Attorney Michael de Broglio on: South Africa, Law, Politics, Attorneys, Sport, Photography, Technology, Gadgets, Media, Crime, Road Accidents Fund,
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The Budget Speech is going to be on Wednesday, 24 February. My main hope for this speech is that we see some cash injection for the Road Accident Fund. There was of course a substantial 50c per litre increase last year, but with the Road Accident Fund hell-bent on settling as many claims as quickly as they can, seemingly to continue to run at a big deficit, it was not enough. It must be borne in mind that for a number of years the Road Accident Fund settled 55,000 cases a year but suddenly in a time when less claims are being lodged against them than ever before they bounced that figure to 110,000 cases in a year and hence the problems we now face.
What will assist the most is if, instead of just giving a per litre increase, and that needs to still be given, the government gives a lump sum. The Road Accident Fund is currently R10,1 billion in arrears on its payments and so one would need a lump sum like R3 or R4 billion just to have some impact. If the levy is currently at R1,50 a litre one is going to need to see at least an inflationary increase, which would be another 10c or so per litre, but another 50c like last year would be ideal or at least, let us say 30c a litre together with a lump sum injection of R3 to R4 billion. I don’t think we will get much of an increase, because to me, this has always seemed like a deliberate strategy to try and force in the new RABS Act by creating the shortfall that has been created and so, I don’t see government relieving it now. There cannot be any other business where the CEO gets incentives, if by increasing the number of settlements he manages to manage the company into a cash flow crisis, but this is South Africa! We’ve had government Ministers trying to explain that swimming pools are really there to put out fires, only for the President’s own advocate to contradict that in court and admit that the report of Thuli Madonsela was correct, so one must expect that nobody at the Road Accident Fund, including their Board, is going to bat an eye at the current mismanagement of the Fund. You cannot describe actively going out, seeking new claimants, to block settle and mass settle as many cases as you can, when you do not have the funds to pay them as anything other than mismanagement and the only question is whether it serves a strategy or not?
Posted by Michael de Broglio on Monday 22-Feb-16
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Comments
Thabitha said:
on Tuesday 23-Feb-16 08:41 AM
If RAF can stop going around and opening new cases paying immediately to impress clients, they can save more cash to solve their problem then if everything is balanced then they can start taking claims.
Charlotte Harding said:
on Monday 22-Feb-16 12:14 PM
I shiver to think what will be said in the budget speech on Wednesday. It would make life so much easier for us here if RAF is given a cash injection and most of our matters can be paid! But then again this is SA........ I am not holding my breath.......
Johann said:
on Monday 22-Feb-16 10:47 AM
It would be great if more money could go to the RAF but is seems like the Government is very reactionary in their approach so there would need to be an outcry and marches first before anything is done about the shortfall.
Juliet said:
on Monday 22-Feb-16 09:27 AM
I think we are all waiting in anticipation for what must be one of Pravin Gordhan's toughest budget speeches yet. He is probably the only person I believe isn't guilty of mismanagement in this government!
Zanell said:
on Monday 22-Feb-16 09:03 AM
Even if they have to increase petrol they will still probably mismanage that money too . A little bit worried about the budget speech, hopefully its not going to be so bad. Expecting the worse.
Jessica said:
on Monday 22-Feb-16 08:39 AM
Well now why are they making it the peoples problem that they can't manage the fund? The people pay their insurance yet now when the time comes to claim from it, it is always a mission.
Melissa P said:
on Monday 22-Feb-16 08:38 AM
Hoping that the budget speech isn't such a joke as the state of the nation this year. Any improvement and development in this country in desperately needed.
Jessica Apfel said:
on Monday 22-Feb-16 08:22 AM
With a recession imminent the budget speech is going to set the tone for any development or hopes of recovering our depreciating rand.
Johannesburg based attorney specializing in personal injury matters including Road Accident Fund claims and medical negligence matters. My interests include golf, reading and the internet and the way it is constantly developing. I have a passion for life and a desire for less stress!
