laid upon the Table:

Mr Chairman, I move the motion as printed on the Order Paper in my name, as follows:

1. (1) That notwithstanding the resolution adopted on Friday, 13 June, the hours of sitting with effect from Wednesday, 25 June, shall be:
   09h00 until the House adjourns upon its own resolution; and
2. (2) that the House at its rising adjourn until Monday, 18 August 1986, at 14h15: Provided that during such adjournment Mr Speaker may accelerate or postpone the date for the resumption of business.

Mr Chairman, we will be opposing this motion and I wish to advance a few reasons why we are concerned about this.

Firstly, the urgency in legislation has been to honour the promise of the State President. In fact, the very first timetabled promise of reform that the State President has ever given was that by 1 July the pass law system will be abolished. We as a party welcomed the fact that the State President had issued a timetable in this regard and we were keen to co-operate in that sense. However, I believe that the State President has done the honourable thing. He has met his obligations concerning that promise to South Africa and to the international community. Therefore I cannot see why it is necessary for us to persist with this legislative programme when the House will be meeting again within six weeks’ time.

However, there is a bigger issue at stake here, namely the whole issue of the role of Parliament itself in these circumstances. The function of Parliament is to act as a conflict-resolving institution. That is why we as a party welcome the presence of the hon member for Sasolburg in this House. It is not that we agree with him but the presence of the hon member for Sasolburg means that the people on the extreme right have a voice in this Parliament. [Interjections.]

Parliament is in crisis at the moment because of two factors. One is that the President’s Council has approved Bills which had been rejected by the majority of members of Parliament and by two of the Houses of this Parliament. Furthermore we have a state of emergency in force in this country at the moment. I believe both these incidents reflect on the very root of parliamentary government in this country at this time.

If the governing party is serious about reform—we do not doubt their bona fides and will be the first to admit that they have made certain changes—then I believe we have to consider what is going on in our country as well as in this House. We have a state of emergency and what is effectively a constitutional crisis as a result of the passing by the President’s Council of the security Bills, and here we have to legislate by exhaustion, as a previous Chief Whip of this House described it. The hours which are proposed in this resolution are intolerable if we want to do decent work.

I do not have to tell you or hon members, Mr Chairman, that most of us have other responsibilities regardless of commitments in respect of the July holidays. It is the view of this party that if there is one time when this Parliament should remain in session it is now when the emergency regulations are in force. I believe if this Parliament is going to be relevant lists of people being detained should be published every day by the Ministry of Law and Order so that Parliament can at least be seen to be fulfilling its correct function in a democratic society. The sovereignty of Parliament as a democratic institution is either accepted or not. This kind of resolution, I believe, just damages our credibility, our function and our role as a parliamentary democracy. What has actually happened, is that we have suspended democracy in South Africa. Why do I say that? It is because we have excluded the majority of our people from participating in the conflict-resolving mechanisms of this Parliament, and because they are on the outside they are like a great tide washing against this institution. That is why we have a state of emergency in this country, and it is precisely in the present situation that this House should actually carry on sitting normal hours in order to debate and to deal with those particular problems.

I believe that if all of us as hon members of Parliament are serious about retaining the credibility of this institution as a conflict—resolving mechanism for our society, we should seek to keep it involved in that very process. To come forward with this kind of proposal, however, makes an absolute mockery of this institution and we shall be voting against it.

Mr Chairman, the CP cannot support the motion by the hon the Leader of the House either. The hon Whip of the PFP said the State President had promised the Black people that the pass laws would be abolished by 1 July. The hon the Leader of the House gave an undertaking to hon members of the House of Assembly that we would adjourn at 12h45 on 20 June.

The promise by the State President clashed with the undertaking given by the hon the Leader of the House, and these pass laws were abolished after 12h45 on 20 June. They were in fact abolished during the past week when this House had to sit till 22h30 or 23h00 every evening, while standing committees also had to sit.

I am sorry but I should not like to quarrel with the hon the Leader of the House because he was the man that gave the undertaking that we would adjourn at 12h45 on 20 June.

He unfortunately fell ill but we are pleased that he is back. Before his return his undertaking was broken because contentious legislation, which profoundly affects the continued existence of Whites in this country, was being put through in the dying moments of this part of the session. [Interjections.] The Regional Services Councils Amendment Bill appears on today’s Order Paper. The motion is for the House of Assembly to meet tomorrow from 09h00 and to adjourn only when the business has been disposed of. The Regional Services Councils Bill was introduced in the House of Assembly during the dying moments of the 1984 session. This legislation was introduced before the House of Assembly during the dying moments of the 1985 session, too. In 1986 that process was repeated once again. [Interjections.]

