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New RAF legislation will not stand in the court of public opinion or any other court

The Organisation Undoing Tax Abuse (OUTA) believes that the draft Road Accident Fund Amendment Bill, 2023, will not withstand legal scrutiny. The draft bill will not do much to address the many issues the Road Accident Fund (RAF) has with claims backlogs, fraud and corruption.

OUTA submitted its comments on the draft bill to the Department of Transport and said it and various other stakeholders are ready to challenge the matter in court if the Minister of Transport does not go back to the drawing board.

“Our legal team studied the proposed amendment bill, and it is clear that this bill amounts to an unconstitutional, unreasonable and irrational cost containment measure that will have a significant impact on all South Africans,” says Advocate Stefanie Fick, Executive Director of OUTA’s Accountability Division.

OUTA has noted in its comments that although the RAF receives approximately R48 billion a year in funding from the fuel levy, the bill proposes a change in the object of the fund by changing the payment of compensation (as a statutory national insurer), to the provision of a social benefit (welfare).

“While the envisaged ‘social benefits’ will be far less than the losses actually suffered in a motor vehicle accident, the fuel levy income received by the RAF will continue to remain in place and grow, as the levy and/or road traffic volumes increase,” says Adv Fick.

“In terms of the bill, the common law rights of all road accident victims to claim compensation for injuries they suffer in a motor vehicle accident will now not only be limited but be removed and replaced with a package of ‘social benefits’, which is grossly inadequate, or completely removed for certain categories of persons or claims.”

OUTA is of the opinion that instead of dealing with the root causes of the problem – namely road safety, the RAF’s grossly inefficient administrative systems, poor processes and a dearth of leadership and expertise – the proposed amendment bill seeks to obfuscate the RAF’s responsibilities and to reduce its claims through legislative measures. The proposed amendments will not address the claim backlogs, fraud, corruption, political interference and a lack of accountability. It needs efficient systems and strong leadership.

OUTA is of the opinion that the RAF should first engage with civil society, the private sector and other stakeholders, to find meaningful solutions to the existing problems. OUTA is not aware of any independent and objective research or assessments conducted by the Department of Transport or the RAF that definitively show that implementation of the proposed amendments will result in improved financial sustainability and operational efficiency.

OUTA calls on the Minister of Transport to go back to the drawing board before submitting this bill to parliament.

More information

OUTA’s comment to the Department of Transport is here.

A soundclip with comment from Advocate Stefanie Fick in English is here and in Afrikaans is here.

The draft Road Accident Fund Amendment Bill is here.