Debated in Parliament on 11 Nov 2013.
Order for Second Reading read.
Mr Speaker, Sir, I beg to move, "That the Bill be now read a Second time."
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This Bill seeks to make a number of changes to the Road Traffic Act. The key changes relate to: (a) the conditional growth for the taxi fleets of taxi companies under the taxi availability framework; (b) taxation for the registration of previously de-registered vehicles; and (c) measures to improve the operational effectiveness and efficiency of the Land Transport Authority (LTA).
Firstly, conditional growth for taxi fleets. Sir, let me first discuss the changes in this Bill to implement the conditional growth criteria for taxi companies.
Under the taxi availability framework that was announced in July 2012, taxi companies will have to fulfil minimum standards pertaining to the availability of their taxis during peak hours and the general availability of their taxis on the road, before they can grow their fleet. This is to ensure that existing taxis are better utilised and, hence, better fulfil their public transport role.
Clause 7 of the Bill thus amends section 103 of the Act to enable LTA to determine the maximum number of new public service vehicle licences for each taxi company based on its performance. The amended section 103 also provides for the right of taxi companies to make written representations for LTA's consideration.
LTA had given the taxi industry time to adjust to the new framework after it was announced in July 2012. From August 2012 to December 2013, taxi fleet growth was capped at 2% for all taxi companies, but without conditions. From January 2014, taxi fleet growth for individual taxi companies will still be capped at 2% but will be subjected to the company having met the required taxi availability standards.
Two, taxation for the registration of previously de-registered vehicles. Sir, the second set of changes to the Act empowers LTA to collect the relevant vehicle tax, known as the Additional Registration Fee (ARF), upon the registration of previously de-registered vehicles.
Currently, the Act only allows the collection of tax at the point of first registration of every vehicle in Singapore. This precludes the second registration of vehicles, namely, after they had been previously de-registered in Singapore. As a rule, de-registered vehicles are not allowed to be brought back into Singapore. However, an exception was made for de-registered vehicles that qualify for the Classic or Vintage Vehicle schemes, if the relevant taxes are paid. Clause 5 of the Bill amends section 11 to allow ARF to be collected for
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such vehicles.
The third group of amendments, Sir, will improve LTA's effectiveness and efficiency in its operations.
Clause 2 allows the LTA to take better enforcement action against car owners who illegally rent out their personal vehicles for use by members of the public for hire and reward. Currently, such rented vehicles may only be regulated under the Act as public service vehicles if they are chauffeur-driven, but not if they are self-driven by the hirers. Clause 2 amends the definition of public service vehicles to include these self-driven rented vehicles so that they will be regulated under the Act.
Clause 4 strengthens LTA's ability to enforce against vehicle alterations for fuel tax evasion. The existing section 6A of the Act only allows LTA to prosecute against motorists who alter the fuel gauges in Singapore. LTA is unable to prosecute against motorists who alter the fuel gauge outside Singapore. To address this gap, the new section 6B makes it an offence to leave or attempt to leave Singapore knowing that the fuel-measuring equipment in their vehicles has been altered.
Finally, clauses 8 and 9 delegate the power to appoint individual LTA employees to cancel traffic ticket notices and compound offences from the Minister for Transport to the Registrar of Vehicles in person. Sir, I beg to move.
Question proposed.
Mr Deputy Speaker, my speech on the subject of this amendment Bill covers the new section 6B – which creates a presumption that a person in charge of a motor vehicle driven past the Customs checkpoint with a tampered fuel gauge knowingly does so and is liable to be guilty of an offence. The presumption is rebuttable, of course, for example, if it can be proven that the vehicle is shared or driven by a number of people and an accused person is unaware of the fact that the fuel gauge has been tampered with.
However, this new section will appear in our Road Traffic Act after Parliament approves it, as a result of another law that has been in place for more than 20 years now – the three-quarter fuel tank rule for Singaporean cars
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which cross Singapore Customs before entry into Malaysia, as referred to in the amendment Bill, section 136 of the Customs Act. Sir, I do not oppose the amendment Bill but I do ask that the Government conduct a review of the continued relevance and rationale of the three-quarter tank rule.
