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SCMP Reporter

MOTORING misery is set to continue, with experts pointing to hidden costs that could drive the financial burden of car ownership even higher.

   Observers are warning the cost of cars, motor insurance, petrol and parking fines could escalate in the light of last week's policy announcement by Transport Secretary Haider Barma.

  And with the unknown costs of Electronic Road Pricing (ERP) waiting around the corner, the price of motoring in Hong Kong could soon leave the motorways clear for the only ones who can afford to use them - the rich.

  Mr Barma's proposals include increasing the first registration tax to 70 per cent in most cases, raising licence fees 40 per cent, and a $10 jump in harbour-tunnel charges.

  In the case of a top-of-the-range car such as a Mercedes-Benz worth $1.5 million, the first registration tax would increase from around $900,000 to $1,050,000, an 11 per cent jump, and the annual licence fee from $11,215 to $15,700.

  But a medium-range car, such as a Honda Accord worth an average $290,000, would be hit harder. Its first registration tax would go from $145,000 to $203,000, a 40 per cent increase, while its annual licence fee would climb from $7,550 to $10,570.

  The Hong Kong Automobile Association (HKAA) has warned consumers will rush to buy cars before the tax is introduced, pushing the Government to implement more punitive measures - including a possible quota on the registration of new cars.

  Association spokesman Andrew Windebank claimed this would play right into the Government's hands. 'There will probably be a run on cars before the new taxes are introduced and the Government will bring in an emergency order,' he said. 'People will just wake up one morning and find new measures in place.'   This, he said, would allow the Government to hit the motorist harder and sooner.

  Recent comments by the Government bear out the association's warning. Mr Barma said during his speech last week an immediate quota would be imposed if panic buying began.

  Car showrooms, meanwhile, are bracing themselves for a large increase in orders before the new tariffs are introduced.

  A spokesman for Concord in Central said their showroom found a marked rise in interested customers the morning after Mr Barma's announcement on Wednesday.

  Other showrooms reported business as usual, but Matthias Lee Ping-hang, of Honest Motors in Happy Valley, said: 'On Tuesday, before the announcement, there was a noticeable increase in people but they now realise they have three months to consider the buying process. This may well trigger the desire to buy and I'm pretty sure it will be before the tax is introduced.'   The Automobile Association believes the trend will push up prices in all parts of the motor industry as the Government gets tough. 'It's all part of the Government's 'hands in peoples' pockets' syndrome',' Mr Windebank said. He cited car, petrol and insurance costs as being the next to feel the Government's squeeze.

  Motoring magazine journalist Murray Cornish backed up the concerns, saying the price of cars would rise if the Government put a limit on the number of licences being issued per year.

  'Insurance companies could also see how much they could get away with and blame it on the general trend,' he said.

  'If cars become more expensive then repair services could charge more for their work. It's part of rippling hidden costs that no other market has been subjected to in Hong Kong.'   Insurance companies say they are adopting a wait-and-see stance on the matter.

   Linda Wong Kwai-sun, of Eagle Star insurance company, said: 'On the whole, we have not got such a plan [to change rates] so far. But it is too early to say anything at this stage.'   According to the association, previous government measures to curb the number of cars on the road through financial penalties have had only a short-term effect.

  In 1984, the Government doubled the annual licence fee but, according to HKAA figures, this only led to a slowdown in new cars on the road for one year. In 1983, according to the organisation, there were 7,108 new vehicles registered. On the introduction of government penalties, this fell to 6,569 in 1984 but was back on an upward trend in 1985 - running at 11,119.

  But the measures proposed last week are on a much larger scale and have prompted the association is to hold an emergency meeting with Mr Barma 'sometime in the near future'.

    Mr Barma's controversial measures, which first have to find their way through the Legislative Council, will hit drivers' pockets in the following ways:    Commissioning consultants to explore the electronic road pricing scheme, followed by consultation and quick implementation;    Examining the possibilities of a quota system on newly registered cars;    Increasing the first registration tax for private cars from 40-60 per cent to 70 per cent for all cars - to be reviewed annually;    Increasing the annual licence fee by 40 per cent - to be reviewed annually;    Eliminating tax benefits on company cars;    Increasing the Cross-Harbour Tunnel charges by $10 for cars and $4 for motorcycles, plus a new passage tax at the Eastern Harbour Crossing of $10 for cars and $3 for motorcycles - with further increases in future years; and    A possible increase in tolls at Lion Rock Tunnel and Tate's Cairn Tunnel.

          The Transport Secretary's proposals, contained in A Report To Address Traffic Congestion, are now open for public consultation until January 31.



High price of Gridlock