I refer to the articles “Supply cut sends COE prices rocketing again” (Straits Times, 8 April) and “COEs the next lighting rod?” (Today, 8 April)
The My Paper article stated that “COE for cars above 1,600cc hit $45,501, 26.1 per cent higher than its previous level and its highest point since 2000.”
“The Open category, which can be used for any vehicle type but is typically used for cars, climbed 16.7 per cent to reach a 10-year high of $49,000.
“In the commercial-vehicle category, prices trekked north to close 11 per cent higher at $36,511 – the highest in 16 years.”
So certificate of entitlement prices have gone up by more than six times in just one year for Cat B cars (above 1,600 cc), from $7,501 to $45,501. Prices for commercial vehicles have also reached a 16-year high.
Second Minister for Transport Lim Hwee Hua’s view (‘COE spikes not due to formula change: Lim Hwee Hua’, Straits Times, 5 April) was that the government’s new formula to determine the number of replacement COEs was unconnected to the surge in COE prices in the latest exercise. She blamed other factors such as market forces and economic conditions.
I was like many Singaporeans flabbergasted by such an irrational denial of responsibility. You do not need to be a genius to know for sure that when you half the growth rate of vehicles from three to 1.5 per cent, the price of COEs will go up.
Moreover, it must be obvious to everyone (except the Ministry of Transport) that higher COE prices must lead to lower de-registration of existing vehicles. Under the new formula of pegging COEs to actual de-registrations, instead of the old formula of projecting de-registrations, this will lead to further price increases.
Christopher Tan of the Straits Times wrote: “Each monthly quota is now about 4,300, or some 40 per cent less than the supply at the same time last year, because of fewer vehicles being taken off the road and an adjustment to offset a COE oversupply in recent years.”
So the number of COEs will be about 40 per cent less each month than the same period last year. Who suffers when COE prices rise so rapidly?
Well, perhaps almost everybody, with the exception of used car dealers and the Ministry of Transport because of higher COE revenue. How much more COE revenue will be collected this year?
“Dealers have reported a plunge in new orders since COEs rocketed two weeks ago, with some saying that sales had dropped by 90 per cent,” Tan reported.
Even public transport operators say that rising COE prices may lead to higher bus fares, he said.
Every day, there are COEs expiring or nearing expiry. Businesses will be affected by the higher COE prices, which may then have to pass it on to consumers by way of higher prices, and thus lead to higher inflation. The fear of rising prices in a sense, may force those nearing their COE expiry to rush to buy now – a vicious cycle that may lead to ever rising prices.
This may be the last thing that Singaporeans need as we are just coming out of our worst recession. The competitiveness of Singapore vis-a-vis other countries may be affected. Those who need a car for work will be more financially stressed. Individuals and businesses who can’t afford may face financial hardship or have to close down their business.
The solution to controlling the growth of the vehicle population need not necessarily be higher car prices and costs.
Perhaps the Ministry of Transport has never heard of the importance of maintaining price stability in an economy. With about 900,000 vehicles of all types, the risk of altering our COE policy is that it may even stall the fragile economic recovery.
By: Leong Sze Hian
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Sometimes I wonder why our elite ruling team standard is average. It seems they just want to continue rule the land and does not want to change their style.
they say they miscalculated what the COE supply should be. at least that was yet another honest mistake lets move on.
or was it deliberate? if they didn’t miscalculate the COE, the COE would have risen earlier, during the crisis or even before, alerting the people that there is a massive population change going on – that both COE and property rising to astroturfing levels would set off alarm bells earlier such that they cannot sneak in 5 million people before everyone realises and the game is up?
possible? probable?
what’s the difference between COE policy and property policy?
property policy = do not admit the “mistake” (or deliberate inflation) because the final aim is to inflate the price.
COE policy = call it a “mistake” so that we can return the price back to where we want it, which is this level now, and that nobody will notice it was low despite population flooding due to deliberate high supply to reduce evidence of population flooding.
They are replenishing our country’s coffers for the next fail investment.
I think the Transport Minister will say that the COE is very affordable. It seems that the ministers are caught off guard again by the rising demand and expectations caused by the influx of new population. They will need to come up with ingenius solutions to our transport situation besides using COE/ERP.
so this spate of repeated policy mistakes as well as other bungles with mas selamat ionescu etc … a spate of bad luck? or some other reason?
it didn’t seem to happen so often when Goh was in charge.
Seem like the million $ salary ministers keep making mistake.
My profession is on Demand/Capacity planning. If I make the same mistake in my company, I have ask to pack and go long long time ago. My boss will never accept the explaination something like “Capacity shortage is not due to my poor capacity planning. It’s demand problem”
Maybe minister can consider to hire me to solve their COE problem and I am only asking their 20% of their pay. :)
If this keeps up, soon the only vehicles on the road will be cars owned by MPs and ministers, since they will be the only ones who can afford them thanks to their outrageous salaries.
I wonder how the PAP will try to talk its way out of that if it really happens.
I think they reported that COE prices was market forces. I almost fell off my chair when reading that. I told my family members , they also shake their heads in disappointment by their reply. $30K , $40K COEs. What a big joke. Everyday still got jam.
this is what you get when govt intervention rideshod over market forces. COE should be scrapped and instead “pay more as you drive” should be the main tool.
