See see!
Mon, Aug 18, 2008
AsiaOne
AN increased number of households now own cars, said Prime Minister
Lee Hsien Loong. There are now 430,000 households who own cars, as
compared to 320,000 households in 2000. This is due to lower
vehicle taxes, a move made possible by the increase in ERP charges,
he said.
In his National Day Rally speech on Sunday night, PM Lee explained
that government taxes on cars have been reduced despite the
increased ERP charges - a move that saves commuters money because
they pay less road tax. "The trouble is," said PM Lee, "people may
not realise or remember how much road tax they are paying, or even
worse, how much road tax they paid last year."
PM Lee elaborates on the ERP charges in the transcript below:
"In 2000, how much do you think it costs to buy a Toyota Corolla
all in? $110,000. This year, same car, in fact the salesman will
tell you it's a better car, the price has gone down to $64,000. And
this is mainly because the government taxes have come down, because
the OMV has remained about the same. It's about $19,000 before, now
it's $16,000 now. So basically, the government taxes have made the
cars a lot more affordable. So the result of this is that there are
more cars around us. You can see it, HDB car parks getting more
crowded. You can see it on the roads. And therefore because of
this, this year we've had to increase ERP charges.
"I know many people are upset by these ERP charges but we have to
see the bigger picture because in fact, the ERP charges are
enabling us to benefit Singaporeans so as to reduce the burden on
you and to enable more Singaporeans to own cars. So when we have to
make the adjustment this year, we considered it very carefully, how
should we do this without increasing the burden on Singaporeans?
And we worked out an ERP package, not just raising the ERP or
putting more gantries but reducing road tax at the same time so as
to offset it and overall to bring down the cost.
"Let me show you how this works. Before the package, let's take the
1.6L car again. Probably a Toyota but could be another one. Before
the package, the ERP was $122, after the package, it's gone up,
nearly $200. So it looks very frightening but in fact if you
consider the road tax which you have to pay and which we have
adjusted, you used to pay $874 of the road tax and now it's come
down to $744. So the net effect is that you have a saving, in fact
you are saving money rather than out-of-pocket because of the ERP
changes. How much? Let's do the sums.
"ERP increase, $76. Road tax reduction, $130. Net savings, $54. So
overall, there's a net saving from this package. So we have not
increased the burden on Singaporeans, we've actually reduced the
burden on Singaporeans by some. The trouble is people may not
realise or remember how much road tax they are paying, or even
worse, how much road tax they paid last year. And sometimes they
may not be the one to pay it.
"I asked one driver how much road tax she paid because she was
complaining about the gantries she went through and the beeps which
she heard. So she thought a while and then she said to me, I'm not
sure, I have to ask my husband. Because she didn't pay the bill,
her husband paid the bill and I'm not sure even when the husband
paid the bill, he noticed that it was smaller this year. And
furthermore, when the husband pays the bill, there's no beep, beep.
But when the wife drives the car, each gantry, one beep. So, that
is a problem and I think that's part of the reason why people are
not happy. And so we have to draw the connections and get people to
understand that actually the middle-income Singaporeans have
benefited from government policies."
