Improve management of Road Accident Fund before considering new funding, says AfriForum
AfriForum warns that it is unreasonable to propose a new funding mechanism for the Road Accident Fund (RAF) before ensuring that the fund is being managed properly. This follows comments from Barbara Creecy, the Minister of Transport, last week that her Department is considering a new contribution scheme for the RAF. This scheme will possibly involve an additional annual charge on the renewal of license discs.
AfriForum points out that the RAF is technically insolvent, had a backlog of 400 000 claims in November last year and there is no indication that the backlog has been cleared. The Standing Committee on Public Accounts (SCPA) is also still investigating the RAF’s management and recently decided to request the Secretary of Parliament to lay criminal charges against Collins Letsoalo, the former CEO of the fund.
Although the Minister is correct that electric vehicles do not currently contribute to the RAF through the fuel levy, AfriForum says this represents only a small loss of revenue. The organisation argues that the real financial damage stems from years of poor governance and mismanagement. According to Louis Boshoff, AfriForum spokesperson, it is odd that the Minister points to electric vehicles as a cause of reduced revenue, but then proposes a levy that would seemingly apply to all vehicle owners. “If this proposal goes ahead the way it is currently being presented, owners of fuel-powered vehicles will effectively pay twice. They already contribute through the fuel levy and they would then face an extra charge when renewing their licence discs. South Africans should not be expected to pay more because of ongoing failures in the management of the RAF.”
AfriForum undertakes to monitor developments and participate in any future consultations on the financing of the RAF. “Government must first show that it can manage public funds efficiently and responsibly before asking motorists to contribute more. It is time to stop pouring additional money into systems where resources continue to be lost through mismanagement and weak oversight,” concludes Boshoff.
