INCREASE IN ROAD TAX

Mr Hwang Soo Jin asked the Minister for Communications and Acting Minister for Culture for his comments on the unhappiness of motorists who feel that the recent increase in road tax is not only unjustifiable but also high and will not contribute to limiting the growth in the number of cars, and that instead of relying on the price mechanism to act as a deterrent, the Government should consider other more positive measures, including the introduction of an import quota system for cars.

The Minister for Communications and Acting Minister for Culture (Mr Ong Teng Cheong): Mr Speaker, Sir, I sympathise with motorists affected by the recent increases in Additional Registration Fee and road taxes. Regrettably, however, they are necessary to reduce congestion on the roads. Although various other measures including possibly import quotas could be considered, pricing is perhaps the most appropriate measure in Singapore's free-economy system. Pricing has proven to be effective in 1975 and 1976 when the car population dropped nearly 5% in 1976 and a further 1% in 1977 following tax increases. The recent measures are minimal considering that real incomes have risen over the years.