When then Finance Minister Richard Hu introduced the half-tank rule in 1989, the rationale, in his words, I quote, "was to ensure that the use of petrol pricing to control the usage of roads in Singapore was not bypassed" because of cheaper petrol in Malaysia. The move was also to staunch the loss of duty on petrol, estimated at $2 million a month. The same rule was amended two years later in 1991 when the half-tank rule was raised to become the three-quarter tank rule.
Sir, measures to control the usage of roads in Singapore have seen many changes since 1989. In fact, today, the common man does not think of the petrol tax as an inhibitor before buying a car. Instead, it is the two abbreviations – COE and ERP – that are seen to be the primary instruments curbing road usage. These have little, if any, correlation to the rules that determine the entry of Singapore cars into Johor. At the recent 6 November exercise, the price of an open category COE was at $89,001 and, since August this year, Singaporeans have had to pay $6 at three ERP gantries, a number which has since jumped to seven after the levy was raised to $6 at four more gantries this month.
Sir, like the three-quarter tank rule today, the new section 6B of this Bill, must be seen through the lenses of 2013 and not 1989. Many things have changed since then.
Firstly, there has been a steady political and economic shift in Singapore's relationship with Malaysia. Only 11 months ago, in December 2012, the Singapore Economic Development Board (EDB) was actively encouraging MNCs to invest in the Iskandar region in Johor, with The Straits Times reporting that this new approach was because of rising land and labour costs in Singapore. To mitigate this, the EDB saw MNCs siting their higher value and more skilled operations as well as headquarters in Singapore, while their factories operate in the neighbouring countries, where land and labour are relatively abundant.
While the EDB's statement covered MNCs specifically, about a week earlier, Minister for Finance Tharman Shanmugaratnam was quoted as saying, I quote, "There will, over time, also be increasing pressures on our SMEs, because of the shortage of labour in Singapore as well as land" and it goes on to say,
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"Malaysia is a logical hop away, easy in terms of operational flexibility and logistics".
Sir, some of our SMEs would receive a shot in the arm if the rationale of the three-quarter tank rule was reviewed or even perhaps reduced to the half-tank level, so as to encourage our businessmen to take further advantage of the cost benefits that can be reaped in Johor, but not in Singapore. Allowing our SMEs to access the market in Johor by removing rules that impede free enterprise would also go some way to encourage greater entrepreneurship amongst younger Singaporeans in particular.
Secondly, Sir, Malaysian policy has also changed since we introduced the three-quarter tank rule. Singaporeans now do not have access to subsidised Malaysian petrol and can only buy 97-octane fuel or a higher variety, which is not subsidised by the Malaysian government, a law which was passed three years ago.
Thirdly, Sir, a review of the rationale of the three-quarter tank rule will be in concert with the goals and objectives of the ASEAN Economic Community's 2015 goal of (a) a single market and production base, (b) a highly competitive economic region, (c) a region of equitable economic development and (d) a region fully integrated into the global economy.
Singapore, as one of the most-open economies in the world, opens its doors to foreigners and businesses and we are known to be one of the easiest places to do business. Singaporean enterprises and Singaporean businesses would greatly benefit if the protectionism manifested by the three-quarter tank rule today is reviewed and Singaporean businesses looking to venture north are not hamstrung by Government policy.
A change to the rule would benefit our local SMEs and MNCs and contribute to their enterprise ambitions, no different from the ambitions of hundreds of thousands of Malaysians who come to Singapore to work and for business daily, riding on our comparative advantage.
In conclusion, Sir, greater people-to-people interaction between Singaporeans and Malaysians can also assist in contributing positively to the Malaysia-Singapore relationship, one that has already premonitioned the construction of a third causeway, a high-speed express link between the two countries and the decision earlier this year between both countries to go ahead to link Johor Bahru and Singapore by a rapid transit system, with the
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Woodlands MRT station to serve as an interchange station. Singaporean businesses should not be denied the economic opportunities unfolding in Johor by the three-quarter tank rule that contributes to disadvantage some Singaporean businesses.
