Come next February, Certificate of Entitlement (COE) prices are projected to increase. The Land Transport Authority (LTA) had announced a “zero growth” stance for cars and motorbikes. It is unclear how this mechanism would operate: does it mean that if there were only 1000 cars scrapped in that month, then there would only be 1000 new COEs available? If this was the case, the bids for COE may be sharply higher.
In March 2015, Senior Minister of State for Transport, Josephine Teo said this in Parliament “As long as incomes continue to grow, it is unlikely for private car ownership to be a low-cost transport option.”
“As car dealers, we are certainly concerned. When COE prices increase, our sales would suffer. Those who cannot afford a car, but need one will be the ones that will be very much worse off” said car dealer Mr. Chia Kam Lock, 47.
However, some believe that this is a good move.
“Singapore is only some 500 square kilometres, if everyone wants to buy cars…and everyone will want to buy a car if they had the chance, there would be no space to drive your car at all” said Stephen Chan, a student at NUS.
There are also some that feel that using price as a control mechanism is unfair and insufficient.
“Why is price the only mechanism? There should be a mix of controls: bidding, needs testing, limitations, restrictions and different versions of ownership, improve the weekend car mechanism, have a different form of leasing. Even a layman such as me can think of so many other ways to control car population. Merely just pricing it out of everyone’s reach is unfair”, said Tay Ju Ern, 32, manager in the shipping industry.
“They only reason I see that the COE won’t disappear, is because it brings strong revenue to the national budget”, continued Tay. Vehicle Quota Premiums brought in some $6.86b to the nation’s coffers, and this figure is just below the $10.85b that GST collections contribute.