Transport Minister Barbara Creecy has proposed a new vehicle-linked fee to fund the Road Accident Fund (RAF), seeking an alternative to the current fuel levy system. The move, intended to restructure the fund’s struggling finances, has drawn immediate criticism from the Public Servants Association (PSA) for its potential impact on household budgets.
Opposition To The Proposed Funding Model
The PSA has formally rejected the introduction of a vehicle-linked fee, arguing that the financial burden would be too high for motorists already managing significant cost-of-living increases. In a statement regarding the proposal, the union characterised the plan as ill-conceived and warned it would further reduce the disposable income of struggling South Africans.
Challenges Facing The Road Accident Fund
The RAF is currently grappling with severe financial sustainability issues and a growing backlog of compensation claims that have strained its operational capacity. As fuel consumption patterns shift due to the increasing adoption of electric vehicles and more efficient traditional engine technology, the reliance on a fuel-levy-based income model has become increasingly unstable.
While specific technical details regarding the proposed fee structure or potential thresholds for vehicle classes remain undefined, the discussion forms part of a broader government push to overhaul how the entity collects revenue. Stakeholders continue to monitor how the Transport Department intends to balance the long-term solvency of the fund against public affordability concerns as the policy remains under consideration.