S Iswaran
Singapore
“The Maritime and Port Authority of Singapore (MPA) has incorporated the requirements of the International Maritime Organization (IMO) 2020 regulation in its Prevention of Pollution of the Sea (Air) Regulations 2022. The Regulations are applicable to Singapore-registered ships and all other ships while they are in Singapore waters.”
“The Maritime and Port Authority of Singapore (MPA) plans to progressively roll out the charging infrastructure for electric harbour craft operations in the Port of Singapore from 2025.”
“Since 2018, the Land Transport Authority (LTA) has imposed minimum bicycle parking provisions covering different types of developments. The requirements are determined by multiple factors, including the developments’ use, location and gross floor area (GFA).”
“I had addressed similar Parliamentary Questions by Mr Gerald Giam on 29 November 2022 and 10 January 2023, as well as in my Ministerial Statement on 8 May 2023. The Member can refer to these past answers and statement as there has been no material change in the allocation of Certificates of Entitlement.”
“To encourage the uptake of electric cars, the Government has rolled out the Electric Vehicle Early Adoption Incentive and enhanced Vehicular Emissions Scheme. When taken together, it provides up to $45,000 off the Additional Registration Fee of an electric car upon registration.”
“The Land Transport Authority studies all potential changes to the Certificate of Entitlement (COE) system carefully, including conducting sensitivity analysis where appropriate.”
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“Thank you. The other point that the Member makes is on OMV and whether OMV should be used as a basis for categories. I had addressed the Member's point in my Ministerial Statement. The median OMV for Cat B is about 70%, 75% more than the median OMV for Cat A. That means actually the market is already quite separated; I mean, you have the separation in terms of value. The next thing is we have achieved this or this is the outcome but the criteria, we are using our objective criteria – engine capacity, power output, what I have described earlier. And our objective has always been to make sure that these criteria are able to accommodate the mass market models in the Cat A, as far as possible. That was one of the reasons for the recent adjustment so that the mass market electric vehicle models could also be captured. But is there going to be some movement on the margin? Yes. So, you will see, as the Member has put it, some of the more expensive type cars migrating to the Cat A. But by the same token, we also have what are considered generally as mass market cars that are actually in Cat B. Examples will be some of the SUVs like Subaru Impreza and Mitsubishi something or other. Because of their engine capacity, two litres, they are in Cat B. What I am trying to say is that it is not a clean cut. And the problem with using an OMV, amongst other things, is that the OMV is not something that is objective criteria because there are a lot of other variables. For example, if exchange rates move, the OMV of the car changes. So, how would you account for that? When we are making these recommendations, let us keep this in mind that there are many moving parts.”
“So, that is the Member's implication. I want the Member to be upfront about it because I have taken pains to point out again that the proportion of foreigners buying cars has remained low and stable. So, yes, what is happening is actually and the correct characterisation may well be that when the COE price goes up, some people will find it more difficult to afford; other people may find it easier to afford. So, there is a re-allocation and distribution going on within our society. And that is one of the things. It is a politically uncomfortable thing but it is a reality. And I would urge the Member to be careful in the way he makes this point; otherwise, we give wrong conclusions and we end up distorting the discussion. But having said that, if the Member wants to respond to this specifically, please do so.”
“We all prefer lower prices, Mr Leong. Let us be very clear about that. We all want to help the people who buy cars and motorbikes. I do not think you have a monopoly of virtue in that regard. The real question here is, and if I hear you correctly, you accept that the long-term trend in prices must be up. So, now, your point is more about the rate of change and whether that can be something that can be done. If I can take the Member's second question first. We do not control prices. I want to put that categorically on the table because we are not stipulating the price or even a range. The only thing that the Government is able to do is settle on the supply and if there are any mechanics in the system, whether there are reasons to adjust them. That is what we have been doing. How that flows into the market or works through the market is also dependent on demand, as the Member would know and, finally, the price outcome is how the market settles it. We know that the Cat D price has come down. But does this mean that this is the new level? I think even if you listen to the industry players, they would advocate that we watch this for a while because whether it is buyers or dealers, they all have to sort of assess the situation and the market will have to find a new equilibrium. Where that is, I cannot say. But what I can say with certainty is that, in the long term, we will see upward price pressure for the fundamental realities we have discussed. So, we do not control prices. Please do not advocate that. Secondly, Mr Leong makes this political point about higher COE prices mean many Singaporeans cannot afford. So, the sub-text here is that somehow it is foreigners who are buying it – because if Singaporeans cannot afford it, who is buying it?”
“So, if I may just ask one other question while the Member is at the lectern. Because I took considerable pains to explain this. Does the Member agree that if the supply is limited, in fact, capped at zero growth, and incomes are rising, that the almost unavoidable conclusion is that the prices must rise?”
“Mr Deputy Speaker, with your indulgence, can I just understand: so, does the Member think that lowering of the price is good or bad? I mean, I am trying to understand. When the Member said "be more careful", what does he mean?”
“There is no need for cross-deployment. As I said earlier in my Ministerial Statement, for the bidding quarter we are having now, it will increase supply by 24%. I think that is quite substantial. In fact, the five-year COEs that are available for Cat B, we are a lot less and that is why also, consequently, you see a much lower percentage increase of about 15%.”
“I thank the Member for his suggestions. First, why does Cat C also contribute to Cat E? Because Cat E can also be used for Cat C. That it is not the case today does not mean that it would not be the case tomorrow. That is why I am saying that what we have to bear in mind is that the market has its own dynamic. We do not know how things will go. People may decide that they do not like cars, they do not want cars and there may be a need more for commercial vehicles in which your Cat E will end up being used for Cat C. Or people may shift their preferences to smaller cars because they want to be more environmentally conscious or spend less and so on. And then, your Cat E could potentially go in there. And, in fact, we do see some of those sorts of behaviours. The point is, you must take from the categories to which the Cat E can apply and that is why we do this. For motorcycles, for example, we do not do that. This was some years back and the reason is because you do not allow Cat E to be used for motorcycles. So, that sort of takes the motorcycles out of it. But for all the other vehicles, they are in the same class and we put them in that contribution group. Can we do more? This is already a big move – taking five-year COEs that are expiring in the future and bringing them to the present. That is a one big move. It is a necessary move and we think it will have a salutary impact overall on the system. So, that is why we are doing it. But we just want to have a situation where we do not make too many arbitrary kind of decisions. So, in response to Mr Vikram Nair's question earlier, I said we will re-allocate on this basis, that Cat A will come back to Cat A, Cat B to Cat B. And based on the numbers and what we can see, it should meet the objective of smoothening supply.”
