REDUCTION OF ROAD TAX (Consideration)

Dr Arthur Beng Kian Lam asked the Minister for Communications and Information, as the target that car growth should not exceed the rate of increase in road capacity has been attained, and taking into consideration the fact that there are fewer vehicles on our roads today than a year ago, whether the Minister will consider a reduction in road tax at this time of economic recession.

The Minister for Communications (Dr Yeo Ning Hong): Mr Speaker, Sir, Government's objective in land transportation is to ensure that our roads remain free from serious traffic jams, so that people and goods can move about quickly and efficiently. We must continually keep the growth of cars within manageable levels. Otherwise, corrective measures will be difficult and painful.

Therefore, we must look at the long-term trend in the growth of cars rather than in any one particular year. Last year, even with the recession, the increase in the number of cars was about 2%. With a recovery of the economy, there is no reason to believe that there will not be a sharp increase in the number of cars. It is therefore reckless to reduce road taxes to stimulate an increase in cars.

In the meantime, Government continues to push ahead with the building of roads and expressways as well as the construction of the MRT.

Dr Arthur Beng Kian Lam (Fengshan): Mr Speaker, Sir, does the Minister not agree that the reduction of road tax, like petrol price and taxi fares which the Ministry has rescinded, will result in a significant reduction in the cost of living and cost of doing business in Singapore, which is the goal of the Government?

Dr Yeo Ning Hong: Sir, the answer is yes. The reduction of petrol prices which has already taken place has indeed con- tributed to the lowering of the cost of living and cost of operations.

Mr Chng Hee Kok (Radin Mas): Sir, will the Minister give an assurance then that road tax will not be increased so long as the relative growth rates between cars and roads are maintained?

Dr Yeo Ning Hong: Sir, I can give the assurance, as the Member has said, provided that the growth of cars is within manageable levels, relative to the amount of roads to be built over the next five or six years. And that will represent the limit of land available in Singapore for roads.

Mr Chng Hee Kok: Sir, the rates we are talking about are the relative growth rates between roads and cars. Does the Minister intend to peg the increase in road tax to some kind of ratio between the increase in cars and increase in roads?

Dr Yeo Ning Hong: Sir, we have to manage our land transportation policies rationally. With about 15% more roads, as far as the potential of land is concerned, we will have to watch the situation carefully and continue to encourage the use of more efficient land transport systems.

Dr Arthur Beng Kian Lam: Sir, will the Minister consider reduction of taxes for goods vehicles and other vehicles used for business?

Dr Yeo Ning Hong: Sir, like all vehicles using our roads, goods vehicles too have to pay their proportionate level of contribution. Many of these taxes for goods vehicles have been kept the same ever since 1966. So in effect, taking into account inflation, the level of taxation has indeed been reduced as a result of the passing years.