Mr. Speaker, I move—

Mr. Speaker, we have now reached the final stage of a controversial and acrimonious discussion that has stretched over a considerable period of time. The Bill as it is before us now, shows that the main object is to give local authority status to Coloured and Indian areas where they have consultative and management committee status at this stage. The main purpose of bringing it to this House is to give the Minister of Constitutional Development and Planning a direct hand in that development in that he is empowered to form a coordinating council of which he will be the chairman. The powers given to that co-ordinating council, listed so fully, will bring about co-ordination between local authorities. Having done that, he proceeds to create an advisory board and regional areas and brings direct control of local government, presently fully in the hands of provincial administrations, into his own hands. Considerable changes have taken place to the Bill and I shall refer to them in a moment.

At the outset let me say the PFP’s attitude towards this Bill is set out very clearly. There are mainly four reasons for that. Firstly, it upholds the perpendicular structure of apartheid and perpetuates it that in separating Coloured, Indian and White local authorities, because there was not adequate …

[Inaudible.]

Vertical? I shall come to it. Secondly, there was not adequate consultation. Thirdly, and most important, he does not bring Black local authorities into the new structures. Since there are discussions with regard to a new structure and since there is a Select Committee on Constitutional Affairs which deals with an overall structure, it would have been better to have referred this Bill to that Select Committee specifically in order to deal with these particular matters. Therefore we have moved that it be referred to a Select Committee. The CP moved that the Bill be read “this day six months” and the NRP supported the CP at that stage.

The Bill through its passage faced some 23 amendments which were placed on the Order Paper. A further seven amendments were moved during the debate, bringing the total number of amendments to 30. Of this number, nine amendments were accepted. I think it can be said that the attitude of the official Opposition has been consistent throughout the entire debate. The PFP moved its amendments consistently in line with its attitude and policy in order to creat a situation it would like to see in the event of this Bill being passed.

The CP also was consistent in its attitude in the sense that it too opposed the Bill although for entirely different reasons. The CP opposed the Bill because it did not want the new structure formed. The CP did not want any liaison with Coloured or Indian local authorities, and consistent with its attitude it moved that the Bill be read this day six months. Let me say that despite the fact that the CP’s attitude has been consistent, in this debate we differ diametrically from its points of view. We completely oppose the point of view of the CP in regard to this Bill. I think our attitude to that is well understood. All we share with the CP at this stage is the common opposition to this Government, but for different reasons. Perhaps it is a sort of Mugabe and Nkomo relationship at this stage and hopefully it will not turn out to be that at a later stage.

On the other hand what a performance we had from the NRP!

A magnificent performance.

I will show the hon. member just how magnificent it was. The hon. Leader of the NRP, the hon. member for Durban Point, had the temerity of accusing the PFP of undermining reform. Sir, can you believe it? While this party stands fundamentally for a reform neither that party, nor any other party stand for reform. We are a party of reform. Our policies are based on reform.

You are a party of revolutionary reform.

We are a party of reform and then the hon. member for Durban Point still has the temerity to suggest that we do not stand for reform.

Revolutionary reform.

Mr. Speaker, on a point of order: The hon. member for Durban North says in the first instance that we are “a party of revolution” and then that we are a party of “revolutionary reform”. Is he entitled to say that?

No, I do not think the hon. member for Durban North is entitled to say that the Opposition is a party of revolution. He must withdraw that.

Mr. Speaker, I said “a party of revolutionary reform”. [Interjections.]

Mr. Speaker, on a point of order: The hon. member first of all said we are “a party of revolution” and on second thoughts, after he had realized that it was unparliamentary he interjected for a second time and said we are a party of “revolutionary reform”. [Interjections.]

The hon. member for Durban North has indicated that he used the words “revolutionary reform” and not “revolution”. I have to accept his word.

Mr. Speaker, is “revolutionary reform” then parliamentary?

Reform can take place in a revolutionary manner, drastic reform, but it need not be revolution in the sense of war. [Interjections.]

Twit.

Mr. Speaker, on a point of order: Is the hon. member for Umhlanga entitled to use the word “twit” in this House?

The hon. member for Umhlanga must withdraw that.

Mr. Speaker, I only used the word “twit”.

The hon. member must withdraw it.

Does the hon. member understand what the word means?

If the hon. member over there will keep quiet I will withdraw it. [Interjections.] I withdraw the word.

The hon. member for Hillbrow may proceed.

I can well understand the NRP’s embarrassment over this. Perhaps I should embarrass them a little further, because when it comes to consistency, they do not know the meaning of the word, and I shall demonstrate that. The NRP’s chief spokesman on local government affairs, the hon. member for Umbilo, said in his Second Reading speech (Hansard, 1 June, col. 8331)—

He uses the word “underride”. Then those hon. members speak of gobbledygook! What does the word “underride” mean? I think he mixed up two words. One either undermines or one overrides, but one cannot underride. I do not know what the hon. member means by that. Nevertheless, he said it was a pernicious Bill and he was so cross about it that he said that he himself would have moved that the Bill be read “this day six months”.

What happened next? Another senior member of the NRP, an hon. member who opposed the hon. member for Durban Point for the leadership of the NRP, in trying to assert himself in that little canoe and putting in his oar here, in expressing the attitude of the NRP said the following (Hansard, 21 June 1983)—

He goes on to say—

You have got it right.

Listen to this, Ron—

Then he goes on to say …

Mr. Speaker, may I ask the hon. member a question?

Let me just finish this first. The hon. member goes on to say—

He closes his speech with the following—

That is the Minister—

Nobody waits to hear what the Minister is going to say. He sees amendments on the Order Paper which conform very much with amendments the hon. members of the NRP have put on the Order Paper, particularly in regard to clause 18(1) which gives the hon. the Minister direct authority to establish local authorities. So it is not enough for the hon. member for Durban North to repudiate the hon. member for Umbilo and cause him all that embarrassment. He is then repudiated also by the leader of the NRP, the hon. member for Durban Point, because the hon. member for Durban Point said the following (Hansard, 22 June 1983)—

So, finally they see the light.

Alf, you know, you are really making heavy weather of it.

No, Sir, the hon. member for Durban Point in fact repudiated the hon. member for Durban North, as he in turn repudiated the hon. member for Umbilo. Their attitude has been completely inconsistent, as has been their flopping around as a party in their attitude to many other matters.

May I ask the hon. member a question now? Of the 12 or so amendments that were passed and which altered the Bill completely, how many of them were motivated by PFP?

They were all initiated by our arguments.

Oh, nonsense.

You did not know what to do until we told you. [Interjections.]

Order! Hon. members must give the hon. member for Hillbrow the opportunity to reply to the question.

There were no amendments accepted over here.

There were a few accepted over here.

The leader of the NRP says that the Bill should go to a Select Committee. They are now trying to hide their embarrassment. Whether their amendments were accepted or not accepted, is a different story. [Interjections.] We are looking forward with great interest to see how they are going to vote on the Third Reading. We are waiting to see what kind of tricks they are going to perform in the House now. They have done a somersault and a backward flip and are they now going to do a belly-flop?

It will be infinitely more intelligent than your approach, anyway.

I do not regard that hon. member’s understanding of intelligence as having any relevance in this debate.

He has some belly to flop on.

Order! I think we have had enough of that now. The hon. member may proceed.

Let me now come to the performance of the hon. the Minister and of the Government in regard to this Bill. We started off with a two hour debate. I think the hon. the Minister may have had in mind that he would like to try a cut and to see what comes out of it, to see what the reaction is by all the people involved who will be affected by this Bill.

It did not work, Chris.

No, it did. Assocom reacted. The hon. the Minister went to the provincial administrations and had various discussions. Representations were made to him. That hon. Minister should have accepted our initial amendment and should have referred the Bill to a Select Committee. All these amendments could have been discussed there if it had gone to the Select Committee on Constitutional Affairs. Representations could then have been made by people to that Select Committee and they could have been dealt with. However, according to certain reports, the hon. the Minister climbed down.

He was forced down.

He then deleted clause 14 and clause 18(1), but he still retained the position where he has control through the co-ordinating council and where he determines the regions. He had to hurriedly have consultations with Assomac, with the Natal Provincial Administration etc., and he experienced difficulty in this debate in having to tell us where we are in fact going, and having to tell this House precisely what the NP congress in Bloemfontein meant when they said that provincial governments will exist at least until the end of their present terms. I think anybody who understands simple English will interpret this to mean that provincial councils will not exist after the expiry of their present terms. Maybe this is not what the hon. the Minister meant, but that is what was said. Anyone with a simple knowledge of English will interpret it in that way. That is how all provincial administrations and members of provincial administrations interpret this statement, namely that the lives of provincial councils are coming to an end and that, in time, they will be replaced by a new structure.

Perhaps this is the time to try to predict the future of what is going to happen in this regard. We can read the recommendations of the President’s Council. We can read the recommendations of the Bloemfontein congress. We can also take note of the new structure that was proposed to us in a Bill which was referred to a Select Committee dealing with the establishment of three Houses. I am prepared to predict that the new structure will no longer have provincial councils as we know them. I think it is the end of the provincial system. Whether it will go on for another year or two I do not know. The time factor is in the hands of the hon. the Minister. It will be replaced by regional boards. The hon. the Minister gave a hint in his Second Reading speech when he referred to eight very important areas of this country to which I also referred in the Committee Stage. Those will probably be the areas for the regional boards. Those regional boards may or may not have metropolitan boards. In the areas of those regional boards will be local authorities on which Coloureds, Indians and Whites will have representation and they will also have representation on these regional boards. When matters are of regional concern, affecting them on a geographically regional basis, they will share this common concern and they will meet together to discuss their problems. This will be co-ordinated by the co-ordinating council and by the hon. the Minister himself. As the provincial councils disappear, local government bodies will come to be controlled by the Minister of Constitutional Development and Planning who may eventually become a Minister of local government and as such have direct control over local authorities. If this sort of system is going to apply I think the hon. the Minister must know that he can only do so if local authorities are financially viable. I am not going to repeat what I said during the Committee Stage. I think the hon. the Minister and many hon. members in this House have had the opportunity to serve on local government bodies for many years and they will know how difficult it is to obtain additional sources of revenue. The Government has failed completely to come up with any answer for additional sources of revenue. Where large local authorities reach a situation where the interest that they are paying on their loans is almost equal to the total income from rates, then I think we are reaching a danger level as far as the finances of our local government bodies are concerned. We must therefore not expect any of those local authorities to use any of their finance to assist the local authorities to be established for the Coloured and Indian communities. What they can do, is to act on an agency basis but that is a possibility that must still be explored.

Finally, let me state clearly the attitude of the official Opposition to this measure. We will vote against the Third Reading of this Bill and in that we are consistent. We will vote against it because it still upholds the rigid vertical lines of apartheid in the field of local government. It is a constitutional matter …

Mr. Speaker, may I ask the hon. member a question?

Hang on. It is a constitutional matter which we think must fit into the total proposals of the new constitution which is being proposed by the Government. We think that the entire plan should be revealed. We furthermore think that there is a fatal flaw in the Bill before us at the moment because the regional areas to be established cannot function properly if there is going to be—and we cannot deny that there is going to be—Black local authorities which will not be viable in terms of what the hon. the Minister has said. If those new Black local authorities are not going to fit in the regional scheme and not going to be coordinated, one is perpetuating something on a limb all by itself. It cannot possibly exist by itself, and therefore it is an absolute fatal flaw. Therefore, since the Bill on the constitution has been referred to the Select Committee and has not come back, since the hon. the Minister has recommended that evidence be taken by the Committee, since local government would like to express their view and since there may be some differences between the views of the TMA and the UME and since this is in the end going to affect all sections of the population, we have no alternative but to vote against the Third Reading of the Bill. I will now answer a question from the hon. member’s question, Mr. Speaker.

Mr. Speaker, if this Bill did allow Black local authorities representation on the advisory boards, would the hon. member’s party advocate proportional representation for them on those boards?

The question of proportional representation is of course part and parcel of the fundamental principle to which the PFP subscribes. The overall policy of proportional representation—as we see it in respect of, for example, the powers granted to the independent National States, the federal Parliament and the federal Senate— is a key factor in our whole approach to the constitutional issue.

Does that mean that your answer is yes?

Of course, we stand for proportional representation. If, however, one should want to say that the coordinating council should specifically be based on proportional representation, that is a matter that would affect the composition of that council directly. We believe, however, that all groups should be represented within that framework by representatives of each and every group.

Mr. Speaker, do I understand the hon. member correctly? Did he say there would be proportional representation for all race groups in, for example, this Parliament?

In a system of federal government, yes. That is what we stand for. We stand for proportional representation. What the hon. member for Durban North is trying to imply is that if we should give proportional representation to all Black local authorities we will have an overwhelming number of Black people on that co-ordinating council. I think that is what the hon. member said. Did I understand him correctly?

Well, he asked you the question. [Interjections.]

Mr. Speaker, I have given the hon. member my reply. We stand by what I have said and we will vote against the Third Reading of this Bill. [Interjections.]

Mr. Speaker, since we have just been listening to the hon. member for Hillbrow, permit me to say that in certain respects the by-play between the PFP and the NRP was rather amusing. [Interjections.] As far as the hon. member for Hillbrow is concerned, I was rather disappointed. If a man who has actually experience of local government, and who in addition has been the hon. mayor of Johannesburg, adopts such an attitude towards local government, one is entitled to be surprised. It surprised me considerably. [Interjections.]

Since we must now, during this Third Reading of the Bill under discussion, give consideration to the consequences or effects of this measure, I want to point out that having debated it fully, we can very definitely say with utter conviction that we are even more impressed with the value and the important of this measure than before. I must say the hon. the Minister is actually a problem for any hon. Opposition member. He, with so much conviction …

Is the hon. the Minister a problem child?

For you people, yes. [Interjections.] The hon. the Minister refuted the objections and problems raised by hon. members of the Opposition with so much conviction and determination and knowledge that all their hair-splitting is no longer a factor.

I should now like to refer to the hon. member for Hillbrow. That hon. member stated that the White local authorities would not be prepared to assist Coloured authorities. I should like to know whether it is the approach of his party that Coloured towns that come into existence as independent local authorities should receive no assistance whatsoever from White local authorities. Should the White local authorities give them absolutely no financial support, not even in cases where this is possible? The hon. member maintained that it was not possible to render such assistance.

They do not have the money.

Yes, that may be true in certain cases. There is, however, one thing the hon. member for Hillbrow should not lose sight of. He and his party always make a fuss about the fact that they are the interceders for people of colour. However, they should remember that in many cases, particularly on the Witwatersrand, they saw to it that the towns in question remained mainly dormitory towns and that they derived profits and other benefits from those people. [Interjections.] Over the years they have lived on the fat of the land and they must also be prepared to help shoulder the burden. They must not now say that they cannot pay. The people settled in those areas have to be assisted. The hon. member must be prepared to assist others who also want to prosper and come into their own. They should not adopt such a standpoint if they want to act in a progressive way.

Does the hon. member know about the resolution which the PFP adopted?

Fortunately I do not know about all the PFP’s resolutions because most of them are merely confusing. They act in such a way that no one can decide exactly what they want.

I maintain that with this measure a new era has dawned in the field of township development. It is an era full of challenges and prospects for those persons with faith who are convinced that this is a positive cause which now has to be furthered. When the effects or consequences of this measure are reviewed, one involuntarily comes to the conclusion that in the debates on it the various Opposition parties emphasized only the negative aspects. I feel it is a pity that only the negative aspects of this measure were emphasized by hon. members of those parties. The positive aspects of this measure are so overwhelming that the objections which were raised made no impression.

It is rather strange that when legislation of this kind is considered, innumerable objections are raised. However, when it is applied, one hears nothing further about the dire predictions made in connection with the adverse effects it will ostensibly have. Over the years we have found that when a measure was being discussed, alarming problems were foreseen, but when it was applied everyone was satisfied with it. It is necessary to emphasize here that this measure is a step forward towards better co-ordination and dynamic local authority structures in the country. This fact was not recognized by Opposition speakers. For the sake of petty political gain they merely raised objections to it. [Interjections ] The positive effects of this measure cannot be ignored. Mr. Speaker, the hon. member for Rissik who is so talkative, should not be too active because he is going to be rapped over the knuckles. [Interjections.] I just want to say in passing that that hon. member recently admitted that the fact that not all the recommendations of the President’s Council were accepted by the Government came as a shock to his party. However, I shall not pursue this matter.

Has it not for decades been a source of concern to and an objection of local authorities that the central Government pays insufficient attention to them, although they form an important part of the State structure. Hon. members are aware that for decades local authorities have alleged that they did not receive sufficient attention from the central Government. Here a body is now being created with a Minister as chairman, one on which they can very definitely make inputs. However, those hon. members maintain that this is a negative measure. How can one understand that?

With this measure the necessary mechanism is being created to give attention to local authorities on an effective basis and in an ongoing way. Because I have great understanding and even appreciation for the important work done by these bodies, I shall avoid any steps that may prejudice the system. I have been involved in these matters all my life, albeit on a modest scale.

We should not lose sight of the fact that in their daily lives people are closely affected by the services rendered by these authorities and their administrations. Their quality of life and their happiness is therefore largely determined by the services of these authorities. One cannot deny the fact that to a major extent man is a product of the environment in which he grows up.

The number of bodies involved in this matter is not always realized. There are approximately 512 full-fledged local authorities, which can be subdivided into various classes such as metropolitan core cities, metro-centres and metro-connecting centres, metro-dependent towns, medium sized towns and smaller rural towns. There are 190 management committees for Coloured and Indian communities and local affairs committees for rural Coloureds. I am not even referring to the 38 divisional councils in the Cape and other peri-urban authorities in Natal and the Transvaal.

I maintain that any future constitutional dispensation for South Africa’s welfare will be largely determined by the way in which the settlement of its people in urban areas is regulated. It is therefore only logical that the authorities dealing with this, should be regulated and operated as effectively and functionally as possible. I am convinced that this measure can accomplish these things.

My experience of the people of Natal—I am coming to the NRP now—is that they approach matters reasonably, soberly and in a well-balanced way. [Interjections.] But it is also true that the continued existence of the NRP is largely determined by the continued existence of the provincial authority in Natal which is controlled by the NRP. Perhaps this is just as well because they have sensible people—in any case this applies to most of them—serving on the Natal Executive Committee. I have had dealings with them in the past. If the hon. the leader of the NRP and the hon. members who are with him would just follow their example, things should go reasonably well for them. As a matter of fact, I think this is what is in fact happening to a great extent. In any event, that is a place where they still have a say; here they have very little to do.

Both the NRP and the PFP maintain that this legislation will mean the end of the provincial system. In the interests of our country this matter has to be approached in a level-headed way.

Would you be prepared to stake your reputation on that?

I am also in favour of devolution of power as far as local interests and matters in connection with local interests are concerned. However, when it comes to the general policy of the country, the central Government may not delegate its responsibility.