“On the Member's second question on the relevance of Cat E, first, we need to size the thing correctly. Cat E has 10% only. Of Cat A and Cat B, 10% goes into Cat E, alright? So, why do we do that? Essentially, we have had basically a Cat E component from the very beginning, and why is that important? When you have got these very fixed categories, you need a mechanism, a valve, if you will, that can help redistribute some because preferences may change over time. There may be a greater shift towards Cat A, there may be a greater shift to bigger cars, there may be other kinds of movements. We do not know. So, this really creates a valve in the system. It is a valve that we have actually been progressively throttling down. In fact, in the early days, it was much more – the contribution from the different categories – and today it is 10%. So, it is at a level we, of course, as I have said, with COEs and the system, the Government has always been reviewing and constantly evaluating the relevance of measures. But I am just trying to give the context for the Leader of the Opposition's benefit. So, it serves an important purpose. I do not think it is a purpose that is irrelevant in today's context by any means and for the foreseeable future. But if there are some other efforts to think about the design of the system, then, at that point, maybe this can be revisited. So, the reason why you cannot say I create a valve but then I restrict its usage. That is why you need the flexibility. If you cannot trade it and apply it to different categories and give them enough time to do that, then you may as well not have the category. So, the design and the features are tied specifically to the intent behind having the category. Alvin, would you like to say something?”
“Thank you, Mr Deputy Speaker, and to the Leader of the Opposition. Just to be very clear, we are not talking about volatility in prices. That is not the objective of the exercise. It is volatility in supply. How prices eventuate in the market – as I have discussed and all of us know – is a function of various factors that are taking place. Today, the prices may go down, tomorrow they may go up. We think that the long-term trajectory is upwards for the reasons I have mentioned. Our supply is basically zero growth. So, it is capped. And the demand is a function, among other things, of incomes, and incomes are rising. So, we must be prepared for this. So, if every time COE prices go up, we approach it as some kind of a new phenomenon, I think we should take pause and understand that these are the fundamentals that we are dealing with. It is a hard choice we have to make. And the decision to have a zero vehicle growth rate is a very hard choice. But what is the alternative? So, I just want to be very clear. It is not about price volatility, although that, I know, is a political concern. It is about supply volatility and how much we can smoothen that so that the market can function. That is the key thing. On the point on curbs on car loans, this should be a question answered by MAS. Was there a PQ on this already? Today or? Maybe I will allow my colleague, Alvin Tan, to reply. But let me just say this. Loans are under the purview of MAS and, if it is hire purchase, then I think it is under the Ministry of Trade and Industry (MTI). But the key point I want to make is that the moves we are making from the MOT and LTA perspectives are really in order to ensure the market functions as we intended and to smoothen the supply and that is why we are going for this.”
“I thank the Member for agreeing with us that this effort to smoothen supply is something that is appropriate. It is a one-off exercise and, specifically, because it is a five-year COE, the time horizon is five years. LTA would not know how many five-year COEs will be expiring more than five years from now. So, what we know is the projection from now to five years from now and the latter part of that period coincides with the peak in the 10-year cycle. It is a very well-defined quantum because we have to bear in mind that the rest of the supply, which is dependent on deregistration, is really variable because it depends on whether people choose to deregister and, therefore, contribute back into the supply, or they may decide they want to renew their COEs. We do not know what will happen and that will then depress. So, the only component that we can deal with, with certainty, is the five-year COE and that certainty is only available on a five-year outlook basis, and that is why we are doing this as a one-off, because it also serves a very important purpose of smoothening the supply from now, especially because now we are more or less in the trough of the 10-year cycle. So, it is a good time to look at how we can do some smoothening and this is the reason we are adopting this. And, yes, the supply will go back to the relevant category.”
“That is not counting those who are on concession passes and those who are buying the concession fares; those who get concession fares and also the concession passes. So, by all accounts – and I think being very objective – we are making a strong effort to ensure that our public transport system remains affordable. If you look at international comparisons, the answer is we are. And if you look at our own pattern over time, expenditure on public transport, as a percentage of household expenses, actually, over the last 10 years, it has been declining for the quintile, decile, almost all the key metrics that we look at. So, my point is, we will continue to do our best to keep public transport affordable. There is a significant amount of subsidy. When we get savings, it is basically ploughed back into the system. We cannot do it at the particular service level; it has to be at the aggregated level. But in the end, what really has an impact on the final expenditure incurred by the commuter is the subsidy that the Government gives, and that is not insubstantial.”
“Mr Deputy Speaker, I thank the Member for his persistence and perseverance. Let me try and deal with the issues in turn. First, the formula – I think it is important to understand that 0.1% is a productivity contribution, but it is a deduction from the fare increase. So, leaving aside, for example, the recent periods when it is 12% or 13% and so on, if you look at in general, let us say you have a year when the fare increases 2%. When I extract 0.1% from you, if the fare increase is 1%, I am extracting 10% from you; 2% is 5%. If it is a 3% increase, then 3.3% and so on. So, it is actually quite a sizeable imposition on the PTOs. It is not a free pass by any means. The Member's point about whether we are doing more to work with them on productivity and other areas, absolutely. I think this is an important thing. It is a win-win. It is not something where we want LTA to just dictate and be left with it. We see this as a joint endeavour and that is why many of the moves that are being made, in terms of technology, fuel efficiencies and so on, these are all areas that we are working together with the PTOs on. On the Member's point on rationalising bus services and, when there are savings, how does it get passed through to commuters? So, if I may, like the Member, persevere and persist with my counterpoints, the fact is that we are subsidising bus services a billion dollars a year. We are not recovering costs by any stretch. So, any savings are ploughed back into the system and it just gets distributed at large. But the bottom line is that we are subsidising public transport significantly. A billion dollars for bus, a billion dollars for train, or, if you want to think about it in another way, every journey gets a $1 subsidy.”
