万元， B组，七万元。这笔费用可在未来与通货膨胀挂钩而增加。
- 基本费可与汽车公开市场价值(OMV)挂钩。这将使豪华车的成本更高，有助于制定更公平的拥车政策。 若选择这个方式，可通过提高附加注册费（ARF）来执行。
我们也建议购买超过一辆车的家庭，需付额外的费用。为了公平起见，一些大家庭或多代同堂的家庭可豁免。
前进党认为，随着我国在建国六十年里取得亮眼的经济发展，我们有能力在各个领域，如住房、就业、和社会福利方面，打造更富有同理心的政策。自上届大选，我们就不断在国会提出这些替代政策。如果单单从经济学的角度审视我们的替代政策，这些政策可能并不是最有经济效益的，但我们认为，我们的替代政策能更公平的对待所有国人。我们呼吁政府认真考虑我们今天提出的拥车证替代政策。
Mr Speaker,
Fairness should be at the heart of our public policies as our nation progresses economically. PSP believes that our proposed approach better balances economic and social considerations, and builds a system that provides a fairer and more equitable allocation of COEs for private vehicles and better matches our value system. We hope the Government will seriously consider this model.
Thank you.