I greatly appreciate the services of the provincial authorities. The task performed by the rural MPC is of particular value. I feel at liberty to say this because I was an urban representative. The rural MPC’s have to travel long distances, because they have various towns and bodies they have to give their attention to. They perform an important service. I do not doubt that the provincial authorities realize better than any other body that an adjustment to their task is essential in the interests of the country as well as in their own interests. A great deal has been said about this by the various Opposition speakers. The policy-making, legislative and financing functions are basic functions which to a major extent determine the right of existence of an elected body. However, what has our experience been over the past few years as far as our provincial auhorities are concerned?

We are going to hold a large rally in Virginia.

Those hon. members are most welcome to do so. I want to tell the hon. door kicker, the hon. member for Jeppe, that if his party holds meetings there—Virginia is not my constituency, but it is in the vicinity of my constituency—those voters’ eyes will be opened to the game that party is playing. I would therefore welcome it if they came there. [Interjections.] The people will realize what they are dealing with.

As far as provincial authorities are concerned …

Are you going to abolish them?

Sir, the hon. member is being a terrible nuisance now. I shall reply to him in a moment. [Interjections.] As far as the provincial authorities are concerned, an adjustment is necessary. I am convinced that the provincial authorities who were asked to make an input in this connection, will do so in a judicious and sensible way. It is true that many of the policy-making aspects of the tasks that have been delegated to provincial authorities, are dealt with on the central level. This was an evolution which took place. When the subsidy formula became applicable it restricted the budgeting function of provincial authorities to a major extent. As few as hospital and health services, roads and education, are concerned one realizes that at present the policy in connection with these matters is being formulated by co-ordinating councils. However, I have sufficient confidence in the sound judgment of the provincial authorities to believe that their recommendations in connection with their future task in this country will be realistic, meaningful and in the general interests of the country. As I know them, I am convinced that they have a real love for their country. They realize that the interests of the country sometimes carry more weight than the interests of individuals or bodies. For that reason I am convinced, because the hon. the Minister is dealing with this matter—it may be a delicate matter—that the new dispensation will be planned in such a way that it will be in the interests of the country. To hon. members of the CP all these things, particularly the more sensitive matters, constitute a wonderful political game. I say to them: Be responsible for a change and act in the best interests of this country! They pretend to have the interests of the Afrikaner at heart. I want to believe this. But then their behaviour must attest to this.

The Third Reading of this legislation deserves our support because it is an important and progressive step forward at local authority level in this country.

Mr. Speaker, I think this House should probably accord the hon. member for Welkom great recognition for his years of service as member of the Executive Committee of the Free State. We do not wish to underestimate the years of experience and knowledge of provincial and local authority matters of the hon. member, but if he alleges in this debate that the CP always, and in this case as well, emphasizes only what is negative, we wish to differ with him. We emphasize, as far as this legislation is concerned as well, the Government’s positive movement in the direction of integration. That is what all these things are concerned with, and will increasingly be concerned with in future. A former NP leader in the Free State, the present Vice-State President and chairman of the President’s Council, Mr. Schlebusch, said the following on the 6h45 news on the morning of 21 June—

This legislation is one of those means. It is a gradual movement.

What are the other means?

We shall still be coming to that. This is a gradual movement to full integration.

Did the hon. member for Welkom see the submission by the Free State Municipal Association to the President’s Council in connection with this matter under discussion now?

I saw the recommendation.

Then I can understand this coming from the Free State, with a former leader like Mr. Alwyn Schlebush. What did the Free State say in that submission? They said they did not mind at all if Coloureds and Indians obtained direct representation in local authorities. Is that correct?

Yes. I saw the recommendation.

Consequently the Free State’s submission is that this should be done. In view of these circumstances and in view of the legislation and its consequences which we are now dealing with, surely it is clear that the entire Government is following that course of which Mr. Schlebusch was one of the precursors, still is and is perhaps going to become to a greater extent in future, as the newspapers are alleging.

Mr. Speaker, may I ask the hon. member a question?

No, my time is unfortunately limited. If there is any time left the hon. member may put his question at the end of my speech.

It is therefore very clear that as far as this kind of legislation is concerned, we are dealing with creeping integration. We are dealing with a gradual movement, with all kinds of measures—in this case on the level of local government—towards finally establishing the one State structure, the one nation idea of—at present—Whites, Coloureds and Indians in South Africa.

A more philanthropic people.

They are one nation after all. [Interjections.]

The hon. member says the Whites, Coloureds and Indians are one nation. It is now on record.

However, I want to come back to the hon. the Minister. I am very sorry that other hon. members who fired only one shot in this debate and to whom I owe a reply and to whom I could have replied very effectively, are not present in this House at the moment. I am referring, inter alia, to the hon. member for Newcastle who, as a Natalian, had a great deal to say about the TMA. I want to tell him that he does not know what is happening in the Transvaal. I was also referring to the hon. member for Witbank. Unfortunately they are not here now. I shall therefore have to say certain things to them in their absence. The hon. the Minister who is having a conversation with hon. members of the NRP now, made the allegation that the TMA had suddenly changed its basic premises. Does the hon. the Minister think that the members of the TMA are like a lot of National Party MPs, that they are a flock of sheep who, when the leader scurries away, all scurry after? They are not like that. There are also people among them who support the ideals and aspirations of this party. That is why it is their standpoint that we should make provision for autonomous separate local authorities on all three levels of Government…

But that is our standpoint too.

… and for all three population groups.

The hon. member for Newcastle, who is not present here at the moment, quoted from the comment of the TMA on the recommendations of the President’s Council on local and regional systems of government in the country. I am quoting from his unrevised Hansard—

That is what the TMA said. That is also precisely where the problem of the CP lies. It lies in the possibility that these bodies will subsequently become authoritative bodies. We have reason to be concerned about this, since this piece of legislation provides, as I pointed out yesterday, that communication shall be equated with participation (inspraak). Participation is joint responsibility, and joint responsibility is decision-making, and that is power-sharing. Surely these are the successive rungs of the ladder, as we have seen.

What happened to the President’s Council, which was merely an advisory body? In Die Beeld of 26 February 1982 we read that the hon. the Minister, according to a secret Cabinet minute that had been leaked to the Press, was the intermediary between the Cabinet and the President’s Council and that he had told the President’s Council that they should adopt certain resolutions which would be acceptable to the Cabinet. What is happening now in this legislation? Now the hon. the Minister is no longer merely the intermediary, he is the chairman of this coordinating council. That simply means direct participation in the Government. Consequently this follows precisely the same pattern which, as we have seen, was followed in regard to the President’s Council. The other day the hon. member for Brakpan told the hon. the Minister that when he was chairman of a council, he was the council. The hon. the Minister then smiled in affirmation.

Mr. Speaker, may I ask the hon. member whether the hon. member for Rissik and the hon. member for Brakpan are puppets? [Interjections.]

The hon. the Minister spelt out very clearly in this legislation that he would dismiss members if they did not agree with him, and appoint others. Surely this means that the hon. the Minister has total control over that body. [Interjections.]

The hon. the Minister alleged, moreover, that the TMA had also accepted these principles contained in this Bill on its congress held between 4 and 7 October 1982. What happened at that congress? What did the congress accept on that occasion? The congress of the TMA accepted that there should be autonomous and equal municipal authorities for the various population groups and declared itself expressly in favour of full self-determination of Whites on the local government level. That was the central message which emanated from that congress. What is the standpoint of the TMA on, for example, the Croeser Working Group’s recommendation on joint services committees? The TMA rejected this because it said that these service committees would in time take over the most important functions of local authorities and that local authorities would in the process be reduced to lesser important community councils which would occupy themselves mainly with social order and protective services. This is in conflict with the principle of fully autonomous local authorities.

The hon. the Minister referred repeatedly the other day to what the hon. member for Waterberg’s MPC, Mr. Fanie Ferreira, had said. I looked up what had been said about this matter in the Transvaal Provincial Council and what Mr. Ferreira’s standpoint in respect of these matters was, and the course of the debate on this matter which was held on 16 February. On page 393 of the Provincial Council’s Hansard, Mr. Ferreira stated—

1. (a) Die primêre munisipale owerheid word ontman deur sy belangrikste funksies en grootste inkomstebronne van hom weg te neem;
2. (b) die skepping van ’n verdere regeringsvlak met wetgewende, uitvoerende en belastingsgesag wat veelrassig is.

The other day, when the hon. member for Helderberg was speaking, he half-denied that this recommendation was now Government policy. I quote further—

Those are the standpoints of the TMA.

I should now like to quote a further passage from the same debate. It was said by someone who is not a CP member, but who also knows a great deal about local government matters and about TMA matters. I am now referring to the hon. member for Parktown’s MPC, who is the leader of the PFP in the Johannesburg city council. What did Mr. Moss say in the Transvaal Provincial Council? After he had indicated how the standpoint of the TMA differed from the proposals of the President’s Council, Mr. Moss said on page 405 of the Provincial Council’s Hansard—

Mr. Moss went on to say—

He then said—

The person who said this is a person who has a well-grounded knowledge of provincial matters and also knows what is happening in the TMA. This is what he said was happening in the TMA. The hon. the Minister now wishes to come and tell us that the TMA agrees with the principles set out in the Legislation.

Let us follow for a moment the Government’s process of power-sharing and their road to integration since the TMA congress in October last year. One of the consequences of that process is the Bill we are now discussing. In May this year the Government published its proposed new constitution and in it the Government identified certain matters as own affairs. There are approximately 15 of these matters and all of them are merely half-baked “own” affairs including things like school cadets, the control of weeds and boreholes. In the explanatory memorandum on the Constitution Bill, local government is the seventh matter which is identified as an own affair. The paragraph in question reads as follows—

This matter is one of those matters, because it is a general affair. The relevant paragraph in the explanatory memorandum continues—

This Bill before us is one of those Bills—

What is the Government doing now? It is going to ask the Whites of this country to express an opinion on the new constitution, but it is not telling them what is going to happen on local government level. This is the level which affects every inhabitant of this country intimately and closely. This, the Government says, it will subsequently specify and give effect to in other legislation. The term “self-determination and co-responsibility” occurs like a refrain throughout the Government’s guidelines. This reminds me of the two old gentlemen who met at De Aar while the one was on his way to Pretoria and the other on his way to Cape Town. They struck up a conversation and subsequently both of them were drinking coffee in a compartment of the train. When the train began to pull out, the one said to the other: “You know, science has really made tremendous progress. Here you and I are sitting on the same train, and I am going to Pretoria while you are going to Cape Town. Is it not wonderful?” If one boards the political train of the NP, and one’s destination is co-responsibility, power-sharing and integration, you can be certain that the station of self-determination is situated in precisely the opposite direction. These are the facts of the matter. [Interjections.]

The Government introduced this legislation in this House on 1 June. Today it is already the 24th of June. From 1 June up to the present date, however, a great deal has happened. Many people have become indignant, telegrams have been sent, delegations have been to see the hon. the Minister, and the provincial council of Natal was in an uproar. The chairman of the Labour Party of the Coloureds also objected vehemently to the fact that they had not been consulted; so, too, did the Natal MEC charged with local government affairs. Hon. Members of the NRP, who apparently seem to be very proud now of being called the National Republic Party …

But they are, after all.

Mr. Speaker, they are all objecting. Yesterday I referred to the report which had appeared in Die Transvaler: Only last night we saw Mr. David Curry on television, and heard him saying that he rejected own, autonomous local authorities, and that he would make it his business to and would fight to establish in this dispensation a mixed situation on the level of local authorities. [Interjections.] Mr. Speaker, this week the hon. the Minister laid his cards upon the table here. Clause 18(1) of the Bill is being deleted, and this brought great satisfaction in the ranks of these dissatisfied people; also a great satisfaction with all the amendments which have been moved and agreed to here.

I want to make the categorical statement, Mr. Speaker, that this destroys one of the foundation stones of the TMA’s standpoints; its standpoint of own, autonomous local authorities. What remains now? If, as the hon. the Minister implied here, there is now a movement in the direction of the acceptance of recommendation 20, surely it is going to happen that completely mixed local authorities are ultimately going to be established here. In which case we can arrive at no other conclusion than that the hon. the Minister, just as he took the NP in tow with his policy of integration on the first level of government, is also in a subtle way smuggling in integration and power-sharing through the back door when it comes to the area of local authorities in South Africa. [Interjections.]

Finally, I want to tell the hon. member for Witbank—I see that he is unfortunately not present here—that if he received a telegram from the president of the TMA in which he pledged his support for this Bill on behalf of the TMA, I want to make the categorical statement that in that case the president of the TMA was expressing his own personal opinion and that he did not receive sanction for it from either the executive committee or the management committee of the TMA. I should like to ascertain from the hon. member for Witbank what the date was on the telegram which he received.

When all is said and done, the members of the TMA are the representatives of the White municipal ratepayers of the Transvaal. We in this party know that the majority of those ratepayers do not support reform in the direction of integration and mixed government. If hon. members of the NP have any doubts about this, I would like to request them to ask the hon. the Minister of Internal Affairs to cause a by-election to be held in Middelburg. In Middelburg the issue is these specific matters, and nothing else. [Interjections.] When we have then received the results, we shall be able to judge for ourselves how matters stand.

Mr. Speaker, let me state clearly and unequivocally to the Government that the CP will oppose every measure which promotes integration and power-sharing in South African politics. For that reason we shall also be voting against the Third Reading of this Bill. [Interjections.]

Mr. Speaker, one can almost not find the right words to describe the sort of argument the CP comes to this House with. I could scarcely believe my ears when I heard the hon. member for Pietersburg referring to the opportunities for communication being created in this legislation and then going on to say that communication leads to people being given a say which in turn leads to co-responsibility, co-responsibility leading to power-sharing and power-sharing to integration. [Interjections.] If one were to reason along those lines, it would mean that if one had a telephone in one’s home one would be well on the way to integration. [Interjections.] The hon. members of the CP should also remember, when they climb into their cars next week to drive home on the road to Bloemfontein, that that road also goes to Johannesburg, Pretoria and Pietersburg. However, that same road also goes to Messina, Zimbabwe and Moscow. They must be careful of that road. If one reasons in this way, I cannot see how one can build up a proper argument. For example, the hon. member quoted a newspaper report on what the Vice State President is supposed to have said a few days ago, namely that the Government will continue with the course it has adopted. The hon. member for Pietersburg immediately added that the course adopted by the Government would lead to integration and, according to him, Mr. Schlebusch had therefore said that the Government would not allow anything to stand in the way of its achieving integration.

That is true.

It is simply not true. [Interjections.] That is not what Mr. Schlebusch said.

During this session the CP has, on various occasions, opposed legislation on the basis of so-called principles. They also opposed this legislation on principle. However, if one considers what is actually at issue, one finds that that so-called standpoint is based on a fallacy. Let us take this Bill as an example. This Bill is not creating a government institution that will be empowered to take decisions that can be forced on anyone. [Interjections.] It is merely an advisory body. It cannot force its decisions on anyone. If one reviews the CP’s own policy in regard to the Coloureds and the Indians, one sees that what it amounts to is what they refer to as the creation of geographical spheres of jurisdiction. Let us call them a homeland. However, they admit that there will still be many Coloureds and Indians outside those homelands.

And Blacks too.

Yes. I therefore inferred from this that the CP would allow those people to have local authorities outside their geographical jurisdictional spheres.

Yes.

If those local authorities exist, may the White local authority not communicate with them?

On a separate development basis. [Interjections.]

If we have separate local authorities for Whites, Coloureds and Indians, there is nothing in this Bill which can lead to mixed local authorities. There is nothing of that sort in the Bill.

What about recommendation 20?

Recommendation 20 has nothing to do with this Bill. It does not appear in this Bill.

But the Government did accept it.

No. The Government did not accept it. There is a vast difference between saying “may” and saying “shall”. The President’s Council said this is how it shall be done. The Government said it may be done in this way, if the local authorities elect to do so.

If one has to take the CP at its word, when all is said and done it would seem as if we are the ones who say we are going to create separate local authorities for Coloureds, Whites and Indians, with a co-ordinating body, whilst they are the ones who say one is not allowed to establish a co-ordinating body. They are not voting against recommendation 20 here; they are voting against the co-ordinating council. For that reason the only conclusion one can reach is that if they were to implement their own policy, they would refuse to have any communication on a horizontal level with Coloured and Indian local authorities. This is the only conclusion one can reach.

I do not want to say any more about the CP, but I do want to state the following facts. We are in a state of development. We are in a situation in which local authorities have to be expanded.

In this process co-ordination is of the utmost importance to ensure that the foundation on which we have to build the entire administrative structure of the country develops properly.

As other hon. members on this side of the House have pointed out, the second objective is communication, because if we do not have proper communication between the various local authorities of the different sections of the population, in future we are going to have more of the problems we have had in the past.

For that reason I consider this Bill to be a tremendous step forward, and I take pleasure in supporting it.

Mr. Speaker, the hon. member for Helderkruin will excuse me if I do not follow his line of debate because he has his own “broedertwis” and I shall probably have mine later in the debate.

The hon. member for Welkom made an assertion to the effect that while he appreciated our attitude as being positive, we were only interested in the preservation of the Natal Provincial Council. This, of course, is not true at all. It is so that we are very interested indeed in the position vis-à-vis the Coloureds and Indians who will be participating in local authorities. We have made that point right through this debate.

The Bill, as it is now amended, is a totally different proposition to that which was originally moved. The amendments which are very substantial indeed together with the verbal promises and assurances of the hon. the Minister converted what I originally referred to as a most pernicious Bill into a useful piece of legislation. From the start—I want to make this point clear—we in this party were not opposed to the establishment of a Council for the Co-ordination of Local Government Affairs. We are not opposed to it and we have never been opposed to it at all. Apart from the ideological matters and matters of a constitutional nature, we believe that a body such as this can be very, very useful in the local government field for quite a number of other matters, such as the training of staff, the funding of local authorities, rationalization of services and a variety of other activities.

The hon. member for Hillbrow chose to make somewhat sarcastic comments about me and my party being turnabouts. I would like to say to him …

Are you now coming to the “broedertwis”?

No, I shall come to that later.

In so far as we as an Opposition party are concerned, the object of debate in this House is to express our objection as forcibly and logically as we can to legislation with which we disagree. We attempt, if circumstances warrant it, to negative totally unacceptable legislation or to amend unacceptable clauses. If we succeed in having the legislation satisfactorily amended, as has been the case with this Bill, we believe we would be behaving childishly and stupidly if we continue to oppose a Bill that has been amended almost totally to our satisfaction.

It was not done totally.

I said almost totally. You had your speech; let me now have mine, and I would like that hon. member to observe that I did not interrupt him while he was speaking. I rather believe that the petulant criticism of that hon. member was engendered by the fact that we had succeeded, by logic and diligent study and by efficient opposition, in doing what his party did not succeed in doing. Now I would like to make a point. I here and now formally accuse the PFP of being incompetent and being guilty of a derelection of their duties and I will say why. I say that because the incompetent and brash hon. member for Hillbrow obviously did not study this Bill, so that he did not have the faintest idea what it was all about. It was only after a considerable amount of debate had taken place in the Second Reading and the Committee Stage that he began to register what it was all about.