“But let us not be too quick to conclude what the causes are and, therefore, start fixing problems that may not really be at the root of the issue. But having said that, I concede the point to the Member that the fact is, it is new and that is why I said what I said in my Statement. PHCs are a relatively new phenomenon and it is a very variegated terrain. It is not just your Grabs; you have got your car-sharing guys, you have got the rental guys who then lease to the drivers and so on. So, there is a whole variety. So, it is important that we understand this correctly before we decide whether there is a need to act because they have an impact that perhaps distorts a market and then, if so, then what are those targeted measures. And that is what MOT and LTA are studying.”
“If we inadvertently, through our policy moves, because deposits are very high, cause motorcycle prices to rise even further, then it will harm precisely the group that the Member wants to help. And that is why we have been cautious about the way we have done this. We may not be as fast as some would have liked but I think the yoke of being in Government and in LTA and MOT is that you have to exercise judgement and decide not just what to do but also how much and when. And this is what has eventuated in what we are doing now. Can there be individual bids? The answer is yes, there can be. But the market practice, in general, is that motorcycle buyers have a preference to just be able to go in and buy in the shops. This is why we have had this arrangement for motorcycle dealers. But there is nothing really that stops us from accommodating this and, in fact, we do already. On PHCs, is there no evidence of PHCs driving up prices? Well, I would like to draw the Member's attention to what I said in my Ministerial Statement. Basically, in the period, for example, 2015 to 2017, when the PHC population grew from 30,000 to 70,000 or nearly 70,000, so doubling, the impact on COE prices was not particularly discernible. At least I do not recall it. I was not in MOT then, but there were not a lot of questions about it. By the same token, and conversely, over the last several quarters and years, COE prices have been rising but, actually, PHC demand or the number of COEs PHCs have secured has actually been moderating. So, I do not think you can make an argument ex ante that there is a causality. So, I understand that we are unhappy when prices go up.”
“I thank the Member for her questions. First, I want to just be very clear. The Member suggested that the moves we make affirm or confirm that there has been speculative behaviour and that that is what is causing the prices to go up. That is not quite what I said. So, let me just repeat that clearly. The fact is the market has already been functioning and the way we know that is when the price goes up, as it did in some of the earlier cycles when the COE price for motorcycles went up to $13,000; and subsequently it came down, the market corrected. And how did it correct? Well, those who were left with very expensive COEs realised that they cannot sell the motorcycles with those COEs and they then had to give up the COEs or they forfeited them. And we then have to recycle that into the market. What happens then is, just to be very clear, before we made the latest move, such as the reduction of the validity period, was that the supply that is forfeited cannot be returned to the market until the next quarter. So, there is a lag of at least 10 to 12 weeks before it goes back. And what we wanted to do was to re-channel quicker. So, we shortened the validity period and then the motorcycle dealers can decide what they want. Similarly, I do not think – whether it is $800 or $1,500, they are not arbitrary. I beg to differ with the Member. If you take $1,500, for example, it is something like – well, at least before this recent correction which may or may not be sustained – but it is about 10% or so and it is of a similar order of magnitude to what we have for COEs for cars. So, there is a certain method in it. Why do we exercise restraint and caution in raising the bid deposit? Simply because, precisely what the Member says.”
“And these will be redeployed – in not just this quarter, the next quarter but in the next few quarters at least, leading up to this. Because, essentially, it is, as one of my colleagues put it, a cut-and-fill exercise. You are really trying to smoothen the curve, try and avoid too sharp a gradient and, worse, the volatility, the ups and downs. That is what we are trying to do. But I want to emphasise again: this is not about therefore expecting prices to ease and that is the measure of success. The objective here is to smoothen the supply, reduce the volatility so that people can then make their choices. I have put out the information and I think car buyers as well as car dealers, based on that, I am sure their behaviour and the next and subsequent bidding rounds will be informed by this data.”
“But the bottom line is, car for car – if I take a car away from private ownership and we put it in the P2P sector – it will benefit more people, at least, as a first principle. Then, there are all the issues we need to deal with in terms of policy. So, we are working on a whole range of ideas on this, how we can do more. And I accept the Member's point that there is a transition. The transition is not just in terms of going to car-lite, but also because it would take us at least about 10 years more before our MRT system comes to that level where we really have good connectivity in many parts. We already have pretty good connectivity, by the way; but this will take it at least a notch higher and we will be comparable to the best cities in the world. So, the key thing is to manage the transition. And as I said, it is about populating the choice spectrum, giving people a whole range of options from public transport at one end to private car ownership on the other, and everything in between. I think the more we can populate that choice spectrum and give people the information and the convenience to exercise that choice, then we are on the right path. On the five-year COE supply, I think the Member's question is how it will be redistributed. And it is not just for one or two quarters because LTA will be releasing more information. Essentially, we have got five-year COEs that will expire probably in about three- or four-years' time and that is when you are really going to know, if you look at the historical cycles, there is going to be a sort of peak-ish. If you go on the basis that everybody who is reaching their 10-year mark is going to de-register, then you are going to be at a peak. So, that is where LTA is basically extracting the five-year COEs from.”
“I thank the Member for his questions. Mr Deputy Speaker, with your permission, just to address one other point about ABSD that was raised. If the Member's intent is that we should have progressivity in the COE system, actually, we already have significant progressivity through the tax system, the ARF system that we have today, in terms of cars. In fact, the Finance Minister announced a whole set of moves to further increase the gradient and the progressivity. So, I think those who are buying cars are actually going to be paying more and, especially if they are buying higher value cars or more expensive cars, they end up paying a higher amount in taxes as well. On Mr Saktiandi's points, first, whether we can do more to increase the supply of the P2P, the private hire cars – and we use all these terms interchangeably – and taxis and so on. The bottom line is that we need to try all measures to enhance the availability of car-like – not car-lite – but car-like services. Because what people really value is the flexibility to be able to hop into a car and go to multiple locations in a certain period of time and come back. But it is a waste to have the car sitting in the carpark when you are not using it for hours, when you only need it maybe a few hours in a week. That is the crux of it. So, we need to find more alternatives and that is what LTA and MOT are working on what we can do in terms of more in the P2P sector and the PHCs. I have a smile on my face because the Member is asking for whether we can do more and have more PHCs. I think I have just heard from others advocating quite the opposite. So, you understand the conundrum, I think.”
