Here we go again, Workers's Party's chief economist, Jamus Lim is back in the parliament talking how COE should address the needs of Singaporeans who could use a car because they have kids or health needs.
As I explained in my post in July, this sounds nice in theory but would be an absolute trainwreck in practice, while still serving only those who have enough money.
Because, let's be honest, even without the COE cars in Singapore are very expensive due to Additional Registration Fee, excise on imports and GST combined.
Before the pandemic the COEs cost about $30,000 to $50,000. If we accept that the surge observed in recent years has put car ownership beyond the reach of most regular Singaporeans, then if you wanted to make them affordable again (by Singapore standards at least) you'd have to offer cuts of 50% or more.
So, what did WP come up with?
10%.
Yes, TEN percent.
If you have several young kids it can stack, to 30 or 40 percent when you have 4 or 5 respectively. Looks like you'd have to keep the neighbours awake over a few years to get your cheap(er) car!
And then they made this bizarre proposal that a 10% discount would also apply to people living with an elderly parent needing care or two elderly parents but only if they're over the age of 80.
I don't want to be rude, but if you live with two octogenarians there are only two possibilities – either you are so rich that you have a mansion and a few cars already, or you're so poor that no discount is going to help you get one.
It honestly feels like homework you had to wing on the night before it was due, so you quickly came up with something to pretend you at least thought about it.
Not that people would be tripping over themselves to get a car if it ever became law. Cat A COE has just hit $119,000. A 10% discount cuts the price to $107,100. What a steal!
This is the worst attempt at populism I've ever seen.
If somebody is about to drop $150-200k on a car, how big a difference does 10% really make? And what about all those people who can't afford one anyway but have 4 kids or an elderly parent?
A 10% discount isn't helping the poor – it's helping the rich.
For the poor it doesn't matter if the cost of the car is $135,000 instead of $150,000 – the can't pay either. Meanwhile those who can pay just got a discount. Thanks, Jamus!
Now, if you brought it down to $50,000 then yes, far more regular Singaporeans could hope to pay it, especially if supported with a loan of some sort. It could bring the cost of ownership to a few hundred bucks per month over the 10 year period.
At that point, however, it would become a mounting financial cost for the budget, which now collects S$4.5 billion each year from auctioned certificates.
WP seems to have wanted to have a cake and eat it too.
As I pointed out 2 months ago, the costs of introducing meaningful discounts would be enormous and because there are only 45,000 COEs available each year, you'd have to build and run a bureaucratic machine that would determine who gets access to a car.
Workers' Party appears to have been desperate to pinch the government on the policy but realised that if it offered too much it would look irresponsible. But now that it has offered too little, the whole proposal doesn't look serious.
I think they have still decided to talk about it as it creates an impression that they care about average Singaporeans, while almost nobody is going to read into the details of what they proposed (much less understand their implications).
What an absolute waste of time.