You are a liar.

Order! The hon. member for Hillbrow must withdraw the word “liar”.

I withdraw it, Sir.

From the Second Reading speech of the hon. member it was obvious to me, being knowledgeable on local government … [Interjections.] Hon. members may laugh and have their fun, but I was in provincial government for 20 years, in local government for years and an MEC of local government for many years. So hon. members please must not make themselves look any more stupid than what they already are. I will now come back to the point I was trying to make and that is that it was the very speeches of the hon. members for Hillbrow and Sea Point that clearly and unequivocally indicated to me that they did not know what they were talking about. That is my first point. [Interjections.] My second point in illustrating their gross incompetence is the fact that when this Bill was read a Second Time on 1 June, we had our amendments on the Order Paper within a few days. A few days later also the hon. the Miniser had his amendments on the Order Paper. But the PFP was so incompetent that they could not think of any amendments until the Bill was discussed at Committee Stage. They then put nine amendments on the Order Paper, of which two were declared out of order by the Chairman while the rest was negatived by the House. As against that we put on the Order Paper, as far as I can recollect, 10 amendments, of which nine were either accepted or were the same as those of the hon. the Minister or were matters of deciding whether the province and the State were one and the same thing in so far as the Bill is concerned. In fact, all except one of our points were met by way of amendments. That shows the difference between competent opposition and incompetent opposition. I formally charge the PFP with gross incompetence in relation to this Bill. [Interjections.] The only thing those hon. members can talk about is Black and White. When it comes to honest government, to bread and butter, they have no experience and know nothing about it. [Interjections.]

I just wish to conclude …

Hear, hear!

I know those hon. members do not like the truth. Boy, does it hurt! They do not like being told the truth. What an incompetent bunch of creatures they are. [Interjections.] They have the Press on their side. They get a lot of publicity and they enjoy it.

We also have the voters on our side.

Oh no. They do not have the voters on their side. If we do not have the voters on our side, they surely do not have them either. [Interjections.] The position is that those hon. members have got to get a lot of publicity by the English-language Press. I noticed in an article only this morning that they are climbing on the bandwagon—they are the Press’ assistants—and claiming credit for aspects of this Bill. That is about as laughable as I have heard in a long time. They have done sweet nothing for this particular Bill as far as I am concerned. I believe it is despicable—in writing a book it would be considered plagiarism—what they are trying to do. They are claiming credit for what they have not done. They did not know what it was all about in the first place.

We in this party are now satisfied that through continued consultations with the provinces and with Indian and Coloured communities, this in future will be effective legislation and of great assistance to the country. We will therefore be supporting the Third Reading.

Mr. Speaker, I shall probably be the last speaker in this debate. I want to tell the hon. member for Umbilo that we appreciate the brave way in which the small group of men in his party supported this stage and helped to get it passed. That is how an opposition should act. We agree whole-heartedly with the hon. member that the official Opposition with which this House is saddled, does not deserve the name “official Opposition”. We want to tell the official Opposition, and the hon. member for Hillbrow in particular, that their behaviour in this connection bore witness once again to what they always do. As the hon. member for Umbilo has just indicated, the PFP’s behaviour up to now has been a boycott action. Only after they had come with their boycott action, did they make proposals.

I want to refer in this connection to the situation in connection with the new constitution. They are beginning to contribute something now for the first time. Now they are putting forward their proposals. Now that everyone has already participated in the debate and they have boycotted it, they are making their belated proposals. They participated in this debate in the same way.

The hon. member for Hillbrow was a member of the city council of a large city for many years. A while ago he asked the hon. the Minister: What about sources of revenue for these people? He said that year after year the large cities have to ask for sources of revenue. I want to ask the hon. member if he ever made a single proposal to create new sources of revenue for the city council on which he served. Did he ever indicate to the city council in what ways they could save money or earn money?

I took the trouble to do a little research into the ways in which city councils can save money and the ways in which they can better utilize their existing sources. I wrote to all the city councils on the Witwatersrand, as well as the city councils of Cape Town, Durban and various others, and asked them only one question, namely: How do you utilize your advertising rights on bus shelters? I wanted to ascertain whether they used them as a good source of income. I received replies from all of them. I am not going to mention the names of the city councils because I do not want to embarrass them, but I do want to refer to the situation in two of the largest cities in South Africa to indicate how badly they sometimes utilize their sources of revenue. What we are creating through this legislation it will now be possible to single out.

Mr. Speaker, may I ask the hon. member a question?

The hon. member must not interrupt my speech. My time is extremely limited. I want to give an example. Here are two city councils which each have approximately 560 bus shelters which could have been a good source of revenue for them. Both have city status. The one earned an income of R15 000 per annum whereas the other earned R100 000 per annum from these shelters. Then there was a smaller town council on the Witwatersrand, which, with only about half that number of bus shelters, was able to earn R100 000. One should therefore get these people together, as is being proposed in this Bill, so that they can communicate with each other and can ascertain where they can effect savings and where they can learn from each other. Then we can get somewhere in this country.

I also want to ask the hon. members of the CP whether they can tell me if we already have people in the Coloured and Indian communities who can qualify as town clerks, engineers, or treasurers.

Mr. speaker, may I ask the hon. member a question?

No, Sir. We gave those hon. members enough time to speak. Now I want to ask: Where does one train a town clerk, a treasurer or engineer? One does not get such a qualification at a university. That person has to receive in-service training. With the sort of structures we are creating here, we are going to create the opportunity for the local authorities to assist us and to advise us until we have the people to take over those functions. This is co-operation we are going to place in the hands of South Africans. This is what is going to make us a nation. This is how we are going to uplift our communities. The hon. member for Kuruman raised a lot of dust here about the number of local authorities in the Cape in which Coloureds are in the majority.

But that is true.

I agree with that. Now I want to ask him: Can it not be to the benefit of the White local authorities if there is co-operation between the Coloured local authority and the White local authority with its smaller numbers? When it comes to the utilization of equipment, both authorities may be too small to purchase their own equipment. However, if these two town councils can get together and do things together they will be able to manage better. Do hon. members agree with that? [Interjections.] Very well, that hon. member agrees with that. Now I want to ask him: Is that power-sharing?

No, I do not agree.

We can carry on with this debate in this way for a long time, but we shall not be able to talk much sense into the hon. members of the CP.

In my Second Reading speech I emphasized the fact that in my opinion what we were creating here, could only bring prosperity and development and improve race relations on the Witwatersrand and in the region I represent. I want to express my thanks for our having reached this memorable day when we could create this structure which can improve relations throughout this country. I want to congratulate the hon. the Minister on the legislation and tell him: Keep up the good work.

Mr. Speaker, the hon. member for Hillbrow introduced the debate on behalf of the official Opposition and made a few statements to which I wish to refer.

†He said firstly—and I hope I am putting it correctly—that in terms of this Bill the Minister has a direct hand in the development and control of local authorities. He said the Bill would bring local authorities under the direct control and place them in the hands of the Minister. With due respect to the hon. member, what basis does he have for that statement?

The Minister will be the chairman of the co-ordinating council.

Bit since when does the chairman of a council that serves in an advisory capacity have powers of control? So on what basis, in all fairness, is the hon. member stating that point? There is nothing in the Bill to substantiate such a conclusion. The hon. member is a lawyer by profession and he will know that when I introduced the Bill and throughout all the stages when we discussed it, I made it perfectly clear that the council which is to be established will be an advisory council, and not to advise the Minister as has been suggested, but to advise the Government. In terms of our law the Government is defined. It therefore applies equally to the central government and to provincial administrations.

Because there was an incorrect interpretation of clause 18(1)—certain people argued that that provision would give the Minister the right to establish local authorities—I withdrew that provision during the Committee Stage. It is not the intention, and it is not so provided for in the wording of the Bill, that control be taken away from local authorities. [Interjections.]

Let me take the point further. The hon. member argues that all this Bill is doing is to structure vertical institutions. I have never shied away from the fact that I believe, and the hon. member may disagree with me, that individual rights in this country have to be maintained in the group context. I have also always maintained, and I still do, that we can only succeed in maintaining democratic values if the institutions serving this country reflect the various communities. I know the hon. member disagrees with me, but he will be the first to concede that hon. members of his party supported, and not only supported but also assisted in amending the law relating to local authorities for the Black peoples, which is also a vertical structure by his definition.

Give us a chance to introduce a new law.

I am not arguing that point at the moment. I want to ask the hon. member how that party can support a Bill which makes provision for Black local authorities and deny the Coloured and Indian people the same right.

We do not.

The hon. member says that he does not, but he opposes this Bill because, he says, it is a structure of apartheid. That is why he opposes the Bill.

I have also indicated before that I understand the problem of consultation between the Black authorities that will be established and other Local Government institutions. We will have to devise ways and means to see how that can be done. However, one thing I would like to reiterate today is that the development of the Black races have, and will, follow a different path than that of Whites, Coloureds and Indians. Let us agree to differ on that point.

The hon. member asked me to tell him what is going to happen to provincial councils. Let me ask him: What is going to happen to them in his federal system?

They will become independent states with executive powers.

In other words, they will disappear as provincial councils, because they will fit into a system of federal government.

They will become self-governing states.

But then they disappear as we know them today.

I am not arguing against it. I am asking you to clarify it.

I am coming to that. I am not trying to score a point. I am just trying to establish how far our attitudes to this differ. The hon. member says it is their intention to establish states which would be components of a federal system. However, he still has to take that to a convention.

Yes.

And until that convention approves this proposal, there is no change whatsoever. In other words, the people who tell us they do not want other people to dominate are prepared to maintain a system where some people do not participate in the process at all. What logic is in an argument of that nature?

*The hon. member for Welkom has had many years of experience of local authorities and I want to thank him for his contribution in this connection. He and I were MECs at the same time and I had the privilege of working with him for quite a long time. I am truly pleased that the House has the benefit of his knowledge in this connection. The same goes for the hon. member for Boksburg. I want to say at once that the hon. member for Boksburg made an important contribution, in one respect in particular. He pointed out how a lack of liaison could flare up into conflicts, and quite probably gave one of the best motivations for the concept of co-ordination and communication. He also pointed out how it could lead to savings being effected, and to more efficient services. There is not one of us in this House who does not accept that there are services on local government level which are common to those of other groups and those of various adjacent local authorities and that a need exists for institutions to render those services. Everyone accepts this, and what we are dealing with now in this specific connection is to cause the technical investigations to take place in order to discover whether we cannot reach an agreement in this respect. However, there is nothing in this legislation which describes how this ought to be done. There is nothing in the legislation before us which affects the constitutional aspects of a country. What is in fact true is that there are elements in this legislation which can prepare attitudes among people and which can try to improve attitudes among people. It is axiomatic that constitutional matters do not result in the right attitudes, but that the right attitudes can promote constitutional matters. Any institution or process which can help to improve group relations, without destruction of the groups, must be to the benefit of this country.

I now want to say in all modesty that all I have been trying to do, with or without success, during the past two years was to see whether it was possible to improve the climate in our country. I want to express my gratitude and appreciation to the provincial administrations, the United Municipal Executive, the ad hoc committee and everyone who tried to make a contribution in an effort to establish institutions which could promote this lofty goal. I am saying this in all seriousness today.

I come now to the hon. member for Pietersburg. He argued a matter which has nothing to do with this legislation, absolutely nothing. He said that they were not being negative; they were merely emphasizing the positive movement of the Government in the direction of integration. He said that that was what the constitutional proposals of the Government, and also this legislation, were leading up to. But consider the way in which he argued. He quoted, as I understood him, from evidence submitted by the Free State Municipal Association to the President’s Council.

I did not quote from it.

Did the hon. member not say that they submitted a memorandum in which they advocated integrated local authorities?

That is correct. However, I did not quote from it.

I am saying that the hon. member quoted it. I am not saying that he quoted from it. He referred to it …

You are utterly confused now.

I wish that man who combs his hair with blue soap would stop interrupting me.

Mr. Speaker, he referred to a speech made by the Vice-State President, a speech which according to him indicated that the Government wished to put its constitutional proposals into operation gradually and that it would do so with all the means at its disposal. Would the hon. member not also like to see his own constitutional proposals being put into operation? Would he not?

They would not give rise to power-sharing.

It makes no difference what it leads to. I want to know whether the hon. member would not also like to see his own constitutional proposals put into operation.

Yes.

Very well then. Is it not true, however, that the constitutional development of this country represents a gradual process spanning a period of decades?

Is it really necessary to shout about it so loudly now?

Yes, but the hon. member must not reproach me to such an extent on this matter. Nor must he use the statements made by the Vice-State President to create a false impression in this House. However, I want to make it clear to the hon. member that the NP will employ all means at its disposal in a constitutional way and we shall make no apology for doing so. In any event, the NP does not associate with people who preach violence. I am saying that candidly to hon. members of the CP today.

Who has been associated with such people? [Interjections.]

Let me rather proceed to reply to the arguments advanced by the hon. member for Pietersburg. The hon. member did not only make a phone call last week, he made another one after that.

I beg your pardon? [Interjections.]

Order!

And he lapses from one untruth into the next.

Did I make another phone call?

Yes.

Who else did I phone?

I shall tell the hon. member now. Of course, I did not eavesdrop on him when he was making his telephone call. [Interjections.] Mr. Speaker, I am now quoting from the minutes of the UME.

The UME? This has nothing to do with the UME.

Oh, please! I am sketching the entire course of events. If the hon. member would only listen, he would not unburden himself of so many untruths.

But you yourself are not without blame, Chris.

Of course not. I admit that I am not perfect.

Mr. Speaker, may I put a question to the hon. Minister?

No, you just sit still. I am in the process of making my reply. [Interjections.]

Order!

On 18 March the UME received a report from the action committee on the legislation and on the talks with the Director General of Constitutional Development and Planning. They also discussed the principles of the legislation in the draft form in which it existed at the time. In that draft the co-ordinating council and its composition were elucidated.

Without the two Indian members.

I shall come to that in a moment. Does the inclusion of those two Indian members make this council more or less integrated, since Coloured people have already been included?

No, but the point is just that this was not in the Bill as it is now worded.

In any case, I never said that. [Interjections.] The UME suggested five amendments to the draft Bill. Apart from the fact that they wanted to include three members as representatives of large cities while we had provided that there should be five such members, we accepted their amendments. Every principle in the legislation we are now discussing was already contained in that draft Bill.

Who was present at that meeting? Who was there on behalf of the Transvaal? There was councilor Van der Spuy, MPC, Mr. Van Zyl, the vice-president, I think, of the TMA, councilor Boshoff, president, if I remember correctly, of the TMA, Mr. Oberholzer of Johannesburg, Mr. A. Niemandt, Mr. J. I. Steyger and Mr. Fanie Ferreira, MPC.

After the discussion had been completed, and councilor Friedlander had objected to a specific aspect, it was resolved that the recommendations of the action committee would be agreed to. Every principle was therefore accepted. [Interjections.]

On 13 June letters were personally drafted by me, as well as by my Department, and sent to various bodies. They contained a list of the proposed amendments; amendments which had resulted from the talks I had held, and which I in fact intend to continue to hold in future. I am now referring to the amendments on which finality had been reached up to 13 June. These were all the amendments which were to be moved during the Committee Stage on Thursday, except that clause 14 was to be deleted entirely. Letters were sent to the four Administrators, as well as to the president of the UME, the chairman of the Association of Management Committees and the chairman of the Indian Council. On Wednesday, 15 June 1983, an official of my department who normally attends the TMA executive committee meeting as an observer—the date is important and who was aware of the fact that the executive committee would hold a meeting on Saturday, 18 June at which the Bill would be discussed, gave them an Afrikaans and an English list of the abovementioned, proposed amendments—I want to say this again—with the qualification that since clause 14 was to be amended, I would subsequently delete it. He gave those amendments to the secretary of the TMA as well as to the deputy town clerk of Pretoria, whom hon. members know and who acts as the advisor to the TMA’s legislation study group. On Thursday, 16 June 1983, the vice-president of the TMA, councillor Van Zyl, obtained the list of amendments in Afrikaans and English, to which I have already referred, from the same official of the Department of Constitutional Development and Planning when the two of them attended the meeting of the Council of the Rand Municipalities in Springs. That morning the secretary of the TMA explained the amendments which he had received the previous day to the management committee of the Rand Council of Municipalities.

What does that prove?

I shall be pleased if the hon. member would wait until I come to that. It proves the untruths of that hon. member. On Friday, 17 June, the management committee of the TMA met in Pretoria with the view, inter alia, to the discussion of the agenda of the executive committee meeting which was to be held the next day, 18 June—not 25 June, as the hon. member for Brakpan alleged. At least three persons who attended that management committee meeting had the list of amendments in Afrikaans and English with them, including the amendments that two members of the South African Indian Council would be added to the co-ordinating council, and they were the president, councillor Van der Spuy, the vice-president, Councillor Van Zyl, and the secretary of the TMA who knew the hon. members. According to my information—which has been confirmed by two persons who were there that day—the full list of amendments was discussed by the management committee. Only one person on the management committee referred to the addition of the two Indian members, and it was not Mr. Ferreira. It was councillor Van der Spuy. The fact of the matter is that everyone knew that the co-ordinating council would be an advisory body which, just like the existing national interim liaison committee, would have members who represented Whites, Coloureds and Indians. Everyone knew that. The people who specifically knew this were the representatives of the TMA who attended the management committee meeting as well as the people who did not attend the meeting. Whether there are 11 members out of 41, as it originally was, who are persons of colour or whether there are 13 people who are Coloureds and Indians, this is no longer a matter of principle. On Wednesday, when I asked the hon. member for Pietersburg what the standpoint of the TMA was, he said—

In its final form.

Mr. Speaker, I am quoting the hon. member’s Hansard. The legislation, together with the amendments, did come before the management committee of the TMA. The hon. member must not add little riders now. I repeat what I said on Wednesday, namely that the hon. member is dealing recklessly with the truth.

Business suspended at 12h45 and resumed at 14hl5.

Afternoon Sitting

Mr. Speaker, I shall carry on with my reply. On Saturday, 18 June 1983 the executive committee of the TMA met in Boskburg.

Yes, that is correct.

The same official from my department who had already given the secretary, a vice-president and an advisory of the TMA the complete amendments in both languages, explained the more technical amendments to the executive committee at that meeting.

Yes.

The hon. member says yes. Previously he said there was no meeting, but now he says yes.

The hon. member for Pietersburg is obviously insinuating that public servants deliberately withheld certain facts from bodies. I think the hon. member will concede to me that the amendment in clause 18 is an important one.

Yes.

This amendment was explained fully by the official from my department to the management committee of the TMA on 18 June, namely that this was being done in order to eliminate the misunderstanding that local authorities could be established in terms of the legislation, while in the first place that was never the intention and, in the second, it was not necessary because legislation for the establishment of such local authorities already existed.

The hon. member said yesterday—he was grasping at straws to save himself from the predicament he had landed himself in—that he wanted to know from me whether I had inferred that the TMA supported the legislation.