“For example, if you want to take your parents to hospital you think it will take you four hours or whatever, you can make those sorts of bookings as well. So, there are other solutions in place and I would say that that is something we should keep in mind. As far as the idea of ABSD is concerned, I have already pointed out clearly that the COE price that we see today is not explained by multiple car-owning households. They have actually been quite constant throughout. The question is: what is the problem we are trying to fix here? Because you may come up with the tool, it may be a very popular move, but does it really address the problem at its root?”
“And I am quite sympathetic to her point, because many families say to me: "Look, I have got children and I need to take them around to enrichment classes on the weekends and so on, and public transport does not quite work for me". And then, we have others who say: "Look, I have got elderly parents whom I need to take to hospital or for medical appointments" and so on. I think if you look at households in Singapore, they will either have children or elderly parents they have to look after and that will probably cover most households in Singapore. So, everyone has a need that I think we can understand. The real question for us is: do we have the resources and the capacity to meet that need effectively? That is where the challenge lies. I mean, I would be very happy if we had a cornucopia of COEs that we can just dispense at will. But we do not, because of the constraints I have highlighted. And that is why we have to make some tough choices in the allocative sense. Having said that, we are working on and, in fact, we do have some alternatives, as I have said, for persons with disability and so on, we have got certain targeted measures. Also, car-sharing services, because these allow households to have a car for a few hours to do what they need to do and then come back and leave the car for somebody else to use. So, that actually is a more efficient outcome and, in fact, it would save households a lot more money than buying a car and incurring the depreciation. That is one of the things we are doing and we will do more. Also, some of the P2P operators, like Grab and so on, they offer chauffeured services where you can do block booking by time.”
“The Member has raised a few questions. Let me try and deal with them. A point-based system – it is really a variation of the idea that Mr Liang Eng Hwa talked about, a ballot. Because in the end, you have got to decide how you would allocate the points, on what basis? And how will that then factor into the final COE allocation? Does that mean that if someone has got more points, then they are entitled to a different price when it comes to the COE? Or does it mean that they go into a different pool? And if they go into a different pool, how do we segment the pools? So, I think a point-based system has, in a sense, the kind of arbitrariness that we are trying to avoid. We are trying to let the market work itself through. We do have schemes where we help people – for example, those who have special needs or persons with disability who need vehicles for, say, work and so on, we do have schemes to help them with that, including with the COEs and so on. Those are very targeted measures that we can do, but that is best achieved not by tinkering with the COE allocation system, but by, instead, trying to defray some, if not all, of the cost impact on certain groups. It is not unlike what we do, for example, for electricity in Singapore. We price electricity fully. We do not subsidise it. We do not say "first hundred units X, next hundred units Y". We price it all the same, because every one, from the beginning, is a unit of electricity. But then what we do is that we provide U-Save rebates and so on. So, if we want to help certain categories of people, it is best to do it that way. Then, the Member makes a point about needs-based.”
“That is also why I cited the survey – there is a perceptible shift in the preferences of the younger generation of Singaporeans. They are more adept at using technology and some of the solutions already available. As a result, they are less seized with the need to buy a car. In fact, they think there are other ways of using their money. And I say, good for them, in that regard. Single- to double-decker buses, I do not have the exact numbers. But I will put it this way – the move for sustainability is the thrust of the Member's question. The main way we are seeking to ensure sustainability is through electrification. We have about 6,000 buses in the public bus fleet. And about half of these will be electric by 2030; the other half will be a hybrid solution. So, that is how we are moving. In terms of single- and double-decker buses, a lot of that is actually a function of capacity planning, based on the routes and the kind of demand. This can vary, depending on how commuter behaviour changes over time.”
“Mr Deputy Speaker, I thank the Member for her questions or clarifications. Factors that will persuade the car owners to switch – there are several and I have talked about some of them. The most important thing that we need to do is to populate the spectrum of commuting choices available to Singaporeans. The more we are able to offer a high-quality public transport system and near-car kind of services, whether it is car sharing, your P2Ps and so on, and if we can also make the first-mile last-mile part of the commute a better one, then I think people who choose to pay the sum that they pay, or the sums that they pay to buy a car, will have reason to take a pause and re-evaluate the choices that they make. But in the end, every individual is entitled to make their allocative decisions. What we are really trying to do is to make the alternatives as compelling as possible. In fact, you hear this more from people who have lived overseas and come here. I was recently at an American Chamber of Commerce dialogue. And one of the ladies said she came from the US where she was wholly reliant on her car. She was waxing lyrical about our public transport system. Her teenage daughter who studied here, used our public transport system, has since gone to the US for her further studies in Houston. According to her, the daughter laments that the public transport system in the US is not of the same quality and accessibility as here. So, we do have advocates and I am very keen to get more of such advocates, especially Singaporeans. And we do have. Many Singaporeans have told us that they really like the fact that we have a good public transport system. Of course, there are always areas we can improve.”
“If it is a discounted price, then it is a windfall for the party that gets this, because they will then be able to resell the car with the COE at a higher price because the market clearing price is higher. Then, the question is: what justifies such a ballot, who qualifies and how do we do it? I am just sharing this with Members because I appreciate the intent behind the suggestion, but I am trying to point out that there are several, quite intractable, second- and third-order issues we will have to deal with. And we will very quickly move from discussing COE prices to wondering why the balloting system is not working. And, indeed, we do have discussions like that in this House as well. So, a balloting system is not a panacea. In fact, it may aggravate the problems, if the concern is around price and unevenness in the market.”
