Vehicle Entry Permit (VEP)

Our closest neighbor West Malaysia has decided to impose a Vehicle Entry Permit (VEP) fee for foreign registered vehicles entering their country. The amount and date of implementation have yet to be decided. They are still not undecided but public announcement to that effect has already been made. This follows Singapore Land Transport Authority’s (LTA) decision to increase VEP fee for foreign registered vehicles from S$20 to S$35 a day WEF Aug 1. The Goods Vehicle Permit fee for foreign registered goods vehicles will also be raised from S$10 to S$40 a month.

VEP fees for all foreign registered vehicles have been in existence here for a long time. LTA has decided to increase those fees for foreign registered vehicles – mainly referring to West M/sian vehicles entering via the 2 landed causeways. All the while Singapore registered vehicles – mainly refer to cars, do not have to pay for the VEP. Why then KL decided to act swiftly in response to LTA’s latest move? Are they acting on impulse?

It reminds me of the toll imposed on vehicles using the 2nd link causeway at Tuas when it first started operation. The amount of toll imposed by them reflected the amount set by us. They followed swiftly what we did then. Are they copy cat or what? You can do that, I also can. Knee jerk reaction or tit for tat? Welcome to Boleh Land!

Is this tit for tat response healthy for them? Does it bring benefits to them? I believe it will bring more woes than benefits to them. Let’s look at LTA’s decision to increase the VEP which has been in place all along. This is to discourage vehicles especially private cars coming into our country from across the causeway – mainly from JB to choke up our roads. After all, local car owners are paying sky high COE premiums for the right to own a car that occupies space (and jam) on public roads. How could they be exempted from the high costs of driving in our jammed public roads? The costs of owning a car over there are so much lower than us. They don’t have COE or ERP at all. So it’s a totally different sets of comparison really. What’s the rationale for them to implement VEP?

Fact is that most Malaysians, especially from JB drive to Singapore to work. Fresh graduates earn about RM2,000 there. Convert that to Sing dollar, it’s about S$800 which is less than our cleaners’ pay. They are here to earn our strong Sing dollar. Sing dollar is 2.5 times of RM. If you look at the tons of m/cycles in the morning queuing at the causeways to enter Sg to work and in the evening returning back to JB you will see my point. Whereas, locals enter JB via the causeways are not there to work but to shop and throw money randomly. In other words, they come here to work whereas we go there to spend. It is as simple as that.

Imposing VEP fee on Sg cars entering JB will have a drastic impact on their economy. Spending power in their local economy will be reduced. Those entertainment nightspots and eatery areas will definitely be affected if fewer locals cross over for the cheap food and shopping. We boost up their economy with our strong currency. The amount collected which won’t amount to much goes to the state but the local businesses in JB will surely be impacted. JB may turn into a ghost town if fewer Singaporeans cross over.

I suspect our Singapore government is too pleased and laughing at their decision to impose VEP fee on SG cars entering their country. Our government can’t stop locals going there to spend lavishly. Our government would rather that Singaporeans spend in our own country instead. Why else did the Singapore government legislate into law all Singapore cars entering Malaysia must have three quarters of petrol or face prosecution? This is to deter local cars going there to spend on cheap petrol, food and entertainment. No government would want their money flowing out of the country. It would rather prefer the money to remain in the country to benefit local businesses. The Malaysian government is doing precisely that helping the Singapore government to discourage locals crossing over to JB.

Before a major policy is implemented, much study and analysis need to be conducted. The pros and cons of a certain policy. The imagined scenarios resulting from such a policy implementation etc need careful calibration. Those policy makers in KL – the capital & seat of power, claim that the state government made the request to charge a VEP fee on Sg cars. Is that so? Fact is that those political elites in KL don’t live in JB and they are simply too far away to realize the magnitude of the repercussions affecting local businesses in JB. After all, they are too remote to feel the pain of the locals. Clearly, they have not done a proper policy implementation impact before announcing to the world that they have decided to implement VEP. They announce it first. Decide on the amount & timing later! Let’s hope that they will not retract and U-turn. Doing so will be the butt of joke. Welcome again to Boleh Land.

Obviously, they fail to learn from the water lesson where they decided to charge many times over when the first water agreement expired. Once we found NeWater, we decided not to renew the first water agreement anymore. Millions of hard cash is lost as a result with all the excess water flowing into the sea. In the fresh water market where there is only one buyer and one seller. If the buyer is not willing to pay for the exorbitant price, the excess water will just have to flow to the sea instead! They get nothing in return. There goes the golden goose when greed overrides reason and logic. After all, we never owe them a single cent nor defaulted on payments for their water. Aren’t we a good customer with so much hard cash?

We shall just wait and see when the details of their VEP fee are announced. Right now, maybe they are still busy countering adverse feedback and objections from those JB businesses. After all, the current government depends immensely on Johor’s (JB) support which is considered a safe state. Do they want to risk their political support? In Boleh Land, everything also boleh including making a big U-turn on policy changes.