I did say that.

But he said that they did not support it.

I am still of that opinion.

The hon. the member says he is still of that opinion. This is important. He says that on the basis of information which he received from Mr. Ferreira. He told me that the other day. I have quoted fully from the congress resolutions of 4 to 7 October 1982 and in those resolutions the principles of a co-ordinating council and development boards are accepted. Is that not true?

We know what resolution they adopted there.

The hon. member must not look for excuses now and say that it was against the background of separate development that they supported it. Surely there is nothing in this legislation which detracts from separate development. On the contrary, clause 18 refers specifically to liaison between separate bodies for various population groups.

The hon. member went further and quoted from the Hansard of a Transvaal Provincial Council sitting on 16 February—I think that was the date he mentioned—while the resolutions were adopted subsequently, on 18 March and afterwards. What the relevance of his arguments on the basic of that evidence is, no one knows except him.

The UME resolutions of 18 March in which the TMA played a part, were conveyed to the Department of Constitutional Development and Planning in a letter dated 22 March 1983 in which five amendments were requested and no objection in principle was raised. These are the facts. The letter dated 8 June 1983 from the president of the TMA to me and in which he expressed his support for the principle of the legislation, the fact that I have to date received no oral or written objection from the ranks of the TMA to the Bill or amendments, while all bodies who do feel aggrieved about certain aspects have expressed their grievances and the door of the TMA has always been open will cause any objective observer of the facts to arrive at the conclusion that that hon. member either did not have the information or was not prepared to convey part of it to this House.

The hon. member has recourse to telephones when he finds himself in difficulties. I am aware of the fact that he had recourse to a telephone again on Thursday morning. I am now talking about the 23rd of June. I want to say at once that if I had been in his shoes I would probably have done the same thing.

Whom did I speak to?

Did the hon. member speak to Mr. Ferreira on 24 June? I challenge the hon. member to reply to this question.

Mr. Speaker, may I ask the hon. the Minister a question?

No, because I unfortunately do not have the time to reply.

The hon. member quoted from the annual report of my department and as it happened—and this is typical of his behaviour— he quoted from paragraph 130. In that paragraph he finds support for his false deduction that we are on the way to integration. Why did he not quote paragraph 127 on the same page?

But surely I did quote it.

No, the hon. member did not. He deliberately omitted to quote it. It did not suit him to quote it. This is the most deplorable method of debating I have ever encountered. [Interjections.] Let me read the section concerned to the House—

Why did the hon. member omit to mention this? He did so deliberately so that, after he had spoken here, he could create a distorted and selective image outside of what had really happened. All I want to say to the hon. member is that hon. members in this House, as well as people outside, will take cognizance of this type of behavior of that party. In all honesty I want to say that we are all fallible, but if we make a mistake we must at least admit that we have done so. This morning, however, the hon. member for Pietersburg continued with the methods which he had adopted during the Second Reading and the Committee Stage. Nothing which is built on such a foundation can ever remain standing. [Interjections.]

Order!

Finally I want to refer to an interesting phenomenon. [Interjections.] Sir, if the hon. member for Rissik would only stop trying to make a speech. [Interjections.]

Order! I want to remind hon. members that when the Chair calls for order, there is a reason for doing so, and I expect hon. members on all sides of the House to heed such a call. I shall allow no further remarks while the hon. the Minister is making his speech. The hon. the Minister may proceed.

The conduct and record of the official Opposition, as well as those of the hon. members of the CP, in respect of the constitutional proposals of the Government are important because they realize that if the proposals are passed by this House and implemented both parties will become totally irrelevant in South African politics. This explains the fierce struggle which is being waged in this House against every proposal, which in the first place will create a climate for better relations and in the second place, seeks to establish a new constitutional dispensation within which peoples’ rights can be regulated and established. We may use this House for those purposes, but then in conclusion I wish to ask this question: Are we all serving our own political parties or are we serving the country?

Mr. Speaker, may I ask the hon. the Minister a question now?

Order! The hon. the Minister has already resumed his seat.

Question put,

Upon which the House divided:

Mr. Speaker, you may have noticed that one of the provisions of this Bill deals with instalments sales agreements. This speech has been an instalment speech in that this is now the third time that we have gone back to the Second Reading of this particular measure during this particular speech. I hope that this will now be the final instalment of this stage of the measure so that we can try and have a debate on it.

When we adjourned on the last occasion, I had drawn attention to a provision in clause 4 which provides for an amendment to the Diamond Export Duty Act. I then drew attention to the plight of the diamond-cutting industry in South Africa. Perhaps it is not inappropriate to mention just a couple of figures. At one stage the union had some 1 200 people who were actively employed in the industry. As a result of the conditions that have come about, some 400 people have actually left the industry as such. Their skills are probably in the main irretrievably lost to this industry. Some 500 of those that remain, are said to be unemployed. I think the House will appreciate that this is actually an industry which has very serious problems.

The problems of the industry are not local of origin, but are the result of the international situation in regard to the diamond market. However, what we do have to bear in mind, is that South Africa consciously set about creating a new industry in South Africa for the cutting of diamonds. Having consciously set about creating such an industry, one has to ask now whether in fact it is the intention of the Government that that industry should continue in South Africa, that it should flourish and that instead of the diamonds being exported, in the main in the rough, the greatest extent of our exports should actually be of cut diamonds as opposed to rough diamonds so that the beneficiation remains in South Africa and the country as a whole gets that.

If we look at this particular provision in relation to that situation in the industry, we have to look at what has really taken place. Firstly, in order to encourage the local cutting of diamonds, there was an arrangement or an understanding which still exists to this day that in so far as the local people were concerned they would purchase the rough stands at a discount of about 10% from the Central Selling Organization. That was intended to be an incentive so as to enable us to build up the labour and the skills in South Africa so that we could compete in the international market. In addition, what has happened, is that you can export from South Africa cut diamonds without any duty whatsoever and that if you export rough diamonds, which are the subject of this provision, you have to pay a duty of 15%. Quite obviously all this is designed to assist the local industry.

When it comes to the question of the 10% discount, that is an arrangement which is between the producers and the cutters, to which the Government is a party through the Diamond Cutting Industry Board in that sense of the word. One has to bear in mind that whether you are actually giving a discount or are not giving a discount, this depends to some extent on the quality of the goods which are offered for sale and on a whole variety of issues that arise. I certainly think that the industry as a whole would like to see that arrangement continue, because it is obviously beneficial.

However, the possibility of removing the duty is another problem which arises, because it comes at a time when the industry is perhaps at its most vulnerable. That is why it is, to my mind, a little unfortunate that this provision is being introduced this year. It is most unfortunate that it is now coming to the fore, at a time when the industry is in such a difficult situation. There is some good news here in that it is provided that it does not have to come into effect immediately. It can be postponed and one hopes that the diamond industry will recover so that it will be completely able to compete one day without this protection, but psychologically, having this provision on the Statute Book at the present moment, creates a problem at this particular moment in time. As a question of timing, it is to my mind highly undesirable to produce this particular provision at this moment in time because with this we are really implying that those concerned are being given notice and had better watch it, because at some time or another the hon. the Minister may in fact bring this into force.

Whereas I would like to see clause 4 eliminated from the measure, whether the hon. the Deputy Minister will agree to abandon clause 4 at the moment, I will have to wait and see. I hope he will do that because I think it is desirable, particularly as he does not intend to introduce it now. I hope that he will not introduce it this year, but if he does not want to do that, then, at least, I would like to get a number of undertakings from him. The first is that no action will be taken in terms of this clause until such time as the hon. the Minister of Mineral and Energy Affairs is fully satisfied that it could be implemented without harm to the industry and, secondly, that no action will be taken under this clause without consultation not only with the master Diamond Cutters’ Association, who are the employers, but also with the union. Both should be consulted and both should express their views before any action is taken in terms of this clause if the hon. the Deputy Minister in fact decides to go ahead with this at this time.

I make this appeal to the hon. the Deputy Minister, and, as I say, it has no political implications, but purely the implication that we are trying to preserve an industry concerning, which I believe, it is in the interests of the country that it should be preserved and should in fact flourish. It produces foreign exchange and job opportunities and only relatively recently it has gone into the field where people who are not White are being trained as cutters. They have been brought into the industry after very difficult negotiations and I would not like to see anything, which harms this very delicate industry introduced in this stage of our economic life.

I would now like to turn to the question of stamp duties, to which I referred originally. I think that every one of these duties creates another cost input and by creating another cost input we are fueling the flames of inflation. I do not want to deal with them individually, as one of my colleagues will do that. However, as a whole, there is no doubt that there is an additional cost input. The one aspect that I would like to single out is the ante-nuptial contract. I really cannot understand how this Government can decide that it is going to increase the tax on ante-nuptial contracts.

You are married.

Yes, I am married and that is why I do not have an interest in this and why I can speak absolutely objectively on this. If it is of any interest to the hon. the Deputy Minister, I can tell him I am married by ante-nuptial contract. However, the important thing is that this particular Government has to a considerable extent committed itself to a change in the law which may well make ante-nuptial contracts unnecessary in the future. At present there is a Select Committee of this House investigating this and it has been delayed. What happened is that, with a delay in the change of the law, this hon. Deputy Minister wants to act quickly and make a few more rand before the law comes into force. That is really going a little far. This Government is now trying to get a few more rand from people who should be entering into ante-nuptial contracts, and who have to enter into ante-nuptial contracts because the Government is so slow in introducing legislation. It is quick with taxes but it is slow with necessary legislation. This is the problem here. To grab these few rand now is certainly not something that we would like to be a party to.

They are women haters.

I think they may be marriage haters. [Interjections.]

[Inaudible.]

Is the hon. the Deputy Minister saying he will withdraw it? I would be very grateful to him if he would do that. [Interjections.]

The other matter I should like to touch on is the question of relieving fixed interest-bearing securities from marketable securities tax. On the face of it one should not really have a difference on a stock exchange between buying a share and buying a debenture. If one is dealing in a market the same principle ought to apply. But one of the problems, and this is why we will not oppose this provision, is that we do not believe that there is at the present moment an adequate market in interest-bearing securities in South Africa. There is not an adequate market not only in regard to company debentures, there is not an adequate market either in respect of gilts. I believe, with great respect, that the Government has failed here to take the necessary steps to ensure that there is a proper market in fixed interest securities in South Africa. For one thing, the ordinary investor is scared off the market. In the normal course he does not go into the market. In the main it is the professional investor and the institutional investor who presently go in to the fixed interest market in this form. The ordinary person goes and puts his money on fixed deposit with the Post Office, or with banks or with building societies. He does not participate in a fixed interest market in the same way as he participates in the stock exchange. I wonder whether the hon. the Deputy Minister could tell us whether there are not more active steps which can be taken in the short-term—not in the long-term; we do not want prolonged investigations—to ensure that we have a proper market in gilts and a proper market in fixed interest securities available in South Africa.

Lastly I should like to touch on the Small Business Development Corporation. As far as we are concerned anything that can reasonably be done to encourage the activities of this corporation has our support. We would like to see the small entrepreneur encouraged get into the business field and to give him financial assistance and expertise. I think the Small Business Development Corporation is doing a job here which we would like to encourage. But again I would like to issue a word of caution. I think one must look at the type of business that is being encouraged and make sure that it is the kind of business which deserve assistance and is job creating. If we do that the Small Business Development Corporation can play a meaningful role not only in the free enterprise system but also in the provision of work for the people of South Africa. That is one of our major priorities.

So, Sir, I end by saying that I wish we could have supported the measure as a whole but, as we have set out in our amendment, the Government does not appear to be able to really get to grips with the problem of inflation. And we have got to demonstrate to the Government at every opportunity that inflation has to be tackled, that it has to take action, and where it in fact has introduced legislation which has the effect of increasing cost inputs to the detriment of the community as a whole, we cannot support it. In those circumstances we must say to the Government that they are not doing their job, the job of combating inflation. That is why we have moved our amendment.

Mr. Speaker, like the majority of Opposition members, the hon. member for Yeoville found only one way to attack the Government, viz. on the basis of inflation. Perhaps I should say a few words about that now. In fact, it is their only strategy of attack—as if they were the only people who were concerned about inflation in South Africa. As I have said, inflation is the only strategy of attack whereby to attack the economic policy of the Government.

Sir, this side of the House is just as concerned about inflation as they are, if not more so. When we on this side of the House take steps to combat inflation, then surely we should be given recognition for it for once.

Why do you not go and learn from Margaret Thatcher.

Mr. Speaker, a moment ago the hon. member for Brakpan, who is now trying to be so noisy, made a few remarks here about certain work situations in Brakpan; something that I want to discuss with him briefly in a moment. In fact, that links up with the remark he has just made.

We must consider the causes of inflation, and also take note of the attitude of the various political parties in that regard. Why do people not tell the Government where the solutions for inflation lie? Why do they not say that inflation can be combated by a more balanced relationship between wage and production? Why do they not say that large-scale unemployment—and now the hon. member for Brakpan must listen, please— will combat inflation? I want to know from the hon. member for Brakpan whether we can afford unemployment in South Africa on the same scale that it is found in other countries. Why do they not tell the people that that is how one combats inflation?

There are other ways, too.

We shall indeed be considering the other ways. Why do they not say that unemployment will result in a decline in purchasing power and that that will counteract inflation? Why do they not say the unpopular things? Why do they not say that the private sector makes an equal contribution to inflation? Surely hon. members of the Opposition know full well what is happening in the private sector. Surely they know that employers in the private sector are luring skilled workers away from one another without there being any increase in the productivity of those workers.

They are also attracting people away from the Public Service.

Yes, surely hon. members of the Opposition know that the private sector is attracting trained workers away from the State; workers who then go and work for higher wages, but at a lower rate of productivity, in the private sector. Why do they not tell the private sector for once that it too must combat inflation in its own ranks and through its own actions? Surely they also know that the State trains workers and that the private sector lures those workers away. Why do they not tell their people that for a change?

Why do they not, for once, tell the public that they should spend less and save more so that, by virtue of a reduced purchasing power, inflation may be combated?

What becomes of one’s savings?

Let us take note of those factors that combat inflation, but that are not so popular. Hon. Members must say these things in this House for a change. The hon. member for Yeoville must tell us whether he would like a high gold price in South Africa or not. Surely hon. members of the PFP all want a higher gold price.

What a stupid question. That goes without saying. [Interjections.]

Mr. Speaker, the hon. member for Bezuidenhout concedes that he would like a higher gold price. I now want to put it to him that one of the biggest causes of inflation in South Africa is a gold price that is out of proportion to the labour and capital inputs in the country. It results in a cash flow that is inflationary.

Do you want to tell me that you do not also want a higher gold price?

Hon. members can argue about this until the cows come home; a gold price that is excessively high creates an inflationary situation. We all want a higher gold price. However, I say that it is inflationary. Why do the hon. members of the Opposition not say these things? [Interjections.]

What is an optimum gold price?

Mr. Speaker, the hon. member for Rissik must not speak about these things. He knows nothing about them.

No, I just wanted to know that from you. After all, you are the clever Van der Merwe. [Interjections.]

Mr. Speaker, hon. members of the Opposition parties are very quick to attack the Government on inflation. We on this side of the House know that administered prices, expenditure by the State, the creation of money, loans, a deficit in the budget and all manner of other things are inflationary. Do those hon. members perhaps think that the Government is so stupid …

Yes, of course.

… as not to be aware that things of this nature are inflationary?

After all, we know how stupid the Government is. [Interjections.]

I want to point out that the Government is taking some steps. Let us consider them. For example, it is redeeming short-term loans on a large scale and has drastically curbed its real domestic expenditure. More stringent control is being exercised over the growth of the domestic money supply. Action is being taken to control administered prices and price increases, for example the price of petrol and the tariffs of Escom. Apart from that, the Government is increasing the production input of people by way of labour training and this, in the nature of the matter, is probably one of the most important counters to inflation in South Africa and one which also controls cost increases. The financial discipline displayed by the hon. the Minister of Finance in the recent budget is probably one of the greatest contributing factors towards countering this very problem of inflation. However, we keep hearing that this Government and this side of the House are the major cause of inflation; it is as if those hon. members had discovered the wheel! We are aware of all the miseries that inflation brings. We are aware of all the shortcomings in trade relations with the outside world that are caused by inflation. Those hon. members must refrain from accusing this side of the House of not taking cognizance of inflation. It is time they came forward with constructive proposals to tell us how we in this country can effectively counter this greatest economic problem.

I want to come back briefly to the legislation before us. This legislation embodies various measures which in my opinion are improvements and deserve the support of this House. Both clause 1 and the associated clause 14(1)(c) contain important implications for the secondary market in the trade in debentures. When in the past private enterprises issued debentures they were often linked to tax on marketable securities. In the nature of the matter that tax imposed a high cost on this and further limited the secondary market. We hope that this new arrangement will improve the opportunity to trade and that financial institutions will eventually be able to use this on a larger scale. In the long term I do not believe that the State will lose much money in this regard because tax is payable in any event with regard to the trade in debentures.

As far as clause 2 is concerned, I believe it will be widely welcomed. It creates the opportunity for shareholders, or partners in smaller undertakings, to take out insurance on one another’s lives which can then be used towards buying out one another’s interests. In the past provision had to be made for the taxability of a person’s estate before the remaining cash could be used to buy out the shares, and I believe that this rectification could make a very important contribution towards ensuring the survival of the small business undertaking in particular because it is not always possible for a businessman to buy out a partner’s estate and still have sufficient capital left to continue with that business.

As regards the commuting of annuities to which the hon. member for Yeoville also referred, I just want to say that the State goes out of its way to encourage the creation of annuities, and adjustments are made accordingly from time to time. However, I believe that it is correct that as far as that is concerned, too, the State will consider the creation of a value in such an estate and that this, too, will within limits form a taxable asset in the hands of a deceased estate.

Clause 3 merely rectifies the situation where a case falling under the Estate Duty Act is transferred to the Administration of Estates Act. I believe that it is a logical rectification.

I also listened to the hon. member for Yeoville when he began to champion the cause of the diamond dealers in a big way. I am not in that league and therefore I cannot speak with the same authority about diamonds and the diamond trade. I think that in view of the part of the world the hon. the Deputy Minister comes from, he will be able to furnish the hon. member for Yeoville with an effective reply. The question I want to ask, is this: Why does the Government tax its exports? This has happened in the case of uncut diamonds, which were taxed whereas the processed product was not taxed. The only reason why this could have happened, was that the diamond cutting industry had to be protected. The question that I am really asking in ignorance is whether this really afforded such good protection or whether other, perhaps more effective, protective measures could not have been instituted. It is also true—the hon. member for Yeoville mentioned this too—that the diamond industry is in deep water at the moment. Because this is so, it is not only the diamond cutting industry that is in deep water. It is the diamond industry as a whole that is in deep water. Perhaps we should consider whether it would not pay us to stimulate the uncut diamond industry so that we can earn that foreign exchange and in this way create employment opportunities as well. I believe that these things will cancel one another out. If the aim is to collect those funds then we are talking about more or less R33 million per annum which could be written off as an expenditure by the diamond industry. Therefore we are in fact talking about a real loss to the State of approximately R16 million. As against this we must set provision of employment and foreign exchange.

