The COE system has broken down

Note: There are many comments coming in, but here’s my rule – if you can’t leave your real name and email address, I will delete the comment. I’m tired of people hiding behind pseudonyms and not having the courage to speak up as their real selves. Using your FB account (that shows your real name) to comment will work too.

Since the 2011 General Elections, the Government has been actively dealing with the various societal and infrastructural issues facing Singaporeans. Be it the fertility rate, housing prices or public transport, there have been much discussion and policy changes.

But the Government remains strangely stubborn on the issue of the Certificate of Entitlement (COE) for vehicles. Despite multiple calls from the public to revamp the nearly 23-year-old system, the consistent response from the Ministry of Transport is that there will be no changes apart from tweaking vehicle quotas.

It is puzzling to most citizens why this sacred cow remains resilient to policy change. It is neither fool-proof nor has it benefited the wider society in the past two decades.

Poor management of the system formula and vehicle quotas led to an explosion in the vehicle population in the last decade. The current state of COE prices have just about decimated the market for affordable family sedans, angering the heartlander population as it seems only the wealthy deserve to have cars. The roads today are still susceptible to massive jams (even during off peak hours) despite the COE and ERP systems in place, exacerbated by a strained public transport network.

It is clear that the COE system needs an overhaul to serve the people, and not be beholden to an obsolete concept from a different era.

The Government needs to abolish old assumptions and policymakers need to realize this has become a hot political issue that has reached a boiling point within the electorate.

Why not consider the following principles in designing a vehicle quota system?

1) Distribution of certificates must be fair and equitable.

To control a vehicle population merely requires a restriction in the number of certificates, not an infinitely increasing price. No matter the price, there is always someone who can afford it, but is that a fair system given the increasing wealth divide in Singapore?

Balloting has been suggested frequently by citizens to level the playing field between the rich and poor, yet this call is ignored by the Government each time.

For those who fear a black market situation, that can be easily dealt with through strict ownership laws and enforcement. Who would dare to trade in balloted COEs if he risks a $200,000 fine or six-month jail term? Singapore’s a “fine” city, right?

2) Car ownership should be driven by needs, not wants.

Balloting can also be prioritized for families who really require private transport.

I have observed how the disabled and elderly face difficulty in getting around with their family members, especially on rainy days when one can never get a taxi. We desire to be an inclusive society, but the ones who are truly dependent on private transport are often shut out. The roads have been prioritized for those who can drive big and flashy continental cars instead.

Also, has the Government ever considered improving the fertility rate simply by giving priority of car ownership to parents with three or more children? If people want to aspire to the 5Cs, especially that of a car, let them achieve the 6th C of having more children first.

Any rational Singaporean will tell you that we can only have a limited number of cars on this island and that we do need a system of control.

However, the COE system’s massive flaws have been apparent for decades, and not fixing them will only lead to greater societal discord and political fallout in the near future.

  • Alvin

    Thanks, Ian. Incisive as always.

  • L. Y.

    Unless you turn the economy into a command economy i.e. communist system, I fail to see how you can possibly design a system that can do both adequately.

  • Mum of 3

    Totally agree with you on all your points!
    Especially that of families with the elderly and many young kids not being able to afford a car. Ironically, *because* they have opted to look after their elderly and have kids, they face reduced means of car ownership. :/

  • Single with no kids

    Distribution via market force is not perfect in the sense that you are allowing people with resources to have access to a commodity. In this case, the use of private transportation (commodity) for a public function, ie commuting. When the market force breaks down, do we have a viable alternative to meet our commuting needs? Unfortunately, the recent spat of transport overcrowding means that this alternative is fueling the unhappiness for those without the access t that commodity (private transportation) due to lack of resources. This is the bane of market force, ie capitalism.

    Likewise, do we really want a “communism” system where things are allocated based on rules? Very quickly, these rules will be obsoleted and feeds into bureaucratic procedure. However, there is some merits for adopting a more “communism” approach when market force breaks down. In this case, it makes sense to control the car ownership beyond the current system where ownership is predominately based on whether you can afford it economically. That’s why you see some households with 2 or more cars because they can afford it and perceived they “need” it.

    “Need” is an effy idea that no one can put a finger on and define it universally. Where do you draw the line between “need” and “want”? My “need” may be just your “want”.

    However, it is refreshing idea to link the issue of COE to national issue such as encouraging birth. This, however, should not be the only qualifying criteria and it will be “exclusive” to couples with kids.

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  • http://www.iantan.org/ Ian Tan

    IMO, there are some key needs that cannot be ambiguous
    – disabled person in family
    – special needs child
    – essential goods delivery service
    – taxi service
    etc etc
    Find me any person who argues that a disabled person should get on our crowded trains and I’ll give him a piece of my mind.

