COE & "Sin Tax"

The Certificate of Entitlement (COE) in Singapore has been under debate since arriving here. and certainly a new concept for me that you have to buy a COE and then pay for the vehicle which does make ownership pretty expensive.

The COE rationale makes sense in a small country where the amount of vehicles on the road needs to be controlled or limited but the scheme itself does not. Currently COE prices is the highest it has been for the past 10 years and actually has an impact far greater than just control with the result that cars have become unaffordable for the average citizen.

So here is my argument. It's like sin taxes. The people who end up being effected are not what I call the haves but rather the have not's or ordinary citizens. The haves can afford the higher prices and it actually works in their favour. The less ordinary people can afford it the more they have at their disposal. Not a good model in a open bidding system where prices are driven by supply and demand.

I am not suggesting you get rid of the COE system but change it to a fixed price model where prices are kept the same for quarters or even half year periods and then reviewed based on statistics. What really needs to be implemented far more aggressively is the existing cost of ERP and parking to have an impact on vehicle utilisation.

As an example, ERP and parking fees in the city and during the week should be far higher which will change the mindset and ensure more people use the excellent public transport. This will ensure that COE's remain "affordable" allowing the ordinary citizen to at least own a vehicle and use it for the family on weekends when traffic is not such an issue.

I know, the haves will sill be able to pay the increased ERP and parking fees but at least the rest of us will have a car and they might end up not having a car for each of their spoilt "brats".

Does sound a little bit bitchy but that's the truth of the matter.