As regards the increase in stamp duty and the closing of loopholes in the tax situation in clauses 5 to 18, this is what the main attack of the hon. member for Yeoville was based on; he alleged that the State was again causing inflation to skyrocket. We are talking here about a planned revenue of R20 million which, as the hon. the Minister said in his budget speech, is being collected by increasing certain stamp duties. The fact is that these stamp duties have remained stagnant for many years whereas the administrative cost involved in preserving associated information has necessarily increased.

The final matter to which I want to refer and in regard to which I support the hon. member for Yeoville is the issue of the Small Business Development Corporation and the exemption from stamp duty when property is transferred to the corporation. I believe that this is something that is welcomed by everyone in the House. It is a step that is being taken to create a stimulus for the encouragement of economic development in South Africa.

I believe that these measures are all well-considered and accordingly I take pleasure in supporting the Second Reading of the Bill.

Mr. Speaker, the hon. member for Springs had a great deal to say about inflation and said that none of the Opposition parties—he therefore included the CP—knew what inflation was and had never spoken about it in the sense of what could be done and why certain things ought not to be done to combat it. I want to refer the hon. member to speeches I made in this House earlier this year. He can go and read them all. There was also a private member’s motion on inflation earlier this year. What I said appears in Hansard. I requested the Government not to try to kill inflation within a year; one cannot do that, because then one creates chaos. I stated clearly that we of the CP said that there had to be a target. One has to indicate one’s target clearly. What is the Government’s target? Why does the hon. member not tell us what the Government’s target is, and when it is going to bring inflation down to a livable level.

After all, it has now become the fashion in this House that when hon. members get up to speak, they get personal. I want to request the hon. members for Boksburg and Caledon to be present in this House when the next stage of the S.A. Tourism Council Bill comes under discussion, because I intend giving the two of them a friendly lesson if they want to be personal. I think it is high time that these personal remarks should stop. I should like to place this on record, because the last time I asked the hon. the Prime Minister to be present he never received the message. I should like to have it on record that I asked them.

I am pleased that the hon. member for Springs touched on several of the matters which are now under discussion. I am convinced that he knows what factors and actions cause inflation. He referred to production. What he said was quite correct. Indeed, that is one of the very first things I said, and I still say it. I said it the other day in this House. Why, then, this accusation that we do not say this? I agree with the hon. member that there should be greater production. I also spoke to the private sector about that. I do so in public and we say that to our people. That is why the CP has credibility when we address party rallies. We tell the people forthrightly what the truth is. There is not a single member in this House who could deny that when one speaks to one’s people forthrightly and tells them that they cannot have that salary if they do not produce enough, they will not be angry at one. It does not matter whether it is I, the Deputy Minister, or whoever, who tells the people that. It does not matter whether it applies to the private sector, the public sector or even on a farm. This is so. That is why there is such a thing as piecework. This is a method of encouragement of providing an incentive for a man to work better. In this way he earns more money and he produces more.

What did you say to the farmers?

I shall come back to that. Perhaps I shall reply to it in the Third Reading.

I now want to refer to unemployment and link it with labour. I want to say here and now that the labourer is worthy of his hire. The hon. member for Springs said that workers had to be trained. After all, the hon. the Minister of Manpower had said and done a great deal about training. However, it has been since he started with his training courses that there have been more numerous strikes, and on a larger scale, than under any previous Minister of Manpower. This had never been the case previously. [Interjections.] Under this hon. Minister of Manpower, we have had, apart from the strikes, the highest rate of inflation South Africa has ever know. The rate of inflation has been 14% for a long time now. If, then, it is true that people are being trained to make them more productive, why has our rate of inflation skyrocketed?

But, Oom Jan, do you not want to give any training?

Wait a moment. That hon. member and I have had a certain relationship for many years now. However, I do not believe it would be a good thing to talk about it. There was a good relationship between us. It was a good relationship, but I did not want to drag it into the debate now. If there is one person who believes in training it is I. If anyone in this House were to tell me that he did not believe in training and that he did not like it, I would believe that there was something gravely the matter with that person. However, I assume that there is no such person here. There is no one here who would say such a thing.

However, what happens with regard to training? There is training and training. As a result of training in order to combat inflation, training has become more mixed. Just look what is happening in Krugersdorp with regard to the training of non-Whites there. There is mixed training.

Is mixed training inflation?

No. What is the situation in South Africa? The spirit of the Whites is being broken. That is what is happening. 1 500 NP workers met at Hartbees-poortdam to learn how to work productively. They were told to break the spirit of the voters. They had to make the voters despondent. If we want to train White workers, but their spirit is broken, in that Blacks or Coloureds take over their jobs, they are not going to be motivated. One will not get them so far as to work.

Mr. Speaker, can the hon. member tell me whether there are any workers in this country who are unable to obtain work because their work has been taken over by Blacks?

No.

What nonsense are you talking then?

There is no such person, but I can elaborate on this further. The man who used to take his suitcase home and do two day’s work in one day no longer exists. That simply does not happen anymore. After all, we have always had too few Whites in the country. Look at the Public Service, for instance. There have always been too few Whites in the Public Service. However, the people were motivated and worked hard. Look at the private sector, too. One can look at all the sectors. There were enough people who were motivated and worked hard. Due to these new guidelines, integration and mixed training, we are missing our target. It is right to train, but …

What are we to do, then?

Training must not be mixed. That hon. member was not in a mixed school in which there was mixing of Coloureds, Whites and Indians.

Were you?

No. [Interjections.] Nor was he at such a university.

Where are the mixed schools?

But I was referring to mixed training…

Where?

At Krugersdorp. [Interjections.] It is true that if people’s spirit is broken and there is no motivation, one does not get the production one wants. If one trains a person, then one of the first ideals is to motivate him. He must know that he is being paid for 8 hours but that he has to put in 10 hours of work by dint of improved achievement. It is true that the State trains workers.

It seems to me he was right, Oom Jan.

Since that hon. member has just made an interjection, let me say that the other day he said rather an unflattering thing here. That hon. member and I have always been very courteous towards one another. I think he has always been very decent. I think his mother brought him up well. He has always displayed good manners. On that occasion I was discussing a certain Bill, without being personal. I then put a question to the hon. the Minister of Industries, Commerce and Tourism. The hon. the Minister thereupon replied that I was right. However, what did that hon. member say then? He said that I was an “unutterable clot”. He said that that did not appear in the dictionary; the Americans did not know what it was and he did not know either. Now, I do not know whether he was standing before a mirror when he said that. I want to ask him whether he now thinks that I have acquired more respect for him or whether he thinks that he has now shown himself to be a man with a noble and excellent character.

He is a forward backbencher. [Interjections.]

He says that it is something agreeable. Then, while he is about it, he should also say to the hon. the Prime Minister, Mr. Speaker, or whoever says anything, that he is an unutterable clot. That hon. member is a backbencher and there are only a few hon. members who are younger than he is, and I think that it was a little presumptuous of him, because up to that time he had behaved himself well and decently. I think that he should regard this as a lesson today, so that he may behave himself better in future. [Interjections.]

The hon. member for Springs said that the Government was spending less so as to combat inflation. That, of course, is one of the recipes, and that is what we are asking for. He said that this had to be done in future. However, the hon. member added that we should not accept the higher gold price because that was inflationary. Then all the farmers must say that they do not want higher prices for their products because that is inflationary. [Interjections.] However, we have said before—the hon. member for Yeoville has also said this, but I advocated it and added that the gold mines should be encouraged—that when the price is excessive, the money over which the State also has control …

Therefore you admit that it can be excessive.

I am talking about an excessive price. Let us say the price is $1 000.

I wish it was $1 000.

Let us make it $2 000. [Interjections.] The State controls it and that money can therefore be sterilized that it does not enter the flow of money. It can be done, but the hon. member does not think of that. I do not want to take it amiss of the hon. member because this is not his field. However, that is the answer to that. Surely there is a great deal that one can do if there is an excessive amount of money in the country. Moreover, the Government takes fiscal and monetary steps to curb this kind of thing. Why are we always talking about discipline? That, then is one of the disciplines that is used and implemented. I wish we could get $3 000 per ounce, because then we could control the stuff. Then we need not feel bad. Now, however, this is taken amiss of us and we are told that we do not want that price. I do not think the hon. member quite understood.

There are many things that the Government is guilty of and that lead to price increases. I have said before that there are also things one cannot help. I have never said that there should be no inflation at all. One gains the impression that inflation is even imported. However, one must pluck the fruits if one’s imports have dropped and one’s own rate of inflation is 14%, whereas that of one’s trading partner is from 2% to 4%. It has been the case for several months now that the rate of inflation overseas has been very low, but that we in South Africa have not yet plucked the fruits of it. Surely that shows one that there is something wrong within the country. Let us admit to one another that there is something wrong somewhere. If the hon. the Deputy Minister tells me that there is nothing wrong at all, then he is doing himself an injustice. The fact that the rate of inflation has not declined means that there is something wrong somewhere. However, if the hon. the Deputy Minister tells me that there are certain things that he cannot do at present, I want to say to him that he must take a fresh look at them.

Let us look at something that happened recently. I shall come back to this again when we discuss the Third Reading of the Appropriation Bill. Bank interest rates skyrocketed. However, there were by-elections in the Bergs and at that time the interest rates suddenly dropped. I want to say to the hon. the Deputy Minister that interest rates are now going to be increased again gradually because, after all, there are no by-elections in the offing. That is why the by-election in Middelburg is not being announced. There is a question on the Order Paper about this by-election. We want that by-election. It is going to be a second Waterberg. It may rain so that the referendum may be held at some time in November. If it were to rain and we were to hold the referendum, one would be able to see how the bank rates changed again. We know it in advance.

The hon. member for Springs, referred to several other matters. However, I think that I have done justice to the hon. member and replied in full to what he said. Nor do I want to say a great deal more. The Bill contains some good things. The hon. the Deputy Minister is proposing certain provisions to combat tax evasion. We are in favour of that. We agree when he tries to do something to avoid tax evasion. It is right that this should be done. We cannot have the situation in South Africa that one man pays tax while another does not: That is wrong. If the hon. the Deputy Minister wants to take such steps, the CP will stand by him. There are not many loopholes in the Tax Act. However, if any loophole does exist, it must be closed. One cannot prosecute a person who avoids the payment of tax in a legal way, but I feel that one should close that loophole. The Bill contains several drastic tax increases. I am not happy about that. We cannot clap our hands and shout “Hurrah” because taxes are being increased. The other day we said that the supertax of 5% should be abolished. It is definitely inflationary. The hon. the Deputy Minister was wrong the other day when he said that the abolition of the supertax of 5% had not affected domestic prices at all. Then there is something wrong somewhere. If prices have not dropped, there is something wrong. The hon. the Deputy Minister must go into that. He asked whether we should introduce price control. I do not say that that should be done, but there are many other measures that could be implemented. The Government must take steps in this regard. It is asked what the CP would do. If the CP were to take over the Government, we would know what to do. We would then have a happy country.

Mr. Speaker, at this time of the year, when we discuss Bills such as the one at present before the House, it seems to me as if this is the time when the Opposition parties butter their bread on both sides. When levies are imposed, that is wrong. This will mean that we shall never be able to curb inflation. On the other hand, however, when we come forward with concessions in one sector, then this can give rise to unemployment in a different sector. Nothing is good. I just want to say that by conducting themselves in this way, the Opposition parties are losing all credibility. I think that is probably the reason why people no longer take them seriously nowadays.

I want to dwell for a moment on one aspect of the Bill in particular, with reference to a remark made by the hon. member for Yeoville. I refer to clause 4, in terms of which it is proposed that export duty on uncut diamonds may be done away with. The hon. member expressed his concern that the diamond-cutting industry in South Africa could be affected detrimentally thereby. To determine whether the hon. member’s concern is well-founded and whether his approach is a balanced one, it is necessary to take a very brief look at the diamond industry as a whole. In the first place, it is necessary to note that the diamond industry is in fact being kept in operation artificially world-wide. If the market forces of supply and demand were to be allowed to take their free course in this industry, the resultant instability would undoubtedly destroy the industry. Only the controlling function exercised by the central selling organization is keeping the industry going.

Secondly, with reference to the first point I made, it must be borne in mind that the industry is extremely sensitive to world economic trends. The ordinary man must be prospering before he buys a diamond. A man who is having a hard time of it financially will not do so. Now, it is true that the economic recession which the world has experienced in recent times, and that has not yet ended, has hit the diamond industry very hard. That, too, is why the cutting industry is having a difficult time. One must see the industry as a whole. One cannot merely single out one component and view it in isolation. The industry is a unit, from the time, figuratively speaking, the spade hits the earth until the ring is put on the lady’s finger. If the primary producer can no longer continue to produce, there will be no diamonds for the cutters to process.

The recession has had two important consequences for the industry, both of them very negative. Firstly, it has compelled the Central Selling Organizations to buy up large quantities of diamonds and withdraw them from the market. If it had not been for that, the industry would now have been in ruins. This has necessarily had the effect of seriously overextending the financial resources of the Central Selling Organization. Secondly— and once again this coincides with the first point I made—this has resulted in serious reductions in price. However, production costs have not dropped at the same time. In fact, production costs have risen during this period. This, of course, has had a very detrimental effect on the position of the primary producer. It made the exploitation of marginal deposits impossible and activities at all levels have either had to be curbed or stopped entirely, with resultant unemployment in the primary sector of the industry as well. In such a situation it is unrealistic that the State should also take a share of the ad valorem value of all uncut diamonds that are exported. The State is already the biggest shareholder in every diamond mine by way of income tax and mine lease compensation, and if any criticism is to be expressed, it must be because the export duty has not yet been abolished. Let us accept this now: This industry is dependent on exports. The cutting industry in South Africa cannot—and sometimes it seems to me that they do not wish to—process the total South African production. Permit me, Sir, to point out in this regard that there is still room for improvement in this sphere. For example, I cannot think of a single reason why South African diamonds should be processed in Israel and India. But the South African cutting industry as organized at present does not deal with the type of diamonds processed there, in any event, not in significant quantities. However, there is no reason why this cannot be done in South Africa. One does not need sophisticated labour, and it need not be done in the urban areas. Accordingly, it can be done in the decentralized areas. Moreover, it can be done on a home industry basis. The large diamond-cutting concern in Ramat Gan, Israel, is, in fact, essentially a family business, and in Idar-Oberstein, West Germany, there is a cutting works that also cuts other precious and semi-precious stones, which is wholly geared to home industry operation.

Sir, we owe it to the large number of undeveloped people in South Africa to make full use of this major source of employment. It ought not to be necessary to remove a single diamond from Namaqualand before it is processed. Just think what this could mean to the people there. And if the cutting industry in South Africa wants to assist in this regard and if we are able to achieve this ideal, then there may be more reason to consider protective measures in future.

There is just one further aspect of the exportation of uncut diamonds that I want to touch on, viz. the competition that we are experiencing overseas to an increasing degree. No one knows what the Russian production or potential is. However, that it is large, and that they are able to regulate marketing at will, is a fact. Major deposits have also been discovered in Australia, but no one has yet been able to determine what the precise impact of this will be on the world market. What is a fact, however, is that we shall have to improve our competitiveness drastically. The abolition of export duty will be of great assistance in this regard, and any prospect that this will be done is more than welcome. I therefore support this measure.

Mr. Speaker, the hon. member for Stellenbosch must forgive me for not commenting immediately on his speech. There are one or two things in his speech which I should like to refer to later on.

It is normal at this stage of a parliamentary session for a number of taxation Bills to come before us. We have already dealt with customs and excise and now we are busy with the Revenue Laws Amendment Bill. These Bills are usually passed without any heated debate. On this occasion the official Opposition, quite rightly, considering the economic situation in South Africa, is emphasizing the need that the Government should concentrate on combating inflation. Before I get to the comments and the amendment of the hon. member for Yeoville, I should like to point out that there are certain measures in this Bill which the NRP welcomes. For instance, there is clause 2 in terms of which insurance policies taken out on the life of a deceased by a partner of a shareholder at his own cost and initiative are excluded when assessing his estate for estate duty. The reason for such a person taking out such insurance is to enable him to be able to buy out his partners shareholding in the event of his death. We know that such situations arise from time to time when one of the partners in a company or partnership dies and the remaining partner or partners find themselves in great financial difficulties because the shareholding of the deceased partner is now distributed to his heirs, something which creates problems. We believe it is very wise for someone in such a situation to find some ways or means of ensuring that he will be able to buy out his partner’s shareholding. The fact that such an insurance policy is now excluded from the deceased’s estate, we believe, is a good measure, and we welcome it.

In terms of clause 3 the Act is now amended by the deletion of the provision that the State President has power to issue regulations. The existing subsection which empowers the State President to issue regulations regarding the payment of fees to executors, etc., who render returns in respect of property, is a stipulation with which we also agree. We always welcome measures aimed at taking away powers from the Government or a Minister or the State President. We do believe that we can overlegislate at times. In the explanatory memorandum it is clearly stated that the main reason for this measure is that despite the fact that it was first introduced, way back in the 1920’s, it has never really been applied. Correctly so, the hon. the Deputy Minister now feels that it should be removed because it is a redundant and useless measure. We do welcome this but the reason why I raised the point is because I wonder how many measures we do have on our Statute Books, which are never used, and which merely clutter up our law books. I wonder if the hon. the Deputy Minister, together with his colleagues in the Cabinet, could not consider the possibility of having the law advisers go through a lot more legislation in order to establish whether there are more such provisions which could be eliminated from our Statute Books.

Clause 4 has already been debated extensively here today. It relates to duties payable on the export of uncut diamonds. I am certainly not a fundi on this subject but I have listened with great interest to what has been said here today. I feel that there are two areas about which we should be concerned in this regard. The one point is that we could be losing on export diamond sales, because diamonds which have come from other countries and are being cut and polished by technicians or specialists, who are doing it much more efficiently and at lower cost, may be competing with our own diamonds, and as such the diamond companies might consider it more profitable and advantageous in many respects to export uncut diamonds rather than cut diamonds. I do think, however, that the hon. member for Yeoville, and also other hon. members, have raised a very interesting point here today. That is that we do have a local diamond industry in which many people are employed and whose jobs may now be at stake. Employment is after all a very important matter, which is worth consideration today. Therefore I am waiting with great interest to hear what the hon. the Deputy Minister has to say in this regard. I should like to hear his views on the discussion we have had here so far.

At this stage, Mr. Speaker, I should like to pass over clauses 6 to 17 for a moment. Those are the clauses in respect of the alteration of the rates of stamp duty payable. I want instead to address myself to clause 18.

This is a very simple clause. In terms of this clause people who are liable to pay these stamp duties are being given one month’s grace in which they can still pay the old rate of duty on any transaction entered into prior to this legislation becoming operative. After that one month’s grace they will have to pay the new rate. I raise this matter because I believe the public should be reminded that if there is any outstanding stamp duty that is required to be paid they had better pay it right now because one month after the promulgation of this legislation, in many cases, stamp duty is going to be doubled. I therefore sincerely hope that the media will remind people of this.

