Hansard Explorer

Mr Yip Hon Weng asked the Minister for Transport (a) what market distortion the proposed COE fee-and-rebate (“feebate”) system is intended to correct; (b) how the Ministry will assess whether the reform restores meaningful differentiation between mass-market and higher-value cars; and (c) whether, beyond correcting this distortion, the Ministry will examine how the proportion of mass-market households who can reasonably aspire to car ownership compares with earlier eras.

Ms Jessica Tan Soon Neo asked the Minister for Transport (a) whether LTA’s COE review will assess affordability impacts on family households and SMEs reliant on cars or commercial vehicles; (b) how these impacts will be evaluated; and (c) whether the review will consider measures to support those priced out by market driven COE outcomes.

Dr Choo Pei Ling asked the Minister for Transport regarding the proposed changes to the Certificate of Entitlement (COE) system (a) how will the Ministry prevent the system from disincentivising the adoption of high-performance electric vehicles (EVs) which often carry a higher Open Market Value (OMV); and (b) how will the Ministry ensure that mass-market car buyers are not financially crowded out by luxury car buyers.

Mr Edward Chia Bing Hui asked the Minister for Transport (a) whether LTA has assessed setting the proposed fee-and-rebate, or feebate, as a percentage of the COE price instead of fixed amounts; and (b) what safeguards will ensure that rebates reach buyers and are not absorbed into dealers’ selling prices.

Mr Edward Chia Bing Hui asked the Minister for Transport further to LTA’s consultation paper on COE car categorisation (a) when will individuals be able to submit initial COE bids online instead of only through ATMs; (b) whether bid fees for individuals will be reduced or waived; and (c) whether motor dealers will be required, and not just encouraged, to publish car prices both with and without COE.

Ms Tin Pei Ling asked the Minister for Transport (a) whether the proposed fee-and-rebate or feebate scheme in the latest LTA public consultation on proposed changes to the COE system will drive up demand for vehicles with originally lower open market value and inadvertently drive up prices of mass market vehicles; and (b) what further support can large Singaporean families with car needs receive to help mitigate high costs of living.

The Minister for Transport (Mr Jeffrey Siow): Mr Speaker, Sir, may I have your permission to take Question Nos 32 to 37 in today's Order Paper, as well as related questions filed for subsequent Sittings? [Please refer to "COE Affordability and Re-categorisation Considerations in Review ↗", Official Report, 4 November 2026, Vol 96, Issue 41, Written Answers to Questions for Oral Answer not Answered by End of Question Time section.]

Mr Speaker: Please proceed.

Mr Jeffrey Siow: Thank you, Mr Speaker. Mr Speaker, the Land Transport Authority (LTA) concluded its public consultation exercise on the Certificate of Entitlement (COE) categorisation yesterday. We are studying the submissions and have not yet decided on the outcomes. So, I ask for Members’ understanding if I do not yet have the answers to some of your questions today.

Let me first set the context for this review. Today, there are 660,000 passenger cars. We have 1.5 million households – two and a half times the car population. Roads already occupy more than 12% of Singapore's total land area. And just last month, we debated in this House on competing demands for land, including housing and nature areas. We also discussed the disamenities of constructing a major road, the North South Corridor.

Singapore does not have enough land for every household to own a car. In fact, the reality is that we cannot even grow the car population much further. This is why the Government’s approach has always been to put public transport first. Not everyone can drive or wants to drive or to own a car. But everyone can take public transport.

In Singapore, we have invested heavily to build up a public transport system that is accessible, reliable and affordable for all. The Government spends around $6 billion to $7 billion a year on public transport, including subsidies to keep fares affordable. In comparison, COE revenues have averaged about $5 billion over the past decade, annually.

Put another way, without COE revenues, we would have to find some other way to fund the public transport system that millions of Singaporeans use every day.

But I understand that public transport does not meet every need. A car ride is more convenient when bringing elderly parents to see the doctor, travelling with young children, or returning home after a late night shift. Some use taxis, private hire cars or shared cars to meet these needs. The taxi and private hire car population has grown from 28,000 in 2013, to about 70,000 last year to meet these growing demands. These are more affordable options to travel by car, without the expense of owning one.

For those who prefer to own a car, the COE system is a transparent, market-based means of allocating this limited supply of 660,000 cars. The revenues generated then go towards funding public transport for all Singaporeans. This achieves the greatest good for the greatest number.

So, this is the broad context. Every now and then, we still have to refine the COE system because of market dynamics or technological change.

Fifteen years ago, Category A and B prices converged because of the increasing prevalence of smaller cars with turbo engines. So, we added an engine power criterion. This worked for quite a few years to separate Category A and B premiums.

