The Singapore solution

Sydney is grinding to a halt. It has more than 600 registered vehicles per 1,000 people. Its motorways and arterial roads are clogged, while the social, environmental and economic costs of traffic congestion continue to rise. The average peak hour traffic speed has slowed to 31km/h and people are spending more time stuck in their cars and less at their desks or in their homes. The situation in Melbourne and South East Queensland is not much better.

There is no shortage of blueprints for fixing the problem. Most involve large investments in public transport, changes to town planning and greater use of tolls and peak hour congestion charges, such as the one levied in London or Singapore.

The first problem they must contend with is the correlation between affluence and people’s desire to own and drive cars more often - regardless of how good the public transport may be.

As a proportion of average yearly earnings, cars are getting less expensive to buy, and may become downright cheap once Chinese cars start to hit the market.

The second problem is the subsequent correlation between car ownership and urban sprawl. The majority of vehicle trips do not occur on the way into or out of central business districts, but in the suburbs, clogging roads around business parks, schools and shopping malls. A congestion charge on Sydney’s CBD won’t help suburban centres like Chatswood, North Ryde, Parramatta or Liverpool.

Finally, switching to hybrid cars may help to clear the air, but it wouldn’t undo the traffic snarls.

The good news is that Singapore’s experience with the car not only demonstrates the problem, but offers Australia’s largest cities a way to escape their polluted, gridlocked destiny. Sydneysiders visiting Singapore are usually amazed by their superb public transportation system. The MRT rail network is cheap, efficient and spotlessly clean. Buses and trains share an integrated ticketing system. Taxis are plentiful and inexpensive.

These are just the outward signs of a successful mass transit system. Less visible to foreign visitors and the media is Singapore’s innovative road user charging system.

Public transport is well-patronised and traffic flows relatively freely because private vehicles are kept expensive relative to the price of public transport. No surprises there. What makes their system unique is the mechanism: the Vehicle Quota System. Although motorists are subject to the usual registration fees, congestion charges and petrol taxes, they must also bid at auction for both a Certificate of Entitlement (COE) to own a car, as well as the number plate they use.

It works something like this. The government determines how many cars the road network can sustain while maintaining acceptable average speeds during peak hours. In April each year the Land Transport Authority calculates a cap on the number of new vehicles that can hit the road, then allocates a monthly quota for COEs. Market forces take care of the rest.

There are two categories of non-renewable, non-transferable certificates for cars (Category A: less than 1600cc and taxis; and Category B: greater than 1600cc). Separate categories exist for motorcycles, as well as commercial vehicles and buses. There is also an “open” certificate (Category E), which may be obtained from the car dealer and which is transferable to any new vehicle if the buyer wants to do a trade in.

Not surprisingly, categories A and B may be obtained more cheaply if the buyer does their own bidding for a specified certificate at one of the regular, fortnightly auctions held by the Land Transport Authority. Bids may also be placed over the web at www.lta.gov.sg or via ATMs. Results are available over the Internet to ensure transparency and fairness.

Is it expensive? It all depends on supply and demand. Following the Asian financial crisis, Singaporean motorists were paying as little as $45 to get their COE. Once the economy rebounded and demand recovered, COEs went for between $23,000 and $30,000. In the April 2007 auctions for an open certificate of entitlement for a car like a Toyota Corolla, 1,800 people placed bids up to $13,300. Together with the licence plate auctions and other taxes, the Corolla owner may have paid between $40,000 and $55,000 to get on the road.

The critical point is this: no matter how expensive it may be to buy, own and drive a car, in a thriving economy there are still more than enough buyers to fill the roads. Only Singapore’s Vehicle Quota System prevents total gridlock.

Would Australians vote for such a system? The freedom we enjoy from affordable motoring has become part of our culture, not to mention our economic and political landscape.

Car ownership is a right of passage for teenagers, families go on motoring holidays and large shopping centres could not exist without cars. Politicians are acutely sensitive to the fallout from motorway tolls, increases in petrol prices or greenslip premiums. Further, making cars more expensive would impact heavily upon the economically disadvantaged, particularly people living in outer metropolitan areas, for whom an affordable (often imported, Korean) car is the only means of transportation to and from childcare, shops and employment.

There are other problems with importing such a system. Singapore is a small, densely populated island, which Australia definitely is not. Rural and regional parliamentarians would question why motorists in Tamworth or Rockhampton, where there is little or no congestion, would benefit from a vehicle quota system.

Capping the number of cars would mean getting serious about improvements to public transport. Also, in our more robust democracy, politicians would flinch at the prospect of making it expensive to buy a new car, or perhaps be tempted to inflate COE quotas in months leading up to an election.

However, there are other factors to bear in mind. While Australia is a vast country, a high proportion of its population and industrial production is concentrated in three sprawling conurbations: Sydney, Melbourne and South East Queensland.

Car ownership may be central to the Australian lifestyle, but gridlock is becoming a burden for businesses and is eroding the quality of life for millions of people by preventing them from enjoying clean air and a trip to the beach. Eventually, the political, economic and environmental imperatives to find a comprehensive solution must reach critical mass.

Also, the regressive features of the Singapore cap and bid system could be softened and modified for Australian conditions, yet still prevent our major cities descending into traffic chaos. A current vehicle registration could be transformed into a transferable, perpetual certificate of entitlement to own the existing car, then subsequent cars of the same class that will replace it.

In other words, the right to own a vehicle would become a new form of property, the title to which could be sold, legally transferred to another person or even used as collateral. Couples could sell one of their COEs if they decided they only needed one car and ageing parents could transfer their certificate to their children.

Therefore, the two-car family in the northwestern suburbs of Sydney would not be affected by the modified COE system - unless it planned to become a three-car family. Vehicles used by farmers and self-employed contractors (and which double as the family car) could have a separate category for regional and commercial vehicles, which would likely incur a lower price for their COE.

Another innovation, also from Singapore, could be the “off-peak vehicle” (with a distinctive red number plate), which is cheaper to register, but which may only be used between 7.00pm and 6.00am weekdays and on weekends.

Capping the number of vehicles on metropolitan roads at about 600 per 1,000 people draws a line in the sand without making existing car owners worse off. A vehicle quota system offers a long term traffic management system that is much more comprehensive than tolls and congestion charges. The benefits for public transport, sustainable development, carbon emissions and even the current account deficit more than outweigh the cost of buying that extra car.