Martin Lee @ Sg
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Solving the COE Price Escalation Problem

It was reported that our March inflation figures (measured year on year) was 5.2%. Part of this increase was attributed to a sharper increase in Certificate of Entitlement (COE) prices, which led to higher car prices.

We all know that a declining COE supply had led to a huge increase in the prices of COEs.

Surely there is a better way of improving the current COE system? This is one area that the government can tweak to reduce the cost of living in Singapore.

My friend Chan Tau Chou suggested implementing some kind of balloting system to control the distribution and prices of COEs.

His point that the average family’s expenditure on the COE could be diverted to more useful purposes is something very true.

Mr Chan’s letter drew a flurry of replies, including my own. Some of these ideas are worth considering:

COE Scheme should be fairer

Social cost of high COE prices

Have balloting and bidding for COEs

Create niche category for luxury cars

After reading through the different ideas, I think the most ideal way to tackle this problem is to have separate COE categories for balloting and bidding. A good analogy would be the way HDB units are sold (balloted) while the private condominiums are sold freely.

You can read about some of my other suggestions in my letter to the ST Forum (My letter is in the background story box), which I will not repeat here due to the exclusivity clause.

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1 comment
Danny says 8 years ago

The primary principle behind the COE scheme is to control the number of cars on the road. Its purpose is NOT to allow more people to own cars or have a “fair” distribution of car ownership across various social strata.

There’s talk about reducing COE premiums and reducing the income gap. IMHO, a wider income gap may be necessary to ensure a proper stratification of society. Imagine a narrow income gap where everyone is rich. So who is going to do the labour-intensive and lower paying jobs? Foreign workers? And then we complain about the influx of foreign workers and immigrants into Singapore. Moreover, everyone being rich means that everyone will be able to afford a car… which leads to congestion and increasing COE premiums again. So you see, it’s a viscous cycle.

Perhaps we SHOULD allow the well-off own cars, so that they can get to work faster/easier and make more money, and can pay their workers higher wages.

Anyway, this is just my personal opinion. No offense intended.

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