WP's proposal for needs-based COE system benefits too few: Jeffrey Siow
Lee Nian Tjoe for The Straits Times
A needs-based certificate of entitlement (COE) system sounds attractive, but in practice will be subjective, divisive and benefit too few, said Acting Transport Minister Jeffrey Siow.
He was responding to Associate Professor Jamus Lim (Sengkang GRC), who proposed giving COE discounts to groups with a greater need for private car ownership in a speech at the close of the Sept 22 Parliament sitting.
Mr Siow said that while he does not doubt that some families, such as those with young children, will benefit from owning a car, the Government is focusing its efforts on mass public transport and not car ownership, as it delivers "the greatest good for the greatest number".
COE revenue, which amounts to $4 billion to $6 billion a year, is used to subsidise a high-quality public transport system that is affordable, as well as other expenditures such as healthcare, education and defence, he noted.
Mr Siow said he has received many appeals for COE subsidies or discounts for families with young children or caregivers of elderly parents who need to go for medical appointments.
He acknowledged it is still not easy to navigate the public transport system with young children or seniors who use wheelchairs, though the situation is much better now with barrier-free access.
However, he said it is difficult to make the case for targeted COE subsidies.
His view is that instead of giving one family a sizeable subsidy on COE that can be in the tens of thousands, the same amount can be redistributed to help more families. This can include those who do not want or are unable to have a car.
Mr Siow said it is also challenging to allocate COEs based on needs because views will be divided on who is more deserving of support.
He asked: "For example, if we subsidise families with children, how many children? How old should the children be?
"Or if we allocate based on income, we have to decide whether to do household income or personal income, or whether big households should be more deserving than small families."
He added: "No matter how one draws the line, there will still be people who fall on the wrong side."
A COE is needed to register a car in Singapore.
Prof Lim, who is from the Workers' Party, said he is aligned with the Government's position to prioritise public transport, and agreed that the Ministry of Transport should rightly be focused on making services efficient, affordable and accessible.
But three groups, he said, are in greater need of their own vehicle.
The first comprises persons with disabilities, who already qualify for a full waiver on the cost of COEs under the Disabled Persons Scheme.
Another group consists of parents with young children. Under his proposal, those with two children under age 14 will get a 10 per cent discount on a COE. An extra 10 per cent discount will apply for every subsequent child under 14.
The third group of people are the primary caregivers of either two parents who are above 80 years old or a chronically ill parent who needs regular medical check-ups. Those in such situations, Prof Lim suggested, will qualify for a 10 per cent discount, provided they are living with their parents.
This is not the first time that a needs-based COE system has been raised.
In January 2025, Ms Hazel Poa from the Progress Singapore Party, who was then a Non-Constituency MP, argued in Parliament for the distribution of COE credits based on needs.
In response to Ms Poa, Dr Amy Khor, who was then Senior Minister of State for Transport, said the proposed ideas may be well-intentioned but were unlikely to be effective in practice due to its complexity. Dr Khor also said that it would be hard to justify who gets more credits.
Mr Siow also weighed in on the concerns over rising COE prices in recent months, reiterating some of the moves made to stabilise COE supply.
These include bringing forward the COE supply from the future to smoothen out the peaks and troughs of the supply curve, and a one-off injection of up to 20,000 COEs over a few years.
Even so, Mr Siow noted that COE premiums have continued to rise because of demand.
On the suggestion by some that demand for COEs from private-hire car companies has driven up premiums, Mr Siow said car-leasing companies have won less than 10 per cent of COE bids in 2025.
COE premiums for cars continued to soar at the last tender on Sept 17, with the price of a certificate for a smaller car hitting a new high of $119,003.
In response to suggestions to separate COEs for private-hire cars from those meant for individuals, Mr Siow said this would mean taking away supply from the two existing car COE categories.
Conversely, if the resulting COE supply for private-hire cars is too low to meet customer demand, Mr Siow said this could lead to higher ride-hailing fares, which will disadvantage those who use such services because they cannot afford a car.
Ultimately, the Acting Minister said the market mechanism is transparent and allows the Government to channel COE revenues for the benefit of the wider public.
"This is not a perfect system, but it is the fairest and most effective way to allocate a scarce resource in Singapore's context."