  • http://www.iantan.org/ Ian Tan

    That’s why you and me are not policymakers. It’s not our job to figure it out totally, but it’s our responsibility to pressure those who do.

  • G

    How about abolishing COE altogether? Charge for car usage, not car ownership. If I want to buy a Ferrari to park in front of my house, I shouldn’t have to pay a premium for that privilege. But driving it around? Yes, charge me by all means. Implement a system which charges the minute the wheels start turning, and raise road taxes so that the price becomes prohibitive. And, IMO, even ERP rates today are FAR TOO LOW. They should be $15 and above AT LEAST. That, in my mind, will make people think twice about driving. And at $15, I will pay it if I can afford it, and the roads better be clear when I pass through the gantry.

  • Raymond

    Delivery vehicles are commercial vehicles and they have a separate category and quota. Same for taxis. Disabled people should make use of special transportation services (e.g. Handicaps Welfare Association) — it makes more sense to pool these special resources rather than have each family with a disabled member own one car. It also prevents abuse of the system — that private car may be rarely used for the disabled family member.

  • Raymond

    “Also, has the Government ever considered improving the fertility rate simply by giving priority of car ownership to parents with three or more children?”

    This might actually work… “Free COE for every 4th kid”, or something like that. But I doubt the PAP government, with the half-hearted measures to boost TFR, is creative enough to implement such radical ideas…

  • Precious Tots

    Couples who want to procreate is entirely their SELFISH business. Bonus or no bonus, these trigger happy couples will produce their little bunnies. Hence, stupid of the govt to waste taxpayers monies on them and to suggest we offer free COE to encourage more births is to ask for war against spineless creatures.

    I think we have enough of mercenaries ideas. Singaporeans are a lousy breed and if they give birth less, the world will be a better place!

  • http://www.iantan.org/ Ian Tan

    Raymond, yes, those services are in existence, but let me share a few stories:

    1. COE for goods vehicles is currently about $54K+. My friend, an entrepreneur who set up a hawker stall selling boutique beer, can’t afford a goods vehicle and he has to transport his cartons of beer via public transport. Companies who can afford the goods vehicle COE pass down costs to the customer, raising the cost of living and inflation as a result.

    2. I have a neighbour who has a very disabled leg, and needs crutches to go around slowly. However, he is still able to drive to work and support his family. It’s not tenable to walk to the MRT as it is 1km away.

    As the population ages, and more people become disabled but are still able to work, can the special transportation services cope? The latter have to pay COE too right?

    The biggest problem with the COE system, is that it’s been around for so many years it’s locked all of us into thinking around the same parameters, and killed our ability to recognize that fundamentally the concept is divisive, accelerates inflation, hurts businesses, stifles entrepreneurship, hits the needy and creates a massive class divide.

  • Raymond

    I don’t find those stories compelling enough that we should award them special entitlement for owning vehicles. For every such story, there are probably a thousand other similar ones. In the context of vehicle ownership, a needs-based resource allocation model would be a step backwards for Singapore.

  • http://www.iantan.org/ Ian Tan

    I’m not concerned with what works on paper, or what’s compelling enough. As an ex-journo, I’m concerned for what works for the people who have no voice for themselves. Touch wood, I do hope you never find yourself in a situation where you “need” a car but cannot afford it. This can happen to any of us.

  • http://www.iantan.org/ Ian Tan

    G, the issue is vehicle population. The number of vehicles must be limited. Usage doesn’t address ownership.

  • http://www.iantan.org/ Ian Tan

    Wait, are you Singaporean?

  • Raymond

    I’m just saying, if I am the one making the judgement calls to award COEs based on needs (like some imperial district official), I wouldn’t award it to those two examples you cited.

    Definitely not the disabled. The disabled are by definition folks who need help traveling about. That’s why there are special transportation services set up for them. If *I am wheel-chair bound, I too will use them. It’s safer and more cost effective for everyone.

    Also definitely not your beer seller friend. Why should he get a free ride over any other car owner, especially when he’s using the same roads to make money for himself? Shouldn’t he, in fact, pay more?

  • http://www.facebook.com/profile.php?id=100002342445923 Bluex Spore

    G’s point is that car usage, not ownership, causes congestion. You can have a bigger vehicle population but yet fewer cars on the road, if people drive their cars less often.

  • http://www.facebook.com/profile.php?id=100002342445923 Bluex Spore

    Raymond, there are plenty of disabled folks who drive in other countries. If you ask them, they would certainly prefer the freedom of driving rather than rely on special services.

  • http://www.facebook.com/profile.php?id=100002342445923 Bluex Spore

    I find it curious how prioritising resources for the needy is straight away equated as communism. If so, most countries must be communist since government tends to spend more on needy folks.

