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The Singapore solution

By Chris Winslow - posted Tuesday, 22 May 2007


Is it expensive? It all depends on supply and demand. Following the Asian financial crisis, Singaporean motorists were paying as little as $45 to get their COE. Once the economy rebounded and demand recovered, COEs went for between $23,000 and $30,000. In the April 2007 auctions for an open certificate of entitlement for a car like a Toyota Corolla, 1,800 people placed bids up to $13,300. Together with the licence plate auctions and other taxes, the Corolla owner may have paid between $40,000 and $55,000 to get on the road.

The critical point is this: no matter how expensive it may be to buy, own and drive a car, in a thriving economy there are still more than enough buyers to fill the roads. Only Singapore’s Vehicle Quota System prevents total gridlock.

Would Australians vote for such a system? The freedom we enjoy from affordable motoring has become part of our culture, not to mention our economic and political landscape.

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Car ownership is a right of passage for teenagers, families go on motoring holidays and large shopping centres could not exist without cars. Politicians are acutely sensitive to the fallout from motorway tolls, increases in petrol prices or greenslip premiums. Further, making cars more expensive would impact heavily upon the economically disadvantaged, particularly people living in outer metropolitan areas, for whom an affordable (often imported, Korean) car is the only means of transportation to and from childcare, shops and employment.

There are other problems with importing such a system. Singapore is a small, densely populated island, which Australia definitely is not. Rural and regional parliamentarians would question why motorists in Tamworth or Rockhampton, where there is little or no congestion, would benefit from a vehicle quota system.

Capping the number of cars would mean getting serious about improvements to public transport. Also, in our more robust democracy, politicians would flinch at the prospect of making it expensive to buy a new car, or perhaps be tempted to inflate COE quotas in months leading up to an election.

However, there are other factors to bear in mind. While Australia is a vast country, a high proportion of its population and industrial production is concentrated in three sprawling conurbations: Sydney, Melbourne and South East Queensland.

Car ownership may be central to the Australian lifestyle, but gridlock is becoming a burden for businesses and is eroding the quality of life for millions of people by preventing them from enjoying clean air and a trip to the beach. Eventually, the political, economic and environmental imperatives to find a comprehensive solution must reach critical mass.

Also, the regressive features of the Singapore cap and bid system could be softened and modified for Australian conditions, yet still prevent our major cities descending into traffic chaos. A current vehicle registration could be transformed into a transferable, perpetual certificate of entitlement to own the existing car, then subsequent cars of the same class that will replace it.

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In other words, the right to own a vehicle would become a new form of property, the title to which could be sold, legally transferred to another person or even used as collateral. Couples could sell one of their COEs if they decided they only needed one car and ageing parents could transfer their certificate to their children.

Therefore, the two-car family in the northwestern suburbs of Sydney would not be affected by the modified COE system - unless it planned to become a three-car family. Vehicles used by farmers and self-employed contractors (and which double as the family car) could have a separate category for regional and commercial vehicles, which would likely incur a lower price for their COE.

Another innovation, also from Singapore, could be the “off-peak vehicle” (with a distinctive red number plate), which is cheaper to register, but which may only be used between 7.00pm and 6.00am weekdays and on weekends.

Capping the number of vehicles on metropolitan roads at about 600 per 1,000 people draws a line in the sand without making existing car owners worse off. A vehicle quota system offers a long term traffic management system that is much more comprehensive than tolls and congestion charges. The benefits for public transport, sustainable development, carbon emissions and even the current account deficit more than outweigh the cost of buying that extra car.

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About the Author

Chris Winslow has a Master of International Studies degree (with Merit) from the University of Sydney. He is a public affairs officer from Sydney who has visited Singapore on a number of occasions, most recently in April 2007.

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