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Shirley Lau

Up to six per cent of car owners may give up their vehicles after the increase in licence fees, the Automobile Association predicted.

The Financial Secretary announced an average 10 per cent increase in private car licences and driving licences, which would raise an extra $160 million this year and $1.1 billion over the next four years.

Justifying the 'modest' increase, Mr Tsang said the fees had not been increased over the past 10 years while the period had seen cumulative inflation of 52 per cent. 'An upward adjustment of 10 per cent will fall short of restoring the real value of these fees,' he said.

The impact to the public would be 'negligible' as the fees comprised only a small share of average household expenditure.

As the increase applied only to passenger cars, the transportation industry would be unaffected, while increases in the driving licence fee would also have minimal impact in the medium term since most drivers had opted for a 10-year licence.

The increase means the owner of a petrol-fuelled private car with an engine under 1,500cc will pay $4,200 in licence fees. Together with a levy payable to the victims of traffic accidents, the owner will have to foot a bill of $4,314, compared with $3,929 now.

For a petrol-fuelled private car exceeding 1,500cc, the total sum will be $12,454, compared with $11,329 now.

The fee for a full driving licence increases from $520 to $570. The total sum payable, including levies, will be $950. A learner driver's licence will rise $50 to $598.

As announced by the Transport Department last week, the new rates will only apply to vehicles or drivers whose licences expired after July 6. Mr Tsang also announced a 50 per cent increase in on-street car parking meter charges, from $2 to $3 for every 15 minutes.

The president of the Hong Kong Automobile Association, Jackson Ho Yee-tak, hit out at the increases as 'very hefty' and expected that between three and six per cent of the 310,000 private car owners would give up their vehicles.

He criticised the lack of consultation with car-owner groups over the increase and said it restricted people's choice of lifestyles. 'Hong Kong is a free society and you shouldn't restrict people's choice by raising the fees so high, making it so hard for people to own and use a car,' he said.

Mr Ho said that although there had not been an increase for 10 years, car tax in Hong Kong was already the most expensive in the world and fuel was also costly.

He said that in Britain, a vehicle under 1,200cc would cost GBP105 (HK$1,200) a year for licensing and GBP160 for those exceeding 1,200cc.

Mr Ho warned that if people gave up their cars, it could trigger a decline in the car sales, repair and car-parking industries, which employ more than 70,000 people.

Those who depended on their car for transport would have to pay the higher fees but would economise in other areas, Mr Ho said.

Chiu Kit-tsee, 50, a director of a watch company, said the increases were a bad move as the economy was still struggling to get back on track.

'It shouldn't be raised, given the current economic condition,' Mr Chiu said. 'I am in the retailing sector and can see that the economy is still going downhill. Besides, 10 per cent is not really a lot to the Government, so it won't do much to the treasury.'

But the chairman of the Hong Kong Motor Traders' Association, Johnson Li Chi-sing, said the increase was mild and car sales would not be affected.



Up to six per cent of drivers could dump vehicles after first increase in 10 years, says lobby group