DEREGISTERED AND SCRAPPED VEHICLES (Cash refunds)

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DEREGISTERED AND SCRAPPED VEHICLES:

(Cash refunds): 24.

Mr Steve Chia Kiah Hong asked the Minister for Transport if he will consider offering cash refunds as an option for motorists who have deregistered and scrapped their vehicles.

Mr Yeo Cheow Tong: Sir, as Members are aware, we introduced the Certificate of Entitlement (COE) as part of the Vehicle Quota System in 1990 to manage the growth of the vehicle population. The COE is a non-refundable upfront payment, which entitles a vehicle to be used for a specific period. If the COE is not fully used up for whatever reason, it will lapse. However, as a concession, when vehicle owners scrap or export their vehicles before the expiry of the COE period, the Government has allowed them to recover the residual value of the COE validity through a rebate.

The Preferential Additional Registration Fee (PARF) scheme was introduced in 1975 to encourage timely replacement of old cars, so that the car population will remain relatively young and roadworthy. In essence, it allows car owners to replace their old cars with new ones at a discount by using a PARF rebate.

As the COE and PARF rebates are not meant to be refundable deposits placed with the Government, they are therefore not payable in cash. However, they can be used to offset the taxes and fees related to the purchase of a new vehicle. Since 1998, we have also made the process for utilising the rebates more flexible. Now, rebate certificates can be divided up or combined to offset the payment of COE, ARF, or the Registration Fee for new vehicles. They can also be transferred to a third party.

Mr Steve Chia Kiah Hong: Sir, would the Minister consider changing the law to allow for cash rebate?

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Mr Yeo Cheow Tong: Sir, as I have said in my reply, the system is not meant to be a deposit which is refundable. It is actually a payment and the concession is the rebate that we are giving.

Mr Steve Chia Kiah Hong: Sir, can the concession be allowed in the form of a cash rebate? Will the Minister consider that option?

Mr Yeo Cheow Tong: The answer is no, and it is because we have considered it many times. Let me explain to him why.

Sir, it is also a difficult process to estimate the amount of ARF and PARF rebates. Let me tell him that the amounts that we have rebated vary from about $600 million to last year's $3 billion. As such, it is very difficult to set aside the funds. Because, to do so, it would then deprive other Ministries of the funds that are being set aside.

Mr Steve Chia Kiah Hong: Sir, where the amount of rebate is small, say, below $1,000, would the Minister consider that option so that it would not inconvenience the motorist to have to look for a buyer to take over that rebate?

Mr Yeo Cheow Tong: Sir, if we do it for any particular amount, I think it would be fair that we do it for everybody. Therefore, it is not possible for us to change it into a cash rebate system.

2.38 pm

Mr Speaker: Ministerial Statement. Mr Wong.