Parliamentary Correspondent
The department of transport is considering the introduction of a hybrid model for the financing of the technically bankrupt Road Accident Fund (RAF), which would involve contributions from the state and motorists, transport minister Barbara Creecy said Tuesday.
Addressing a media conference before her budget vote speech in a mini-plenary of the National Assembly, Creecy said that given the fiscal constraints facing the government, it was not feasible to rely on the state to finance the RAF, which pays out claims by road accident victims. The fund, which has contingent liabilities exceeding R400bn, has been plagued by controversy over management and delayed payments.
“We are researching options for a hybrid funding model that will include private and public contributions to lessen the burden on the fiscus,” the minister announced in her speech.
A change in the funding model for the RAF would form part of its redesign as a no-fault system under the proposed Road Accident Bill, with the aim of reducing the contingent liability faced by the government and introducing a standard schedule of benefits to ensure equity and to ensure the long-term sustainability of the fund. This would also, among other things, prevent the huge sums paid in legal fees by the RAF in contesting claims.
