CONTROVERSIES
Today, however , criticisms from the COE system seem to overshadow its preliminary intentions.
Many people have lamented, sometimes tongue-in-cheek, how the piece of paper to possess a car often expenses more than the vehicle alone.
Yet while the COE strategy is “certainly one of the more controversial” policies that the Govt uses to manage transport in Singapore, they have to be judged upon whether it plays a role in a more sustainable and efficient transport system and not whether it makes motorists happy, said transport analyst Walt Theseira.
The associate professor from the School of Business at the Singapore University or college of Social Sciences said “the ongoing existence of high COE prices and extra demand for vehicles suggests that, for a variety of reasons, public transportation does not yet satisfy everyone’s needs sufficiently to reduce demand meant for car ownership to some low level”.
“So the most important thing to do is not in order to tweak the COE system, but to keep on improving general public transport and metropolitan planning to reduce the have to travel. So that demand falls for vehicle ownership in the first instance, ” he said.
Assoc Prof Theseira also suggested the COE system was never designed to address some essential issues in transport.
For example, it was designed to efficiently allocate the right to have a vehicle, according to who will be willing to pay probably the most for a vehicle, this individual said.
“But it’s not made to answer the questions: How many vehicles should exist in the first place? And what is the mix of automobiles that suits Singapore’s needs the best? ”
Assoc Prof Theseira added that while authorities have attempted answering the latter issue with adjustments, these types of “have sometimes made unintended consequences”.
“The Open Category had been meant to use market forces to progressively change the vehicle mix over time. Yet, this particular category soon became exclusively a ‘large car category’, since those were the buyers with the most ability to pay, resulting in higher growth for big cars, ” he or she said.
Another unintended consequence stemmed from guidelines that “relaxed the particular growth rate of the private car population in the late 2000s”, said Assoc Prof Theseira.
“There were a number of policy factors behind this, including the shift to ERP, which was marketed to the motoring populace as a possible way of allowing expanded car possession by moving motoring charges to usage rather than purchase. ”
There were also changes to the method that quota from deregistered cars had been predicted, and policymakers may have wanted to “accommodate the rapid development of the economy plus population then”.
“Regardless, the outcome was that private vehicle growth was around the order of five per cent per annum within the late 2000s – and was abruptly cut down by policy in the early 2010s. This resulted in a huge bulge of COE issuances for personal cars in the past due 2000s, which is still influencing the COE program today, ” said Assoc Prof Theseira.
“From the particular viewpoint of ideal transport policy, that it is hard to believe that this is optimal. ”
Assoc Prof Theseira reiterated that although the use of policy to differentiate COEs between mass-market cars and luxury cars might be imperfect, the point is the fact that COE system is “creaking in many ways because of problems that it was never designed to solve”.
“It simply solves the allocation problem. Once you have decided how many vehicles should can be found, it allocates these to buyers efficiently – although that factor, of how bidding works and interacts using the market, is also badly understood, ” he said.
“Unfortunately, all the other problems, such as questions showing how to make the system fairer, how to accommodate the various needs of industry, families, motorists and motorcyclists, can’t be clarified with the basic construction of the COE program.
“That requires policymakers to generate judgments about how several vehicles should exist and why, that is much more complicated than simply auctioning them away from to the highest bidder. ”