Now, Category A and B prices are converging again, because of electric vehicles (EVs). Manufacturers and workshops can easily adjust the power output of EVs using software, and so, the same car qualifies for different COE categories. As a result, Category A premiums have exceeded Category B premiums on a few occasions this year. Without intervention, this trend will continue as EVs become more popular.

Mr Edward Chia’s "feebate" scheme, proposed a few months ago, aims to restore a permanent price distinction in COE premiums between mass market and luxury cars. LTA consulted the public on the design of this feebate scheme. The majority of respondents expressed support for such a scheme. Most people preferred a feebate with five bands, to reduce cliff effects.

Mr Edward Chia asked if the feebate could be a percentage of the COE price instead of a fixed amount. This could reduce the cliff effects further, but one downside is that buyers would not know the exact rebate or surcharge before the auction begins.

In response to Mr Chia and Mr Victor Lye, some car buyers still prefer to have their motor dealers bid for COEs on their behalf, as a one-stop service. So, we should not make this too difficult. But we can make it easier for individual buyers who wish to bid for COEs on their own. I have asked LTA to evaluate whether to further reduce COE bid fees – which today are at $2 a bid for individuals – and whether to require motor dealers to publish car prices without COEs.

A separate feebate structure for EVs was also proposed, I think by Dr Choo Pei Ling. But I think this would over-complicate the system. To Dr Choo’s question on high-performance EVs, the Government will continue to support EV adoption separately through the Vehicle Emissions Scheme, rather than via COE policies.

Assoc Prof Jamus Lim asked about the treatment of taxis and private hire vehicles and car leasing companies under the feebate system. We are still reviewing the treatment of taxis under the proposed feebate system, so, I ask for more time before we come back on this question. Private hire cars, on the other hand, are private cars with the added flexibility to be used for private hire. So, they are not totally like taxis which cannot be for private use.

We considered creating a separate COE category for private hire cars, but doing so will restrict the supply of COEs for private hire cars. This would raise rentals for private hire car drivers and drive up fares for commuters, which would be unfair to those who do not own a car or cannot drive.

Ms Tin Pei Ling asked if more can be done for large families with car needs. I recognise that larger families, particularly those with young children, find travelling together by public transport difficult. But in supporting such families, we must consider not just those who plan to purchase a car, but also those who do not want a car and rely on public transport, taxis or private hire cars. We are therefore studying the option of a transport grant for large families, which can be used more generally. LTA will provide more details of that later.

Mr Speaker, I thank Members and the many Singaporeans who have contributed their views on this COE review. We will study the public feedback carefully and continue to improve the COE system. I recognise the concerns that Singaporeans have about high COE prices and the cost of owning a car. While we will try our best to refine the COE system for car buyers, my first responsibility is to build a transport system that serves all Singaporeans. So, I ask for everybody's understanding.

Mr Speaker: Mr Yip Hon Weng.

Mr Yip Hon Weng (Yio Chu Kang): Thank you, Mr Speaker. I thank the Minister for his response. My supplementary question is on affordability of car ownership for the average Singaporean. The proposed framework defines mass market cars relative to the value of other cars. As part of the review, will the Ministry of Transport (MOT) consider an income-linked benchmark to assess whether cars in the lower-value bands remain meaningfully affordable to ordinary Singaporean households over time?

Mr Jeffrey Siow: Thank you, Mr Speaker. The COE is market-determined. COE prices are determined by demand and supply. Generally speaking, we can control either the quantity or the price, but it is not possible to do both, not easily done. So, the COE policies are designed to control the overall quantity of cars and therefore, trying to control the price is very difficult. In fact, it is very difficult to predict what the COE price is going to be. Therefore, dealing with an income index, and trying to link it to income and then affordability is a very difficult exercise.

What we really want to do, knowing that we cannot enable everybody to own a car, we try to enable as many people to have access to a car ride. And beyond that, to really focus our attention on public transport, which can meet the needs of more Singaporeans.

Mr Speaker: Ms Jessica Tan.

Ms Jessica Tan Soon Neo (East Coast): Thank you, Mr Speaker. I have two supplementary questions for the Minister. One is that many Singaporeans are raising children while caring for ageing parents. For these sandwich generation families, having a car can really help reduce the coordination burden associated with caregiving and multiple medical appointments, or mobility challenges. Has the Ministry considered how vehicle affordability affects caregiving responsibilities, particularly for such households? I know the Minister has shared that it is difficult to balance affordability as well as owning a car, but for these families, it does make a significant difference. I would like to hear the Minister's views on that.

On my second supplementary question, can there be an assessment of how sustained high COE affects the viability of small businesses relying on commercial vehicles? I know the assessment now is about mass market and higher-value cars. But has MOT considered whether there may be merits in exploring a framework that better recognises business essential vehicle usage for micro businesses and self-employed people who do need a vehicle; and they do not have that purchasing power?