“I thank Mr Liang for his questions. I am not sure what the Member means by disparity in purchasing power. Because, as I explained earlier, overall, if you look at it over a 10-year cycle, peak to peak, our incomes have risen. And to the extent that cars remain an aspirational product or a necessity, then you must expect that there will be a propensity to want to allocate the budget to buy that and the prices will reflect, to some extent, the trends in incomes as well. That is why I gave the numbers that I did. That is not to say that that is the only factor but, generally, if you compare it to incomes rising and so on, I think that does tell us an important story. Secondly, I would say that in terms of ownership – I stressed this point and I would like to make it again – we have 470,000 households in Singapore that own cars. That is about 36% to 37% – so, it is a very sizeable proportion of our population base. So, what we have been trying to do is, through a combination of ownership and usage measures, make cars available as widely as possible, but within our zero-growth constraint, which we have imposed for good reasons. And that will continue to be the basis. The Member's second point was on balloting some amount. I am very sure all the Members here will be able to offer perspectives on it, but let me just deal with this. If we say a proportion of COEs are balloted and the rest are not, then the question is: so, we have a market where you bid and you secure; and then, there is another segment which is by luck of the draw, literally. How do we price that? Do you price it at the same price as the COE in that period? Or do you say no, it is a discounted price.”
“Again, I want to go back to the point that I am not sure that decoupling the financing is going to be the solution to the current set of concerns that Members have.”
“Mr Deputy Speaker, if there is one thing I have learnt in my short time in MOT, there is no shortage of creativity in the suggestions made to improve the COE system. I thank the Member for his suggestions. But if I may, say, first, a pay-as-you-bid system, I understand the motivation behind it. But if I may offer Members the counterpoint – the problem then is you create a great deal of variation in the market. For the same car bought in the same exercise, the value may be quite different because one bids higher and one bids lower. I do not want to get into a long discussion on this, but from an auction theory perspective and so on, actually the method we use is probably the most efficient. So, I would say that that is not the source of the problem. Let us diagnose this correctly. The issue is not the system or how it is being administered per se. The issue is really around supply and some level of volatility that we are trying to mitigate, as well as where we can or where we discern some need to intervene because of either speculation or some inefficiencies in the market. And that is what we have sought to do. The second point on financing, I would say I think it is a question that should be put to the Monetary Authority of Singapore (MAS), frankly, or the authorities. But if I may just offer Members this perspective. A COE and the car are indivisible, really. A standalone COE is of little value until it is applied to register a car. So, one needs to look at it in totality first. Second, if you look at it from the point of view of the cost of buying a car, which then you are seeking to finance, I think most financial institutions will look at it as a whole – the value of the car, the market price, including the COE price. So, that is why the system runs as it is.”
“As Singapore develops and grows, Singaporeans’ transport needs will continue to evolve and our transport policies must move in tandem while paying heed to our key constraints. The Government is committed to developing the necessary policies and infrastructure to build a car-lite, accessible, inclusive and sustainable transport system to meet the diverse needs of Singaporeans. It is part of our social compact, anchored by the values we hold as a society. Ultimately, our success in realising that vision rests on the commuting choices that every Singaporean makes every day.”
“We also expect the COE supply to start increasing substantially in the coming months as more cars reach the 10-year mark. Notwithstanding this, MOT and LTA have studied if there is more that we can do to smoothen the supply of COEs in Categories A and B, while adhering, importantly, to the cap on the overall car population over the 10-year cycle. Consequently, as a one-off exercise, LTA will bring forward and redistribute the supply from five-year COEs which are due to expire in the next projected supply peak. As these five-year COEs cannot be extended and, therefore, have to be de-registered, LTA will be able to identify the exact number with certainty. This supply will be redistributed over several quarters starting from the next bidding exercise. This move will increase quota supply in the next bidding exercise by about 24% in Cat A and 15% in Cat B. LTA will release more details shortly. Even as we make this move, I would like to emphasise two points. First, this will help to lessen, but it will not eliminate, volatility in supply. There will still be a degree of supply fluctuation due to historical factors and also broader market conditions. Secondly, the long-term upward trend of COE prices due to rising incomes and zero vehicle population growth will not abate. Mr Deputy Speaker, Sir, as we seek to improve the efficiency of the COE system, with these measures that we have already taken over the years, it is important that we do not lose sight of our goal of becoming a car-lite society with accessible and inclusive transport for all Singaporeans. The COE system helps us to make our transport system more sustainable and our living environment better for all.”
“As the Member would be well aware, consumers make their purchasing decisions based on a myriad of factors. So, it is actually quite difficult to establish a causal relationship between such car shows and promotions with COE prices. So, what then is the cause of rising COE prices? Fundamentally, the COE prices reflect demand for a limited supply of COEs. This is further accentuated or exacerbated by the fact that we are now at a trough in the 10-year cycle of COE supply. Demand in all categories has remained resilient, especially as the economy recovers from post-COVID-19. Incomes have also been rising over the long term. As was observed in Prof Raymond Ong’s article in The Straits Times on 7 May 2023, the ratio of COE prices to median monthly household income has fallen from 11 to one during the previous COE price peak in 2013 to nine is to one today. So, in comparison to median income, the COE price is actually lower – although in absolute terms, the price has risen. And the reason is because household incomes have risen. As household incomes continue to rise in the coming years, coupled with our policy of zero-growth in the car population, we must expect the long-term trajectory for COE prices to be upwards. COE supply, in turn, is determined primarily by car de-registrations in preceding quarters, which have been relatively low of late. Over the past few months, MOT has made several moves to reduce volatility in quota supply. Instead of just the preceding quarter, we first adopted the average of the preceding two quarters in August last year and now use the moving average of de-registrations in the four preceding quarters to compute COE quotas for the next quarter. These moves have helped to mitigate quarter-on-quarter volatility.”
