COEs for Commercial Vehicles

Mdm Speaker, as at the end of August 2013, a total of 101 commercial vehicles had been replaced under the Early Turnover Scheme. Interest has started to pick up in recent months, with 52 of these commercial vehicles replaced in August alone, compared to 49 in the first three months. We would certainly like to see higher take-up rates for the Scheme, going forward.

In this regard, we have received feedback for possible enhancements to the Scheme and we will consider these suggestions in due course. I understand that rising Certificate of Entitlement (COE) prices is one of the cost-related challenges faced by businesses. To help businesses with this aspect of their cashflow and to provide them more flexibility, the Minister for Finance had announced in this year's Budget the lifting of the restriction on vehicle owners who renew their Cat C COEs for five years so that they can now renew again for a further five years thereafter.

Since the announcement, about 96% of Cat C COE renewals have been for five years instead of the 57% prior to the policy change. So, now, almost all the Cat C renewals are for five years instead of about half prior to this change.

There are also several schemes to help businesses with general cost concerns. These include the Productivity and Innovation Credit Scheme which offers tax reductions to companies that invest in improving productivity and driving innovation.

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Thank you, Mdm Speaker. I would like to thank the Minister for the comprehensive reply. In addition, I am glad that the Minister had also accepted my suggestion to tweak the definition of Cat A COE, a suggestion I made earlier this year.

The objective of the tweak is to make the COE system more socially equitable so that Cat A COE is mainly reserved for cars with OMV of $20,000 or less, catering to Singaporeans with a smaller budget to buy cars. Similarly, we would like MOT to adopt the same principle to help the SMEs to purchase commercial vehicles at a reasonable price and not be squeezed out by MNCs with deep pockets. Thus, I have two supplementary questions for the Minister.

Firstly, would the Minister consider making the Early Turnover Scheme even more attractive as many old fleet owners find that they could fetch a higher price in the resale market, as compared to scrapping a vehicle by taking advantage of the Early Turnover Scheme? The second supplementary question is: would the Minister consider splitting the Cat C COE into two categories or more, one for small commercial vehicles of up to 3.5 tonnes and another for commercial vehicles of more than 3.5 tonnes?

Mdm Speaker, first, let me thank Mr Ang Wei Neng for his suggestions on how to improve the categorisation of the COEs for private cars. Indeed, his suggestions and those of a number of other Members of Parliament have been very helpful in this regard and we tried to look at them very closely and we had, of course, not been able to adopt all the suggestions that were put forward, but I thank you all nonetheless for giving the inputs.

On making the Early Turnover Scheme (ETS) even more attractive, well, this is in the early stages. We had committed to run this programme for two years. We are starting to receive feedback already and we certainly will take this feedback and others that will come in into consideration when we look at how we can further improve the scheme going forward.

On Cat C COEs, I understand the point that is raised by the Member because, today, we obviously have the light goods vehicles, the heavy goods vehicles and the very heavy goods vehicles all lumped into the same category and, therefore, there is some concern that we may be disadvantaging some of the lighter goods vehicles in this regard and this is something that the Ministry will look at going forward.

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