Success and failure of road accident fund.
Answers
Answer:
The Road Accident Fund, referring to reports from the United Nations and the World Health Organisation, stated that road traffic injuries were a global problem affecting all sectors of society that had received insufficient attention partly because of a lack of political responsibility. Road traffic injuries cost low and middle-income countries between 1% and 2% of their gross national product: of all deaths caused by injuries, 22.8% were caused by road traffic accidents, a far higher percentage than deaths caused by war injuries (3.4%) and violence (10.8%). Road traffic injuries were the second leading cause of death in persons aged between 5 and 14, the first leading cause of death in persons aged 15 to 29 years, and the third leading cause of death in persons between 30 and 44 years. In brief, road accidents had their biggest impact on the youngest in society worldwide. South Africa, with 33.2 road traffic deaths per 100 000 of population, ranked amongst the highest in Africa. According to data from the Road Traffic Management Corporation, in 2008 there were 12 011 fatal accidents in South Africa, in which 14 057 people lost their lives – 38 people a day.
The Road Accident Fund was misunderstood as to the nature of its business, which was to provide to all the users of South African roads peace of mind and cover for death or bodily injuries, financed by the payment of fuel levy, collected by the South African Revenue Service (SARS) at refineries and paid subsequently to the Fund via the National Treasury and the Department of Transport. Problems arose from the fault based system of compensation whereby the Fund spent a disproportionate amount of time determining who was at fault, rather than prioritising assisting the injured. Compensation included past and future hospital, medical and related expenses, funeral expenses, past and future loss of support, past and future loss of earnings, and general damages. The system was subject to widespread abuse and ‘systemic fraud’. The Fund admitted that the scheme was inaccessible to ordinary South Africans. Furthermore, a fault of the scheme was its subjectivity in the need to project expected earnings of a claimant. This perpetuated past inequities, since assessors based projected earnings on earnings of parents. This was a scheme where ‘the poor subsidise the rich’. The cost of administration was excessive; more than half the R0.64 fuel levy went towards administrative costs, including the costs of legal experts. The Fund sought support from the National Treasury in setting a fuel levy policy that would result in the scheme being fully capitalised.