“Nevertheless, to improve allocative efficiency and deter any speculative bidding, we made further moves recently, to increase the bid deposit from $800 to $1,500 and to shorten the TCOE validity period from three months to one month. Let me now address some of the specific questions raised by various Members about car COE prices. Dr Lim Wee Kiak and Ms Joan Pereira asked about the impact of foreigners. I know this is a common query. The proportion of car COEs secured by foreigners remains low and has not changed significantly over the years. As I shared in January this year, from July 2020 to December 2022, on average, less than 3% of car COEs were allocated to foreigners. This number has remained stable. Another common query – there is no specific PQ on this, but I know it is on many Members' minds and elsewhere – is about multiple-car owning households. In November last year, I had shared with this House that as of 31 October 2022, of the 471,000 households that own cars – and that is about 36% of all households in Singapore – 12% own two cars, and less than 3% own three or more cars. The percentages remain about the same today. In fact, over the past decade, the proportion of multiple-car owning households has been steadily declining from about 19% of households in 2012 to less than 15% today. I had also, in a response to a PQ earlier in the year, I think by Mr Gerald Giam, pointed out, and it is worth noting and underscoring that these multiple-car owning households reside not just in private residential estates, but also in public housing, including some households that own three or more cars. Mr Saktiandi Supaat asked about the effect of car shows and promotions.”
“In other words, if I can put it the other way, Cat B OMVs in the median is about 75% higher compared to the median in Cat A. So, there is a clear differentiation although it may not be a complete dichotomisation of the market. We will continue to monitor and review the differentiating criteria between Categories A and B as the technology evolves. Ms Mariam Jafaar and Mr Saktiandi Supaat asked about Cat D COEs for motorcycles. A key feature of the motorcycle market is that dealers bid and hold the temporary COEs (TCOEs) in their own name before transferring it to a motorcycle buyer. This is a deliberate design feature because it provides convenience for buyers who can readily purchase a motorcycle. This is unlike the car market where bids are primarily in the name of the buyer. The prospective car buyers who need immediate access to a car and, in other words, a bid was not submitted in their name, can rely on Cat E COEs where there is some flexibility. As I explained at my Ministry’s Committee of Supply (COS) debate this year, about 450 Cat D TCOEs that were secured when prices were close to or above $13,000, were subsequently left to expire when COE prices fell. To Ms Mariam Jaafar’s query, the expired TCOEs were held by more than 50 dealers; and of course, those with a bigger market share contributed more, but there is a spread. The TCOE utilisation rates subsequently went back up, with the market correcting when it could not support the prevailing prices. This is what we mean by the market working as intended. In other words, it responds to price signals, upwards or downwards, and then there is a re-allocation.”
“It is the principal tool to manage ownership, as recognised in the 1996 White Paper on creating "A World Class Land Transport System". The VQS fundamentally works through supply and demand forces to efficiently allocate a scarce resource – COEs. The system also incorporates progressivity considerations by having different COE categories. In fact, when the COE system first started in 1990, there were four categories for cars. The number of categories was reduced to the current two in 1999 to address concerns over the relatively small quota supply and resultant volatility as well as limited choices of cars in some categories. Category E (Cat E), which is the Open category, was retained to allow for changing preferences and needs in vehicle types over time. Mr Liang Eng Hwa has asked if there are plans to review the COE system. On the whole, the system continues to serve our policy objective of efficiently allocating the limited supply of COEs. However, over the years, the Ministry of Transport (MOT) and LTA have made various refinements to the VQS scheme to ensure its relevance and efficacy without forsaking the core policy intent. The power rating criterion of 97 kilowatt (kW) was introduced in 2014 for the mass market Cat A, so that car COE categories are differentiated not just by engine capacity. Last year, as more electric car models became available in Singapore, we increased the power output threshold for Cat A COEs to 110 kilowatt hour (kWh) in order to accommodate mass market electric cars. On Mr Leong Mun Wai's question, between 2018 and April this year, the median Open Market Value, or OMV, for Cat A cars for each year was just over half of the median OMV for Cat B cars in the same year.”
“In fact, the period where we saw the fastest growth in PHC numbers was between 2015 and 2017, where they increased from 30,000 to almost 70,000. There was no commensurate upward pressure on COE prices in that period. Conversely, while COE prices have been rising over the past several quarters, demand from PHC companies has, in fact, been moderating. PHCs are a flexible way to augment the supply of P2P passenger transport, giving commuters more choices while serving a much wider segment of society than private cars. So, we should be careful when making calls about imposing caps, sometimes arbitrarily, on the PHC population. That said, the PHCs are a relatively new development. The P2P regulatory framework, for example, only commenced in 2017 and COVID-19 has caused some disruption in the market. We are studying this further to ascertain the effect of PHCs and whether there is, in fact, any impact on the market. On private car ownership, there are encouraging trends, especially amongst our youths. According to a Straits Times survey, the percentage of youths who aspire to own a car has fallen from around 65% in 2016 to around 50% in 2022. More than 75% of the respondents cited ready access to public transport as the reason why they did not aspire to own a car. Nevertheless, Mr Deputy Speaker, Sir, we do recognise that there is still a desire to own a car. For some, it is a necessity; for others, a useful option; yet others, an aspiration. Hence, it is quite understandable that Members have raised questions on COEs and prices. COEs are a key feature of our Vehicle Quota System (VQS). The VQS is essential for us to achieve our zero growth rate policy objective for cars and motorcycles.”
“More broadly, LTA and fellow Government agencies are integrating land transport and urban planning strategies to enhance the liveability of our city by bringing jobs closer to homes, developing lifestyle and amenity hubs near transport nodes and making public transport and active mobility convenient for the daily commute. Mr Deputy Speaker, Sir, given the land and carbon constraints I have highlighted, going "car-lite" is a key strategy that our agencies have adopted. With excellent public transport connectivity and active mobility infrastructure, less road and parking spaces are needed for general vehicular traffic. This is the "car-lite" future that we envisage as we plan and redevelop our precincts to prioritise pedestrians, cyclists and public transport users and lessen the need for and use of private cars. Even amongst cars, there is a spectrum of choices. Shared transport, which includes both taxis and PHCs, providing point-to-point (P2P) passenger transport services, complements mass public transport. They provide a useful alternative to car ownership for those who may need access to car-like services, whether chauffeured or self-driving. Today, the P2P sector accounts for around one million daily journeys, up from 800,000 in 2012. With zero growth in our car population, such shared transport, including car sharing services, allows for a more efficient and inclusive use of our roads, serving the needs of many more Singaporeans, compared to individually-owned private cars. The total PHC population has averaged around 70,000 since 2019, with some fluctuations due to COVID-19 and the subsequent reopening of Singapore's economy. As a proportion of the total car population, PHCs have remained at around 10% for the past four years.”
