Straits Times: Squeeze money from motorists? Minister rebuts Low


TRANSPORT Minister Raymond Lim yesterday rejected opposition MP Low Thia Khiang’s accusation that the purpose of the Electronic Road Pricing (ERP) scheme was to generate revenue and “squeeze money out of car owners”.

That is a “popular” assumption which “flies against the facts”, said Mr Lim.

When ERP was introduced, several charges were reduced. They include the additional registration fee (ARF) on cars, excise duty and road tax. In all, they add up to $1.2 billion in revenue forgone and this recurs every year, he said.

In comparison, the current revenue from ERP charges is about $100 million.

Later, when Mr Low suggested again that the expansion of the ERP scheme would “benefit and enrich” the Government’s coffers, Mr Lim trotted out more figures.

Against the $70 million projected from additional ERP charges this year, the Government will forgo some $110 million annually from the reduction of road tax, he said.

Mr Lim said: “Since 1998, every time we have adjusted the ERP system and relied more on usage charges, we have brought down quite significantly the vehicle ownership taxes.”

What this means is that the burden of taxation has shifted from car ownership to car usage.

ERP, which charges vehicles for the use of busy roads, is meant to control congestion and “is not a revenue measure”, stressed Mr Lim.

Earlier, an impassioned Mr Low had said vehicle taxation has become a “strong revenue-generating model” for the Government, noting the 35 per cent year-on-year increase in the latest estimates for vehicle tax collection. A fresh round of ERP hikes are expected in July.

Playing on Mr Lim’s earlier remark that the efficient public transport system here was “uniquely Singapore”, Mr Low countered that what was unique about the country was “perhaps private car users pay through their nose with the highest car price and probably (highest price for) road usage in time to come”.

Mr Lim firmly refuted this, pointing out that the Government had lost much more through reducing ARF, excise duty and road tax, than it had gained by expanding ERP.

Mr Low also asked the minister to spell out the criteria for deciding where to place ERP gantries in the heartland. The MP suggested that Ang Mo Kio had been spared because it “happens to be the Prime Minister’s constituency”.

“That’s not the way we do things,” Mr Lim said sharply.

“You know that it’s a congestion measure and if there are indeed roads in there that are congested, ERP would have been effected.”

But how high are ERP and car certificate of entitlement (COE) charges likely to go, quizzed Mr Low. He wanted to know what was the “optimum car population being targeted” by the Transport Ministry.

The minister questioned in return if there really was such a thing as “an optimal mix” for ERP and COE fees.

“It really depends on the congestion levels and you need, therefore, a dynamic system. You can’t sort of say that ‘I want to fix it this way’.”

The cardinal rule, he said, is that “the vehicle population growth rate cannot grow faster than the rate at which our roads are growing”.

ERP and MRT queries: Minister responds

NO ANOMALY: Transport Minister Raymond Lim explained why ERP gantries have been erected in Toa Payoh but not Ang Mo Kio.


Mr Low said he received feedback that roads in Ang Mo Kio experience congestion levels similar to those in Toa Payoh during morning peak hours.

But, he noted that ERP gantries have been erected in Toa Payoh, not in Ang Mo Kio, “which incidentally happens to be the PM’s constituency”. Prime Minister Lee Hsien Loong is an MP for Ang Mo Kio GRC.

Mr Low wanted Mr Lim to clarify this “anomaly”.


Mr Lim said he was “disappointed” with Mr Low’s remarks.

“That’s not the way we do things. You know that it’s a congestion measure and if there are indeed roads in there that are congested, ERP would have been effected.”

Besides, key access roads to Ang Mo Kio GRC already have ERP gantries, he noted.

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