Steep COE prices: Balloting fairer and cheaper

IN THE light of the unhappiness over soaring certificate of entitlement (COE) prices of late, I question the wisdom behind the system of car ownership in Singapore.

The stated purpose of COEs is to limit car ownership and, hence, ease traffic congestion. The outcome has struggled to match the goal.

The high COE prices indicate that the system influences who buys a car - those who can afford it - more than it limits car numbers.

This is obvious from the fact that the Government has to intervene by reducing the annual vehicle growth rate to 0.5 per cent come August, from 1.5 per cent currently and 3 per cent before 2009. ('COE prices up because economy is doing well, says Lui'; Monday)

The number of cars sold can at most match the number of COEs available, regardless of the COE price. This means it is unnecessary to have a price beyond an administrative fee required to run the system, which is meant to control car ownership and not generate revenue.

If important aspects like housing and education can be subject to balloting, surely a system can be designed to ballot for cars.

In hindsight, the unintended knock-on effect of high COE prices outweighs its limited success so far.

For the convenience of owning a car, the average family is saddled with a debt of tens of thousands of dollars - money that can improve its quality of life in many other ways.

Most people pay for their cars in instalments, reducing personal savings and spending power over several years.

If they were to divert a part of that money towards retail, education, health care and such, that would surely do Singapore a lot more good.

Chan Tau Chou

(Taken on straitstimes.com, published 19 Apr 2012)

My comments: 

I agree. I think it makes sense rather than people spending unnecessary money just to buy a piece of paper which depreciates. There are many ways to control vehicle population rather than just making people Pay and Pay (sounds familiar...).Deterrence should also be implemented to people who have access to more than one car (although I believe identifying them will not be easy)

Also found and extracted this below passage from www.tremeritus.com which the writer has, I believe, very accurately described the current situation: 

"The main problem with the COE system it allocates a scarce resource based on a person’s ability to pay rather than his needs. A middle income parent who has to ferry his children to school and take his parents to hospital can be out-bidded by a multi-millionaires’s son who uses the car for dates and clubbing. The disadvantage of such a system is it causes an ever widening gap of unfulfilled demand among those with the greatest need for a car. In Singapore, where the income gap is so wide, over time more and more COEs will just go the rich rather than people who need it."