Transport Minister Barbara Creecy.
Image: GCIS
In the midst of the political noise, an important announcement made by Transport Minister, Barbara Creecy that government will retable the Road Accident Fund (RAF) and the Road Accident Benefits Scheme (RABS) Bills at Parliament, went largely unnoticed. Yet this progressive commitment will bring relief to millions of commuters and drivers, and road accident victims and their families.
The RAF is a public insurance fund for road accident victims and their families to claim relief when injured or deceased during a road accident. It is funded by the RAF fuel levy.
The RAF has been in a crisis for years and a site of state capture and rampant corruption. It has occupied media headlines for all the wrong reasons, with claimants attaching its property due to its failure to pay them relief due.
What is less known are the human tragedies the RAF has left in its wake. Thousands of working-class road accident victims struggle to submit their claims and receive relief due to them and their families. This administrative chaos has condemned these families to lives of absolute poverty and misery, whilst saddled with medical bills and often no longer able to work.
Cosatu is pleased that we have an ally in Minister Creecy and government led by the African National Congress. We have been championing the RAF and the RABS Bills over the past decade as we have seen the price thousands of working-class families have paid due to the RAF’s anarchy and corruption. The RAF and RABS Bills provide a sober and sustainable solution to stabilise the RAF and place it on a sustainable path, and most critically to ensure its funds are targeted at those most in need, the poor and the working class.
The Bills address the legislative and structural faut lines that have partly led the RAF into its quagmire.Currently the RAF compensates claimants based upon their current and potential income. This has resulted in perversities of awarding a Swiss tourist R50 million while the RAF sits on a backlog of thousands and outstanding liabilities exceeding R400 billion. The RAF also awards claimants lumpsum payments. On average it receives 100 000 claims a year amounting to R30bn. In short, the system is structurally and financially broken.
Commuters and an economy already battling to cope with the cost of living, weak economic growth, and staggering levels of unemployment, indebtedness, poverty and inequality; can least afford the annual adjustments to the R2 plus RAF fuel levy, let alone the increases that would be needed to settle the R400bn plus liabilities. The fiscus facing pressing needs to hire teachers, nurses, doctors and police, to fund schools and hospitals, to fix roads and courts, etc. cannot afford to bail out the RAF.
The Bills seek to fix these structural fautlines by adopting the model utilised by other government insurance funds, to ensure that RAF’s limited funds are prioritised for low-income workers. The RAF, like the Unemployment Insurance and the Compensation of Occupational Injuries and Diseases Funds, will set a cap at the level to which it will compensate claimants for loss of income. This will ensure that its limited funds are directed to working-class claimants and not compensating millionaires with fancy lawyers and doctors. It will be extremely critical that the income cap is correctly set to cover working and middle-class South Africans and adjusted annually for inflation to retain its value.
Second, the Bills propose a shift away from large once off lumpsum payments to monthly living annuities based on lost income and medical expenses. This will reduce excessively large amounts needed to be paid immediately and place payments to victims and their families on a more sustainable long-term path. This is similar to pension fund and retirement annuities payment structures.
The third major change proposed by the Bills is to introduce the no fault award. This is important for two reasons. First it removes the costly and time-consuming burden upon claimants to prove they were not at fault and thus the time it takes for the RAF to adjudicate claims. Most importantly the no-fault award shifts the RAF away from the current practise of linking medical and loss of income compensation to the degree to which one was at fault. In most instances, one will always be at fault for an accident. Why should your family then be punished financially because of that? They have already suffered. If there is a need to claim damages, then that should be pursued through civil claims. If there is a need to punish, then that must be secured through the courts.
Lastly the Bills remove lawyers from submitting claims. Government services must be accessible to all and not require the hiring of expensive lawyers the poor cannot afford.This shift comes to the heart of why it has taken so long for the Bills to come to Parliament. Due to the chaos at the RAF, road accident lawyers have made fortunes submitting claims on behalf of frustrated claimants, and all too often generously help themselves to the awards, further inflicting pain upon victims.This progressive clause means the RAF must get its act together. This requires government removing corrupt elements from it, appointing competent management, filling vacancies, and modernising IT systems and infrastructure.
Cosatu is pleased Minister Creecy has firmly committed to tabling these urgent Bills at Parliament. The Bills left Nedlac a decade ago and were later mysteriously rejected by the 5th Parliament’s Portfolio Committee on Transport after shameless lobbying by road accident lawyers who could not bear to see their days of pilferage at the public’s expense coming to an end.
Cosatu will work closely with government and Parliament to get these progressive Bills through. The government needs to move quickly to table the Bills at Parliament by the end of 2025. Parliament too must expedite their adoption.The state can and must be fixed. The RAF is an important tool to protect the poor. Its days of being looted must end.
Solly Phetoe is general secretary of Cosatu.
Image: Doctor Ngcobo / Independent Newspapers.
Cosatu General Secretary Solly Phetoe.
*** The views expressed here do not necessarily represent those of Independent Media or IOL.
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