Pretoria - Finance minister Nhlanhla Nene will sit down on Tuesday with the portfolio committee on transport and representatives of the department to voice his concerns over the enormous cost implications of the proposed Road Accident Benefit Scheme Bill.
Under the proposed bill, both parties to an accident can claim for damages, as it works on a no-fault basis and states that the person responsible for the accident may in many cases benefit more than the victims when they are compensated.
Over the past few weeks the committee has held public consultations in the nine provinces to gather comments on the proposed new legislation, following weeks of submissions that were made to the department in Parliament by various stakeholders, including law societies.
One of the major concerns was that the proposed bill could lead to a massive increase in the fuel price but, despite the problems raised, the portfolio committee pushed for the bill to be finalised by the end of October and to proceed towards enactment.
However, Pretoria-based Road Accident Fund expert and lawyer Gert Nel said a common theme echoed in all the presentations was that the bill in its present form would fail constitutional muster.
“Taxpayers will simply not be able to afford a dual system," he said, "essentially adding the financial demands of the proposed legislation on top of the already struggling RAF.”
Nel said it would cost a vast amount to fund this, and at present there were more questions than answers. The public had raised concerns about the affordability of the bill, he added, and the representatives were asked how they intended to pay for the running of both systems.
“It became apparent during the National Treasury’s presentation," he said, "that neither the committee nor the department had engaged the Treasury on certain key areas of the funding model of the proposed scheme.”
In response to comments from the Treasury, the chairperson of the portfolio committee, Dikeledi Magadzi, asked that minister of transport Blade Nzimande and Nene urgently meet to clarify the impasse. The portfolio committee subsequently accepted a request from Nene to address it on Tuesday on the cost implications.
Nel said several key concerns were raised by the Treasury, including the absence of any separation of the funding of the bill’s benefits from the funding of the administration of the fund. Manwhile, it remained unclear why the committee and the department were pushing to enact the bill despite the clear and adverse financial impact it would have on taxpayers.