20 February 2019
The number of private cars in Hong Kong reached about 500,000 in 2014, a 43 percent jump from 2003. Photo:HKEJ
The number of private cars in Hong Kong reached about 500,000 in 2014, a 43 percent jump from 2003. Photo:HKEJ

Is traffic congestion an insoluble problem in Hong Kong?

Hong Kong is famous for its traffic jams.

Over the past decade, the number of private cars has increased by over 40 percent to about half a million in 2014.

The city simply has too many cars.

The Transport Advisory Committee released a report last week giving a dozen suggestions on how to ease the situation.

All the advice can be reduced to a single sentence: increase the cost to car owners and drivers.

But is that going to work?

Specifically, the report, which the committee spent eight months to complete, recommended that the government increase the first registration tax by 15 percent and raise the annual license fee by 80 percent.

It also proposed increasing parking meter fee and the penalties for illegal parking.

Parking spaces, including those with meters, in Hong Kong have in fact declined over the years, figures the Transport Department provided show.

The government’s logic is simple. Reducing the number of parking meters and raising the cost of parking (both legal and illegal) will discourage people from driving, since they find it difficult and expensive to park their cars.

The parking meter fee has been kept at HK$4 per 15 minutes since 1994.

It is much lower than the fees private car parks charge in some of the busiest districts in Hong Kong. For example, drivers need to pay as much as HK$32 an hour to park in some car parks in Tsim Sha Tsui.

However, if the government raises the parking meter fee, that could give private car parks an excuse to hike their fees too. At the end of day, nothing would change, as drivers would choose to drive around, waiting for a parking meter, which will in turn clog the streets.

Raising the first registration fee and the annual license fee might be able to deter the demand for cars.

But the government should consider tightening up the tax reduction scheme for environmentally friendly vehicles at the same time.

It is worth noting that the government raised the first registration tax in 2011, but the increase only applies to luxury cars that sell for over HK$300,000.

The tax rate remains unchanged for cars that sell for between HK$150,000 and HK$300,000. The rate was, in fact, cut to 35 percent for cars that sell for less than HK$150,000.

The engine size of most environmentally friendly vehicles is below 2500cc, and their prices range from HK$100,000 to HK$300,000. 

Under a tax reduction program launched by the government in 2007, buyers of these cars enjoy a reduction in first registration tax. The maximum reduction is HK$75,000.

In fact, the policies have spurred a boom in private cars, led by hybrid models.

That’s why the report also suggested that the government tighten the definition of environmentally friendly vehicles and grant the tax reduction to electric cars only.

Separately, in an Apple Daily column Tuesday, news commentator Lim Hung-tat said the government should not focus only on developing the city’s railway system and network.

To ease traffic congestion, it should, at the same time, push for the development of franchised bus services and improve the attractiveness of other forms of public transport.

For example, the government can encourage minibus operators to ensure their vehicles have a “barrier-free” design.

Families with children or disabled members might then take a minibus instead of driving themselves.

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EJ Insight writer

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