The CP, the PFP and the NRP requested in the standing committee that evidence be heard in order to amend the principal Act because far-reaching financial measures, which would affect John Citizen’s pocket, were being implemented. A multiracial local authority which is to collect its own funds must be created. [Interjections.]

We shall, it is true, discuss the Bill later, but I should like to point out the hon the Chief Whip of Parliament that legislation concerning the regional services councils has been introduced before the House of Assembly in the dying moments of the session for three consecutive years. Because this legislation has been debated in the dying moments of the session every year, it has produced only rotten legislation because not a single regional services council has yet come into being.

Now they want to do it again.

This is one of the most important reasons why I say that hon members of this House should not be overloaded in this way from morning till midnight with decisions on important matters such as this one. The CP was right during the two previous years in moving that we should rather have longer sessions, if necessary, so that our people would be fit and fresh when decisions such as this one have to be taken. We warned that side of the House but they took decisions regarding regional services councils in their sleep. This is also the reason that not a single regional services council has come into operation thus far. I therefore want to request the hon the Leader of the House to ask the hon the Minister of Constitutional Development and Planning to keep this legislation back for three or four weeks so that the standing committee can consult the South African Agricultural Union, the Afrikaanse Handelsinstituut and Assocom, and these bodies can give evidence. It is already envisaged that the legislation I have just mentioned will be amended again in August.

The CP is fit and fresh, even now in the dying moments. We are not complaining about this. We are fit and fresh but that side of the House takes decisions while they are fast asleep. I have already given my reasons for saying so.

Important legislation has been dealt with in these dying moments, and it has been steamrollered by Parliament during the past week, after we should already have adjourned. Provincial councils as White local authorities have been replaced by multiracial executive committees and an administrator, who could also be Black. The restoration of citizenship to 1,7 million Blacks from independent homelands in the past week, by that sleeping party…

Order! The hon member must please get a little closer to the motion before the House.

Sir, I am trying to indicate that important legislation, just as in the case of the legislation regarding regional services councils previously, was piloted through Parliament during the past week, and in a year or two hon members could possibly be just as sorry as they are now about the legislation on regional services councils. However, it could then be too late. Regional services councils have not yet come into operation, but provincial councils have been abolished, citizenship has been restored to Black people, and influx control has been abolished. Legislation regarding a uniform identity document has also been piloted through Parliament. Legislation affecting this people very closely has been piloted through Parliament while the NP sleeps, while that side of the House cannot wait for us to adjourn so that they can go and make biltong. [Interjections.] Seven times in the course of this session there has not been a quorum in this House. This was the case again yesterday evening. [Interjections.]

Were all of your men here all the time?

Three hon members from the Conservative Party were in the dining room last night. [Interjections.] The National Party has 126 hon members and they are not even able to ensure that 50 of them are in this House at the same time. [Interjections.] However, they want the House of Assembly to start sitting at 09h00 tomorrow morning, and to sit right through, possibly even till Friday. [Interjections.] Yes, this could even go on till Friday!

We shall just keep you here till Saturday!

Meanwhile the National Party is not even able to have a quorum in this House during normal sitting hours. [Interjections.] Yes, they are not able to maintain a quorum during normal sitting hours. [Interjections.]

Quite true!

It is because there is no discipline among their Whips!

Mr Chairman, the discussion of legislation with regard to regional services councils also lies ahead of us. Then there is also still legislation concerning the development of Black communities. In the time between 09h00 tomorrow morning and the time we adjourn one day we have to discuss that legislation and take important decisions in connection with a measure in terms of which ownership rights are to be granted to millions of Black people in White South Africa.

Hear, hear!

Mr Chairman, the PFP is shouting “hear, hear!” Ten to one they will not actually participate in that debate either. They will simply praise the Government for what it is doing and then let that suffice. My own residential area, however, has ceded 633 000 morgen to Bophuthatswana so that that people may have a fatherland. Millions of rands have been spent in the homelands. Nevertheless, legislation must be adopted by this Parliament to give ownership rights to Black people here in the Western Cape as well, and even in Crossroads too, to which the hon the Deputy Minister of Constitutional Development and Planning has just referred.

