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Nene to clarify cost of RAF Bill

Finance Minister


THE portfolio committee on transport and the Department of Transport have agreed to meet Finance Minister Nhlanhla Nene tomorrow to discuss the enormous cost implications to the proposed Road Accident Benefit Scheme Bill.

Both parties are pushing for the proposed bill to be finalised by the end of October.

Over the past few weeks the committee held public consultations in the nine provinces to gather comments on the proposed new bill.

This followed weeks of submissions that were made to the department in Parliament by various stakeholders, including the law societies.

Finance Minister

Pretoria-based Road Accident Fund (RAF) expert and lawyer Gert Nel said a common theme echoed in all the presentations was that the bill in its present form would fail constitutional muster.

“The South African taxpayer will simply not be able to afford a dual system, essentially adding the financial demands of the proposed legislation on top of the already struggling RAF.”

One of the major concerns was that the proposed bill could lead to a massive increase in the fuel price in the future.

Under the proposed bill, both parties to an accident can claim for damages.

It is based on a no-fault basis and states that the person responsible for the accident may in many cases benefit more than the victims when they are compensated.

Nel said it would cost a vast amount to fund this, and at present there were more questions than answers.

Regardless of the problems raised regarding the proposed bill, the portfolio committee pushed for the legislation to proceed towards enactment.

Nel said the public especially raised concerns about the affordability of the bill and the representatives were asked how they intended to pay for the running of both systems.

The portfolio committee subsequently accepted a request from Nene to address it tomorrow on the cost implications.

“It became apparent during the National Treasury’s presentation that neither the committee nor the department had engaged Treasury on certain key areas of the funding model of the proposed scheme.”

Nel said several key concerns were raised by Treasury, including the absence of any separation of the funding of the bill’s benefits from the funding of the administration of the fund.

In response to the comments from Treasury, the chairperson of the portfolio committee Dikeledi Magadzi requested that the Minister of Transport (Blade Nzimande) and Nene urgently meet to clarify the impasse.

Nel meanwhile said it remained unclear why the committee and the department were pushing to enact the bill despite the clear and adverse financial impact it would have on the taxpayer.


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