Clause 19, Mr. Speaker, is a clause with which I believe everybody agrees. That clause stipulates that all transactions entered into, or any transfer of properties entered into by the Small Business Development Corporation, will be free from transfer duty. I think that all parties in this House will agree that this is absolutely necessary. This is a very important development corporation. Much has been said about fighting inflation. One way to keep down rising costs that are rising not necessarily because of inflation but because of profiteering is for us to have more competition in South Africa. I think that the more small businesses we can promote in South Africa, the better for South Africa as a whole, and so we are 100% behind the hon. the Minister in this connection.

I want now to discuss clauses 6 to 17 which deal with stamp duties. The hon. member for Yeoville has moved an amendment in which he states that the PFP feels that they cannot support this Bill because, inter alia—

The hon. member went on to say that by raising the stamp duties one raises the input costs in respect of many areas of activity and that this is therefore inflationary. I am in full agreement with the hon. member for Yeoville that the Government is certainly demonstrating its inability to deal with inflation. The fact remains that inflation is still running in this country at 14%. A number of hon. members opposite including the hon. member for Stellenbosch have told us that if we are to lower the inflation rate in South Africa it will mean that we are going to experience an increasing unemployment rate. This is possibly very true. We know that the inflation rate has been lowered considerably in both the United States and in Great Britain. In the case of Great Britain it was at one stage 20% whereas now it is about 4% or 5%, and we know that there are over 3 million unemployed in the United Kingdom. I wonder personally whether it is at all possible really to get on top of inflation without there being a certain degree of unemployment. Unfortunately, one of the major reasons for inflation is that money is being spent by companies and by the Government and money is being paid to people in the form of salaries and that money is in turn being spent on consumer goods which is money that has not been earned. It is money that has been printed by State printing presses and that very action of printing more money than a nation is earning is the reason why the value of that money or the currency of the particular country involved depreciates and why costs inflate.

The hon. member for Yeoville has stated that these increases in duty will result in inflation. I decided to have a good look at these duties and I am quite sure that hon. members will be interested to know what duties we are talking about.

And the percentage increases.

And the percentage increases. I think that is very important. What I also think is of great importance is when these duties were last raised. What is also very important is that we note the transaction in respect of which the duty is being applied.

In clause 7 there is a duty on agreements. This means that if my colleague and I enter into an agreement, in order to make it legal we have to put a revenue stamp on it. The stamp duty we have to pay at present is 50 cents and this is going to be increased by 100% to R1. The last time this duty was increased was in 1977, which is six years ago. With inflation running at 15% per annum compounded I think that this is a reasonable increase in the light of that inflation. As far as its effect on input costs is concerned, however, I must disagree to some extent with the hon. member for Yeoville. In similar transactions, for instance, in respect of customs forms, the duty has been increased from 20 cents to 40 cents and in the case of cheques, the duty has been increased from 3 cents to 5 cents per cheque. These three stamp duties were last increased in 1977. One can go further. The ante- and post-nuptial contracts, about which the hon. member for Yeoville had much to say, will have an increase in stamp duty from R2 to R5. The last time that duty was increased, was in 1911. I want to ask the hon. member for Yeoville to what extent an ante-nuptial contract, the duty on which is increased from R2 to R5, is going to affect the input costs in South Africa. It may affect the input cost into the legal profession’s total structure, but I do not know for sure.

Mr. Speaker, may I ask the hon. member whether it is not a fact that the issue as to when there was last an increase is irrelevant to the cost input at this moment because costs go up from the moment the input takes place? Therefore the history is really irrelevant in respect of a cost input as at this moment.

Mr. Speaker, if we follow that argument to a logical conclusion, I suppose it must also apply, for example, to the lawyers who, because of the present inflationary pressures, would like to raise their fees—and the engineers—I am an engineer—theirs. If we want to do that as a means of beating inflation, then we should follow the argument of the hon. member. That, however, is a matter I shall pursue later.

The point at issue at the moment is that the Government has to raise revenue in order to finance the budget which will be passed by the House. If it does not find the revenue, where will the Government find the money? I imagine the hon. member for Yeoville would like the Government to print it, but to me that is the root cause of inflation.

The Government should not spend so much.

The next clause I should like to refer to, is clause 12 which deals with fixed deposit receipts. The duty in this connection is increased by 100% from 5 cents to 10 cents. The last time this duty was increased was in 1968.

What sort of people invest in fixed deposits? Are they not the elderly people?

Yes, when they have the money to invest in fixed deposits. Very wealthy people, too, invest in fixed deposits.

Clause 15 concerns partnership agreements. The duty in this regard is increased from R5 to R10. A partnership agreement may last for a lifetime. That increase of R5 may therefore last for a lifetime—it can be written off over the lifetime of that partnership. The duty on powers of attorney is increased from 50 cents to R1 and the maximum duty on security and suretyships is increased from R10 to R20. The rate is 5 cents per R100 of security. The rates for these stamp duties were last increased in 1968.

Having looked at this very objectively, as the NRP does with all legislation that comes before the House, we believe that first of all in the light of when these were last increased, and, secondly, the type of transaction which is being undertaken, these increases will not add substantially to input costs of commerce and industry in South Africa, and therefore, we cannot support the amendment of the hon. member for Yeoville.

These additional stamp duties are going to raise about R20 million in revenue for the State coffers out of a total stamp duty income of approximately R140 million. This is on a total budget of R21 176 million. As I said earlier on, I believe that the State has to raise revenue. The question is: Where does the State raise this revenue? We in this party have said over many years that we believe it must be by means of more indirect taxation because direct taxation in the form of income tax and companies’ tax acts as a tremendous disincentive to the entrepreneur, also the worker who may be working on the bench, who is working on a bonus scheme and is earning overtime. We say, those people who want to work in South Africa and want to to build up assets for their family should be encouraged to work because it is only through work that one generates wealth and prosperity in a nation. Therefore we are against too high a rate of personal income tax or property tax. We are very pleased that in recent years indirect taxation increases which have been introduced, such as on stamp duty, general sales tax, etc., have enabled the State to reduce the upper marginal limit of taxation from 70-odd cents in the rand to 50 cents in the rand. I want to suggest that, if we could reduce that maximum marginal rate of taxation to an even lower level, say 40c, we would then not have the great need that exists in this country—also in other countries—for so-called tax havens to be formed on behalf of those people who are earning big incomes. There will not be an incentive for them to try to find ways of avoiding paying tax. In so doing, one would release into the economy dozens and dozens of professionally trained people, such as lawyers and accountants, who presently are occupied in trying to assist their clients in avoiding paying the tax man his due. These people would be far more productively employed in the economy and in so doing would be generating greater wealth instead of consuming wealth by trying to avoid paying taxes.

For these reasons we will support these measures. Taxation has to be raised to finance the budget which has been approved by the House. If we really want to fight inflation, the Government must cut its expenditure even more. I complimented the hon. the Minister of Finance during the Second Reading debate on the budget on the fact that over the last few years he has decreased the rate of growth of Government expenditure on a percentage basis. I think if he can continue to cut Government expenditure so that we do not have to raise these taxes, then we will be on a sure path towards licking inflation.

If we do not raise these taxes to pay for the services which this Government and the Opposition, including our own party, from time to time demand for our people, we must ask the question: How is the Government going to pay for it? The Government pays for it either by borrowing, which then puts pressures on the capital market and pushes up interest rates, or, alternatively, by asking the Reserve Bank to print the money, worthless paper money. That is what causes inflation. We are against those practices. We believe that when this House passes a budget, it has to bite the bullet and go to the people and say that, because they want these services, they have to pay for them. While we will fight this Government if it spends too much money, we certainly do not want this country to run into a deficit like so many other countries have done. Some countries are almost bankrupt and have inflation rates of over 300% per annum today. Because we believe in balancing the budget, we will, in this particular case, support this measure.

Mr. Speaker, it of course does not come as a great surprise that hon. members of the “National Republic Party” will be supporting this legislation.

What are you saying?

I am not surprised that they are supporting this measure. In fact, they are welcoming it. [Interjections.] They have actually welcomed proposals which are going to have an inflationary effect on the South African economy.

Prove it.

Does the hon. member not believe that the raising of these particular stamp duties and charges by the Government will increase costs and therefore add to the inflation rate? Surely it will.

By how much?

To give the hon. member the answer supplied by his own colleague, by R20 million per year.

By what percentage of the budget?

It will be a minimal percentage of the total budget, but does it matter what percentage it will be? It is inflationary. We know that in this country today probably our biggest single enemy on the economic front is inflation. The Government is always telling private enterprise that it must do its best to keep inflation down and to increase productivity. Yet here we have a Government doubling its charges overnight. Where a certain sum was collected before, it is now going to be virtually doubled. What excuse is there really for collecting a duty of 5 cents on a cheque? What advantages does the public get out of having that hon. Minister increase the duty on a cheque from 3 cents to 5 cents? I am aware that in Israel they have recently put a 3% tax on bank withdrawals, but what advantage is there to the people who utilize bank accounts if the Government stamps cheques? I do not believe there is any advantage in that. It simply adds to the costs and it is a direct taxation. In this particular case it is also inflationary.

Mr. Speaker, may I ask the hon. member from what source he believes the Government should raise the additional R20 million?

I have not suggested that they should raise the additional R20 million.

Must we then spend less?

Yes, of course. That is basically what I would prefer. If one wants to go into this, I believe there are many areas in which in fact tremendous amounts of money could be saved. We have said often from these benches that apartheid costs a tremendous amount of money. Facilities are duplicated unnecessarily in all sorts of ways. There is the cost of buying out whole areas, relocations, and the rest of it. All this money has to come from somewhere. In our view this is totally unnecessary. I am saying that the Government should not be raising these funds because they should not be spending as much. The budget of this country could be reduced tremendously if we did not have the albatross of apartheid around our necks.

I agree with you.

I am glad that the hon. member for Amanzimtoti agrees, and I thank him for that.

The hon. member for Springs made some extraordinary statements about inflation. He seemed to suggest that we could not follow the pattern that has been followed in England and America because in those countries the measures taken to reduce the inflation rate actually caused a lot of unemployment in his view. I want to say that in this country we have both. We actually have the high inflation rate and I submit we have a higher unemployment rate than either America or Britain. One cannot actually get correct figures in relation to unemployment in South Africa because the unemployment figures for Blacks are a total disaster. One cannot really establish those figures. I have before me Volume II of the report Forced Removals in South Africa. Let us look at the rate of unemployment in Ciskei—this volume happens to deal with Ciskei and I happen to have it because I am naturally interested in that part of the country. To quote from the report—

The rates of unemployment in America and Britain, which run at approximately 9%, pale into insignificance beside this.

How are we going to solve this problem?

How do we solve the problem? The problem in Ciskei is caused by the fact that the Government has taken people from areas where they were earning livings and where they had their own properties, as the Fingos had them near Humansdorp, and dumped them in areas …

You are talking rubbish.

No, it is not rubbish; it is absolutely true. Three and a half million people have been dumped by this Government in various places. It amounts to a crime against humanity.

I want to get back to inflation, because if I get on to forced removals, I will really blow my top.

Inflation actually suits the Government, because in terms of taxation, every time inflation goes up, the Government collects more tax. There is what is called in America bracket creep or fiscal drag. In other words, salaries go up to cope with inflation and because taxation comes in at certain levels the percentage of this increment a man pays tax on goes up by an unusually high amount. The net effect of this is that the employee who gets a salary increase of 15% as compared to an inflation rate of 15%, ends up at the end of the year actually worse off. He has less money available to spend on goods. The inflationary situation in South Africa therefore suits the Government very well.

Let us take another example, namely that of the petrol price. I have no doubt whatsoever in my own mind that the hon. the Minister of Mineral and Energy Affairs could tomorrow reduce the price of petrol by between 3 cents and 5 cents per litre. Oil prices throughout the world today are lower than they have been for years. The spot market in Amsterdam is right down and official Government selling prices are right down. The South African economy has not benefited from those reductions. The South African economy has not benefited from this in the slightest.

I want to get back to the actual bill itself and I want to talk predominantly about clause 2, which related to estate duty. I believe there are a number of things that remain undone in this particular clause. This particular clause is an advantage in that it is providing relief, as the hon. member for Amanzimtoti has said, to the business partner who is a shareholder in a private business. However, I have a problem with this in that the section in the Act which is being amended creates the situation where, if there is a relationship between the deceased and anybody who benefits from a policy, then that capital amount gets added to the deceased’s estate. We are making the exception here for business partners. What if the business partner is a son or perhaps a father? What if it is a partnership in a farm? What is the situation if a son and a father who farm in partnership want to protect each other in terms of estate duties and want to take out insurance to cover that particular situation? Will the clause except them, or will the overriding desire of the Receiver to collect estate duty from relatives in fact be the prime consideration in deciding whether the amount gets added to the estate or not. Estate duty is in fact a very iniquitous tax and it is sad to see that inflationary effects on houses, farms and businesses increase the amount of estate duty which has to be paid. The managing director of Escom has said in the last day or two that the cost of building a house has gone up 100% in the last three years. The values of farms have also gone up tremendously over the last few years. I am aware of an instance where a farm was purchased for R150 000 in 1977 and is today worth R450 000. I suggest that this is not unusual in terms of the current inflation rate and the tremendous escalation in property prices. What was the situation in 1977 and what would the situation be today had that particular farmer died? In 1977, if he had a surviving spouse and two children, he would have received a rebate of R100 000. That means that they would have had to pay estate duty on only R50 000 and that would have come to approximately R7 500. Today his rebate would be R180 000 and he would therefore have to pay tax on R270 000, a taxable amount which is five times greater. Tax goes up to as much as 35% on the sliding scale—in this instance it would not have quite reached that figure. The amount of estate duty payable would have been seven times greater on that particular estate.

If one looks at farmers and farming, particularly in view of the drought that we have today, it is clear that these people simply do not have the money to pay amounts such as that by way of estate duty. We are well aware of the fact that farmers’ debts have increased enormously over the last five years or so and the drought has caused those debts to go up even more dramatically. Farmers are having to pay a great deal of the cost of strategic protection for Atlantis diesel engines, fertilizers, etc.

I want to point out to the hon. the Deputy Minister what has happened in other countries of the world as far as estate duty is concerned. When the Reagan Administration came into power in the USA, they announced that the inheritance taxes would not come into play until the value of an estate rose to 600 000 dollars as against 175 000 dollars when he came into power. The provision was due to be phased in over a period of six years and was designed to prevent the disappearance of family-owned businesses and small farms which must often be sold to pay inheritance taxes.

I believe that to quite a large extent that is happening in South Africa today. There is an increasing danger that, because of estate duties, small businesses, family businesses, small farms and family farms will have to be sold in order to pay estate duties. It is disappointing that this position appears to continue and I look forward to hearing what the hon. the Deputy Minister has to say about the question of relatives in partnerships and relatives as shareholders in businesses: We are all aware that this Government is very keen to build up small businesses, but small businesses inevitably get to a stage where they are medium-sized businesses and, if they are efficient, they inevitably become big businesses. As these companies grow and as they plough back their profits, which they need to do to train and to grow and to provide employment in this country, it becomes increasingly difficult for the owners of those businesses to be able to pay this type of duty.

I look forward to hearing the hon. the Deputy Minister’s reply to this and I support the amendment of the hon. member for Yeoville.

Mr. Speaker, the hon. member for Port Elizabeth Central must just wait a minute, since I should like to deal with the hon. member for Sunnyside before speaking to him. [Interjections.] That hon. member stated here that one of the causes of this situation in South Africa which is responsible inter alia for the high rate of inflation, was that we were providing training on a mixed basis. He specifically referred to a training centre in Krugersdorp. If I am correct—and I shall repeat this for his sake—he referred specifically to the mixed training centre in Krugersdorp. He created the impression that Whites, Coloureds, Indians and Blacks were trained there on a mixed basis. Or would he be prepared to admit that the place he was referring to, is a place by the name of Chamdor, and that in-service training is provided there for Coloureds, Indians and other people of colour, but not for Whites? Are those the facts, or is the hon. member purposely trying to create a different impression in order to …

Just leave it at that, please. I shall deal with that on Monday. [Interjections.]

Very well, Mr. Speaker. I want to make it clear to the hon. member for Sunnyside, however, that I shall take it amiss of him if he is not prepared either to admit or deny that that is what he meant. I believe that he is maliciously trying to create the wrong impression, without being able to support his allegations with facts. It is unethical for him, as a long-standing and seasoned politican, to act in this way. In fact, today he tried to give backbenchers a lesson in the ethics of politics; what requirements they had to meet, and how they should behave. However, as a senior frontbencher, I take it amiss of the hon. member for advancing arguments of this nature. There is a certain expression used in the legal profession when people go to court. It is said that they should go to court with clean hands. In my opinion, the hon. member for Sunnyside discredited himself and his party today by not participating in the debate in this House with clean hands. I only hope that he will be able to support his allegations with facts on Monday.

I shall come back to this on Monday. [Interjections.]

Rather resign, oom Jan. [Interjections.]

Mr. Speaker, I now want to turn to the hon. member for Port Elizabeth Central, and put a few questions to him at the same time. The first question I want to ask him, has a bearing on one of the basic arguments he advanced here as to why the Government emphasized inflation so strongly and why it was being fanned so vigorously by the Government. He claimed that the reason for this was that, for example, increases which would automatically lead to inflation were being proposed in the present legislation. He said that that was the reason the hon. member for Yeoville had moved an amendment, which he would support. I therefore ask the hon. member for Port Elizabeth Central the following question: Is he of the opinion that an increase of 100% is in any event inflationary? Is that what he bases his argument on?

Any increase in price is inflationary.

The hon. member says that every increase in price contributes to an increase in inflation. Of course, that is where the hon. member is making a drastic mistake in his reasoning. The hon. member for Yeoville realizes that, and that is why he is sitting there laughing at the hon. member for Port Elizabeth Central. The hon. member knows just as well as I do that when one pays tax of 1 cent on an item one purchases, and that tax is increased by 100% to 2 cents, it does not mean a thing. What does an increase from 1 cent to 2 cents matter? It is an increase of 100%, but one could play around with percentage increases until one is blue in the face. One could keep the children amused for days with that kind of thing, but when one wants to deal realistically with real questions, one cannot play around with figures in this way.

After all, I believe the hon. member for Yeoville is a responsible member of this House. Yet he has moved an amendment to this Bill, an amendment in which he conceded in part that this was good legislation; that the amendments it contained were also good, despite the fact that they contained certain aspects of an inflationary nature. In any case, I believe the hon. member for Amanzimtoti gave him an in-depth reply on that. Let us look at a few of the things the hon. member for Amanzimtoti pointed out.

Let us commence by looking at antenuptial contracts. Surely both the hon. member for Yeoville and the hon. member for Port Elizabeth Central are aware that the increase from R2 to R5 means an increase of R3 on a total amount of approximately R55. That is a percentage increase of 6%.