“This includes those made by cars, motorcycles, buses as well as private hire cars (PHCs). Compared to driving an internal combustion engine car, taking the train reduces our carbon footprint by 90%. That is why mass public transport is the core of our transport strategy and our rail network is the backbone of our transport system. Today, seven in 10 households are within a 10-minute walk of one of our 202 Mass Rapid Transit (MRT) and Light Rail Transit (LRT) stations. By the next decade, it will be eight in 10 households. To achieve this, we are building an additional 100 kilometres (km) of rail, almost a 40% increase from our current rail network. By 2035, we will have eight MRT lines and two LRT lines, interconnected and reaching all parts of the island. As we expand our public transport network, we are also ensuring that it is inclusive, affordable and sustainable. Today, all our MRT stations and bus interchanges, as well as 98% of our bus stops, are barrier-free and the work is ongoing. Public transport, as we have discussed many times in this House, is heavily subsidised. And our public transport fleet will fully comprise cleaner energy models by 2040. We are also improving first-mile-last-mile connectivity with extensive infrastructure for cyclists and pedestrians. By 2030, the island-wide cycling path network will more than double to about 1,300 km. Through the Land Transport Authority (LTA)'s "Friendly Streets" initiative, we will work with the local communities to create more pedestrian-friendly facilities within residential neighbourhoods.”
“Thank you, Mr Deputy Speaker. Several Members have filed Parliamentary Questions (PQs) on the Certificates of Entitlement (COEs). My Ministerial Statement will address Question Nos 1 to 7 for Oral Answer as well as Question No 25 for a Written Answer in today's Order Paper, as well as related questions that have been filed for subsequent Sittings. Sir, I would preface my reply to Members' questions with an overview of our land transport system. To be complete, any discussion on COEs must be situated within the broader context of our land transport system of which private cars are but one aspect. Sir, to meet the transport needs of Singaporeans and enhance our living environment, we must address two key constraints – land and carbon emissions. Roads occupy 12% of our land, compared to around 13% for industry and 15% for housing. Our land transport system accounts for about 15% of Singapore's total domestic carbon emissions. We must make it much more sustainable as part of the national effort to achieve net-zero emissions by 2050. Pre-COVID-19, about 14 million journeys were made every day, across four modes – public transport, point-to-point transport, private vehicles and active mobility. That is the scale of the challenge. The Government's aim is to build an accessible, inclusive and sustainable land transport system that meets the needs of all Singaporeans. The best way to achieve this is through mass public transport. It allows the greatest number of people to get to their destinations with the least land take and carbon emissions. Our rail network serves around three million journeys a day and takes up less than 1% of our total surface area. In contrast, roads take up 12% of our land, for seven million journeys.”
“Public transport is heavily subsidised in Singapore and this has helped to keep fares affordable. The Adult Monthly Travel Pass further lowers the cost for heavy users of public transport. Any reduction in the pass price will reduce revenues and need to be offset by fare increases for other commuter segments and/or other measures. The pricing of the Adult Monthly Travel Pass is regularly reviewed by the Public Transport Council as part of its annual Fare Review Exercises, balancing the affordability and financial sustainability of the public transport system.”
“The Land Transport Authority (LTA) assesses vehicle safety using internationally recognised vehicle safety standards. Currently, there are no safety standards involving the colour of the vehicle, as it is not common international practice to assess vehicle safety by colour. As such, there are no strong grounds for LTA to introduce measures to reduce the number of dark-coloured vehicles.”
“The purpose of daytime running lights or daytime running lamps (DRLs) is to make the vehicle more easily visible during daytime driving. This is useful in countries that experience prolonged low visibility conditions in the day, such as during winter and foggy conditions. We do not experience such conditions often, so there is no strong need to mandate DRLs in Singapore. Nonetheless, there are quite a few car models that have DRLs installed. In dimly lit environments, such as multi-storey carparks and in other low visibility conditions such as heavy rain, motorists should ensure that their headlamps are switched on so that they are able to see the road clearly and can be seen by other road users.”
“The Ministry of Transport and the Civil Aviation Authority of Singapore (CAAS) work closely with the Changi Airport Group (CAG) and air cargo stakeholders to support and grow the Singapore air cargo hub. Following the COVID-19 pandemic, we are reviewing the demand for air cargo over the next decade to determine the upgrades needed at the Changi Airfreight Centre (CAC). This review will consider various macroeconomic factors, such as global trade and air cargo demand, as well as shifts in global supply chains. CAAS and CAG are also working with the air freight terminal operators, such as Singapore Airport Terminal Services, to employ greater automation and digitalisation to increase productivity and capacity at the CAC. Works have also resumed on the planning of the Changi East Industrial Zone, which will be ready in the mid-2030s. This is expected to double Singapore's air cargo handling capacity, from about three million tonnes per annum today, to up to 5.4 million tonnes per annum.”
“We will drive the next bound of growth across our air, sea and land transport sectors. Together, we will continue to build a more resilient, sustainable and inclusive transport system for all Singaporeans.”
“We have established clear regulatory milestones: to disallow registration of diesel cars and taxis from 2025, and Internal Combustion Engine cars and taxis from 2030. We will review financial incentives to encourage the adoption of electric cars, and monitor related developments in other vehicle segments, such as motorcycles and goods vehicles. We have brought forward the island-wide deployment of Electric Vehicle (EV) chargers, and one in three public housing carparks will have EV charging points by the end of this year, with full coverage by 2025. We remain on track to deploy 60,000 charging points by 2030. A central theme that emerged from our Forward Singapore engagements was for our transport system to be more inclusive, especially for seniors and persons with disabilities. To make our streets more conducive for pedestrians, we will expand pedestrian-friendly initiatives, such as retrofitting lifts at pedestrian overhead bridges, providing covered linkways, and traffic-calming schemes such as Silver Zones and School Zones. We will work with local stakeholders to pilot Friendly Streets in five neighbourhoods, in areas near key amenities with high pedestrian flow. Features, such as wider footpaths, more greenery, barrier-free crossings and road markings, will inform road users that they are in a Friendly Streets zone. Where necessary, we will also implement more direct crossings for pedestrians and reduce waiting times for pedestrians at traffic crossings. Friendly Streets will complement the expansion of our network of cycling paths to about 1,300 kilometres by 2030. Every town will have cycling paths by 2024; these intra-town paths will aid first and last mile connectivity to the major public transport nodes and key amenities.”
