The sharp rise in certificate of entitlement (COE) prices set in the latest tender last Wednesday should not have been unexpected in view of the falling supply of COEs - from 19,994 for the three-month period of November last year to January, to 17,511 for February to April, and then to 16,010 for May to July, as announced by the Land Transport Authority (COE prices surge ahead of another supply cut, April 22). Under these circumstances, prices will probably rise further.
In this situation of demand outstripping supply of COEs and the resultant price uptrend, I suggest that the COE system be adjusted to discourage ownership of multiple cars. Such an adjustment might also better suit the prevailing demographics, which differ considerably from what they were in 1990 when the COE system was introduced.
The auction-style COE system based on a bidder's willingness to pay might appear fair and impartial. The unintended flaw, however, is that it favours the wealthy who can afford higher COE prices.
This has allowed some of them to own multiple cars which may become underused, while middle- and lower-income families or individuals with a genuine need for a car are priced out or are compelled to pay COE prices they can ill afford.
Although the number of multiple-car owners is not publicly available, I contend that, whatever that number is, broadening the car ownership base by decreasing the number of multiple-car owners and increasing that of single-car owners is more equitable.
Accordingly, I propose that an extra fee be imposed on the owners of multiple cars. There may be various ways to determine this fee, including pegging it at an appropriate percentage over the COE price, with the number increasing with each additional car owned. Under this scheme, anyone willing to pay the fee could still own multiple cars.
This concept is similar to the existing additional buyer's stamp duty scheme, which imposes additional charges on those acquiring more than one property.
I urge the incoming Minister for Transport to consider my proposal.
Ang Ah Lay