As reported yesterday, Parliament has abandoned the Road Accident Benefit Scheme (RABS) Bill in its current form. The Bill was meant to replace the Road Accident Fund (RAF) Act, which could have led to a drastic increase in the fuel levy, among other concerns, notes a Business Day report.

Among other things, the RABS Bill aimed to address several issues faced by the struggling RAF, including lengthy claims processes and huge payouts to legal practitioners.

In the previous financial year, lawyers alone pocketed close to R11bn from the RAF.

Introduced by the Transport Department almost a decade ago, the Bill proposed amending the RAF Act to lean towards providing social security to accident victims. It also sought to introduce a no-fault system.

Those opposed to the Bill said it would create a dual system because even if it were adopted, SA would still be compensating people for years under the current Act, especially considering the huge backlogs.

This would require additional funding for the RAF through a huge increase in the fuel levy, which was unaffordable for the government and consumers.

Set to become the second-largest contingent liability after Eskom, the RAF has also been flagged as one of the biggest risks to SA’s finances, notes the Business Day report. It expects to record a loss of at least R15bn in the current financial year amid a drop in fuel levy income as a result of the Covid-19-induced lockdown.

Tax consultants at PwC have previously warned that claims against the fund are growing significantly faster than the increases in the RAF fuel levy, with the effect that there has been insufficient growth to offset growth in liabilities, online news site BusinessTech reported in February.

The DA has argued that the Bill is anti-poor, unaffordable and poses major stumbling blocks for road accident victims.

Parliament’s Transport Committee has now resolved to rework the Bill.

Yesterday, committee chair Mosebenzi Zwane said it was concerning that the Bill had failed to pass in Parliament for several years and therefore the committee felt it was best to go back to the drawing board to ensure all concerns were addressed. He said the committee would discuss the redrafting process and time frames in the coming weeks.

DA MP and transport spokesperson Chris Hunsinger said current RAF claimants would have to be financed parallel to the RABS Bill, which would have implications on the fuel levy.

‘Neither the fiscus nor consumers would have been able to afford two road-crash compensation streams,’ Hunsinger said.

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