Wednesday, April 07, 2010

COE shoots up further....

DPM Teo Chee Hean recently called the COE an innovation.

"The public housing programme, the Central Provident Fund system as well as the certificate of entitlement scheme for vehicle ownership are all examples of policy innovations,” - DPM Teo

I'm not too sure how many more policy innovations from the PAP govt that Singaporeans can survive but the COE is really something we can do without. No city in the world has fallen apart without the COE. The COE has resulted in Singapore having the highest cost of car ownship and usage in the world. The COE allocates an important resource based purely on a person's ability to pay - the rich man's teenage son can afford to own a car for dating while a middleclass father who needs to drive his children to school and parents to hospital may not be able to do so. It maximises the pain among those with greatest need and limited means ...and it maximises the govt revenue.

There is a technician I know with a leg problem. He cannot stand for more than 15 minutes without feeling pain in his legs. Every day he struggles to work in the sardine packed buses and the MRT. Because of the COE system, he can never afford a car.

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Relentless rise in COE premiums
Wed, Apr 07, 2010 AsiaOne
By Tony Ng


FRENZIED activity characterised the first Certificate of Entitlement (COE) open bidding for April, also the first bidding where the much-talked about supply cut takes effect.
Premiums rose by as much as 26 per cent for all COE categories.
A piece of Cat A COE, used for small cars of 1,600cc and below, now cost $34,001, up by 19.8 per cent. Similarly a Cat B COE would now cost $45,501, a 26 per cent rise from its last price.
Premium for the open category, used largely for cars, closed shy of the $50,000 mark, at $49,000.

Premiums for commercial vehicles and motorcycles weren't let off either. Both went up to finish at $36,551 and $1,221 respectively.

25 comments:

Rialce said...

I think in the current situation, the COE wouldn't have much effect on ordinary singaporeans. Ha~ hai~

Anonymous said...

Agree with Railce...most of us give up the thought of owning a car in our lifetime already. ...long ago already give up. So what if COE hit 100K...

i have a open Cat COE said...

All the more your technician shouldnt drive, what if his leg problem acts up and cause an execution on the expressways.

He should just stick to public transport. getting packed like sardines will harden the soul and make better citizens out of Singaporeans. It is character building.

Anonymous said...

Nothing surprising--in Singapore everything goes up except salary. Only the rich are unaffected.

Anonymous said...

in pap's world, money rules. no money, no talk. got money, even kangaroos hop.

for peasants with less than $1,000,000 in NET assets (owner-occupied HDB flats don't count), don't vote for pap.

vote oppo. show 'em our color.

Anonymous said...

10 years ago when I was working as a marketing professional and had to ferry some Japanese to a restaurant I committed a face-losing act- I got lost.

The high cost of car ownership and the associated costs of running it made me very timid to drive around Singapore! I call myself a collateral damage.

Good grief now we have GPS.

Anonymous said...

Aiya, what is $45,000 COE, even $100,000 also have before what, in the 90s.

Nothing happened what, right?

If can't afford just be like me ordinary Joe with BMW (bus MRT walk) lah. What so difficult?

Anonymous said...

A fundamental weakness of the typical Singaporean is the inability to anticipate / extrapolate.

e.g. "I take public transport, so high COEs don't affect me".

1. X take public transport
2. COE prices go up
3. X don't buy car
4. So X's not affected
--this is normally where it stops--
5. The things X buy require transport
6. High COE prices = higher transport cost
7. The things X buy becomes more expensive

Get the picture?

Anonymous said...

Good everything up up and away. But not my salary.

Anonymous said...

"Agree with Railce...most of us give up the tthought of owning a car in our lifetime already. ...long ago already give up. So what if COE hit 100K..."




Even if you do not own a car, high COE prices will still impact you. High COE prices translate to higher business costs e.g. in commercial vehicles, and naturally businesses will sooner or later pass on the costs to consumers. This is an example of how the cost of living creep up.

Anonymous said...

If I were to be Prime Minister,

COE would cost differently to different people.

If you want to own a car, sure. But it will cost you 50% of your total assets. Do you still want to pay for it?

So for poor people, that might be a bonus, but it might still be a faraway bonus, as they might not afford it if they need the money for food and rent.

For the rich, if they really need the car for slimming centre trips or for grocery shopping, sure, but its 50% from their assets.

What do you all think of this policy? Fair? Afterall the government would know how much one's assets are worth right?

kilroy said...

I am not too exercised about high COE prices. Its not like public housing where there is a social need and where prices must be affordable and if necessary, controlled especially for citizens. True, an efficient and cheap public transport must be available. Except for overcrowding and infrequency of SMRT services at peak times, latter is passable.

For COEs, prices reflect supply/demand but because bulk of bidding is done by motor car dealers they can be influenced by the major car distributors. The ones representing luxury margues have fatter profit margins and can bid more aggressively. Rising COE prices will snuff out the entrant marginal car owners which is acceptable. But tweaking to limit bidding to actual buyers, higher deposit for bids,reducing the open category and making successful bidders pay what they bid will make COE prices less misaligned with actual landed car prices. But because goverment revenues will be less, these measures proposed at various times in the past will be rejected...

Aurvandil said...

