Meeting the Transport Needs of Singaporeans

12.30 pm

The Minister for Transport (Mr S Iswaran): Thank you, Mr Deputy Speaker. Several Members have filed Parliamentary Questions (PQs) on the Certificates of Entitlement (COEs). My Ministerial Statement will address Question Nos 1 to 7 for Oral Answer as well as Question No 25 for a Written Answer in today's Order Paper, as well as related questions that have been filed for subsequent Sittings.

Sir, I would preface my reply to Members' questions with an overview of our land transport system. To be complete, any discussion on COEs must be situated within the broader context of our land transport system of which private cars are but one aspect.

Sir, to meet the transport needs of Singaporeans and enhance our living environment, we must address two key constraints – land and carbon emissions. Roads occupy 12% of our land, compared to around 13% for industry and 15% for housing.

Our land transport system accounts for about 15% of Singapore's total domestic carbon emissions. We must make it much more sustainable as part of the national effort to achieve net-zero emissions by 2050. Pre-COVID-19, about 14 million journeys were made every day, across four modes – public transport, point-to-point transport, private vehicles and active mobility. That is the scale of the challenge.

The Government's aim is to build an accessible, inclusive and sustainable land transport system that meets the needs of all Singaporeans.

The best way to achieve this is through mass public transport. It allows the greatest number of people to get to their destinations with the least land take and carbon emissions. Our rail network serves around three million journeys a day and takes up less than 1% of our total surface area. In contrast, roads take up 12% of our land, for seven million journeys. This includes those made by cars, motorcycles, buses as well as private hire cars (PHCs). Compared to driving an internal combustion engine car, taking the train reduces our carbon footprint by 90%.

That is why mass public transport is the core of our transport strategy and our rail network is the backbone of our transport system. Today, seven in 10 households are within a 10-minute walk of one of our 202 Mass Rapid Transit (MRT) and Light Rail Transit (LRT) stations. By the next decade, it will be eight in 10 households. To achieve this, we are building an additional 100 kilometres (km) of rail, almost a 40% increase from our current rail network. By 2035, we will have eight MRT lines and two LRT lines, interconnected and reaching all parts of the island.

As we expand our public transport network, we are also ensuring that it is inclusive, affordable and sustainable. Today, all our MRT stations and bus interchanges, as well as 98% of our bus stops, are barrier-free and the work is ongoing. Public transport, as we have discussed many times in this House, is heavily subsidised. And our public transport fleet will fully comprise cleaner energy models by 2040.

We are also improving first-mile-last-mile connectivity with extensive infrastructure for cyclists and pedestrians. By 2030, the island-wide cycling path network will more than double to about 1,300 km. Through the Land Transport Authority (LTA)'s "Friendly Streets" initiative, we will work with the local communities to create more pedestrian-friendly facilities within residential neighbourhoods.

More broadly, LTA and fellow Government agencies are integrating land transport and urban planning strategies to enhance the liveability of our city by bringing jobs closer to homes, developing lifestyle and amenity hubs near transport nodes and making public transport and active mobility convenient for the daily commute.

Mr Deputy Speaker, Sir, given the land and carbon constraints I have highlighted, going "car-lite" is a key strategy that our agencies have adopted. With excellent public transport connectivity and active mobility infrastructure, less road and parking spaces are needed for general vehicular traffic. This is the "car-lite" future that we envisage as we plan and redevelop our precincts to prioritise pedestrians, cyclists and public transport users and lessen the need for and use of private cars.

Even amongst cars, there is a spectrum of choices. Shared transport, which includes both taxis and PHCs, providing point-to-point (P2P) passenger transport services, complements mass public transport. They provide a useful alternative to car ownership for those who may need access to car-like services, whether chauffeured or self-driving. Today, the P2P sector accounts for around one million daily journeys, up from 800,000 in 2012.

With zero growth in our car population, such shared transport, including car sharing services, allows for a more efficient and inclusive use of our roads, serving the needs of many more Singaporeans, compared to individually-owned private cars.

The total PHC population has averaged around 70,000 since 2019, with some fluctuations due to COVID-19 and the subsequent reopening of Singapore's economy. As a proportion of the total car population, PHCs have remained at around 10% for the past four years. In fact, the period where we saw the fastest growth in PHC numbers was between 2015 and 2017, where they increased from 30,000 to almost 70,000. There was no commensurate upward pressure on COE prices in that period. Conversely, while COE prices have been rising over the past several quarters, demand from PHC companies has, in fact, been moderating.

PHCs are a flexible way to augment the supply of P2P passenger transport, giving commuters more choices while serving a much wider segment of society than private cars. So, we should be careful when making calls about imposing caps, sometimes arbitrarily, on the PHC population.

That said, the PHCs are a relatively new development. The P2P regulatory framework, for example, only commenced in 2017 and COVID-19 has caused some disruption in the market. We are studying this further to ascertain the effect of PHCs and whether there is, in fact, any impact on the market.

On private car ownership, there are encouraging trends, especially amongst our youths. According to a Straits Times survey, the percentage of youths who aspire to own a car has fallen from around 65% in 2016 to around 50% in 2022. More than 75% of the respondents cited ready access to public transport as the reason why they did not aspire to own a car.

Nevertheless, Mr Deputy Speaker, Sir, we do recognise that there is still a desire to own a car. For some, it is a necessity; for others, a useful option; yet others, an aspiration. Hence, it is quite understandable that Members have raised questions on COEs and prices.

COEs are a key feature of our Vehicle Quota System (VQS). The VQS is essential for us to achieve our zero growth rate policy objective for cars and motorcycles. It is the principal tool to manage ownership, as recognised in the 1996 White Paper on creating "A World Class Land Transport System".

The VQS fundamentally works through supply and demand forces to efficiently allocate a scarce resource – COEs. The system also incorporates progressivity considerations by having different COE categories. In fact, when the COE system first started in 1990, there were four categories for cars. The number of categories was reduced to the current two in 1999 to address concerns over the relatively small quota supply and resultant volatility as well as limited choices of cars in some categories. Category E (Cat E), which is the Open category, was retained to allow for changing preferences and needs in vehicle types over time.

Mr Liang Eng Hwa has asked if there are plans to review the COE system. On the whole, the system continues to serve our policy objective of efficiently allocating the limited supply of COEs. However, over the years, the Ministry of Transport (MOT) and LTA have made various refinements to the VQS scheme to ensure its relevance and efficacy without forsaking the core policy intent. The power rating criterion of 97 kilowatt (kW) was introduced in 2014 for the mass market Cat A, so that car COE categories are differentiated not just by engine capacity. Last year, as more electric car models became available in Singapore, we increased the power output threshold for Cat A COEs to 110 kilowatt hour (kWh) in order to accommodate mass market electric cars.

