Aug

RABS Bill will result in fuel levies rising by 75% says lawyer

2018-08-23 10:31
Kirstie Haslam, partner at DSC Attorneys, says the focus should be on fixing the current system as opposed to implementing something which is unknown, costly and inequitable. “It is going to cost significantly more and most claimants will receive significantly less - and it will be harder to claim,” she says.

If objections are not tabled following the so-called “public consultation” process which has taken place at “obscure towns” around the country and the proposed Road Accident Benefit Scheme (RABS) bill goes ahead, we will see fuel levies rising by an estimated 75% and reduced compensation being provided to road accident victims and their dependents.

Despite objections, this is the unconceivable reality according to partner at DSC Attorneys, Kirstie Haslam, who has been actively involved in parliamentary debate surrounding the proposed ‘no fault’ public insurance Road Accident Benefit Scheme (RABS) bill that is now before parliament as a replacement for the current Road Accident Fund (RAF).

DSC Attorneys is a Cape-based law firm that has a proven track record specialising in personal injury and road accident claims throughout South Africa.

“Other than the dire affect the Bill will have on accident victims’ claims, the failure to highlight the anticipated and unavoidable increase in the fuel levy to the public in order to meet the funding requirements for RABS is especially disturbing, considering the latest outcry about the price of fuel and the fuel levy itself,” says Haslam.

Kirstie Haslam, partner at DSC Attorneys: “Other than the dire affect the Road Accident Benefit Scheme bill will have on accident victims’ claims, the failure to highlight the anticipated and unavoidable increase in the fuel levy to the public in order to meet the funding requirements for RABS is especially disturbing, considering the latest outcry about the price of fuel and the fuel levy itself,” says Haslam.

Kirstie Haslam, partner at DSC Attorneys: “Other than the dire affect the Road Accident Benefit Scheme bill will have on accident victims’ claims, the failure to highlight the anticipated and unavoidable increase in the fuel levy to the public in order to meet the funding requirements for RABS is especially disturbing, considering the latest outcry about the price of fuel and the fuel levy itself,” says Haslam.

She adds that during the parliamentary hearings, the Department of Transport (after numerous previous requests) finally disclosed the single actuarial report on which it was relying to justify the affordability of RABS (which incorporated likely “savings”). RABS’s affordability is one of the cornerstones of the reasoning behind its introduction.

However, Haslam explains that numerous individual actuaries as well as the Actuarial Association of South Africa made presentations to the Portfolio Committee on Transport (PCT) recommending that, given the highly significant nature of the intended changes to the system of road accident compensation and the potentially huge impact on the public, the latter report should, at a minimum, be subjected to peer review to test the reliability of the assumptions on which it relies. She says this has not been done.

She goes on to say that an analysis of the Department’s own actuaries’ estimation of the implications on the fuel levy in terms of the anticipated funding requirements for RABS reveals that significant increases to the fuel levy are anticipated bearing in mind that both systems, i.e both RABS and RAF, would have to run side-by-side for an estimated minimum of 8 to 10 years.

Haslam says that even on this conservative estimate, the fuel levy is set to increase by an initial 75% which, even after ten years, will taper to a still significant 1½ times what it currently is.

“This has not been explained to the public to date and may very well influence their attitude to the RABS Bill as it is being sold to them,” she says. “The focus should be on fixing the current system as opposed to implementing something which is unknown, costly and inequitable. It is going to cost significantly more and most claimants will receive significantly less – and it will be harder to claim. This is especially in the case of children who, by the Department’s own admission, are among the worst affected by the Bill.”

She adds that it warrants mentioning that children comprise an estimated 33% of injured road accident victim claimants.

As to next steps that will follow after the parliamentary hearings, Haslam says that the Bill has reached a critical stage.

“Once these isolated “public consultations” have been completed, the Portfolio Committee on Transport is going to undertake a final review of the Bill and it is understood that there is an intention to push the Bill through within the current session of Parliament, this year, notwithstanding the wide-ranging objections which have been raised to it.”

She says that it is also disturbing to note that to date, no civil rights organisations have been given the opportunity to give their input on the Bill even though these groups can present compelling independent insights into the dramatic impact which the reduction of benefits will have on those affected by road accidents.

“I recently learnt, for example, that the QuadPara Association of South Africa (QASA) has made a number of requests to make submissions on the Bill but these have been ignored.”

She points out that it is critical that when it comes to considering a Bill of this nature, which will have a profound impact on future victims of road accidents, those organisations which carry their best interests at heart, must be allowed to voice their concerns and have their input taken into account.

What Haslam says is extremely worrying about the intended scheme is the fact that the increase in fuel levies will impact most severely on those who can least afford it. “I think there’s a limit to what can reasonably be expected from consumers and we have already seen how there have been recent strident calls for a reduction in the fuel price,” she adds.

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