An unnecessary R11m legal battle with the auditor-general (AG) to defend an improper accounting change and a R2 fuel levy that is carrying a struggling bankrupt institution. These are two of the revelations uncovered by the standing committee on public accounts (Scopa) during the oversight investigation into the Road Accident Fund’s (RAF’s) finances.
The committee heard testimony from the deputy minister of transport, Mkhuleko Hlengwa, and the department’s director-general, Mathabatha Mokonyama.
@sowetan1981 The Road Accident Fund (RAF) interim board has told parliament that even if the fund saves money internally, it still won’t cover the massive growing claims bill. Video: @Sinazo Magaba Kos Reporter: @Koena Mashale #roadaccidentfundsouthafrica #southafrica #fyp #viral ♬ original sound - sowetan1981
Here are five things you need to know:
- Mokonyama said if the RAF had been audited like a normal company, it would have been shut down. It spends about R20bn a year but earns only around R4.55bn, with growing liabilities, and is kept afloat mainly by the fuel levy.
- Hlengwa said the department and the National Treasury agreed the current model could not continue, as lawyers were benefiting more than claimants. Claims by foreigners are seen as a major risk.
- Hlengwa estimated that road accidents cost South Africa between R205bn and R260bn a year, putting severe pressure on the fund.
- He further said shutting down the RAF would hurt the poorest, so reforms such as the RABS bill, a no-fault system, annuity payments, and tougher road safety measures, including a proposed zero-alcohol limit, are aimed at fixing the system and preventing accidents in the first place.
- The RAF wasted R11m of public money fighting the AG in court to defend an improper accounting change meant to hide a R300bn liability, said Hlengwa.
Would you like to comment on this article?
Sign up (it's quick and free) or sign in now.
Please read our Comment Policy before commenting.