On Mr Leong Mun Wai's question, between 2018 and April this year, the median Open Market Value, or OMV, for Cat A cars for each year was just over half of the median OMV for Cat B cars in the same year. In other words, if I can put it the other way, Cat B OMVs in the median is about 75% higher compared to the median in Cat A. So, there is a clear differentiation although it may not be a complete dichotomisation of the market. We will continue to monitor and review the differentiating criteria between Categories A and B as the technology evolves.

Ms Mariam Jafaar and Mr Saktiandi Supaat asked about Cat D COEs for motorcycles. A key feature of the motorcycle market is that dealers bid and hold the temporary COEs (TCOEs) in their own name before transferring it to a motorcycle buyer. This is a deliberate design feature because it provides convenience for buyers who can readily purchase a motorcycle. This is unlike the car market where bids are primarily in the name of the buyer. The prospective car buyers who need immediate access to a car and, in other words, a bid was not submitted in their name, can rely on Cat E COEs where there is some flexibility.

As I explained at my Ministry’s Committee of Supply (COS) debate this year, about 450 Cat D TCOEs that were secured when prices were close to or above $13,000, were subsequently left to expire when COE prices fell. To Ms Mariam Jaafar’s query, the expired TCOEs were held by more than 50 dealers; and of course, those with a bigger market share contributed more, but there is a spread. The TCOE utilisation rates subsequently went back up, with the market correcting when it could not support the prevailing prices. This is what we mean by the market working as intended. In other words, it responds to price signals, upwards or downwards, and then there is a re-allocation.

Nevertheless, to improve allocative efficiency and deter any speculative bidding, we made further moves recently, to increase the bid deposit from $800 to $1,500 and to shorten the TCOE validity period from three months to one month.

Let me now address some of the specific questions raised by various Members about car COE prices.

Dr Lim Wee Kiak and Ms Joan Pereira asked about the impact of foreigners. I know this is a common query. The proportion of car COEs secured by foreigners remains low and has not changed significantly over the years. As I shared in January this year, from July 2020 to December 2022, on average, less than 3% of car COEs were allocated to foreigners. This number has remained stable.

Another common query – there is no specific PQ on this, but I know it is on many Members' minds and elsewhere – is about multiple-car owning households. In November last year, I had shared with this House that as of 31 October 2022, of the 471,000 households that own cars – and that is about 36% of all households in Singapore – 12% own two cars, and less than 3% own three or more cars. The percentages remain about the same today. In fact, over the past decade, the proportion of multiple-car owning households has been steadily declining from about 19% of households in 2012 to less than 15% today.

I had also, in a response to a PQ earlier in the year, I think by Mr Gerald Giam, pointed out, and it is worth noting and underscoring that these multiple-car owning households reside not just in private residential estates, but also in public housing, including some households that own three or more cars.

Mr Saktiandi Supaat asked about the effect of car shows and promotions. As the Member would be well aware, consumers make their purchasing decisions based on a myriad of factors. So, it is actually quite difficult to establish a causal relationship between such car shows and promotions with COE prices.

So, what then is the cause of rising COE prices?

Fundamentally, the COE prices reflect demand for a limited supply of COEs. This is further accentuated or exacerbated by the fact that we are now at a trough in the 10-year cycle of COE supply.

Demand in all categories has remained resilient, especially as the economy recovers from post-COVID-19. Incomes have also been rising over the long term. As was observed in Prof Raymond Ong’s article in The Straits Times on 7 May 2023, the ratio of COE prices to median monthly household income has fallen from 11 to one during the previous COE price peak in 2013 to nine is to one today. So, in comparison to median income, the COE price is actually lower – although in absolute terms, the price has risen. And the reason is because household incomes have risen. As household incomes continue to rise in the coming years, coupled with our policy of zero-growth in the car population, we must expect the long-term trajectory for COE prices to be upwards.

COE supply, in turn, is determined primarily by car de-registrations in preceding quarters, which have been relatively low of late. Over the past few months, MOT has made several moves to reduce volatility in quota supply. Instead of just the preceding quarter, we first adopted the average of the preceding two quarters in August last year and now use the moving average of de-registrations in the four preceding quarters to compute COE quotas for the next quarter. These moves have helped to mitigate quarter-on-quarter volatility.

We also expect the COE supply to start increasing substantially in the coming months as more cars reach the 10-year mark. Notwithstanding this, MOT and LTA have studied if there is more that we can do to smoothen the supply of COEs in Categories A and B, while adhering, importantly, to the cap on the overall car population over the 10-year cycle.

Consequently, as a one-off exercise, LTA will bring forward and redistribute the supply from five-year COEs which are due to expire in the next projected supply peak. As these five-year COEs cannot be extended and, therefore, have to be de-registered, LTA will be able to identify the exact number with certainty. This supply will be redistributed over several quarters starting from the next bidding exercise. This move will increase quota supply in the next bidding exercise by about 24% in Cat A and 15% in Cat B. LTA will release more details shortly.

Even as we make this move, I would like to emphasise two points. First, this will help to lessen, but it will not eliminate, volatility in supply. There will still be a degree of supply fluctuation due to historical factors and also broader market conditions. Secondly, the long-term upward trend of COE prices due to rising incomes and zero vehicle population growth will not abate.

Mr Deputy Speaker, Sir, as we seek to improve the efficiency of the COE system, with these measures that we have already taken over the years, it is important that we do not lose sight of our goal of becoming a car-lite society with accessible and inclusive transport for all Singaporeans. The COE system helps us to make our transport system more sustainable and our living environment better for all.

As Singapore develops and grows, Singaporeans’ transport needs will continue to evolve and our transport policies must move in tandem while paying heed to our key constraints. The Government is committed to developing the necessary policies and infrastructure to build a car-lite, accessible, inclusive and sustainable transport system to meet the diverse needs of Singaporeans. It is part of our social compact, anchored by the values we hold as a society. Ultimately, our success in realising that vision rests on the commuting choices that every Singaporean makes every day.

Mr Deputy Speaker: We have opportunity for clarifications. Dr Lim Wee Kiak.

12.55 pm

Dr Lim Wee Kiak (Sembawang): Thank you, Sir. I would like to thank the Minister for his Statement. I would like to make two suggestions in terms of the current COE system – and these are not new. These were suggested previously.

First, would MOT consider a pay-as-you-bid system instead of people bidding higher and then paying for the lowest rate? Second, can we disallow financing of COE, which means that when you take a loan, it has to be only the car loan and not the COE? The COE has to be paid in cash.