“We also work with partners to develop sustainable international aviation and maritime ecosystems, such as "green lanes" for flights powered by sustainable aviation fuels as well as green and digital shipping corridors. Public transport remains at the heart of our land transport system. Many participants in our Forward Singapore engagements recognised and appreciated the improvements to our public transport system over the last decade, which have made it more accessible, reliable, and inclusive. The Government will significantly expand our land transport network over the next decade. We are on course to expand our rail network by a further 100 kilometres; when completed, eight in ten homes will be within a ten-minute walk of an MRT station. Increasing the density of our rail network will make journeys more convenient for commuters, enhance the resilience of the overall system, and contribute significantly towards our net-zero emissions target by encouraging more people to opt for public transport over private vehicles. We must also ensure fiscal sustainability, as we invest in building a high-quality, world-class public transport system. Financing public transport is a shared responsibility across the Government, operators, and commuters. We are heartened that participants in our Forward Singapore engagements acknowledged the need for this, while emphasising the importance of affordable public transport fares, especially for the vulnerable and lower-income groups. The Public Transport Council is reviewing the fare adjustment formula and mechanism, to achieve equitable cost distribution across all stakeholders. MOT will further encourage the adoption of cleaner-energy vehicles through regulation, incentives, and infrastructure.”
“Tuas Port opened as planned despite the pandemic and is on track to be completed by the 2040s, with an annual handling capacity of 65 million twenty-foot equivalent units. Beyond upgrading our infrastructure, MOT will strengthen capabilities in the aviation and maritime sectors through digitalisation and other innovations. To build up our aviation and maritime workforce, we are collaborating with industry partners to reach out to more students, develop work-study programmes, and support job conversions and skills upgrading for mid-career workers. We will also invest in our people by redesigning jobs and deepening skillsets. Sustainability is central to the next phase of growth for our aviation and maritime hubs. Both sectors will contribute towards the national target to achieve net-zero carbon emissions by 2050. MOT will aim for all airside vehicles at Changi Airport to run on cleaner energy by 2040, and will require all new airside light vehicles, forklifts, and tractors to be electric from 2025 as part of the transition. We will also require all new harbour craft operating in our port waters to be fully electric, capable of using B100 biofuels or compatible with net-zero fuels such as hydrogen from 2030. MOT will also work with the aviation and maritime ecosystems to put the regulatory frameworks, pilots, incentives, and infrastructure in place to facilitate a smooth transition. On the global stage, MOT actively supports the efforts of the International Civil Aviation Organization and the International Maritime Organization to reduce emissions from international transport.”
“Our air, sea and land transport sectors have weathered the worst of the pandemic and emerged stronger, due to the close cooperation between the Government, workers, unions, and industry partners. In the next phase, the Ministry of Transport (MOT) will focus on gearing up for growth. We will enhance the competitiveness of our global aviation and maritime hubs by strengthening capabilities and sustainability efforts, and creating opportunities for our enterprises and people. We will build a sustainable, resilient and inclusive land transport system as part of a liveable city for Singaporeans. Changi Airport’s passenger traffic has recovered to about 80% of pre-COVID levels; passenger traffic is expected to recover fully by 2024. As our anticipated activities return, the Government will work with aviation stakeholders to build up Changi Airport’s operational capacity ahead of demand, and readiness to deal with new threats. Singapore’s maritime hub stayed resilient and performed well through the pandemic, maintaining our position as the world’s busiest transhipment hub. We must build on our strengths to respond adroitly to changes in the global economic landscape and disruptions to supply chains. The Government has planned major expansions in our aviation and maritime infrastructure over the next two decades. We have restarted the Changi Airport Terminal 5 (T5) project, which is targeted to be operational in the mid-2030s. MOT is working with the Civil Aviation Authority of Singapore and Changi Airport Group to update the design of T5 to be pandemic-resilient, with greater modularity for flexibility in scaling operations. The new terminal will also be designed for sustainability with energy-efficient features.”
“Pedestrian crossings with CoopeRative and UnIfied Smart Traffic SystEm are no different from other typical crossings. Cyclists and pedestrians can continue to use them the same way by activating the green man light with the push buttons installed on traffic light poles. Cyclists are not required to dismount at pedestrian crossings but are required to slow down, stop and look out for oncoming traffic before crossing.”
“As of February 2023, the public sector has deployed 89 electric vehicles. Under the GreenGov.SG initiative, all new cars procured by the public sector from this year onwards will be electric, or alternatives with zero tailpipe emissions. Other vehicle types procured from this year onwards would also run on cleaner energy, subject to the availability of models that meet the agencies' operational requirements.”
“Mr Speaker, on the Member's first question, the factsheet entitled "Enhancing Singapore's Connectivity; Securing our Future" which was released by my Ministry on 21 August 2022, includes details on how we are designing Terminal 5 (T5) to be a green and sustainable terminal building. Changi Airport Group's 2022 Annual Sustainability Report addresses the second question. The Report describes measures that have been taken including the enhancement of the drainage network at Changi Airport, installation of tidal gates and raising the platform level at Changi East to 5.5 metres above mean sea level. I have also given a Written reply to Dr Tan Wu Meng's Parliamentary Question on 13 September 2022 on the mitigating measures that have been taken to protect Changi Airport against the effect of higher temperatures. [Please refer to "Effect of Increased Temperatures from Climate Change on Changi Airport Operations", Official Report, 13 September 2022, Vol 95, Issue 68, Written Answers to Questions section.] We will continue to monitor technological developments and review and enhance the measures for T5 to be green, sustainable and resilient to climate change.”
“LTA is also actively involved in the research and development of new technologies, for example, using plastic-bituminous asphalt mixes, for roads for better performance in urban cooling.”