Sir, my request for the Government to review the rationale of the three-quarter tank rule notwithstanding, I support the Bill.
Mr Speaker, Sir, let me first declare my role as the Executive Adviser of the National Taxi Association.
LTA should, indeed, put in place indicators that enable the taxi industry to operate competitively and grow its size upon meeting certain conditions.
Taxi fares and the supply of taxis were previously deregulated to inject greater competition. The aim is to allow fares to be set competitively and that commuters can enjoy high quality of service. To do so, taxi operators have to comply with the Quality of Service (QoS) standards in call bookings, safety, taxi drivers' conduct and so on.
I would like to propose that determinants to measure taxi operators' ability to increase their fleet size should include how they expand the relief driver pool, how fairly they draft the hiring agreements and what efforts they undertake to look into the welfare of their hirers and relief drivers.
In a truly competitive landscape, taxi operators should be able to do more to provide for their drivers. Currently, operators have the full bargaining power and can terminate the hiring agreements of drivers should they fail to meet the standards. In some sense, operators can "churn" the drivers' pool.
For instance, there are currently over 90,000 taxi vocational licence holders but only about 28,000 are hirers and a small number of active relief drivers. As such, taxi operators can possibly access an untapped pool and an ever-growing pool of new vocational licence holders.
Other than raising the service standards, taxi availability indicators were recently implemented to get taxi operators to meet peak hour taxi demands and
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shorten waiting time.
For drivers who are unable to meet this standard, they may have their hiring agreement terminated or penalties imposed by the operators. Taxi hirers are under immense pressure and many struggle to look for relief drivers to assist them.
As such, hirers are squeezed in between, as relief drivers now know that they have been given additional bargaining power. Many have shared with me that, in their experience, relief drivers can determine when they want to drive and at what rental rates they can charge the hirers. As a result, this often leaves the hirers bearing the bulk of the responsibilities.
Another example that operators are passing on the higher COE cost is in the form of higher taxi rental. While commuters today express their confusion and unhappiness at the different and higher flag-down fares, many taxi hirers have also expressed their concerns that higher rental fees are affecting their take-home income. To taxi hirers, higher flag-down fares merely offset the increase in rental fees partially while operators continue to maintain their business margin.
Taxi operators should provide more supportive conditions to taxi drivers to help them. They can introduce incentive schemes to motivate the drivers. Having programmes to keep drivers safe, fit and healthy will be welcomed as well. They can also offer assistance programmes to help the drivers who face difficulties in getting relief drivers.
There are valid concerns that operators are fully passing on the taxi availability indicators to the drivers. The National Taxi Association (NTA) had earlier urged LTA to review the taxi availability indicators, set up a mediation system and consider having new taxi vocational licence holders serve as relief drivers for a period of time. I urge that LTA take them into consideration to improve the situation on the ground.
To illustrate, LTA can measure how effective the taxi operators are matching the hirers to a relief driver. A set of clear guidelines can also be developed to regulate the shared responsibilities relating to rental and vehicle maintenance between the hirer and relief driver, and also checking that the operators share in these responsibilities as well.
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When their taxi fleet does not meet the minimum mileage requirement, some taxi operators issue warning letters and threaten to remove those drivers who are unable to meet the standards. Eventually, they choose to retain only the drivers who can help them meet the desired KPIs. We should ensure that taxi operators do not merely "churn" the drivers so as to fulfil the requirements set by LTA.
For the drivers, we want to develop a steady pool of career drivers who are committed and motivated. They can get good support from the operators to find relief drivers and enjoy a portable scheme whereby they can switch to a different taxi company that offers more attractive terms.