Mr S Iswaran: Mr Deputy Speaker, if there is one thing I have learnt in my short time in MOT, there is no shortage of creativity in the suggestions made to improve the COE system. I thank the Member for his suggestions.

But if I may, say, first, a pay-as-you-bid system, I understand the motivation behind it. But if I may offer Members the counterpoint – the problem then is you create a great deal of variation in the market. For the same car bought in the same exercise, the value may be quite different because one bids higher and one bids lower.

I do not want to get into a long discussion on this, but from an auction theory perspective and so on, actually the method we use is probably the most efficient. So, I would say that that is not the source of the problem. Let us diagnose this correctly. The issue is not the system or how it is being administered per se. The issue is really around supply and some level of volatility that we are trying to mitigate, as well as where we can or where we discern some need to intervene because of either speculation or some inefficiencies in the market. And that is what we have sought to do.

The second point on financing, I would say I think it is a question that should be put to the Monetary Authority of Singapore (MAS), frankly, or the authorities. But if I may just offer Members this perspective. A COE and the car are indivisible, really. A standalone COE is of little value until it is applied to register a car. So, one needs to look at it in totality first.

Second, if you look at it from the point of view of the cost of buying a car, which then you are seeking to finance, I think most financial institutions will look at it as a whole – the value of the car, the market price, including the COE price. So, that is why the system runs as it is. Again, I want to go back to the point that I am not sure that decoupling the financing is going to be the solution to the current set of concerns that Members have.

Mr Deputy Speaker: Mr Pritam Singh. Sorry, I thought it was your hand. Mr Liang Eng Hwa. Hands look a bit similar from here. My apologies.

Mr Liang Eng Hwa (Bukit Panjang): My first question to the Minister is, I think he mentioned that the reason why COE prices are higher is because of high demand and limited supply. But I would like to ask the Minister whether another reason why COE prices may be at this level, this recent wave, is because of the disparity in the purchasing power among the bidders. In other words, there are, in each batch of the COE bidding, more bidders that have higher purchasing power and, therefore, the ability to pay up; and that is where the COE prices are. So, I would like to ask whether that is desirable.

The second question is whether some amount of allocation by balloting, like how we do for housing, can be part of the solution as well.

Mr S Iswaran: I thank Mr Liang for his questions. I am not sure what the Member means by disparity in purchasing power. Because, as I explained earlier, overall, if you look at it over a 10-year cycle, peak to peak, our incomes have risen. And to the extent that cars remain an aspirational product or a necessity, then you must expect that there will be a propensity to want to allocate the budget to buy that and the prices will reflect, to some extent, the trends in incomes as well. That is why I gave the numbers that I did. That is not to say that that is the only factor but, generally, if you compare it to incomes rising and so on, I think that does tell us an important story.

Secondly, I would say that in terms of ownership – I stressed this point and I would like to make it again – we have 470,000 households in Singapore that own cars. That is about 36% to 37% – so, it is a very sizeable proportion of our population base. So, what we have been trying to do is, through a combination of ownership and usage measures, make cars available as widely as possible, but within our zero-growth constraint, which we have imposed for good reasons. And that will continue to be the basis.

The Member's second point was on balloting some amount. I am very sure all the Members here will be able to offer perspectives on it, but let me just deal with this. If we say a proportion of COEs are balloted and the rest are not, then the question is: so, we have a market where you bid and you secure; and then, there is another segment which is by luck of the draw, literally. How do we price that? Do you price it at the same price as the COE in that period? Or do you say no, it is a discounted price. If it is a discounted price, then it is a windfall for the party that gets this, because they will then be able to resell the car with the COE at a higher price because the market clearing price is higher. Then, the question is: what justifies such a ballot, who qualifies and how do we do it?

I am just sharing this with Members because I appreciate the intent behind the suggestion, but I am trying to point out that there are several, quite intractable, second- and third-order issues we will have to deal with. And we will very quickly move from discussing COE prices to wondering why the balloting system is not working. And, indeed, we do have discussions like that in this House as well. So, a balloting system is not a panacea. In fact, it may aggravate the problems, if the concern is around price and unevenness in the market.

Mr Deputy Speaker: Ms Hany Soh.

Ms Hany Soh (Marsiling-Yew Tee): Thank you, Mr Deputy Speaker. I have two clarifications. One is in relation to the COE, whether the Ministry has conducted any public surveys to better understand and discover what are the factors that would persuade more private vehicle owners to switch to public transport.

Another one is in an effort to reduce carbon footprint, what is the ratio of the single- to double-decker buses currently in service and whether LTA has plans to move towards 100% double-decker buses to maximise ridership capacity and, thereby, an effort to reduce the carbon footprint?

Mr S Iswaran: Mr Deputy Speaker, I thank the Member for her questions or clarifications. Factors that will persuade the car owners to switch – there are several and I have talked about some of them. The most important thing that we need to do is to populate the spectrum of commuting choices available to Singaporeans. The more we are able to offer a high-quality public transport system and near-car kind of services, whether it is car sharing, your P2Ps and so on, and if we can also make the first-mile last-mile part of the commute a better one, then I think people who choose to pay the sum that they pay, or the sums that they pay to buy a car, will have reason to take a pause and re-evaluate the choices that they make.

But in the end, every individual is entitled to make their allocative decisions. What we are really trying to do is to make the alternatives as compelling as possible. In fact, you hear this more from people who have lived overseas and come here. I was recently at an American Chamber of Commerce dialogue. And one of the ladies said she came from the US where she was wholly reliant on her car. She was waxing lyrical about our public transport system. Her teenage daughter who studied here, used our public transport system, has since gone to the US for her further studies in Houston. According to her, the daughter laments that the public transport system in the US is not of the same quality and accessibility as here.

So, we do have advocates and I am very keen to get more of such advocates, especially Singaporeans. And we do have. Many Singaporeans have told us that they really like the fact that we have a good public transport system. Of course, there are always areas we can improve.

That is also why I cited the survey – there is a perceptible shift in the preferences of the younger generation of Singaporeans. They are more adept at using technology and some of the solutions already available. As a result, they are less seized with the need to buy a car. In fact, they think there are other ways of using their money. And I say, good for them, in that regard.

Single- to double-decker buses, I do not have the exact numbers. But I will put it this way – the move for sustainability is the thrust of the Member's question. The main way we are seeking to ensure sustainability is through electrification. We have about 6,000 buses in the public bus fleet. And about half of these will be electric by 2030; the other half will be a hybrid solution. So, that is how we are moving.

In terms of single- and double-decker buses, a lot of that is actually a function of capacity planning, based on the routes and the kind of demand. This can vary, depending on how commuter behaviour changes over time.

Mr Deputy Speaker: Ms Hazel Poa.

