What Singaporeans get WRONG about the COE debate (FIXED!!) | #DailyKetchup EP442

Key Concepts:

• Certificate of Entitlement (COE): A cash bid required to own a car in Singapore, controlling vehicle numbers and congestion.
• Open Market Value (OMV): The actual price of the car from the manufacturer.
• Additional Registration Fee (ARF): A progressive tax layered onto the car's OMV.
• Public Transport vs. Car Ownership: Debate on prioritizing affordable public transport versus car ownership for those in need.
• Meritocracy: A system where success is based on individual talent or effort.
• Mobility Credit: An annual credit for residents to offset COE costs or pay for public transport/car sharing.
• ERP 2.0/3.0: Future road tax system based on tracking vehicle usage and carbon emissions.

1. COE System and its Criticisms:

• The COE system in Singapore requires a cash bid to own a car, with prices reaching $100,000 for Cat A and $119,000 for Cat B as of mid-July. This is in addition to other layered duties.
• Besides COE, car buyers face GST, customs duty (20% if imported), and the Additional Registration Fee (ARF), which is a progressive tax based on the car's Open Market Value (OMV) and age.
• Example: A car with a $40,000 OMV can end up costing $200,000-$300,000 after all taxes and COE are added.
• WPMP Jamus Lim's criticism: The current COE system doesn't adequately address the needs of those with genuine need for a car, defaulting to an auction mechanism that favors those with more money.
• Senior Minister Leong's response: The government focuses on providing affordable and efficient transport options for everyone and offers grants to families with young children that can be used for COE.

2. Perspectives on the COE System:

• Some argue that the COE system is necessary to control the number of cars and manage congestion.
• Others believe there should be considerations for segments of society that need a car (e.g., families with disabled members or elderly parents requiring frequent ICU visits) and cannot rely on public transport.
• The rise of private hire/ride-hailing services buying up cars has also impacted COE prices, raising the question of whether this benefits society by serving more people per car.
• One speaker expressed the ideal situation as one where the rich can take public transport, and the poor don't need a car, highlighting the quality of Singapore's public transport but acknowledging its limitations for certain groups (e.g., wheelchair users).

3. Potential Solutions and Considerations:

• Subsidies for Service Vehicles: Providing subsidies or priority access to COE for companies offering car services to those with mobility issues.
• Improving Public Transport: Focusing on improving public transport (more trains, buses with dedicated lanes) to reduce reliance on cars.
• Re-evaluating Car Pooling Regulations: Addressing regulations that have stifled car pooling, which used to be a cheaper and more convenient transport option.
• Transitioning to Smaller Vehicles: Suggestion to transition to smaller, single-seater or dual-seater electric cars to reduce congestion. If cars were half the size, the congestions will be half the congestion.
• Incentivizing Larger Families: Linking car ownership to family size to address the country's need for more children.

4. International Examples and Alternative Systems:

• Beijing, China: Uses a lottery system for car allocation and restricts the usage of certain plates on weekdays.
• Jakarta, Indonesia (Ganjil Genap) & Mexico City, Mexico (Hoy No Circula): Implement variations of odd/even number plate restrictions on certain days.
• Denmark: Employs a registration tax similar to Singapore.
• Tokyo, Japan: Requires proof of a legal parking spot before car ownership is permitted in the city center.

5. Chat GPT's AI Solution:

• Three-Bucket COE Distribution:
  • 40% reserved for middle-income earners via a lottery system with need-based criteria.
  • 50% auctioned like the current system.
  • 10% allocated for EV or hybrid car buyers.
• Mobility Credit: Every resident receives an annual mobility credit to offset COE costs or pay for public transport/car sharing, with more credit given to lower-income individuals. This credit could potentially be sold in a secondary market.
• Carbon-Based Road Tax (ERP 2.0/3.0): Future road tax system that tracks vehicle usage and charges more for higher-emission vehicles.

6. Concerns and Counterarguments:

• Black Market Potential: Concerns that subsidized COE allocations for those in need could be exploited through a black market, where individuals sell their subsidized COE for profit.
• Meritocracy vs. Needs-Based Allocation: The discussion touches on the tension between a meritocratic system and the need to provide for those who genuinely require a car due to disability or other circumstances.
• Individualism vs. Collectivism: The effectiveness of different transport policies depends on whether a society is more individualistic (like the US or Singapore) or collectivist (like Mexico).

7. Notable Quotes:

• "The ideal situation is the rich can take transport, not when the poor need a car." - Speaker, expressing a vision for equitable transport access.
• "If the cars were half the size, the congestions will be half the congestion." - Speaker, advocating for smaller vehicles to alleviate traffic.

8. Synthesis/Conclusion:

The discussion explores the complexities of Singapore's COE system, its impact on different segments of society, and potential solutions to address its shortcomings. While the COE system aims to manage congestion, it faces criticism for disproportionately affecting those with genuine needs for a car. The conversation covers a range of alternative approaches, from improving public transport and re-evaluating car pooling regulations to exploring smaller vehicle options and implementing AI-driven solutions. The debate highlights the need to balance market forces with social equity and consider the specific needs of different communities within Singapore.