
Deputy Minister of Transport, Mkhuleko Hlengwa, has put forward a proposal to introduce the Road Accident Fund (RAF) Levy into the pricing calculation of alcohol in South Africa.
This comes after the country recorded a spike in alcohol-related accidents and deaths on the nation’s roads over the 2024/25 festive season, with an astonishing 3,840 individuals being arrested for drunken driving in a matter of weeks.
Hlengwa explained to Newzroom Afrika that authorities have noted an alarming lack of regard by motorists for the laws of the road. Over December and early weeks of January, traffic authorities regularly pulled over inebriated drivers at all hours of the day, even as early as nine o’clock in the morning.
Drunk drivers are often linked to road accidents and fatalities which put the country’s infrastructure, emergency response, and healthcare systems under unnecessary strain.
As such, Hlengwa believes that if alcohol prices are directly affected by road accidents, it would lead to more drivers thinking twice before getting behind the wheel after having a few drinks.
“Currently you have a situation where the Road Accident Fund Levy comes out of the Fuel Levy, and I do not see anything wrong with us instituting within the alcohol pricing system a direct charge for the Road Accident Fund as well, among others, in order for us to actually ensure that the user-pay principle applies for the alcohol users and the kind of behaviors that we see on the road,” said Hlengwa.
“If you hit the pocket, you make quite a significant stride towards ensuring that there’s a second thought to how people conduct themselves and how they drink their alcohol and where they drink their alcohol.”
At present, the RAF Levy accounts for R2.18 of every litre of petrol and diesel sold in the country.
It’s allocated to the Road Accident Fund to compensate the victims and families of victims for damages stemming from road accidents in South Africa.
Between 2022 and 2024, the levy brought in a whopping R145 billion for the Fund, R142 billion of which was paid out in claims.
RAF in dire straits
Adding the RAF Levy into the alcohol price mix could be one way to restore the entity and push its balance books back into the green.
The embattled RAF recorded a R1.5-billion deficit for the 2023/2024 financial year despite the substantial levels of revenue it receives from the levy imposed on fuels.
CEO Collins Letsoalo attributes the shortfall to a levy freeze initiated back in 2021.
Fuel taxes and levies are typically adjusted in February, however, as part of an economic relief measure for citizens that was first introduced during the Covid-19 pandemic, the RAF Levy has been frozen at R2.18 per litre for the better part of the last four years.
Letsoalo insists that the levy has effectively been reduced to R1.93 in real terms due to a lack of adjustment for inflation which partly explains the entity’s poor performance, and has called on the powers that be to kickstart annual increases once again.
These comments have been met with their fair share of criticisms, however.
Speaking to MyBroadband, Hennie Klopper, a practicing attorney since 1973 and former law professor at the University of Pretoria, said that inefficiencies within the RAF are the primary reasons for its budgetary woes and are directly contributing to unnecessarily high prices at the pumps.
He noted that the RAF has spent some R48 billion on needless litigation over the past 20 years which has led to the levy being as high as it is.
In addition, the RAF is woefully unequipped to handle the sheer scale of claims it receives annually.
Klopper said the country’s treacherous roads generate in the region of 100,000 claims against the RAF per year, however, the entity employs about 2,400 workers who only manage to process roughly 30% of cases.
The remaining claims, which are estimated to be worth R11 billion, are carried to the following financial year.
Klopper further indicated that the RAF appears to have a fundamental misunderstanding of the Act that governs it.
RAF corporate communications head McIntosh Polela said during a media briefing in late 2024 that the Fund’s operating model is based on litigation, which is unsustainable.
He said that suing the state for people injured in accidents to access their benefits shouldn’t be allowed.
“The statement suggests that the RAF does not seem to have a clear conception of the RAF Act, which it is legislatively and Constitutionally obliged to administer,” said Klopper.
“The system is not based on litigation as is stated, but on common law. What is recovered by claimants as clearly stated by the Act are not benefits but loss or damage suffered.”
Klopper said the RAF Act puts forth provisions that encourage the settlement of claims without litigation. In fact, it actively discourages litigation.
“Some of these RAF provisions carry the sanction of loss of claim and an adverse legal cost order where there is non-compliance of early disclosure of information requirements, or where there is unnecessary and speculative litigation by claimants,” he said.
“The fact that the RAF is a litigant is a direct consequence of the RAF’s failure to timeously and effectively deal with lodged claims.”
The RAF’s inefficiencies, instead of the RAF Act, is what’s forcing claimants to resort to litigation to enforce and prevent prescription of their claims, Klopper said.
Prescription is a legal principle where a debt or claim becomes uncollectible after a certain amount of time has passed.
“The RAF is a delinquent litigant, as has been stated by a number of judges,” Klopper said, referring to a recent case presided over by Judge Dennis Davis.
“It does not investigate claims as it should and, in many instances, simply ignores summonses served upon it,” he added, pointing to a separate ruling from September 2024.
The expert further cited a Daily Maverick article in which lawyers sounded the alarm about how the RAF was crippling the Gauteng High Court, something that can be seen across courts in the country, said Klopper.
“Its dereliction of its legislative duty to investigate and settle claims has resulted in it being faced with default judgments and has had an adverse impact on High Court Rolls,” he said.
“Finally, the reduction of the deferred payment of judgments obtained by claimants is entirely as an indication of the successful administration of the RAF when the mere fact that such a system exists, indicates quite the opposite.”
He said this comes at a considerable cost in interest that increases on deferred payments of around R1 billion annually.
“The RAF is engaged in a media campaign which is effectively a whitewash of the real situation and also to prepare the public for the cuts in compensation that it is proposing,” warned Kloppers.
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