Ms Hazel Poa (Non-Constituency Member): Thank you, Deputy Speaker. Would the Minister consider alternative ways of allocating the vehicle quota based on other factors, instead of just price alone? For example, maybe a point-based system, where apart from the bidding price, we also consider other factors like nationality, and needs-based factors, like families with young children or persons with disability.

Secondly, would the Minister consider, in the same way as we have the Additional Buyers' Stamp Duty (ABSD) for the purchase of second or more residential properties, would the Minister consider an additional levy on additional vehicle purchase?

Mr S Iswaran: The Member has raised a few questions. Let me try and deal with them.

A point-based system – it is really a variation of the idea that Mr Liang Eng Hwa talked about, a ballot. Because in the end, you have got to decide how you would allocate the points, on what basis? And how will that then factor into the final COE allocation? Does that mean that if someone has got more points, then they are entitled to a different price when it comes to the COE? Or does it mean that they go into a different pool? And if they go into a different pool, how do we segment the pools?

So, I think a point-based system has, in a sense, the kind of arbitrariness that we are trying to avoid. We are trying to let the market work itself through. We do have schemes where we help people – for example, those who have special needs or persons with disability who need vehicles for, say, work and so on, we do have schemes to help them with that, including with the COEs and so on.

Those are very targeted measures that we can do, but that is best achieved not by tinkering with the COE allocation system, but by, instead, trying to defray some, if not all, of the cost impact on certain groups.

It is not unlike what we do, for example, for electricity in Singapore. We price electricity fully. We do not subsidise it. We do not say "first hundred units X, next hundred units Y". We price it all the same, because every one, from the beginning, is a unit of electricity. But then what we do is that we provide U-Save rebates and so on. So, if we want to help certain categories of people, it is best to do it that way.

Then, the Member makes a point about needs-based. And I am quite sympathetic to her point, because many families say to me: "Look, I have got children and I need to take them around to enrichment classes on the weekends and so on, and public transport does not quite work for me". And then, we have others who say: "Look, I have got elderly parents whom I need to take to hospital or for medical appointments" and so on. I think if you look at households in Singapore, they will either have children or elderly parents they have to look after and that will probably cover most households in Singapore.

So, everyone has a need that I think we can understand. The real question for us is: do we have the resources and the capacity to meet that need effectively? That is where the challenge lies. I mean, I would be very happy if we had a cornucopia of COEs that we can just dispense at will. But we do not, because of the constraints I have highlighted. And that is why we have to make some tough choices in the allocative sense.

Having said that, we are working on and, in fact, we do have some alternatives, as I have said, for persons with disability and so on, we have got certain targeted measures. Also, car-sharing services, because these allow households to have a car for a few hours to do what they need to do and then come back and leave the car for somebody else to use. So, that actually is a more efficient outcome and, in fact, it would save households a lot more money than buying a car and incurring the depreciation. That is one of the things we are doing and we will do more.

Also, some of the P2P operators, like Grab and so on, they offer chauffeured services where you can do block booking by time. For example, if you want to take your parents to hospital you think it will take you four hours or whatever, you can make those sorts of bookings as well.

So, there are other solutions in place and I would say that that is something we should keep in mind.

As far as the idea of ABSD is concerned, I have already pointed out clearly that the COE price that we see today is not explained by multiple car-owning households. They have actually been quite constant throughout. The question is: what is the problem we are trying to fix here? Because you may come up with the tool, it may be a very popular move, but does it really address the problem at its root?

Mr Deputy Speaker: Mr Saktiandi Supaat.

Mr Saktiandi Supaat (Bishan-Toa Payoh): Thank you, Mr Deputy Speaker. I would like to thank the Minister for sharing the Statement earlier, especially about the release of the five-year COE supply and also the measures taken by LTA over the past few months about the deposits and all that. It has actually helped, in terms of price recovery and microstructure.

I got two clarifications, Deputy Speaker.

First, in relation to our transition to move away from and finding alternatives to private car ownership, the Minister mentioned just now about enhancing the alternatives of P2Ps, PHCs and taxis going forward. My question is that as we still have Singaporeans aspiring to own cars and we are trying to go car-lite, I think these are the sorts of issues that I am hearing from the Minister's Statement, we are not moving away from them anytime soon – car-lite, zero-growth, we are a very small country and the push is towards public transport. That is clear, Minister.

So, the question is the transition. There is going to be a time transition for people to move away from their aspirations. My question is: if you go towards the holistic approach or to the car-lite strategy and zero-growth, how can we improve our P2P, PHC and taxi services? Because the exasperation of Singaporeans on the ground, if they want to move away from a private car, but they have to wait for taxis and PHCs and these are not there, every single minute when they want to have access to it, 24 hours of the day and at any time, is something that will need to be addressed. That is my first question, Minister.

Second, I would like to get some clarification with regard to the five-year COE supply in terms of the numbers and what is the direction or thought trends going forward beyond the existing three to six months this year and probably into the many years ahead.

Mr S Iswaran: I thank the Member for his questions.

Mr Deputy Speaker, with your permission, just to address one other point about ABSD that was raised. If the Member's intent is that we should have progressivity in the COE system, actually, we already have significant progressivity through the tax system, the ARF system that we have today, in terms of cars. In fact, the Finance Minister announced a whole set of moves to further increase the gradient and the progressivity.

So, I think those who are buying cars are actually going to be paying more and, especially if they are buying higher value cars or more expensive cars, they end up paying a higher amount in taxes as well.

On Mr Saktiandi's points, first, whether we can do more to increase the supply of the P2P, the private hire cars – and we use all these terms interchangeably – and taxis and so on. The bottom line is that we need to try all measures to enhance the availability of car-like – not car-lite – but car-like services. Because what people really value is the flexibility to be able to hop into a car and go to multiple locations in a certain period of time and come back. But it is a waste to have the car sitting in the carpark when you are not using it for hours, when you only need it maybe a few hours in a week. That is the crux of it.

So, we need to find more alternatives and that is what LTA and MOT are working on what we can do in terms of more in the P2P sector and the PHCs. I have a smile on my face because the Member is asking for whether we can do more and have more PHCs. I think I have just heard from others advocating quite the opposite. So, you understand the conundrum, I think.

But the bottom line is, car for car – if I take a car away from private ownership and we put it in the P2P sector – it will benefit more people, at least, as a first principle. Then, there are all the issues we need to deal with in terms of policy.

So, we are working on a whole range of ideas on this, how we can do more. And I accept the Member's point that there is a transition. The transition is not just in terms of going to car-lite, but also because it would take us at least about 10 years more before our MRT system comes to that level where we really have good connectivity in many parts. We already have pretty good connectivity, by the way; but this will take it at least a notch higher and we will be comparable to the best cities in the world.