With some of these proposed amendments and refinements, I believe that LTA can better create an environment where taxi operators can operate competitively, treat their hirers and relief drivers fairly, maintain higher service standards and, finally, meet the conditions to enable them to enlarge their fleet size. With that, Sir, I support the Bill.
Sir, I would like to thank the two Members who have spoken on the Bill, firstly, Mr Pritam Singh and then Mr Ang Hin Kee.
Mr Pritam Singh had queries with regard to the relevance of the three-quarter tank rule and, as he had said, many things have changed in the intervening years. But I would also hasten to add that many things still remain relevant. And, certainly, in the context of Singapore, ownership and usage restraints need to be taken together, given the land constraints that we are fully aware of in tiny Singapore. Certainly, while we have caps on the growth rate of the vehicles, in terms of the 0.5% growth that we have allowed for over the few years, usage restraints are equally important. And, hence, the ERP, parking charges, as well as fuel cost, are all matters that a motorist would have to take into consideration.
Mr Pritam Singh also mentioned the possible benefits to the SMEs. It is unusual that, actually, we have not heard very much from the SMEs or this matter being raised by them in a concerted fashion. They believe that whatever it is there now, is generally a level playing field for the SMEs and it is something that they accept as part and parcel of doing business here in Singapore. I am not so sure, therefore, that, actually, the three-quarter tank rule that the Member had mentioned really disadvantages Singaporeans from benefiting from the
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growth that is taking place in Malaysia. Otherwise, we will not have seen the kind of investments that we are seeing taking place, for example, in Iskandar.
Let me also thank Mr Ang Hin Kee for his comments on the taxi availability standards and his suggestions to improve taxi services. I certainly share his desire to see better and more reliable services for our commuters. This is exactly the reason why we introduced the taxi availability standards and these were developed after a rigorous consultative process with key stakeholders, including the National Taxi Association (NTA).
In fact, the feedback that we have received from taxi drivers who are actually serious about their vocation is that it is not difficult to clock 250 kilometres on their taxis on a regular day, even without a relief driver. This is supported by the data that we have in LTA. But LTA will certainly continue to consult and engage the NTA and other stakeholders as we finetune the availability regime in the years to come.
In response to the suggestion by NTA to help match hirers to relief drivers, LTA had launched an online matching portal in June this year. It has seen a fair take-up rate over the last few months and we certainly encourage more hirers and possible relief drivers to make use of this online portal. And we would be happy to work with NTA to promote this further.
However, LTA has not incorporated requirements on relief driving, such as measuring how well operators are expanding their relief driver pool or matching hirers with relief drivers, into the LTA's taxi availability standards, as Mr Ang had suggested. We do not want to be so prescriptive as to dictate that taxi companies and drivers must operate a two-shift system because we know that some drivers prefer to drive alone.
Mr Ang had made a few other suggestions, including how to manage the pool of relief drivers. I think it is also appropriate for NTA, whose mandate is to look after the interests of all its drivers, to take on a more active role on this issue, and to consider mediating between hirers and relief drivers. After all, "conciliating and mediating differences" and "fostering friendly relations and mutual help" amongst its drivers are also part of NTA's constitution. LTA will be happy to lend support to Mr Ang and NTA on this and his other ideas.
At the end of the day, let me say that we need to find the right balance between the interests of taxi commuters, taxi drivers and taxi companies. The taxi availability framework aims to increase the utilisation of our taxis, so that
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commuters find it easier to hail a taxi on the road. I know that taxi drivers are trying hard to provide the level of service and availability that commuters want. On the part of taxi companies, I again urge them to work with and help their drivers achieve the service and availability standards, and not expect the drivers to achieve them all on their own.
*Question put, and agreed to.*
*Bill accordingly read a Second time.*
Mr Deputy Speaker, can I seek a clarification from the Minister?
Mr Pritam Singh, I think it is a bit too late for this.
Bill accordingly committed to a Committee of the whole House.
The House immediately resolved itself into a Committee on the Bill. – [Mr Lui Tuck Yew].
Bill considered in Committee; reported without amendment; read a Third time and passed.
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