PREFERENTIAL ADDITIONAL REGISTRATION FEE (Raising of 10-year limit)

Mr Chng Hee Kok asked the Minister for Communications and Information if he will raise the 10-year limit on motorcars for Preferential Additional Registration Fee to save foreign exchange.

The Minister for Communications and Information (Dr Yeo Ning Hong): Mr Speaker, Sir, the PARF scheme was introduced in 1975 as an incentive to encourage car owners to scrap their cars before they are 10 years old. The objective is to reduce the number of old cars so that there would be fewer breakdowns and greater safety on our roads, and also to minimize the traffic congestion during peak hours caused by such breakdowns.

This policy has proved effective over the last 10 years. We now have a relatively young car population. Raising the 10-year age limit will mean more old vehicles with a greater likelihood of breakdowns returning to our roads. That will result in greater inconvenience for all road users.

The PARF scheme has been an incentive to encourage scrapping before the cars become unroadworthy and have to be scrapped out of necessity. There is no compulsion. Car owners are free to choose when to scrap their cars. Those who have well-maintained cars can keep them beyond the 10-year limit. It is unnecessary to give an incentive to owners who have cars older than 10 years old and wish to scrap them when they are no longer roadworthy.

I should add, Sir, that our car restraint policies, in fact, achieve what the hon. Member appears to ask for, ie, to save on foreign exchange. By keeping the car population at a low level, we have reduced the amount of foreign exchange spent on the purchase of new cars.

Mr Tan Soo Khoon (Alexandra): Sir, does the Minister not agree that the compulsory inspection of vehicles contributes to a reduction in breakdowns of vehicles?

Some hon. Members: Hear, hear.

Dr Yeo Ning Hong: Sir, the compulsory inspection ensures that minimum standards are kept. But we all know that old equipment and old machinery do have a greater tendency to break down with increasing age. So too with cars.

Dr Augustine H.H. Tan (Whampoa): Mr Speaker, Sir, does the Minister have any figures on the age of cars which do break down on the roads?

Dr Yeo Ning Hong: Sir, we do not keep a record of all the cars that break down on the roads. But I am sure the Member for Whampoa will remember that way back in the 70s it was a common sight to see cars breakdown along the roadside and owners plucking off a branch from a tree and sticking it at the back of the bumpers.

Some hon. Members: They still do.

Mr Chng Hee Kok: Is it not true that the recession is really the major cause of the decline in the car population growth last year? If that is the case, why do we not allow a suspension or lift the 10-year limit for a limited time until the economy recovers?

Dr Yeo Ning Hong: Sir, it is probable that the recession was the primary cause for the slower growth of cars over the last 12 months. The PARF is a different scheme altogether. The PARF is meant to keep the number of old cars down to a reasonable number.

Dr Augustine Tan: Does the Hon. Minister have any figures on cars which are 10 years and over which are exported to other countries? Because if they are actually exported, we are gaining some foreign exchange.

Dr Yeo Ning Hong: Sir, the Ministry does not keep track of where all the old cars go. But we know that most of the old cars have been scrapped locally. If the Member is interested, Sir, I could inform the House that in 1975, one car out of every five was 10 years or older. Today, one car out of 14 is 10 years or older. That has helped significantly in ensuring that we do not have serious traffic congestions, particularly during peak hours.