So, the key thing is to manage the transition. And as I said, it is about populating the choice spectrum, giving people a whole range of options from public transport at one end to private car ownership on the other, and everything in between. I think the more we can populate that choice spectrum and give people the information and the convenience to exercise that choice, then we are on the right path.

On the five-year COE supply, I think the Member's question is how it will be redistributed. And it is not just for one or two quarters because LTA will be releasing more information. Essentially, we have got five-year COEs that will expire probably in about three- or four-years' time and that is when you are really going to know, if you look at the historical cycles, there is going to be a sort of peak-ish. If you go on the basis that everybody who is reaching their 10-year mark is going to de-register, then you are going to be at a peak.

So, that is where LTA is basically extracting the five-year COEs from. And these will be redeployed – in not just this quarter, the next quarter but in the next few quarters at least, leading up to this. Because, essentially, it is, as one of my colleagues put it, a cut-and-fill exercise. You are really trying to smoothen the curve, try and avoid too sharp a gradient and, worse, the volatility, the ups and downs. That is what we are trying to do.

But I want to emphasise again: this is not about therefore expecting prices to ease and that is the measure of success. The objective here is to smoothen the supply, reduce the volatility so that people can then make their choices. I have put out the information and I think car buyers as well as car dealers, based on that, I am sure their behaviour and the next and subsequent bidding rounds will be informed by this data.

Mr Deputy Speaker: Ms Mariam Jaafar.

Ms Mariam Jaafar (Sembawang): I thank the Minister. I have two clarifications. One is on motorcycle COEs. I think the Minister will know I have spoken on this a number of times, including on 1 March where I asked for more measures to deter speculative bidding. And I think what the Minister mentioned about the main measures suggests that he now recognises that, beyond supply and demand, speculative behaviour by dealers who have the incentives to bid up prices actually is a factor, and especially so, it is amplified in a market where we are talking about a few hundred COEs every month.

And I think what sits with us is that we all feel that it is particularly egregious when the people who bear the brunt of these actions by dealers, are people who are the lowest income workers, students who are holding part-time jobs because they need to earn.

I guess my clarification is, can we do more to close down these loopholes a bit faster? How can we be more responsive? One suggestion could be – I mean $200, $800, $1,500, it is a bit arbitrary. Could we tie the dealer deposits to the size of their bids, to be a bit quicker to rein in speculative bidding? Two, could we allow for individuals to bid, like we have for cars, for motorcycles also? And three, is there a way to provide more transparency on individual dealer bidding practices?

My second clarification is on car COEs this time. The Minister mentioned that they are currently still studying the impact of PHCs on COE prices. So, I want to just clarify, is there no evidence? Does the Minister feel that there is no evidence today that the PHCs are driving up COE prices? I mean the market works, but it is also not a level playing field as we know. They have ways to pass on higher prices and also the ability to convert some of these PHCs into private cars, although, of course, there is a market for that.

So, how can we close down some of these loopholes? Do they actually exist today? How many cars are converted from PHCs to private cars by these platform companies as an option? And can that be closed down as a low-hanging fruit?

Mr S Iswaran: I thank the Member for her questions. First, I want to just be very clear. The Member suggested that the moves we make affirm or confirm that there has been speculative behaviour and that that is what is causing the prices to go up. That is not quite what I said. So, let me just repeat that clearly.

The fact is the market has already been functioning and the way we know that is when the price goes up, as it did in some of the earlier cycles when the COE price for motorcycles went up to $13,000; and subsequently it came down, the market corrected. And how did it correct? Well, those who were left with very expensive COEs realised that they cannot sell the motorcycles with those COEs and they then had to give up the COEs or they forfeited them. And we then have to recycle that into the market.

What happens then is, just to be very clear, before we made the latest move, such as the reduction of the validity period, was that the supply that is forfeited cannot be returned to the market until the next quarter. So, there is a lag of at least 10 to 12 weeks before it goes back. And what we wanted to do was to re-channel quicker. So, we shortened the validity period and then the motorcycle dealers can decide what they want.

Similarly, I do not think – whether it is $800 or $1,500, they are not arbitrary. I beg to differ with the Member.

If you take $1,500, for example, it is something like – well, at least before this recent correction which may or may not be sustained – but it is about 10% or so and it is of a similar order of magnitude to what we have for COEs for cars. So, there is a certain method in it. Why do we exercise restraint and caution in raising the bid deposit? Simply because, precisely what the Member says. If we inadvertently, through our policy moves, because deposits are very high, cause motorcycle prices to rise even further, then it will harm precisely the group that the Member wants to help.

And that is why we have been cautious about the way we have done this. We may not be as fast as some would have liked but I think the yoke of being in Government and in LTA and MOT is that you have to exercise judgement and decide not just what to do but also how much and when. And this is what has eventuated in what we are doing now.

Can there be individual bids? The answer is yes, there can be. But the market practice, in general, is that motorcycle buyers have a preference to just be able to go in and buy in the shops. This is why we have had this arrangement for motorcycle dealers. But there is nothing really that stops us from accommodating this and, in fact, we do already.

On PHCs, is there no evidence of PHCs driving up prices? Well, I would like to draw the Member's attention to what I said in my Ministerial Statement. Basically, in the period, for example, 2015 to 2017, when the PHC population grew from 30,000 to 70,000 or nearly 70,000, so doubling, the impact on COE prices was not particularly discernible. At least I do not recall it. I was not in MOT then, but there were not a lot of questions about it.

By the same token, and conversely, over the last several quarters and years, COE prices have been rising but, actually, PHC demand or the number of COEs PHCs have secured has actually been moderating. So, I do not think you can make an argument ex ante that there is a causality.

So, I understand that we are unhappy when prices go up. But let us not be too quick to conclude what the causes are and, therefore, start fixing problems that may not really be at the root of the issue.

But having said that, I concede the point to the Member that the fact is, it is new and that is why I said what I said in my Statement. PHCs are a relatively new phenomenon and it is a very variegated terrain. It is not just your Grabs; you have got your car-sharing guys, you have got the rental guys who then lease to the drivers and so on. So, there is a whole variety. So, it is important that we understand this correctly before we decide whether there is a need to act because they have an impact that perhaps distorts a market and then, if so, then what are those targeted measures. And that is what MOT and LTA are studying.

Mr Deputy Speaker: Mr Gerald Giam.

Mr Gerald Giam Yean Song (Aljunied): Thank you, Mr Deputy Speaker. I have some quick clarifications pertaining to public transport. In the new fare adjustment formula, how is the productivity contribution quantum of 0.1% derived? Are these all the productivity gains that MOT is expecting the PTOs to achieve and could that be too low an expectation?

