SINGAPORE: Transport Minister Lui Tuck Yew has said the government is going ahead with its plan to cut the annual vehicle population growth rate to 0.5 per cent from 1 per cent from this February.
He said such a cut will affect the quota for Certificates of Entitlement (COE).
A shrinking supply has already affected prices.
In the latest bidding exercise, COE prices for small cars, for example, climbed to another record high of over $92,000.
Mr Lui said there are no plans to review the system for now.
He added prices are also influenced by many factors.
"If you look at the prices of COEs, supply is certainly one of the factors that caused the increase but I think there are also a number of other factors as well, including the state of the economy, the spending power of people including their desire to own a car," he said.
Mr Lui said currently about 45 per cent of households in Singapore already own a car.
And the growth of vehicles needs to be constrained, given that land is also scarce with about 12 per cent of space already used for roads.
He said a lot more emphasis should be placed on making the public transport reliable.
Still, Mr Lui said, he has asked the Land Transport Authority and his ministry to look into whether the rebates offered under the new Carbon Emissions—based Vehicle Scheme introduced in January, has led to a more aggressive bidding for COE.
Mr Lui said: "The CEVs rebate for the carbon—friendly cars kicked in at the start of January. We know that the rebate ranges from $5,000 to $20,000, so I want to see how and try to understand this a little bit better whether there’s an impact of this rebate being channelled towards more aggressive bidding for COEs in category A.
"It will, of course, take a little more time to stabilise because I think some of these things you can’t decipher it in the space of one bidding, but this is something that we are paying attention to as well."
Asked if COE prices will be an issue in the Punggol East by—election, Mr Lui said he believes there will be more localised issues.
"No I don’t think so. I think that while people may talk about some of these things, it may very well be on more localised issues," he said.
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