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Singapore's COE System Sparks Debate on Car Affordability

In a detailed discussion on the affordability of car ownership in Singapore, Prime Minister Lee Hsien Loong and Workers’ Party Member of Parliament Jamus Lim engaged in a significant exchange during a parliamentary session. The conversation centered on the Certificate of Entitlement (COE) system, a unique mechanism in Singapore designed to control the number of vehicles on the road by requiring prospective car owners to bid for a limited number of permits. This system has often been criticized for making car ownership prohibitively expensive, particularly for middle- and lower-income households. The debate highlighted the tension between maintaining an efficient transport system and ensuring that car ownership remains within reach for those who need it, while also addressing broader issues of equity and accessibility in Singapore’s urban landscape.

Prime Minister Lee Hsien Loong defended the COE system as a necessary tool to manage traffic congestion in a densely populated city-state like Singapore, where land is scarce and public transport is heavily prioritized. He emphasized that the government’s primary goal is to ensure that the majority of Singaporeans have access to a reliable, efficient, and affordable public transport system, which is seen as a more sustainable solution to urban mobility challenges. According to Lee, cars are not a necessity for most Singaporeans due to the extensive and well-developed public transport network, which includes buses, the Mass Rapid Transit (MRT) system, and an expanding network of cycling paths. He argued that car ownership, while desirable for some, is a privilege rather than a right, given the constraints of space and the environmental impact of widespread car use. Lee further noted that the COE system, by limiting the number of vehicles, helps to prevent the kind of gridlock seen in other major cities around the world, thereby preserving the quality of life for residents.

However, Lee acknowledged that the rising costs of COEs in recent years have made car ownership increasingly out of reach for many Singaporeans. He explained that the government does not directly control COE prices, as they are determined by market forces through a bidding process. The prices fluctuate based on demand and the limited supply of certificates, which are released in quotas determined by the government. When demand for cars surges—often driven by economic growth, population increases, or other factors—COE prices can skyrocket, as has been observed in recent times. Lee pointed out that this market-driven approach, while effective in controlling vehicle numbers, can create perceptions of inequity, as wealthier individuals are more able to absorb the high costs of COEs and secure car ownership. He stressed that the government is aware of these concerns and is continuously exploring ways to refine the system to make it fairer without undermining its core purpose of traffic management.

On the other side of the debate, Jamus Lim, representing the opposition Workers’ Party, raised pointed concerns about the social implications of the COE system and its impact on affordability. Lim argued that while the public transport system in Singapore is indeed world-class, there are still segments of the population for whom owning a car is not merely a luxury but a practical necessity. He cited examples such as families with young children, elderly individuals with mobility issues, or people living in areas less well-served by public transport. For these groups, a car can significantly improve quality of life by providing flexibility and convenience that public transport may not always offer. Lim questioned whether the current COE system, with its high costs, disproportionately disadvantages lower- and middle-income households, effectively pricing them out of car ownership and exacerbating social inequality.

Lim also challenged the notion that car ownership should be viewed solely as a privilege. He suggested that in a society as affluent as Singapore, there should be a broader conversation about balancing the need to control vehicle numbers with the aspiration of citizens to own a car as a marker of personal achievement or family convenience. He proposed that the government could consider alternative mechanisms to make car ownership more accessible, such as tiered COE categories based on income levels or specific needs, or increasing the supply of COEs temporarily to ease price pressures. Lim emphasized that such measures could help address the growing frustration among Singaporeans who feel that car ownership is becoming an unattainable dream, reserved only for the wealthy elite.

In response, Lee Hsien Loong reiterated that the government is not blind to these concerns and is open to reviewing policies to ensure they remain relevant and equitable. He highlighted that the government has already taken steps to mitigate the impact of high COE prices, such as offering rebates or subsidies for electric vehicles to encourage greener transport options, and investing heavily in public transport infrastructure to reduce reliance on private cars. Lee also pointed out that the COE system is not static and has been adjusted over the years to respond to changing circumstances. For instance, the government has periodically revised the vehicle growth rate and COE quotas to balance supply and demand. However, he cautioned against measures that might undermine the system’s effectiveness, such as flooding the market with too many COEs, which could lead to congestion and negate the benefits of decades of careful urban planning.

The exchange between Lee and Lim also touched on broader themes of sustainability and urban planning. Lee underscored the importance of maintaining a car-lite society, not just for traffic management but also to meet Singapore’s environmental goals. With global concerns about climate change intensifying, reducing carbon emissions from transport is a priority, and limiting private car usage through the COE system aligns with this objective. He encouraged Singaporeans to embrace alternative modes of transport, such as cycling or car-sharing schemes, which are becoming more viable with technological advancements and government support. Lim, while agreeing on the need for sustainability, argued that the transition to a car-lite society must be inclusive, ensuring that no one is left behind due to financial constraints or lack of access to alternatives.

This parliamentary debate reflects a deeper societal tension in Singapore between individual aspirations and collective needs. The COE system, while effective in controlling vehicle numbers and preventing urban congestion, has become a lightning rod for discussions about fairness and affordability. For many Singaporeans, a car represents more than just a mode of transport—it is a symbol of success and personal freedom. Yet, the realities of living in a small, densely populated city-state mean that not everyone can have that freedom without compromising the greater good. The government’s challenge lies in striking a balance: maintaining the efficiency and sustainability of Singapore’s transport system while addressing the legitimate desires and needs of its citizens.

The discussion between Lee Hsien Loong and Jamus Lim underscores the complexity of this issue. It is not merely a matter of economics or policy but also of values and priorities. As Singapore continues to grow and evolve, such debates will likely persist, prompting ongoing reflection on how to create a society that is both equitable and sustainable. The COE system, for all its merits and flaws, remains a critical tool in this endeavor, but its implementation and impact will need to be continually reassessed to ensure it serves the needs of all Singaporeans, not just a privileged few. This conversation in Parliament is a reminder that urban policy is never just about infrastructure or numbers—it is fundamentally about people, their lives, and their aspirations.

Read the Full Channel NewsAsia Singapore Article at:
[ https://www.channelnewsasia.com/singapore/lee-hsien-loong-jamus-lim-coe-car-transport-affordable-5240881 ]