Secondly, related to that, how closely does LTA work with the PTO to conceive and implement productivity enhancing measures and how can LTA be sure that the PTOs do not treat the 0.1% productivity contribution as a cost of doing business without significant productivity gains that will reduce costs over the long term and help to stave off future fare hikes?

And lastly, when PTOs rationalise bus services – for example, the removal of bus services 22, 66 and 506 for my residents in Bedok Reservoir in 2022 and 2021, sorry I am not letting go of this – which saves the Government $9.5 million a year in subsidies, how are these cost savings passed to commuters?

Mr S Iswaran: Mr Deputy Speaker, I thank the Member for his persistence and perseverance. Let me try and deal with the issues in turn.

First, the formula – I think it is important to understand that 0.1% is a productivity contribution, but it is a deduction from the fare increase. So, leaving aside, for example, the recent periods when it is 12% or 13% and so on, if you look at in general, let us say you have a year when the fare increases 2%. When I extract 0.1% from you, if the fare increase is 1%, I am extracting 10% from you; 2% is 5%. If it is a 3% increase, then 3.3% and so on. So, it is actually quite a sizeable imposition on the PTOs. It is not a free pass by any means.

The Member's point about whether we are doing more to work with them on productivity and other areas, absolutely. I think this is an important thing. It is a win-win. It is not something where we want LTA to just dictate and be left with it. We see this as a joint endeavour and that is why many of the moves that are being made, in terms of technology, fuel efficiencies and so on, these are all areas that we are working together with the PTOs on.

On the Member's point on rationalising bus services and, when there are savings, how does it get passed through to commuters? So, if I may, like the Member, persevere and persist with my counterpoints, the fact is that we are subsidising bus services a billion dollars a year. We are not recovering costs by any stretch. So, any savings are ploughed back into the system and it just gets distributed at large. But the bottom line is that we are subsidising public transport significantly. A billion dollars for bus, a billion dollars for train, or, if you want to think about it in another way, every journey gets a $1 subsidy. That is not counting those who are on concession passes and those who are buying the concession fares; those who get concession fares and also the concession passes.

So, by all accounts – and I think being very objective – we are making a strong effort to ensure that our public transport system remains affordable. If you look at international comparisons, the answer is we are. And if you look at our own pattern over time, expenditure on public transport, as a percentage of household expenses, actually, over the last 10 years, it has been declining for the quintile, decile, almost all the key metrics that we look at.

So, my point is, we will continue to do our best to keep public transport affordable. There is a significant amount of subsidy. When we get savings, it is basically ploughed back into the system. We cannot do it at the particular service level; it has to be at the aggregated level. But in the end, what really has an impact on the final expenditure incurred by the commuter is the subsidy that the Government gives, and that is not insubstantial.

Mr Deputy Speaker: Mr Vikram Nair.

Mr Vikram Nair (Sembawang): I thank the Minister for a very clear explanation on a difficult and emotive topic. I have a few clarifications on this five-year COE being brought forward. The first is: is this just one-off to deal with the current trough or is this going to be a change in approach to how the five-year COEs are dealt with?

The second clarification is that I believe the Minister said they would be re-allocated to Cat A. I just want to clarify, would they be re-allocated according to the expiring category or would they all be re-allocated only to Cat A?

The third clarification is I just wish to make the point that I think it is sensible to smoothen out the supply over the long term. Any measures to help do that would be fair.

Mr S Iswaran: I thank the Member for agreeing with us that this effort to smoothen supply is something that is appropriate. It is a one-off exercise and, specifically, because it is a five-year COE, the time horizon is five years. LTA would not know how many five-year COEs will be expiring more than five years from now. So, what we know is the projection from now to five years from now and the latter part of that period coincides with the peak in the 10-year cycle. It is a very well-defined quantum because we have to bear in mind that the rest of the supply, which is dependent on deregistration, is really variable because it depends on whether people choose to deregister and, therefore, contribute back into the supply, or they may decide they want to renew their COEs. We do not know what will happen and that will then depress.

So, the only component that we can deal with, with certainty, is the five-year COE and that certainty is only available on a five-year outlook basis, and that is why we are doing this as a one-off, because it also serves a very important purpose of smoothening the supply from now, especially because now we are more or less in the trough of the 10-year cycle. So, it is a good time to look at how we can do some smoothening and this is the reason we are adopting this. And, yes, the supply will go back to the relevant category.

Mr Deputy Speaker: Mr Pritam Singh.

Mr Pritam Singh (Aljunied): Thank you, Mr Deputy Speaker. Just two questions for the Minister for Transport and they are quite narrow, relating to the volatility or trying to manage the volatility in COE prices. So, the first question is: with regard to car loan restrictions, which are now at seven years and at 70% of the selling price, is the Ministry intending to look at the loopholes vis-a-vis these car loan curbs, because it is not uncommon to hear of dealerships offering 100% loans and things of that nature. That is the first question.

The second question pertains to the continuing relevance of the Cat E COE, the open category. Unlike Cat A and Cat B, which we know are tied to car registration numbers, the Cat E COE can be traded for up to three months, if I recall correctly. So, there is a potential speculative vector in Cat E COEs. I would like to know what is MOT's view on the continued relevance of Cat E COEs and whether removing that category altogether can help towards a smoother COE system.

Mr S Iswaran: Thank you, Mr Deputy Speaker, and to the Leader of the Opposition. Just to be very clear, we are not talking about volatility in prices. That is not the objective of the exercise. It is volatility in supply. How prices eventuate in the market – as I have discussed and all of us know – is a function of various factors that are taking place. Today, the prices may go down, tomorrow they may go up. We think that the long-term trajectory is upwards for the reasons I have mentioned. Our supply is basically zero growth. So, it is capped. And the demand is a function, among other things, of incomes, and incomes are rising. So, we must be prepared for this.

So, if every time COE prices go up, we approach it as some kind of a new phenomenon, I think we should take pause and understand that these are the fundamentals that we are dealing with. It is a hard choice we have to make. And the decision to have a zero vehicle growth rate is a very hard choice.

But what is the alternative? So, I just want to be very clear. It is not about price volatility, although that, I know, is a political concern. It is about supply volatility and how much we can smoothen that so that the market can function. That is the key thing.

On the point on curbs on car loans, this should be a question answered by MAS. Was there a PQ on this already? Today or? Maybe I will allow my colleague, Alvin Tan, to reply. But let me just say this. Loans are under the purview of MAS and, if it is hire purchase, then I think it is under the Ministry of Trade and Industry (MTI). But the key point I want to make is that the moves we are making from the MOT and LTA perspectives are really in order to ensure the market functions as we intended and to smoothen the supply and that is why we are going for this.