Previously, there was a lot written about how public transport in Singapore was terrible. People were therefore increasingly moving to use cars.

Instead of improving public transport, the PAP's unique way of solving the problem is to implement a supply shock to the COE system so that COE's shoot towards $100,000. Not being able to afford a car, people are then forced to take public transport.

Later I suppose they will cite increased ridership in the public transport system as how they have hit their KPI of having 70% of the population take public transport.

Anonymous said...

Why are we talking about the PRICE OF COE when the limited(restricted amount) number of COEs can be allocated by means of draws. The reason for COE is solely to restrict the amount of vehicles on the roads in the country. Vehicle population can be controlled by restricting ownerships to those above 21 yr old with valid driving licence and each such qualified owner allowed only one vehicle.

Why and where is the need for the people to bid for COE and why are car dealers allowed to bid for them?? By all means charge a reasonable administrative fee on the COE.

Using a scheme to make money when the motive is to just control the growth of vehicle population is pure exploitation. There is no justification to exploit the people in this case.

lim said...

In times to come, it will be easier on the wallets to use bicycles..

Only problem is the heat and rainy weathers here..

We will truely be like china back in the 80s, 90s where bicycles pack the roads..

Anonymous said...

COE = 死给他 (in hokkien)

Anonymous said...

To 10:19,

I totally 100% agree with your point = "There is no justification to exploit the people in this case." But if you think carefully since when does an authoritarian, totalitarian govt ever NOT exploit its people? What is the use of 100%power if you don't control (abuse???) people? The egyptian pharoah enslaved the jewish people. American people enslaved african people.

1)in the 60s/70s land was bought(grab???) on the cheap. but now how much does a 4rm flat in toa payoh cost? Someone paid $700,000.

2)GST 7% on EVERYTHING, even staple foods and utilities. In UK there is NO VAT(same like GST)in supermarkets. HK has no GST and still very competitive. Europe has GST too but they exercise discretion. In Singapore, only companies can be exempted from paying GST. Isn't this funny?

There are many more examples but the problem is NOT that Singaporeans are STUPID. It is just that the well educated people like Lawyers, Judges and Economists in Singapore have no balls to tell the truth and set it right.

Asked yourself this question : Would you quit a job that pays at least $30,000 a month to exploit the "daft" and "lumpen masses"? I know many Singaporeans would take up this offer to "eat better" for himself and his family without batting an eyelid or before you can say "Singapore Meritocracy."

Singapore will only be saved if more people decide to look fear in the eye and stand up for justice, for the poor and for the weak. In short, the RICH Singaporeans must learn not to be selfish (an oxymoron???)

Cheers
Economist with a heart :)

Anonymous said...

The government will nevr scrap the COE and quotas will be tweaked to make more money for the government. For me the simple arguments of this innovative policy is not that is controls traffic for they are so many other way to do it. The sole purpose is for generating revenue for the government. One simple way to peg it to demand is to have a system whereby you pay the amount you bid. But as usual the governmenwill not do this as the rich will suffer. Right now they will bid 100,000 and know they will not have to pay that amount. If they have to pay that amount the bids will not bo so high. The man who eally needs a car will bid the amount he can afford. But them the darn government never cared for the the rest but the rich

Yilong said...

Just at the beginning of last year, the govt said that for singaporeans to be able to afford a car, the will use ERP to control the number of cars on the road and COE dropped..

As the months go by, more ERP gantries were setup and charges went up. The reason? So that the particular road will be able to hit the avg speed set by the govt, not considering everyone will detour through another road.

Then the govt realised (maybe this is all planned, so they can have excuse for increasing the charges!) the other road are being jammed up, they erect another ERP there, it's a never ending cycle!

Then come this year where suddenly the govt say: oh the number of cars on the road are too many, we will have to cut the supply of COE to control them.

This effectively made the COE prices shoot up! COE shot up, number of cars are controlled, BUT ERP IS STILL CHARGING THE SAME PRICE!

People feeling the pinch, sell off their cars and take Bus/MRT, but since donkey years back, MRT/Bus didn't really improve their service! eg: number of buses/MRT, waiting time.. Buses/MRT are still packed even when it's OFF PEAK period! It's made worse by our dear FT that was 'introduced' by our govt and our population increased by so much, transport infrasture didn't improve to match it.

Worldclass govt with Worldclass transport indeed!

Xtrocious said...
This comment has been removed by the author.
Xtrocious said...

Yilong, you are right...

The 'house" always wins, especially when the name of their game is "heads I win, tails you lose"...

Anonymous said...

dont buy loh...thats it...given up hope liao ....

Im just waiting to complete my degree and leave if possible.

Pointless struggle for vainity and "happiness"

Anonymous said...

They often praise about how low income tax is in Singapore compared to other western countries. But if you factor in COE, we really do have very high taxation in Singapore. It is robbing our savings away. Still, there is demand for expensive cars.

A decent Honda Jazz in US can cost around USD16K about SGD23K. This is what a car price should be, under SGD30K for their worth. Now, it costs like SGD70K? Still people are willing to spend off their savings.

The authorities are the BEST when it comes to exploitation, from cheap labour to charging high on cars and on HDB accommodation.

We all know what we need to do.

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