Mr Jeffrey Siow: Thank you, Mr Speaker. I very much understand the needs that the Member has raised. There are many Singaporeans who juggle the responsibilities that she talked about – raising young children, caring for elderly parents. I think many of us in this House will understand. Some of these households may indeed prefer to own a car.

But our principle is that the Government must support all families, including those who do not own a car or who do not wish to own one; and again, going back to the point where our priority is to provide good public transport, complemented by taxis and private hire cars, which every Singaporean can have access to.

More broadly, the Government does support families with caregiving responsibilities in other ways, including through childcare and elder care subsidies, healthcare support, other assistance to defray household expenses. Families who are in a situation where they still wish to own a car can consider their overall household finances, including the support they receive from the Government, and then decide how best to manage the additional expense of car ownership.

On the Member's second question on small businesses, that is always something that is top of mind for MOT. The review as we have scoped it is really on specifically on passenger cars at the moment. But we do look very closely at Category C, the COE categorisation for commercial vehicles, and we will separately consider the Member's suggestion on commercial vehicles as we continually review the system.

Mr Speaker: Dr Choo Pei Ling.

Dr Choo Pei Ling (Chua Chu Kang): Thank you, Mr Speaker. I have two supplementary questions for the Minister.

First one, if monitoring shows that mass market buyers face higher effective COE costs after the changes, what would trigger a review? And secondly, how will the Ministry distinguish between a higher Open Market Value (OMV) arising from EV technology and one reflecting luxury positioning?

Mr Jeffrey Siow: Thank you, Mr Speaker. The plan is for LTA to review the feebate system annually to ensure that the scheme parameters, including the OMV thresholds and the feebate quantum remain appropriate. Well, we have not started the system yet, so, perhaps let us give ourselves some time before we decide how we are going to structure the review.

As for how to distinguish between OMV arising from EV and luxury cars, the OMV of the car is actually set by the car manufacturer and importer. It is currently used to calculate the taxes, like the additional registration fee, and so it is a good starting point to proxy the value of the car for the Feebate Scheme. That is really what matters – the value of the car, rather than the technology that goes into the car.

Mr Speaker: Mr Edward Chia.

Mr Edward Chia Bing Hui (Holland-Bukit Timah): Thank you, Speaker. I have three supplementary questions for the Minister. First, on the point of the percentage feebate, I note that the Minister says that the issue is that bidders will not know the absolute amount and he will ask LTA to review this. So, would the review also include having dealers to itemise the items on the sales invoice, requiring dealers to report actual selling price at registration, so that LTA can track the actual rebate and ensure that the rebate reaches the customers? So, this will address the unpredictability of the absolute amount.

Conversely, if the decision is to keep the fixed amount capped, how would LTA be reviewing this? Because the effect will weaken or strengthen, depending on the prevailing COE. What are the thresholds of review and would this also mean that it could be tied to the COE premium, essentially?

My second supplementary question is, in terms of online bidding, can the Minister commit that the online bidding will be in place before the new COE framework takes effect? And will the online bidding system will also be applicable to all bank account holders and types? I understand that right now, only specific bank holders can bid on COE by themselves.

And my last supplementary question is, will the feebate apply to COE renewals as well; and if not, what is the transitional support given to owners of mass market vehicles who would wish to renew their COE?

Mr Jeffrey Siow: Thank you, Mr Speaker. First of all, I want to thank Mr Edward Chia. His questions allow me a chance to thank him personally for being so closely involved in this review. He was the one that proposed the idea originally and then he has been involved in the public consultations to explain these ideas to people who have participated. So, very, very grateful for that. Members can tell because the questions he asked are very technical, not all of which I have the answers to. I will try my best.

Specifically, on his three questions on applying the feebate, our intention is to make sure that the feebate is applied to the COE price directly and not through the dealer. So, whether it is a percentage or, as I explained, in absolute amount, we will make sure that it will do so, and it will be clear and transparent to the car buyer.

On the online system, LTA is trying very hard to build the system at the moment. I think I had better not commit them to a timeline. It is somewhat of a separate issue, because the intent is to make it easier for individual bidders to bid. It is not quite entirely related to the feebate mechanism, but we will see what we can do to make sure that the two are aligned.

And finally, on his last question on the feebate and how it applies to renewals, we are studying this at the moment. What is likely is that if you renew, you will still have to pay the Prevailing Quota Premium (PQP) of the single COE price, but the question is whether to apply the feebate even then to the renewal price. We are studying the implications of that. So, please give us some time.

Mr Speaker: We have many Parliamentary Questions (PQs) today and I would like to cover as much as possible, particularly those listed later covering the haze situation. So, I am only going to call Members who have filed PQs, if they have supplementary questions.