On the Member's second question on the relevance of Cat E, first, we need to size the thing correctly. Cat E has 10% only. Of Cat A and Cat B, 10% goes into Cat E, alright? So, why do we do that?

Essentially, we have had basically a Cat E component from the very beginning, and why is that important? When you have got these very fixed categories, you need a mechanism, a valve, if you will, that can help redistribute some because preferences may change over time. There may be a greater shift towards Cat A, there may be a greater shift to bigger cars, there may be other kinds of movements. We do not know. So, this really creates a valve in the system. It is a valve that we have actually been progressively throttling down. In fact, in the early days, it was much more – the contribution from the different categories – and today it is 10%. So, it is at a level we, of course, as I have said, with COEs and the system, the Government has always been reviewing and constantly evaluating the relevance of measures. But I am just trying to give the context for the Leader of the Opposition's benefit.

So, it serves an important purpose. I do not think it is a purpose that is irrelevant in today's context by any means and for the foreseeable future. But if there are some other efforts to think about the design of the system, then, at that point, maybe this can be revisited. So, the reason why you cannot say I create a valve but then I restrict its usage. That is why you need the flexibility. If you cannot trade it and apply it to different categories and give them enough time to do that, then you may as well not have the category. So, the design and the features are tied specifically to the intent behind having the category. Alvin, would you like to say something?

Mr Deputy Speaker: Minister of State Alvin Tan, if you would like to contribute to the debate.

The Minister of State for Trade and Industry (Mr Alvin Tan): Sir, just to build on the Minister's point. There is a PQ by Ms Mariam Jafaar at No 64 on today's Order Paper. So, I will respond for MAS using that PQ. But, primarily, MAS' restrictions on loans that are granted by financial institutions are to encourage borrowers to spend or to borrow prudently.

Mr Deputy Speaker: Members, the Minister gave a 25-minute Statement. I have allowed 20 minutes of clarifications. I know this is an important topic for both sides of the House. I propose to conclude this aspect of the business at the 60th minute mark. So, we have another 10 to 15 minutes. Mr Ang Wei Neng.

Mr Ang Wei Neng (West Coast): Thank you, Deputy Speaker, Sir. I thank the Minister for the very comprehensive reply. I have two supplementary questions on the Cat E COE. As what the Minister has said, the contribution of Cat E COE is from 10% of deregistered Cats A, B and C. I want to ask the Minister why do we want to contribute from Cat C where it is mainly used for commercial vehicles and all the Cat E COEs are mainly to register Cat B COE, which means that you are shrinking the Cat C COEs meant for commercial vehicles.

For the second supplementary question, I am very thankful that the Minister is using the COEs expiring in the next five years to reach earlier in the next few quarters. The Minister has said that they will go back to the respective categories. So, I would like to urge the Minister to really distribute more to Cat A COEs because it is a mass market COE, whereas the Cat E COEs always mirror and always register for Cat B COEs.

Mr Deputy Speaker: May I ask Members to keep your clarifications short?

Mr S Iswaran: I thank the Member for his suggestions.

First, why does Cat C also contribute to Cat E? Because Cat E can also be used for Cat C. That it is not the case today does not mean that it would not be the case tomorrow. That is why I am saying that what we have to bear in mind is that the market has its own dynamic. We do not know how things will go. People may decide that they do not like cars, they do not want cars and there may be a need more for commercial vehicles in which your Cat E will end up being used for Cat C.

Or people may shift their preferences to smaller cars because they want to be more environmentally conscious or spend less and so on. And then, your Cat E could potentially go in there.

And, in fact, we do see some of those sorts of behaviours. The point is, you must take from the categories to which the Cat E can apply and that is why we do this.

For motorcycles, for example, we do not do that. This was some years back and the reason is because you do not allow Cat E to be used for motorcycles. So, that sort of takes the motorcycles out of it. But for all the other vehicles, they are in the same class and we put them in that contribution group.

Can we do more? This is already a big move – taking five-year COEs that are expiring in the future and bringing them to the present. That is a one big move. It is a necessary move and we think it will have a salutary impact overall on the system. So, that is why we are doing it.

But we just want to have a situation where we do not make too many arbitrary kind of decisions. So, in response to Mr Vikram Nair's question earlier, I said we will re-allocate on this basis, that Cat A will come back to Cat A, Cat B to Cat B. And based on the numbers and what we can see, it should meet the objective of smoothening supply. There is no need for cross-deployment.

As I said earlier in my Ministerial Statement, for the bidding quarter we are having now, it will increase supply by 24%. I think that is quite substantial. In fact, the five-year COEs that are available for Cat B, we are a lot less and that is why also, consequently, you see a much lower percentage increase of about 15%.

Mr Deputy Speaker: Mr Leong Mun Wai.

Mr Leong Mun Wai (Non-Constituency Member): Thank you, Deputy Speaker. I have two questions for the Minister.

One is the whole discussion here actually is about prices going up too fast, too high and also about equity. When prices go up high, many Singaporeans will not be able to afford. So, one of the grievances that I have also heard from some residents is that the Cat A and Cat B, a lot of the expensive cars are now going down to Cat A. So, as a result, in order to ensure more equity amongst Singaporeans – the lower-income can still buy cars, the cheaper cars – will the Minister consider putting OMV as an additional criterion for classifying Cat A? That is one question.

The second question is that, for the recent phenomenon we have seen in the motorcycle market, it has indicated that the Government does have some leverage on controlling the prices in the motorcycle COE market. With the recent collapse, I think it is a reflection that not enough has been done in the past. Going forward, will the Minister say that the Government will be more careful because the price of a motorcycle is very important for many of our working Singaporeans; so, to be more careful in maybe controlling the prices of the motorcycle COE?

Mr S Iswaran: Mr Deputy Speaker, with your indulgence, can I just understand: so, does the Member think that lowering of the price is good or bad? I mean, I am trying to understand. When the Member said "be more careful", what does he mean?

Mr Leong Mun Wai: Minister, lowering is good. We will prefer to have a lower price.

Mr S Iswaran: So, if I may just ask one other question while the Member is at the lectern. Because I took considerable pains to explain this. Does the Member agree that if the supply is limited, in fact, capped at zero growth, and incomes are rising, that the almost unavoidable conclusion is that the prices must rise?

Mr Leong Mun Wai: Deputy Speaker, to answer the Minister, yes, we agree to many of the things that the Minister has said. For example, we have to control car population; as a result, we require the COE system to allocate the COEs, limited supply.

However, I think the Government should also be careful when prices go up too fast, there will be problems, problem from the aspect of affordability and also from the aspect of equity. So, as a result, the discussion today is actually about that, that prices have gone up too much. Like the motorcycle COE has gone up multiple times over the last two years. So, we prefer a lower price.