It is R3 on R2.

No, Mr. Speaker, the hon. member for Yeoville surely knows that he has to agree with me. One cannot calculate the R3 on the basis of the amount of R2; the calculation has to be done within the framework of the total concept. The hon. member for Yeoville wants to make the calculation in terms of the R3 increase from R2 to R5. He could then claim that it represented an increase of 150%. Within the framework of the total picture of expenditure in respect of the antenuptial contract, the amount the hon. member should use as a basis is R55, and an increase of R3 on R55 amounts to an increase of 6%. The increase in expenditure that has to be incurred therefore amounts to only 6%. In view of an inflation rate of 14%, that is a very realistic and very small increase.

Let us assume that the stamp duty on partnership contracts is increased from R5 to R10. That is an increase of 100%. On the face of it, it is an enormous increase, but seen against the background of what ensues from it, it is reasonable. If two persons enter into a contract of partnership and the additional expense they have to incur is R5, do hon. members want to tell me that even though it would be inflationary, that amount should not be spent in order to make that partnership viable? Surely that is an absurd argument. When we speak of inflation, we should see the realities of South Africa against the complete background.

The hon. member for Port Elizabeth Central made a great fuss here today as regards the price we in this country have to pay for apartheid. Would the hon. member agree with me that the expenditure on South West Africa is one of the largest albatross expenditures hanging around the neck of the Republic of South Africa today? According to calculations, it costs South Africa approximately R1 000 million per annum. That is money the Republic of South Africa has to spend unproductively on behalf of South West Africa. Are voices ever raised from the ranks of the PFP to the effect that the international cadre of nations that concern themselves with South West Africa every day and that want to give us advice on that score, should be prepared to contribute financially to the administrative costs South Africa has to bear alone at present and for which no word of thanks or appreciation is given? [Interjections.] The hon. member for Yeoville may say what he likes, but I challenge the next speaker on that side to tell me what the standpoint of that party is in this regard. In any case, South Africa has a built-in inflation rate as regards that amount of R1 000 million that has to be spent unproductively each year.

Apart from that, the Republic of South Africa has a further built-in inflation rate which is not comparable with the rate in European or other countries. I am referring here to our situation of having an abnormally high defence expenditure, which the European countries do not have at this stage. Surely that is why it is unrealistic to come and tell us today that the South African inflation rate of 14% should be compared with the inflation rates of European countries. I cannot accept an argument of this nature.

I should now like to come back to the Bill. The hon. the Minister pointed out in his introductory speech that not only increases but also concessions were being introduced in this legislation. It is therefore my considered opinion that in general, businessmen welcome these concessions made by the hon. the Minister and accept that the increases being introduced are reasonable and realistic.

Firstly, I should like to refer to clause 1 and clause 14(1)(c) of the Bill. They concern the proposed amendments to the Marketable Securities Tax Act and the Stamp Duties Act. I believe that this is a step in the right direction. In the recent past we have noticed in the international market, and particularly in Australia, that there is an urgent need for a stock market and interest-bearing debentures, which has resulted in a secondary stock market. In the past, the development of this market in South Africa has been handicapped by factors that have restricted the marketability of such stock, of which statutory taxes and levies were the most important factors. I think this amendment will contribute towards considerable expansion of this market in South Africa. I believe that the proposed amendments will increase the marketability of the interest-bearing debentures, a development I believe the banks in particular would welcome, since the banks have to maintain a fixed percentage in respect of prescribed assets, due to both their present and past obligations. The banks are among the largest holders of such debentures, and they will probably remain so in the future. I believe that the increased marketability of these debentures will now enable the banks to follow more closely the rapidly fluctuating market trends and perhaps they will be able to determine them as a result. Banks that in the past have allowed debentures to constitute a considerable percentage of their asset structure, have experienced a certain amount of lack of flexibility in the past as regards their ability to follow market trends effectively, due to the required percentages being linked to the capital ceiling and their commitments to the public. I think this would be very beneficial to them and assist them greatly in introducing more flexibility into their method of trading.

In view of further developments in this stock market, I believe the international investor will also become increasingly interested in national debenture markets in South Africa. In this way we shall have more foreign investment in South Africa, which will be to the benefit of our country. To sum up, what this amounts to is that the Bill is in line with the support of our economy. This will also serve as an incentive to the economy, which is now in the process of disengaging itself from a recessionary phase.

I now come to clause 2(1)(a), by means of which paragraph (iA) is inserted after paragraph (i) of the proviso to paragraph (a) of subsection (3) of section 3 of the Estate Duty Act, 1955. This concerns a policy for a partner or shareholder. I have something of a problem here, since I do not take quite the same view of this issue as the hon. member for Port Elizabeth Central. His opinion is that if there is a relationship between the people concerned, taxability enters the picture. I inferred from the hon. the Deputy Minister’s introductory speech that the effect would be precisely the opposite. Since the hon. member and I have differing views on this, I should be obliged if the hon. the Deputy Minister would react to this. The Bill does not, however, provide that the interest actually has to be acquired, and I therefore recommend that the hon. the Minister consider inserting the words “and actually acquire it” so that any such lack of clarity of this nature can be eliminated in the case where the proceeds of the insurance are not used for the purposes for which this policy was taken out. I think this legislation will be much clearer as a result, and I recommend such an amendment to the hon. the Deputy Minister.

I should also like to refer to the proposed substitution of section 29 of the Estate Duty Act, as envisaged by clause 3. I think this is a most welcome alteration, in that it will be possible to make regulations concerning the compensation applicable when certain returns are submitted to the Master. In the past, the policy has been that application had to be made to the Master for the payment of a fee in respect of the work that had to be done. This gave rise to uncertainty, but if we could obtain a scheduled list specifying these fees, it would suit everyone and dispel any uncertainty.

The final aspect I want to refer to, is the Small Business Development Corporation, an aspect referred to in clause 19. As has been said previously, we all support the amendment being effected and which is a result of the fact that the subsidiaries concerned, which were previously subsidiaries of a company operating on a non-profit basis, were not liable to pay tax. It is a good idea to have these properties transferred to the Small Business Development Corporation from its subsidiaries. In any case, these are properties that consist of industrial sites and business and shopping complexes, which create an infrastructure in areas where it is most urgently needed. I believe that these buildings are in any event let at non-profitable returns at present, and consequently they will all incur a loss in due course. It will be possible to utilize more effectively the losses the subsidiaries of the Small Business Development Corporation are experiencing at present to the benefit of the Small Business Development Corporation in future, and consequently to the benefit of the small businessman as well, if the properties are transferred to the Small Business Development Corporation. I have one problem with this situation, however. If one takes it that transferring this property onto the name of the Small Business Development Corporation will be better in all cases, administratively as well, since it is fitting that the properties of all the subsidiaries should be distributed throughout the country and should be in the name of the Small Business Development Corporation, one asks oneself whether it would not be better, instead of retransferring all the properties of individual institutions to the Small Business Corporation, to insert an umbrella statutory provision. In all humility, I want the hon. the Minister to consider the possible amendment of this clause. Instead of the properties all being retransferred individually, the legislation could be altered in such a way that the property is deemed to be the property of the Small Business Development Corporation. In this way one could save the money it would have cost to effect the various transfers and …

Business interrupted in accordance with Standing Order No. 74.

Mr. Speaker, this has been a debate which has covered a very wide spectrum and which has in fact digressed for a long time from the legislation we are dealing with here. In a number of instances, however, certain constructive matters did come to the fore.

I want to thank hon. members on this side of the House most sincerely for their constructive contributions and for the fact that each of them replied concisely in their particular field and illuminated a few matters of importance. I should like to deal with those matters.

The hon. member for Springs made detailed reference to a number of the generalizations the hon. member for Yeoville made. He mentioned very specific ways in which the Government was, in fact, combating inflation. I thank him for that.

The hon. member for Sunnyside really had very little to say about the legislation. He did at least make one point I agree with, viz. that the Government should have an objective as regards inflation. I do not want to turn this into an inflation debate, but the Government does have an objective regarding inflation. For example, there are steps to curb State expenditure and measures in respect of housing. The Government has just made half a million houses available to the poor at a very reasonable price. The middle income group gets a subsidy of 20% on their interest on housing. There are also other measures to combat inflation, such as, for example, the control of money. The hon. member for Sunnyside agreed with me on that score, too. He said that the Government should not do these things too rapidly. We still have too large a money supply. I am saying this to the hon. member for Yeoville as well. However, these are not things one can change overnight without their having serious consequences. The Government is giving attention to productivity and training as well. Look at what the Government is spending on training. There is also the competitive aspect. There is the Competition Board. There are subsidies on foodstuffs to assist the less privileged. I could mention many more examples. We therefore have an objective, and it is being pursued positively.

The hon. member also made the odd remark that interest rates rose and fell according to whether by-elections were being held. I want to ask him whether he was accusing the financial institutions and the banks of deliberate fraud. He must tell me that.

You are saying that, not I.

The hon. member says that interest rates rise the moment a by-election is held. The hon. member should really be careful and not suck things out of his thumb.

We have had a good debate on the question of inflation as a result of a motion by the hon. member for Amanzimtoti. The hon. member for Sunnyside also participated. That day—I wonder whether the hon. member has forgotten it—he congratulated the Department of Finance on the steps it had taken. Does he remember that?

That was a long time ago.

So much for that hon. member. He will have a formidable enough task on Monday, and I do not want to make it even more difficult for him.

I am going to get stuck into all of you on Monday. [Interjections.]

I now want to refer to the hon. member for Stellenbosch. He made a valuable contribution, particularly on the diamond trade. It is clear to me that he knows a great deal about this industry. It is quite correct that the tax was imposed primarily to protect the industry. Like the hon. member, I also have my doubts as to whether it has really had that effect. However, it is true that to a country that would like to export, it is an anachronism to tax the goods it wants to export. We intend abolishing that tax. That is apparent from the legislation. We shall do so with the greatest circumspection, however. I say this for the sake of the hon. member for Yeoville, who raised that point. We shall do so only with the greatest amount of circumspection, since the Government placed a tremendously high price on the welfare of the workers of South Africa. I want to tell the hon. member for Stellenbosch that I share his sentiments that not a single gemstone should be exported from Namaqualand in anything other than its processed form.

†The hon. member for Amanzimtoti …

Are you finished with the subject of diamonds? May I ask you a question about that?

Yes.

Mr. Speaker, may I ask the hon. the Deputy Minister whether he is prepared to give an undertaking that he will consult with both the employers’ organizations and the union before he does anything in relation to this particular tax?

No, I will give no such undertaking.

That is bad.

I can give the hon. member the undertaking that anything we may do under this particular provision will be done with the greatest possible consideration for all the parties concerned. That undertaking I can give him.

I think the union will be very unhappy about that.

I want to thank the hon. member for Amanzimtoti for the very effective reply he gave to the hon. member for Yeoville. At the moment the inflation rate is showing a downward trend. It is not 14%; it is less than 13%. However, we all agree that it is still too high. I also have no difficulty with the hon. member’s suggestion that if at all possible we should bring down the marginal rate of income tax to even below the 50% it is at the moment. We have done a lot in this respect. We have brought it down from about 70% to 50% and I fully agree with him that if indirect ways of taxation are at all possible, we will certainly do our best to rather levy taxes in that way.

The hon. member for Port Elizabeth Central referred to bracket creeping and said that it suits the Government. The Government also experienced the problem of increased expenditure as a result of inflation. However, the fact of the matter is that no worker is worse off in this country on account of inflation, because in real terms wages increase faster than the inflation rate.

The hon. member raised a question in regard to two business partners taking out insurance to cover themselves for expenses if one of them were to die. I can give the hon. member the assurance that a father and son are covered in terms of the clause.

*The hon. member also referred to estate duty in general. He referred to the escalating price of land, and to a certain farm the value of which has increased so rapidly. I want to tell the hon. member that the deductions permitted in terms of the Act have increased to the same degree. As regards land that is used for agricultural purposes, and which the hon. member referred to, one could make use of the agricultural valuation of that land, which is considerably lower than the market value. What is interesting, however, is that people only make use of this in one-third of the cases where estate duty has to be paid on estates that include agricultural land. In other words, people do not make sufficient use of the methods available to them to lower that tax.

†As regards the small businessman the hon. member referred to, I can assure him that estate duty is paid by rich people and not by poor people. I do not think there is reason for many sleepless nights on that particular score as far as those people are concerned.

*The hon. member for Vasco replied very well on the question of inflation. He pointed out that hon. members of the PFP and the CP had been splitting hairs today as far as that was concerned. While I am dealing with this, I want to reply in part to what the hon. member for Yeoville had to say. He spoke about the inflationary effect the increase on stamp duties would supposedly have on an antenuptial contract. I do not think the hon. member was serious; he was simply trying to score a point off us. I want to ask him, however …

Are you married by antenuptial contract?

Yes, I am, and it did not cost me anything. The hon. member said—and the hon. member for Vasco also referred to this—that the increase from R2 to R5 in respect of the stamps on the few antenuptial contracts that are registered, would have a tremendously inflationary effect.

Only a few?

Perhaps a few thousand, since many people are still marrying in community of property, and some do not get married at all. If the hon. member were not so busy splitting hairs, I should like to ask him the following question: Is it not true that in terms of this legislation we are abolishing the tax on certain marketable securities?

What has that got to do with getting married?

It has a great deal to do with the reduced flow of money to the State coffers and with the fact that the public need pay less. Is the hon. member prepared to thank the Government for that measure?

That does not mean a thing to those who are getting married.

The hon. member was speaking about inflation in general, and any decrease in expenditure on revenue stamps on an antenuptial contract would mean nothing to a person purchasing stock. Surely the hon. member cannot argue in that way.

The hon. member for Vasco made a further point to which I should like to refer. He asked whether, when the interests of two partners are insured, it should not be added that those interests should be actually acquired, in order to be able to make use of that benefit. I think the hon. member has a point, since it is quite possible that that measure could be used as a loophole in the future. We do not want to extend this any further at this stage, however. All I am saying is that they should be actual partners, and if the circumstances of these partners should change at a later stage to the extent that they no longer need the insurance— although it was originally purchased with the bona fide purpose of acquiring coverage for expenditure pertaining to that partnership, where the partnership itself paid the premiums, and where this was not merely done through a scheme—I cannot see that we should regard this as a loophole at this stage. The hon. member also asked whether we should not introduce legislation which would provide that the property should be regarded as the property of the Small Business Development Corporation. I do not think this matter has been given attention as yet, and perhaps we could consider doing so.

Sir, I am not yet finished with the hon. member for Yeoville. I also want to say a few things to him with regard to the question of taxation. I refer to the question of indirect taxation. During the debate today, as well as during the debate on the previous Bill, the hon. member for Yeoville only spoke about inflation. Of course, I do not blame the hon. member. I only hope that he will also eventually learn something, so that he can come up with something really worthwhile as regards solving the problem.

You cannot teach me anything more about the NP.

If only the hon. member would listen, he might learn something. As regards the question of indirect taxation, it is an open question as to whether it is at all inflationary. It is an open question as to whether sales tax or surcharges are at all inflationary. Surcharges and sales tax are both indirect taxes. It is an open question whether they are inflationary. I would concede that they do, in fact, result in price increases. That is correct. However they have another effect, and that is that they reduce the amount of money available for people to purchase things with. Of course, this again has the effect that prices are forced down.

It does not work that way at all. That is the argument of the Financial Mail. It is as old as the mountains but things do not work that way.

Mr. Speaker, I was not aware that that was the opinion of the Financial Mail, too. In that case, at least I find myself in better company than the hon. member for Yeoville. [Interjections.]

Mr. Speaker, I infer from the amendment moved by the hon. member—although he did not refer to it directly—that he is of the opinion that the increase in stamp duties will supposedly fan the flames of inflation to a considerable degree, and that that is the reason he is opposing the present legislation. When the hon. member speaks of increased inputs, it seems to me as if he is really opposed to the small stamp duty on cheques. I honestly want to say that the hon. member must not take it amiss of me when I reiterate that this really seems very much like hairsplitting. In any case, I think the hon. member for Vasco dealt with this matter very thoroughly.

The hon. member is fighting with us about inflation. He is arguing and fighting today, but tonight he will thank his lucky stars that the NP is in power. The hon. member came and made a great fuss about inflation here, but tonight he will thank heaven for inflation, since without it all his arguments would fall away. [Interjections.]

I believe that, in general, we have had a very good discussion on a piece of legislation of which the substantive aspects have been analysed in depth by hon. members. Of course, I do not take it amiss of them for trying to smuggle inflation in through the back door.

Question put: That all the words after “That” stand part of the Question.

Question affirmed and amendment dropped (Official Opposition and Conservative Party dissenting).

Bill read a Second Time.

Mr. Speaker, I move—

Well, then we must have a debate on it.

Order! The motion has been put that the Bill be not committed. Any objections?

Yes, I want to debate the clauses of the Bill.

In that case I now ask the Deputy Chairman to take the Chair.

Committee Stage

Clause 1:

Order! I put clause 1 of the Bill, and I want to say at the outset that no discussion will be permitted, since the time allowed for the Bill in terms of Standing Order No. 74 has already expired.

Clause agreed to.

Clause 2:

Mr. Chairman, we have certain amendments to the clauses of this Bill on the Order Paper. Will you not consider them? They do not have to be debated but I think they should be put.

Order! I want to refer the hon. member for Yeoville to Standing Order No. 155 which stipulates that amendments cannot be put when the time allotted for the debate has expired.

Clause agreed to (Official Opposition and Conservative Party dissenting).

Clause 4 agreed to (Official Opposition and Conservative Party dissenting).

Clauses 8 to 17 agreed to (Official Opposition and Conservative Party dissenting).

House Resumed:

Bill reported.

Bill read a Third Time.

Mr. Speaker, I move—

Agreed to.

Mr. Speaker, I move—

Permit me, before explaining the contents of the Bill, to outline briefly the special role of income tax in the broad fiscal policy and to comment on reform in the field of this tax.

A tax on income is and remains that primary constant source of financing of State expenditure, and judiciously handled, it can be used as an effective economic regulator. It is adaptable and has been described as “the most equitable of all taxes”.

Because this is such a powerful and flexible instrument in the national economy, it should be kept at the most effective level at all times, to keep it productive, on the one hand, and, on the other, to adapt it to changing circumstances and to ensure fair and equal treatment of taxpayers.

In order to put the importance of income tax in State financing into perspective, I want to refer you to the report of the Auditor-General for the 1981-’82 financial year and to the estimates of revenue furnished in the recent budget speech. In the 1981-’82 year, income tax contributed 55% to the total ordinary revenue of the State, and it is estimated that it will contribute 57,9% during 1983-’84.

Although indirect taxation plays an important role and will become increasingly important, it is subject to certain limitations, because of its sensitivity to pressure, and it will never be able to play a dominant role in our society, while income tax will always be a stable source of revenue and can be adapted to the means of the taxpayer.

