Oil tax cuts (money out) cannot, ERP increase (money in) can?

Reading today’s papers make me feel that the government is right in one thing, and that is not everything is solved by the price mechanism. However, the funny thing is, one ministry think this way, but the other does not?

The article today speaks about why the government does not want to subsidise oil in the wake of the rising oil prices worldwide. Our Minister says that “cutting the duty of about 40 cents” “would send the wrong signal to consumers about the real price of oil”. Hmm. It makes perfect sense.

I quote:

“Subsidising oil will not be right as it would encourage consumers to use more oil, which would drive up the price even more. We want to make sure that we pay the correct price for oil and tackle the problem in a sustainable way.”

This involves changing lifestyles and habits by car-pooling, using public transport, or just turning off lights and air-conditioning at home when not needed.

I think this is great. When we come up with policies, we need to make sure the factors that does not involve price are taken care off. In this case, it would be great if we can save money by changing our own life styles isn’t it? The government will then have to decide on policies to make it more attractive to car-pool and use public transport.

However, recently in the history of the past few months, our transport ministry has been rather short-sighted. We keep seeing more ERP gantries being put up. We see more ERP gantries raising their “prices”, or the fees that they charge when we go under them and the stupid unit goes “beep!”.

So why are we still talking about solving congestion using prices? Is there no other way? We have to give them some credit because some plans are underway to make public transports more “ridable”, but if only they can come up with non-price policies as enthusiastic as they erect more gantries to charge money, then Singapore will improve.

In fact, did I recall the minister saying that ERP is there to charge for the pollution?

What I am trying to say is, there are more things that can be done other than raising ERP gantries and fees. The amount of news about new ERP gantries seem to be more than any type of news in the newspapers these days. There was once I thought about having wonderful maps linked to GPS units and subsidise car owners to install them. These smart GPS units will take into consideration the congestion of the area and give alternative suggestions to the road that once can travel to avoid congestion. I wonder if anyone ever thought about that, because it would be a great technology to have, and people will use them because we do not want to get stuck in traffic jams.

Well, it does seem that it is ok if policies are created to generate revenue, but not ok if policies are created to use revenue? That’s actually a joke, so don’t take this sentence too seriously. Just food for thought.

One thought on “Oil tax cuts (money out) cannot, ERP increase (money in) can?

  1. Head or tails, black or white they still win. That’s why these coffers think they are worth millions.

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