Mr S Iswaran: We all prefer lower prices, Mr Leong. Let us be very clear about that. We all want to help the people who buy cars and motorbikes. I do not think you have a monopoly of virtue in that regard. The real question here is, and if I hear you correctly, you accept that the long-term trend in prices must be up. So, now, your point is more about the rate of change and whether that can be something that can be done.

If I can take the Member's second question first. We do not control prices. I want to put that categorically on the table because we are not stipulating the price or even a range. The only thing that the Government is able to do is settle on the supply and if there are any mechanics in the system, whether there are reasons to adjust them. That is what we have been doing. How that flows into the market or works through the market is also dependent on demand, as the Member would know and, finally, the price outcome is how the market settles it.

We know that the Cat D price has come down. But does this mean that this is the new level? I think even if you listen to the industry players, they would advocate that we watch this for a while because whether it is buyers or dealers, they all have to sort of assess the situation and the market will have to find a new equilibrium. Where that is, I cannot say. But what I can say with certainty is that, in the long term, we will see upward price pressure for the fundamental realities we have discussed. So, we do not control prices. Please do not advocate that.

Secondly, Mr Leong makes this political point about higher COE prices mean many Singaporeans cannot afford. So, the sub-text here is that somehow it is foreigners who are buying it – because if Singaporeans cannot afford it, who is buying it? So, that is the Member's implication. I want the Member to be upfront about it because I have taken pains to point out again that the proportion of foreigners buying cars has remained low and stable.

So, yes, what is happening is actually and the correct characterisation may well be that when the COE price goes up, some people will find it more difficult to afford; other people may find it easier to afford. So, there is a re-allocation and distribution going on within our society. And that is one of the things. It is a politically uncomfortable thing but it is a reality. And I would urge the Member to be careful in the way he makes this point; otherwise, we give wrong conclusions and we end up distorting the discussion.

But having said that, if the Member wants to respond to this specifically, please do so.

Mr Deputy Speaker: I think you can carry on, Minister.

Mr S Iswaran: Thank you. The other point that the Member makes is on OMV and whether OMV should be used as a basis for categories.

I had addressed the Member's point in my Ministerial Statement. The median OMV for Cat B is about 70%, 75% more than the median OMV for Cat A. That means actually the market is already quite separated; I mean, you have the separation in terms of value. The next thing is we have achieved this or this is the outcome but the criteria, we are using our objective criteria – engine capacity, power output, what I have described earlier. And our objective has always been to make sure that these criteria are able to accommodate the mass market models in the Cat A, as far as possible. That was one of the reasons for the recent adjustment so that the mass market electric vehicle models could also be captured.

But is there going to be some movement on the margin? Yes. So, you will see, as the Member has put it, some of the more expensive type cars migrating to the Cat A. But by the same token, we also have what are considered generally as mass market cars that are actually in Cat B. Examples will be some of the SUVs like Subaru Impreza and Mitsubishi something or other. Because of their engine capacity, two litres, they are in Cat B.

What I am trying to say is that it is not a clean cut. And the problem with using an OMV, amongst other things, is that the OMV is not something that is objective criteria because there are a lot of other variables. For example, if exchange rates move, the OMV of the car changes. So, how would you account for that?

When we are making these recommendations, let us keep this in mind that there are many moving parts. But the fundamental objective, which is the point that the Member is also driving at, we want to ensure that there is an element of progressivity in our COE system. And that is why we have two categories. And, as I said in my Ministerial Statement, we will continue to look at this and if there is a need to adjust the criteria that divide the two categories, we will look at it. But as of now, there is no compelling reason and, certainly, not to use the OMV.

Mr Deputy Speaker: Mr Leong, insofar as you are going to respond to the Minister's question to you, you are allowed to do so. And then, we will end with the last hand which I see, which is Mr Pritam Singh. And then, we will move on. So, Mr Leong, would you like to respond to the Minister? No clarifications, please. Just your answer to the Minister.

Mr Leong Mun Wai: Thank you, Deputy Speaker. I would like to respond to the Minister's point about whether I am pinpointing foreigners crowding out the Singaporeans in the market. In this instance, about this COE, no. My question is about the equity amongst Singaporeans.

The Minister mentioned that COE prices for the OMV value between Cat A and Cat B, there is a 75% difference. But actually, that may not capture the whole picture. So, anyway, we are just urging the Government to further consider so that under Cat A, the slightly lower-income Singaporeans can still afford the cheaper cars.

Mr Deputy Speaker: Minister, do you want to respond?

Mr S Iswaran: Maybe after the last clarification.

Mr Deputy Speaker: Very well, after Mr Pritam Singh. Mr Pritam Singh.

Mr Pritam Singh: Thank you, Mr Deputy Speaker. Just a quick point in response to the remark made by Minister of State Mr Alvin Tan vis-a-vis Mariam Jaafar's question for today's Order Paper. It is directed at the Prime Minister and specifically to MAS on curbs on car loans. As we know and as the Minister has alluded to, we also have car loans which take the form of almost like money lending or quasi-money lending arrangements. You have hire purchase, which comes under MTI.

So, just to confirm whether this would be a whole-of-Government exercise to look at car loans or vehicle loans, including even motorcycle loans, and whether there is any prospect of a review to ensure that the loopholes, with regard to the financing of vehicles, can be further looked at and even tightened, if need be.

Mr Alvin Tan: Mr Deputy Speaker, the short answer is MAS will work with MOT to monitor the situation in the COE market.

Mr Deputy Speaker: Minister Iswaran, if you can close the business on this subject?

Mr S Iswaran: Yes. I thank Mr Leong for clarifying that he is not making the argument that foreigners are depriving Singaporeans of cars, because he has been known to make that argument in other contexts. So, I wanted to be very sure about it. It is okay. You do not need to pursue the matter.

But having said that, I just want to thank all Members for a very vigorous clarification session. The objective, if I may restate, with your indulgence, Mr Deputy Speaker, is that we need to make sure that all of us in this House and Singaporeans in general understand the fundamental constraints that we are dealing with. We cannot run away from them and those constraints around land, around carbon emissions and what we need to do are something that we will have to grapple with.

Previous Transport Ministers have had to do this, I am doing it, future Transport Ministers will have to do this. But, in the end, they need this House to support and also the broader society because if we do not internalise these constraints, then we are always going to be unhappy with the outcome.

What we do need to do though is then work on all the other options and solutions so that we can make the transport system in Singapore not just car-lite but, as I have said, accessible and inclusive and sustainable. [Applause.]

2.03 pm

Mr Deputy Speaker: Order. End of Ministerial Statement. Introduction of Government Bills. Minister of State Alvin Tan.