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Budget: Old Mutual Insure reaction

22 February 2024 Ronald Richman, Chief Actuary at Old Mutual Insure
Ronald Richman

Ronald Richman

On the Climate Change Response Fund

We are happy to see that the Climate Change Response Fund considers both preparedness and response. However, the fund will need to have robust governance measures in place to ensure that it is used appropriately. We believe leveraging extensive expertise from the insurance sector through public-private partnerships will see meaningful value unlocked from this initiative. It is a pity that insurance does not appear to have come into play; we encourage Government to use the tools provided by the insurance sector to help protect the South African society, especially those most vulnerable to the impact from climate change. A challenge may be around the lack of weather data for SA and uncertainty about how the environment will evolve in the future. Addressing these challenges will require concerted efforts and innovative solutions to enhance risk assessment and preparedness measures effectively.

On Electric Vehicles

To encourage the production of electric vehicles in South Africa, government will introduce an investment allowance for new investments, beginning 1 March 2026. This will allow producers to claim 150% of qualifying investment spending on electric and hydrogen-powered vehicles in the first year. The incentive will be implemented in addition to the existing support under the Automotive Production Development Programme. Government has also reprioritised R964 million over the medium term to support the transition to electric vehicles.

"We welcome investments in electric vehicle production in South Africa," said Richman. "From an emissions reduction perspective, we see it as a challenge that electric vehicle subsidies for the private market do not seem to be included, unless it is already in the R964 million.”

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