  • http://www.iantan.org/ Ian Tan

    Look where that led us! The problem now is that we have too many cars and the ERP/parking fees do nothing to restrict usage. I drove in NYC recently, and despite ridiculously high parking fees and toll fees, I spent a long time stuck in jams in the city. There were simply too many cars.

  • http://www.facebook.com/profile.php?id=100002342445923 Bluex Spore

    Well, that’s because the toll fees and parking are not expensive enough. G did say that EP needs to be way higher than $15 to contol congestion.

  • Precious Tot

    Very much so. My disdain for this constipated, deluded and self absorbed specie is self evidence. They are the product of a leadership equally obsessed with self importance. The result is a coldness and rudeness only those who enjoy frozen porridge will appreciate.

    That said, no selfish justification should be entertained to bring down the cost of a non necessity( car is not a life or death item). If someone desperately wants a car but can’t afford A NEW car or TOY, please turn to a much cheaper and more viable option – used cars.

    And as for encouraging more babies, please stop using taxpayers money to serve couples selfish reasons for having kids.

    Having children should be a natural decision conceived in a natural environment. When the state has to intervene by “baiting” couples to procreate, it is a sign that the environment is no longer natural. Why then bring kids into an “unnatural environment”. And hence, let the breed decline hopefully for the environment to heal itself or the policies makers to repent.

  • Precious Tots

    Very much so. My disdain for this constipated, deluded and self absorbed specie is self evidence. They are the product of a leadership equally obsessed with self importance. The result is a coldness and rudeness only those who enjoy frozen porridge will appreciate.

    That said, no selfish justification should be entertained to bring down the cost of a non necessity( car is not a life or death item). If someone desperately wants a car but can’t afford A NEW car or TOY, please turn to a much cheaper and more viable option – used cars.

    And as for encouraging more babies, please stop using taxpayers money to serve couples selfish reasons for having kids.

    Having children should be a natural decision conceived in a natural environment. When the state has to intervene by “baiting” couples to procreate, it is a sign that the environment is no longer natural. Why then bring kids into an “unnatural environment”. And hence, let the breed decline hopefully for the environment to heal itself or the policies makers to repent.

  • http://www.iantan.org/ Ian Tan

    Well, I do like my friends, my family and my colleagues. Singaporeans are not all the same, and I do know many non-lousy ones.

  • http://www.iantan.org/ Ian Tan

    Err, pls read my previous comment on NYC.

  • Precious Tots

    Sorry for the double post. There are exceptions. But generally, a lousy breed

  • http://www.iantan.org/ Ian Tan

    Note to all commentators: There are many comments coming in, but here’s my rule – if you can’t leave your real name and email address, I will delete the comment. I’m tired of people hiding behind pseudonyms and not having the courage to speak up as their real selves. Using your FB account to comment will work too.

  • Raymond

    And they may too, if they so prefer, in Singapore. There’s no law against it. And there sure are plenty of handicap parking available for them everywhere.

  • Raymond

    As a community, yes. We do have services, programs and institutions for various special needs. But at the individual, personal property level, no. We don’t distribute wealth and resources that way. The central theme of Karl Marx’s communism thesis is a distribution of resources based on needs.

  • Raymond

    In a way, I agree with you. Our planet, not just Singapore, is over-populated. Natural resources like fossil fuel are fast depleting. Industries in over-drive and warming (killing?) the planet. Yet here we are, encouraging our people to breed. Ironic, isn’t it?

    Singapore may some day be known as the nation of smart people who voluntarily marched towards her own extinction.

  • http://www.iantan.org/ Ian Tan

    We can disagree till the cows come home, but like I said, don’t end up an anecdote. Find a solution that you think will benefit this country and tell others about it.

  • Johnny Tan

    COE is a scam, buying cars in singapore better off call it renting car with a tenor of 10yrs. I don’t understand why can’t we own the COE when we bought it but require a renewal after 10yrs. Think the people are money shaking trees….every 10yrs shake 1 time.

  • http://www.facebook.com/sinchi.yip.9 Sin Chi Yip

    Well, i actually wrote to chan chun sing few months back to suggest, amongst other things, that give singaporeans what they all want by pegging their wants to the country’s needs. For example, those with 2 kids can a 20% rebate on coe, 3 kids get 40% rebate etc. more kids get higher queue priority in bto queue. Priority q in primary school admission.

    There are so many creative ways to boost birth rate. And most of them will not cost the country a single cent. The whole reason why they are not going down this path is that fundamentally, bringing in new citizens will boost their performance at the polls. Period.

    Anyway, chan chun sing gave me the standard “will look into it” answer andtold me he would get back to me. Of course he never did. That certainly pisses me off, because if you dont intend to get back, dont say it. That just shows how much they really care.