Response from RAF management to the article by DA MP, Chris Hunsinger titled: “Call for the Minister’s intervention as RAF faces collapse” published on Politicsweb
6 September 2024
The RAF Management notes with disappointment and regret the posture taken by Mr. Hunsinger on the RAF and its “current management”. What is concerning and irks the Fund’s management is being called “cruel” by Mr. Hunsinger who is a known proponent of a kind of RAF model that seeks to perpetuate an unsustainable and unequal RAF system that benefits the rich and privileged.
This is notwithstanding Fischer J in a reportable judgement (ADV Van ANTWERPEN obo SCHOLTZ JC Vs ROAD ACCIDENT FUND) delivered on 29 July 2024 holding that, “ A constitutional challenge in respect of this right cannot be launched without an inclusive approach and a holistic challenge to failings in the scheme; the RAF cannot be singled out as the State Organ which must take direct and exclusive accountability for the failure of a scheme which has long been acknowledged to be interim in nature, underfunded, and presently unsustainable.”
Mr. Hunsinger was responsible for the demise of the Road Accident Benefit Scheme Bill (RABS), and he prides himself with that fact. He did this in collaboration with Association for the Protection of Road Accident Victims (APRAV), an organisation founded by lawyers, masquerading as messiahs for road accident victims.
Theirs is to mislead the public at large. The article by Mr. Hunsinger is in line with this campaign. Hiding behind being a member of Parliament, he hopes that the RAF management will be cowed into not responding to his attack against the state entity. Our freedom of expression is protected as a fundamental right in the constitution of South Africa.
Now that we have unmasked who Mr. Hunsinger really is and what he stands for; allow us to put matters of fact for the record.
1. There is no RAF that is about to collapse (as suggested by Mr Hunsinger); the last annual report, audited by the Auditor General of South Africa (AGSA) released on 31 August 2024 bears testimony to this; the RAF is stronger than it was in 2019.
2. The RAF Amendment Act of 2008 was a monumental disaster from a financial sustainability point of view. The RAF in 2008 had a short-term deficit of R284 million which increased to R6,9 billion in March 2015. By December 2019 this short-term deficit had reached R19 billion and was projected to reach R51 billion by 2022/23. However, through the interventions of this “cruel” management, the short-term deficit has since reduced to R8.3 billion as of 31 March 2024. The AGSA noted the following in the 2022/23 management report, “A significant portion of the funds received by the public entity is spent on claims related expenditure and this has been the case for the past five (5) financial years, despite the fact that there has been no increase in the fuel levy rate.
Management is urged to continue directing the net fuel levies received to the claim payments as this is an indication of management’s intention to deliver on their mandate”. This was in reference to the fact that in the 2022/23 financial year, the RAF spent R45 billion of its R48.6 billion fuel levy income on claims expenditure, a complete departure from the past when administrative costs took a significant chunk of the fuel levy income.
3. The legal costs of RAF had escalated from R800 million to R10.6 billion in 2018; i.e. 14 times over a period of 10 years (Read Prof. Klopper Research paper). These legal and other administrative costs have since reduced significantly in the past 4 years. In reflecting on the reduction in legal costs, the AGSA noted as follows; “This reflects that the majority of the gross fuel levy is directed towards payment of claimant compensation with a steady reduction in the claims requested not yet paid.”
4. The AGSA had this to say about the new RAF Form 1, that Mr. Hunsinger claims is illegal or against the law : “The planned target of a 20% reduction of 3-year-old open claimed was, similar to the prior financial year, not achieved in the current financial year which can be attributed to the large number of claims that cannot be processed as the information required to process the claims remain outstanding. We, however, commend management on their continued efforts to ensure achievement of this indicator as RAF has launched a backlog campaign which is aimed at urging claimants to submit their outstanding documents that are required for claims processing.
Furthermore, the implementation of the pre-assessment, which ensures the registration of only compliant claims (claims with all minimum required supporting documentation) assists in reducing the number of claims that cannot be settled due to missing or no information.....”. Mr. Hunsinger may do well by asking his lawyer collaborators to educate him about Section 18.1 of the Superior Courts Act; regarding appeals.
5. There is also nothing onerous about the minimum requirements for a claim. The information is meant to assist the settlement of claims as per the AGSA’s own assertions, which were arrived at using an international audit methodology.
6. It is just blue lies that RAF has not paid claims in 4 months; one wonders where Mr. Hunsinger, gets this from. As an honourable Member of Parliament, he knows how and where to get correct information, but of course he would rather opt for Shakespearean ‘Sound and Fury’.
7. The RAF accounts and has been accounting to all oversight bodies as expected by statutes; to say otherwise is another lie. As a matter of fact, accountability is at the centre of our values iCARE2. It is therefore propaganda with a clear intention; to undermine the work already done by this management and the board.
Contrary to the assertions by Mr Hunsinger, what the RAF currently has, is a successful turnaround strategy implemented under a very difficult operating environment in the past four (4) years. This operating environment included an inadequate legislative framework, and no fuel levy increases for the past three (3) years, something completely unprecedented for the RAF. The magnitude of the task we were confronted with in turning around the Fund could not have been better articulated by Judge Fischer in a judgement (ADV Van ANTWERPEN obo SCHOLTZ JC Vs ROAD ACCIDENT FUND) as delivered on 29 July 2024 where she noted the following, “from the history, long and past, and more recent, it is clear that it cannot be in dispute that the current Board, as many of its predecessors, inherited a Fund which was insolvent.
Bertelsmann J in Ketsekele v Road Accident Fund remarked that whomsoever should manage RAF is “saddled with an inheritas damnosa”- a cursed inheritance that would be doomed to failure.” What will certainly collapse the RAF is reverting to a strategy of accepting claims with inadequate information and not efficiently managing administrative costs.
It is clear from the above that Mr. Hunsinger cannot be trusted by those that elected him to be a public representative. He is abusing his parliamentary privilege, calling the RAF management “cruel”. He and his collaborators that killed the RABS Bill are anti RAF transformation and are hellbent on facilitating our removal as those that want to ensure an equitable and sustainable RAF for the benefits of poor road accident victims.
We march forward to a better RAF, one that puts the claimant first! The RAF is now a better organisation since the current management came on board. As the management we will continue to strive for continuous improvements in the best interest of all South Africans.
Issued by RAF Management, 6 September 2024