Taxes are not imposed arbitrarily, and the principles of a good system of taxation, as advocated by Adam Smith in his Wealth of Nations, still apply, sometimes in a somewhat modified form.

The objective which should be pursued in the on-going process of reform, which is still continuing, should therefore be to broaden the tax base and to protect that base against erosion, so that increased fiscal productivity can be brought about in this way rather than by raising tax rates.

It is necessary to guard against small inroads on this source of revenue, for although any single request for accommodation or for a concession, no matter how deserving, may seem harmless in itself, it creates precedents for equally deserving cases, leading to more and more inroads being made, with the result that the revenue from this form of taxation declines and the tax has to be increased, and then we find ourselves back in the same cycle which must be guarded against at all costs, namely declining revenue, higher taxes, more concessions, etc.

How have we fared so far? Mr. Speaker, I am proud to be able to say that where it has been possible, having regard to budgeting requirements and in the light of the growth in tax receipts resulting from a higher gold price or new sources or better exploitation of sources, we have not hesitated to make concessions over the past year.

I want to mention a few—

1. (a) General lowering of the rate of taxation: the maximum marginal rate has been lowered from 60%—or 66%, including the loan levy—for the 1978 year of assessment to 50% for the 1984 year.
2. (b) The level at which the maximum rate is reached has been increased from R28 000 in 1978 to R40 000 in 1984. This has reduced the steepness of the progression and benefited everyone.
3. (c) The thresholds for liability have been increased, with regard to—

1. (d) It has to a large extent been possible to counteract the effect of fiscal drag by means of the tax relief which was granted before 1984 and carried through into 1984.
   For example: A married man whose salary was R5 000 in 1978 will find, if his salary keeps up with inflation and if he earns R10 400 in 1984, that although his income before tax has increased by 108%, his income after tax had increased by 122,1% over this period. An income of R10 000 in 1978 which has increased by 108% will be on more or less the same footing before and after tax, while an income of R30 000 before tax in 1978 will show an 11% after-tax improvement in 1984 over the inflation rate.
2. (e) Retired persons and those who are about to retire have not been forgotten, and the reason for this is that they will mostly have a fixed income after retirement and will therefore need a wholly or partially untaxed nest-egg in the form of lump sum benefits to invest in order to supplement their income.
   During the period which I am reviewing, i.e. 1978 to 1984, which is also the period during which more purposeful attempts at tax reform have been and are being made, we have granted, in addition to the increased rebates and medical deductions to elderly persons over the ages of 60 and 70 years, increases in the untaxed portions of lump sum payments made to persons upon retirement by their employers or from pension funds.
   I shall mention an example. When a person retires upon attaining the age of at least 55 years in the case of a man and 50 years in the case of a woman, and his employer pays him a gratuity either in lieu of holiday leave not taken during his career or as a token of appreciation for outstanding or long service—the so-called “golden handshake”—the tax-free portion of such a gratuity has been increased from R12 000 in 1979 to R30 000 in 1983-’84. In addition to this direct gratuity, an employee may also receive a lump sum benefit or gratuity from a pension, provident and/or retirement annuity fund of which he is a member. The untaxed portion of such lump sum is calculated according to formulas which take into consideration the period of membership of a fund and other factors. The formulas have been considerably improved since 1979.

I want to emphasize that I am not mentioning these improvements and the relief that has been granted in a spirit of boastfulness, but rather in a spirit of gratitude for the fact that our financial position is so sound that the Government has been able to do this.

But reform is not simply a question of concessions and relief; it also entails a continuous endeavour to improve the effectiveness of our tax system by means of effective legislation.

The stability of a tax system lies in the consistent imposition of taxation and in the just and impartial administration of the tax laws, and especially in such a measure as this one which we are dealing with. Every taxpayer must be assured that he and all other taxpayers receive the same tax treatment when the circumstances are the same.

†And here, Sir, I must unfortunately sound a discordant note. The tax avoidance industry is probably one of the fastest growing industries in the country. It is a trite saying that every person has the right to so order his affairs as to escape paying taxes. There is no sentiment in tax and there is no reason why any man should pay more than is rightfully due by him. But by the same token, the revenue authorities must seek means of combating avoidance in order to stop the erosion of the tax base and thereby protect the general body of taxpayers from increased tax rates to make good the losses suffered through large scale tax avoidance. I am sure that hon. members on both sides of the House will endorse the sentiments that tax avoidance should be combated.

I want to assure the House that it is not the intention to stifle ordinary commercial practice, but engineered or contrived situations that have no commercial purpose in themselves other than reducing taxes, cannot be counternanced. In this Bill a few measures are proposed to combat some of these schemes which I trust will find general support.

Mr. Speaker, with their customary thoroughness which we have got so used to that we take it for granted, Inland Revenue has once again prepared a comprehensive and informative explanatory memorandum on the contents of the Bill which has been distributed to all hon. members. I will therefore not dwell on each provision, but will confine myself to those provisions about which there may be some doubt and to give some background to some of the proposals contained in the Bill.

A considerable part of the Bill is devoted to housekeeping measures. Some provisions give effect to proposals contained in the budget speech, others are aimed at modernizing our tax system, while quite a few are aimed at plugging loopholes and thereby making the law more effective.

Firstly, I wish to deal with those proposals relating to our senior citizens and to measures relating to retirement benefits.

Clause 4 gives effect to the proposals for an increase in the additional rebate relating to persons over the age of 70 years. This will have the effect of raising the threshold at which their liability for income tax can arise to R6 800 for a married person and to R5 850 for a single person. It has always been Government policy to assist taxpayers by means of tax concessions to make better provision for their retirement so that they could be independent in their senior years and maintain a decent standard of living. I am thankful that we were once again able to afford further assistance in this regared.

Clause 9 provides for a bigger tax-free portion of a gratuity paid by an employer to an employee on retirement, which he can then invest to augment his income after retirement. This measure must not be confused with the gratuity or lump sum payable on retirement by a pension or retirement annuity fund, which I will deal with presently.

The provisions realting to the widening of the basis of deductibility of contributions to pension and retirement annuity funds contained in clauses 10(1)(j) and 10(1)(1) will enable taxpayers to bolster their retirement income against the inroads of inflation.

The improvement in the maximum tax-free lump sum benefits from pension, provident and retirement annuity funds is dealt with in clauses 46(a) and (b) and 48 of the Bill.

Hon. members will observe that the maximum tax-free amount has been increased to the greater of R80 000 or an amount equal to R3 000 multiplied by the number of completed years during the whole of which the taxpayer had been a member of one or more pension, provident or retirement annuity funds. The R3 000 rule will be of great value to taxpayers who were members of pension, provident or retirement annuity funds for considerable periods. Hon. members will observe from the explanatory memorandum how periods of membership common to all funds of which the taxpayer is or was a member are to be dealt with.

Hon. members will notice from the proposals contained in clauses 40, 57 and 61 of the Bill that further improvements have been effected to the final deduction system introduced last year.

First of all the new system does not exempt persons with incomes of less than R7 000 from income tax (which limit clause 61 proposes to increase to R8 000 as from the 1985 tax year), but merely will not require certain persons in this income category to complete income tax returns.

Deductions of PAYE from remuneration continue and it will negative the efficacy of the whole system if small amounts must be collected or refunded where the PAYE deductions fall short of or exceed actual liability. The deductions have been so structured as to give as accurate as possible a result, but there can be many permutations in deductions and circumstances to cause a divergence from the completely accurate balancing of tax deductions from eventual liability. While it is not the intention to withhold any substantial amount overdeducted as a result of changed circumstances or to neglect to recover amounts underdeducted, I am of the opinion that the ends of fiscal justice will be served and the efficiency of the tax gathering machine improved if small divergencies are ignored. Clause 40 therefore proposes that assessments need not be issued under the system if the undercollection amounts to R10 or less and that no refund need be made if amounts of R2 or less are overdeducted.

I now come to a few measures aimed at closing loopholes. I wish to deal firstly with cessions of rights to income which are dealt with in clauses 7, 29, 31(1)(a) and 33 of the Bill. Hon. members are probably aware that donations, except those specifically dealt with in terms of section 18A of the Income Tax Act, i.e. those made for educational purposes as described in that provision, are not tax deductible in terms of section 23(b) read with section 23(g) of the Act.

The ordinary man makes his donations out of his after-tax earnings, but “the astute and the ingenious”, who have certain identified income-earning assets, have seen a way around the non-deductibility by merely ceding the income while retaining ownership of the asset. By this short-hand delivery they have sidestepped their tax liability on the amount of income ceded, and have made what is tantamount to a tax-subsidized donation.

Mr. Speaker, clause 7 not only brings the ceded income back into the tax net, where it rightfully belongs, but, as we are aware that in some cases the cedent may have covenanted to donate for a number of years, provision is also made that he may recover any tax payable by him on the ceded income now taxed in his hands, from the person or body to which it is ceded. This provision will ensure that all taxpayers receive the same treatment in regard to donations.

It has been the long standing policy to allow certain capital expenditure incurred by mining and farming enterprises as deductions in the determination of the taxable income of the taxpayer concerned. For many years now any losses suffered on farming activities as a result of such deductions, are not set off against non-farming income but are carried forward for set-off against future farming income. This is sound policy, as the type of deduction is peculiar to the determination of the taxable income from farming owing to the nature of the activity carried on.

Although, as I have said, mining also enjoyed tax deductibity of certain capital expenditure, the limitation applicable to farming capital expenditure did not, however, apply to mining activities.

During the past years the practice of one type of business making use of the tax allowances of another in order to reduce its own tax base, has become more and more prevalent, and in this regard the practice has developed for enterprises unrelated to mining to become partners in mining enterprises, and then to utilize losses resulting from the allowance of capital expenditure to the mining enterprise in determining their taxable income derived from non-mining income. The proposal will not affect mining companies as such but will affect non-mining companies who are involved in a mining enterprise, and then only as regards their non-mining income.

There are other anti-avoidance measures in the Bill, such as those contained in clause 8(c) relating to abandoned leased property on termination of the lease, and proposals regarding the tightening up of provisions relating to lease premiums on certain assets— clause 10(1)(a), (b) and (c)—which are fully explained in the memorandum.

Measures relating to trading stock—clause 20—and exporters’ allowance—clause 11— are necessary, on the one hand to bring the law into line with commercial practice, and, on the other hand, to stop an allowance from being used for a purpose for which it was not intended.

My last comment relates to the termination of the deduction presently allowed in respect of expenditure incurred by a taxpayer on certain post-graduate study courses— clause 15 of the Bill. The termination will apply in respect of expenditure incurred on any post-graduate study course in respect of which studies are commenced on or after 1 March 1984.

You may recall, Sir, that more than 10 years ago, the Franzsen Commission examined the merits of the deduction allowed for income tax purposes for post-graduate study expenditure in certain fields of study. The commission, for very good reasons advanced by them, came to the conclusion that there was no justification for the perpetuation of this concession and that it should be withdrawn. It is always difficult to withdraw a concession once it is given, especially this one. But, Sir, tax is a hard fact of life and the granting of the specific concession in the first instance was in fact contrary to the general practice based on the law as interpreted by the courts. It was also discriminatory and led to strong representations from post-graduate students in disciplines other than those specifically catered for in the law. I then asked the Standing Commission on Taxation Policy to re-examine the matter and they, after thoroughly considering the pros and cons, recommended that it be withdrawn. I have, after careful consideration, decided to accept the commission’s recommendation. Post-graduate students who have already embarked on an approved post-graduate study course will not be affected as the withdrawal will only apply to post-graduate study courses in respect of which the taxpayer’s studies commence on or after 1 March 1984.

Mr. Speaker, I do not think that the Government can be accused of not being sympathetic to the improvement of educational qualifications if regard is had to the far wider concessions allowed in regard to donations to educational institutions being tax-deductible, to the exemption of bursaries from tax or to the generous training allowance given for tax purposes. This covers educational and training facilities and programmes for the vast majority of the total population.

I have pleasure in commending this Bill to the House.

Mr. Speaker, when the hon. the Deputy Minister says that he has much pleasure in commending this Bill to the House, he must be the only person in South Africa who is able to derive any pleasure from it. I do not believe that many of the features of this Bill are desirable. In fact, I have a great deal of fault to find with it.

I want to say at the outset that we are indebted to the officials of the department for their explanatory memorandum as well as for the assistance they always give us in regard to such legislation. The problem is that it presents a great deal of difficulty when one has such nice people having to implement such an unacceptable law. It would be much better for us if they were not such nice people because it would make our job that much easier.

However, I cannot say the same thing about this debate. It is quite ridiculous that two hours are allocated for a debate on one of the most important laws affecting every single South African, although it contains a mass of technical information that could not be debated during the budget debate. Of that period of two hours, more than half an hour has been taken up by the hon. the Deputy Minister in introducing the Bill and that leaves one and a half hours in which South Africa has to debate what must be a most important measure in relation to which the Opposition has been deprived of a reasonable opportunity to debate its provisions. [Interjections.] I want to register our protest immediately in respect of this fact.

The debate on this Bill is the occasion for the assessment of the Government’s fiscal policy. The questions one has to ask are: Where does one tax, where are the incentives to be given and how are the fiscal instruments that are available to be used. On the basis of those issues we propose to test this measure and to demonstrate that this measure fails.

The hon. the Deputy Minister referred to the question of indirect taxation and the way in which the balance had changed. What is, however, important is that, while in normal circumstances the arguments which the hon. the Deputy Minister uses about the desirability of indirect taxation are fine and one has no quarrel with them, in the present situation in South Africa, where there are tremendous gaps in income among different people in the country, the reality is that indirect taxation is a heavier burden on the poorer people, the lower-paid people in South Africa, because they have to spend a greater proportion of their income whereas the richer people do not have to spend that proportion of their income. Therefore, in many cases the people in the lower income group have to spend the whole of their income on living expenses whereas the savings take place mainly in the upper income group.

In normal circumstances it is completely acceptable if one brings about a more equitable distribution between direct and indirect taxation, but in the present situation in South Africa—we shall debate this in detail when we discuss the Sales Tax Amendment Bill in the near future—it is in fact not correct because it is prejudicial to the lower income groups of South Africa, it is prejudicial to the working person in South Africa, it is prejudicial to the pensioners of South Africa.

Let us take a simple example. If one has no indirect taxation, no consumption taxes, obviously the pensioner’s money goes further in regard to purchases, but the moment one has consumption-type taxes, then he is prejudiced. It should be remembered that the pensioner does not pay any income tax if his income is within certain limits.

This form of taxation is an acceptable form of taxation in a different type of society, but in our society it discriminates against the lower income groups. That is where we differ in principle with the hon. the Deputy Minister and that is why we cannot take pleasure out of taxing the lower income group to their disadvantage.

The hon. the Deputy Minister quoted a lot of carefully selected statistics by comparing the 1978 year with the present year. The real test of the wealth of a country, however, is in the growth of its gross domestic product, not in absolute terms but in per capita terms. I want the hon. the Deputy Minister to tell us what the growth is in per capita terms of the gross domestic product at present and what it has been over the years he has been talking about. At the moment the average South African is getting poorer because there is no growth at all; there is in fact a negative growth of well over 3%, and that is the reality of it. [Interjections.] Therefore, if one wants to compare income, one has to compare the balance of disposable income which is available in comparative real terms, because that is the true test as to whether people are better off, that should be the basis of comparison and we should not have the kind of juggling with figures that we get from the Government.

Let us talk about tax avoidance to which the hon. the Deputy Minister referred. The House is against tax evasion in toto; not a single hon. member will get up to support it. It is, however, perfectly proper and legitimate for anybody to regulate his affairs in such a way as to pay the minimum amount of tax. That is an acceptable principle. It is also perfectly proper for the hon. the Deputy Minister to introduce legislation to close loopholes. What is not proper is to seek to do it retrospectively. That is not proper because one cannot allow people to regulate their affairs legitimately and legally and then retrospectively make them liable for tax. That is not a proper action on the part of the Government and I shall demonstrate that at least in some respects in this Bill this is what is taking place.

Let me try to analyse a couple of other things in respect of this Bill. In the first instance I want to ask the hon. the Deputy Minister when he replies—he has unlimited time when he replies and, because the time he uses then does not come out of the two hours, he should spend his time in replying to and not in introducing the legislation—to tell us what is in the Bill for job creation in South Africa which is the major issue that faces us in South Africa in respect of the economy. What is there in this Bill? I should like to indicate, for instance, that, while provision is made for the abolition of the concessions for post-graduate training, we have asked for an extension of those concessions. We consider that, if a man is prepared to educate himself further at his own expense, it is not only a benefit to him, but also a benefit to South Africa. What the Government is doing is that it is giving other people incentives to train somebody, but when someone wants to train himself, it now takes away the incentive. It does not make sense. I thought this was a free enterprise society, but every day the contrary is proved. When a man wants to train himself for his benefit and for the benefit of the country by postgraduate training, instead of extending the concession, as we asked, we get exactly the opposite from the Government, we get a retraction from it.

If one looks at the Government’s policy in regard to the question of incentives to create jobs, one finds that the Government has now decided to do a very simple thing. It only wants incentives in the decentralized areas. Gradually we are going to have a contraction of everything else. I can also refer to the abolition of the financial rand. The foreign investor could invest in South Africa and could actually get a discount on his investment. He could do that wherever he invested, whether it was in a decentralized area or not. Now, that having been abolished, there is no incentive for him there. What is really happening is that the Government is channeling everything for ideological reasons into the decentralized industrial areas. If that is so, then the challenge to this Government, when in fact it is not fulfilling the real needs of South Africa, is to create the maximum number of jobs at the cheapest possible cost to the country. Unemployment is not only one of our greatest problems now, but it is increasingly going to be the problem that South Africa is going to have to deal with in the years that lie ahead. If the Government wants to play political games and thereby not solve the problem of creating jobs, it is letting down the children who are now being born in South Africa because they will be left with this problem to solve because the Government is not doing anything about it today. Sir, if one wants to govern a country, one cannot put the problems of today onto the shoulders of one’s children for them to solve tomorrow. One should be ashamed if one tries to do that in this kind of situation.

Let us also take another example, namely the question of trying to provide housing. Everybody talks about housing. The incentives which were given in a previous budget in respect of the building of flats and dwelling houses are not effective. I am pleased the hon. the Deputy Minister of Community Development is here because he can tell us that in private enterprise nobody is really regarding those incentives as adequate in order to build houses for the lower and middle income groups. The incentives are not adequate. I do not understand why the Government does not get to grips with the problem in that context. If the Government wants free enterprise to get involved in this, free enterprise should have the incentives to do it. With great respect, the present housing incentives are utterly inadequate.

Let us take the position of married women. This Government continues with its policy of not seeking to encourage the skilled married woman to go and work. We say again and again that the Government should not tax in this way. This year’s budget does not give any relief at all. This year we have done nothing for married women. Normally we try and improve matters a bit, but this year nothing was done at all. We on this side of the House take the view that the married woman should be taxed separately. We feel that the present system of taxation is not acceptable and not fair. It is discriminatory against the married people of South Africa.