With the technology available now,we can monitor road conditions and charge more for congested roads
it’s meant to be environmentally conscious, but the real elitist reason is to widen the income gap between the haves and have nots.
The question is what they do with the COE money? Same goes for ERP charges and what not. Instead of using those money to widen, improve and build more roads—the roads are getting more congested. More immigrants = more demand for cars, housing, etc…
Meritocracy my foot. More like mediocracy for the ruling elites.
Can’t stand the congested roads…makes one, tense…
I take the MRT or the lousy bus.
They also eased credit for cars…before it used to be 4yrs…now it’s 10yrs..so more people can afford the monthly installment…..
last few months ago.. i 1/3 to buy a brandnew gplate van..my motor adviser advised against it..sayin whatever 4 wheels i drive..jam here jam there even ntuc jams tasted better than killiney kopitiam kaya..
so whoever/whatever idiots who jacked up the coes prizes are realLEE idiots…onlLEE raymond lim says it good for you…
I hope the new leadership will scrap COE and ERP which have not solved the problem. bus is still as much a pain in the …. as 15 years ago.
The new leadership will have plenty of significant changes he can choose to execute, easily, and make a difference.
Bus fare will increase for sure.
The change in the system where lines/routes are cut into 2 with the aim of reducing travelling time.
To do that, the operators will have to increase the number of drivers and number of buses.
…
On another note, we all agree inflation is going up or has gone up.
Has interest rate gone up?
No!
Tan Kin Lian is wrong to think that every time inflation goes up, interest rate goes up.
It is not in the interest of the pigs to have high interest rate.
public debt:GDP is too high.
Does anyone realise that the current monumental rise in COE is a result of LTA’s mismanagement?
They admitted that the old system of COE allocation was based on poor estimation which caused the large no of cars on the road today. They knew of the problem some years back but took years to fix it.
Now with rapid tightening they have caused another problem and many related ones will follow.
I see a distinct pattern on how the govt fixes problems – just fix it – regardless of consequences. Just like mass letting in of foreigners to fix manpower problems.
With all the supposed brains, is this the way to approach governing a country???
it’s common sense that in a country where jams are common, that adding more cars onto the road will only exacerbate the situation.
but COE sure is quite profitable; tens of thousands of dollars for one electronic record saying that you may own a car. as long as the government can profit from COE, there will always be a conflict of interest; there will always be traffic congestion.
Current COE system can only fix on the nos of cars on the road based on the ability to pay for them, so only favours the very rich regardless of whether the need to use the car is important. This resulted in misallocation of resources where rich individuals may own many cars to show off their wealth while leaving many cars idle at home.
The government should consider need-based mean testing for the allocation of COEs instead. Example: A family of fours living in the same house is eligible to bit for COE once every ten years or when they sold their car. Second a sales person who need a car to do delivery or sales pitch can only bit for a van. etc.
There must be qouta on the number of cars own by a company for use by their managers and directors.
These definitely will bring down the unrealistic and vanity demand on cars and those who are not eligible will be foreced to use public transport. At the same time, we can motive family to have more babies to make up to 4 persons in a family to achieve eligibility.
Something is wrong. A BIG mistake was made and no heads roll?????????????????????????????????
@ spirited-centred
no. that isnt good either. actually, there are many people that have given good suggestions in another COE/ERP related article.
i think that each person should only have one car. but the government should study how many cars the roads on SG can support at any one time, and then let all private car owners buy the rights to own the car; taking into account the exemption of all services/business vehicles.
this will allow the market to decide how much each right will be “done” at, just like the stock market, but people are buying the right to drive at peak hrs. one person can only have own one right.
making a cap on the number of vehicles is the only practical way of controlling traffic congestion, since it is not possible for the government to legislate the staggering of opening hours of companies.
right now, COE and ERP are just ways for the government to milk money from the existing problem without solving it. but, since my solution will NOT allow the government to suck great amounts of money annually, it will not be implemented.
***i mis-spoke in the 2nd paragraph
the “right” is the right to drive an individual to drive his/her private vehicle at peak hours.
It is a man-made problem. When you take certain actions, you must try to foresee the consequences of your actions. Did they not see the misery this constant meddling with the market forces will have on Sporeans.
@ Father of three
i doubt the PAP government cares.
money first. how much is a gram of conscience worth?
I like the PAP’s optimism. Every single problem in SG is an opportunity for them to make money.
When they were putting up many more ERP gantries (remember the ERP at your doorstep in Toa Payoh?) and increased the ERP rates, they tell you that COE is low, making it easy for people to own cars, and the way to go is to control the usage through ERP.
Now they’re back to tightening the growth rate to control the vehicle population, halving the growth rate and caused COE to rocket to new heights; and so what happen to the many ERPs gantries that have since been put up? Are we going to pull them down soon?
If not, how can we trust these PAP leaders’ words anymore in future when they try to justify policies that affects the people?
The COE is the same as letting in as many foreigners as possible.Why is this so? It was to add to the earnings and economic figures. As usual , they did not listen, too many vehicles on the road and too many people, foreigners in the street, shopping centres, and public transport. So now its showing at the seams, high COEs and too many foreigners and making everyone unhappy with their policies. So now they’re fighting fire with fire and it won’t work this time, we are just pissed off with their short sightedness really, and now we have to suffer, high COE’s and competing with the foreigners with jobs and what not. I have no problem with the foreigners, its just too many of them.