Every time that the Finance Minister announces his Budget or Medium-Term Budget Policy Statement, South Africans take note.
This statement not only is important for tax advisers and politicians – but for every South African who cares about his own financial stability!
What impact does the Mini –Budget revelations have on the car insurance industry?
The Finance Minister has revealed that there will be new regulations aimed at beefing up the stability of banks and insurers, as well as bringing previously under-regulated products such as derivatives and hedge funds, under a single Financial Markets Bill.
Very important for car insurance companies and consumers who are faced with increased premiums are the steps taken to combat fraud, corruption and other crimes. Crime is a significant contributing factor to rising insurance premiums – and any steps to reduce crime are welcomed by the insurance industry!
Mini Budget Statement reveals increased funding for Police and Courts
Finance Minister Pravin Gordhan announced an increase in funding for the police, courts and military over the next three years. The allocation for the police will rise by an average 7.5% annually, with the bulk going towards improving detective and intelligence services.
“Additional funding over the MTEF period will expand detective services, crime intelligence and crime prevention, especially at the local station level.
“Tactical response teams will be established in each of the provinces over the next three years to conduct medium-risk policing operations and make use of available intelligence to prevent crime,” the document says.
The state’s corruption-busting capacity will also be boosted, with the Special Investigative Unit’s ranks set to increase to more than 650 staff by 2013/14.
The courts’ budget allocation will go up by 8.4 percent annually over the medium-term framework period.
The revised national expenditure estimates for this year includes R320 million for salary adjustments in the department of justice, the National Prosecuting Authority and Legal Aid South Africa.
Conclusion
The insurance industry needs effective law enforcement to reduce car insurance fraud. By reducing car insurance fraud the consumer will benefit from a potential slow -down in rising insurance premiums. We would like to urge all vehicle owners to join the fight against insurance fraud and to report fraudsters!!