Finance Minister announce big blow for motorists

06 March 2015

RAF's nifty fifty misses the problem

Finance Minister Nhlanhla Nene dealt motorists one of the biggest blows in recent times with the announcement of a 48 percent increase in the Road Accident Fund levy, from R1.04 a litre to R1.54 a litre effective April. The 50 cents per litre increase in the RAF levy is a symptom both of the magnitude of the road safety crisis facing South Africa and the government's inability to rein it in. 

If traffic crashes didn't exist, nor would the RAF, but it is a necessary feature of society - no country in the world has yet reduced traffic crashes to zero. Unfortunately though, South Africa's road safety record is grimmer than most, and the result is that compensation for crashes has tended to be expensive. This  situation has not been aided by many attempts to defraud the RAF over the years, by claimants, lawyers and doctors alike. It is common knowledge that the RAF has been financially squeezed for a long time, and the situation has recently become critical, with more than R20.1 billion in claims being paid out in the last financial year.

There is no doubt that increasing the RAF levy by 50 cents a litre will make a marked difference to the stability of the fund, but the AA's view is that government seems to be missing the real issue here: should we not be reducing claims by improving road safety instead charging motorists around R25  more per tankful to fund road crash injury payments?

It is estimated that the 50 cents per litre will bring the RAF an annual windfall of around R10bn. Let us stop for a minute and think about what could be done with R10bn a year if we were to spend it on road safety instead, to try and reduce the RAF's payouts.

The Road Traffic Management Corporation, for instance, stumbles along on a parliamentary allocation of around R180m per annum, plus whatever it receives from the Transaction Fees charged upon licence renewals and similar transactions. It is well known that the RTMC has suffered from some serious problems regarding unauthorised expenditure, but the corporation nonetheless runs on a shoestring, which is part of the reason it has not yet achieved any of the lofty goals set out in the preamble to the RTMC Act. Look, for instance, at traffic statistics. The AA has pointed out on many occasions that the RTMC has not yet released full, detailed statistics on all crashes since it was formed in 1999. Without this data, we cannot know with any certainty what is happening on South Africa's roads, nor how to combat it. But if the RTMC were to suddenly come into a R10bn budget (with the appropriate checks and balances), it would be child's play to generate an accurate statistics bundle. It would also then become possible to conduct  other much-needed road safety research into the effects of our deteriorating roads, the standards of enforcement and the levels of resources available to coax drivers into obeying our traffic laws.

And let's assume, as we might, that the outcome of such research indicates that many more traffic officers are needed on the roads. This is undoubtedly the case - the traffic police have been under-resourced for decades. With a R10bn per annum budget at the RTMC's back, it would no longer have to partner with car hire companies to obtain sponsored vehicles to use as patrol cars. It could buy hundreds every year outright. And it could equip them with the highest standard of evidentiary camera and law enforcement equipment. R10bn would also create the ability for the RTMC to staff these new patrol vehicles with trained officers who could operate on a three-shift basis to ensure that traffic law enforcement is routinely a round-the-clock affair.

With R10bn a year at its back, the RTMC could also revamp the licensing system, provide free driving lessons for underprivileged learner drivers, and distribute road safety promotional material in bulk as the Department of Transport used to do. 

Considering that road fatality risk has at least doubled since 1998, the year before the RTMC was formed, there is no reason to believe that a well-funded, integrated approach to road safety couldn't reverse the trend and reduce danger on our roads by half, if not more. Spending 50 cents a litre to reduce crashes until the RAF's injury claims drop below breakeven threshold would not only ensure the continued stability of the fund, it would save tens of thousands of lives too.

But as much as the AA might be in favour of spending money on road safety rather than on the RAF,  it is clear that this will not happen overnight, and we can also not overlook the pressing need to improve the fund's financial position. In our view, a formula needs to be applied under which a percentage of the RAF levy goes to improving road safety. With improving safety over time, the RAF's financial position should likewise improve, meaning an ever-greater proportion of the RAF levy could be devoted to saving lives on our roads, rather than compensating survivors of crashes that should not be happening.

Contact AASA Public Affairs 
Telephone 011 799 1180

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