Mr Chairman, then there is also still the Promotion of Local Government Affairs Amendment Bill in terms of which Black people are being brought into local authorities. There is the Abolition of Development Bodies Bill whereby White development bodies are being abolished while their functions are being transferred to multiracial local authorities such as regional services councils and multiracial provincial executive committees. Furthermore, there is the Joint Executive Authority Bill for kwaZulu and Natal. These are important items of legislation which intimately concern the continued existence of my people. I can, however, guarantee all those hon members on the other side that they are going to be parrots and vote with the hon the Leader of the House. Afterall, they also have to support this motion that we should sit from tomorrow morning onwards, perhaps till Wednesday, Thursday or even till Friday.

And Saturday!

Yes, this could even go on till Saturday. [Interjections.] Those hon members of the National Party, who are not even able to maintain quorums in the House of Assembly, may as well know that there is a fit and fresh party on these benches! [Interjections.]

We are not going to waste time, that we promise. [Interjections.]

Order! Hon members are making it difficult for the hon member for Kuruman to deliver his speech.

The CP is not going to waste time, that we promise. That hon the Deputy Minister of Agricultural Economics and of Water Affairs, who is now berating us so, once said that the hon the Minister of Constitutional Development and Planning was a liberal. He was quite right.

Stop the reproaches; you are wasting time.

I say, Sir, that the CP is not going to waste time, but we shall discuss this very important legislation if we deem it necessary. We are doing this for our people, whose interests are close to our hearts. We shall protect the interests of that people here, and we shall guard over them. [Interjections.]

I am therefore now appealing to the hon the Leader of the House to deliberate once more on this matter with the hon the Minister of Constitutional Development and Planning. I do not believe that much will be lost if these Bills are dealt with only in August, during the second part of this session. [Interjections.] I therefore ask the hon the Leader of the House to go back to the hon the Minister of Constitutional Development and Planning and request that he keep back these Bills. They are in fact very important Bills that we have to deal with. I shall then support the hon the Leader of the House if he moves that we adjourn tonight or tomorrow so that the hon members of this House of Assembly, who have worked hard during this session, may go and rest during the recess.

I am very sorry, Sir, but we in this party cannot support this motion at all.

Mr Chairman, I realise that in this House the maize lobby is enormously powerful and the wine lobby is also powerful. We also have a wheat lobby and even a small sugar lobby. However, at this time of the year the most powerful lobby in this country is the biltong lobby. I now appreciate the expression and I thank the hon member for Parys for identifying them. They should have a badge and their motto should be: “Biltong baffles brains”! That the hon the Leader of the House can even seek to move a motion such as this before us today completely baffles me. How he can expect members to sit these hours, and how he can expect the staff of Parliament to work under these conditions heaven alone knows. I just cannot comprehend that he can really be serious when he does this sort of thing.

We are not concerned in this party about how many days we sit in this House. That is of no consequence. We are perfectly happy to sit here, to work, to do our duty and to accept our responsibility, but we question the hours that we are expected to sit on each day. We question the ability of people… [Interjections.] If the hon member has biltong for brains perhaps he has the ability to do nothing and not to think about anything! When one does not have anything between one’s ears one does not need to think! [Interjections.] Anybody in this House who is serious about wanting to do his duty towards his country must consider the responsibility thereof and the fact that he needs the time for preparation in order to do justice to that duty and to his country. That does not only apply to members sitting in this Chamber, but also to the staff whom we ask to tend to our needs—the Hansard reporters and the other staff members in the corridors of Parliament all around this Chamber.

What do we get from this hon Minister? We get an almost contemptuous attitude, this cavalier attitude—this is another week, so let us have another bright idea about how long we are going to sit and what hours we are going to sit! It is a good old-fashioned case of: Pull up the ladder, Jack, I am aboard—pull up the ladder, do not worry, because I am all right! We do not worry about anybody else either. The Bills remaining on this Order Paper are important, but I want to tell the Leader of the House that I was deeply disturbed when I arrived here at 14h10 to have before me the prospect of item 11 on the Order Paper possibly being dropped, to be debated in August. I just want to tell the hon the Minister that the people of Natal will not forgive him if he does that, because that Bill is the subject of an agreement entered into between the people of kwaZulu and the Natal Provincial Administration. It is an agreement that ties in with the Provincial Government Bill which has been passed by this House and by the other two Houses, and furthermore it is something that is owed—to say the least—to the people of Natal. If he is going to adopt this cavalier attitude towards Natal on this issue, let me tell him that he is going to find himself in a measure of trouble. [Interjections.] I say this because this measure is vitally important because of its tie-in with the provincial councils. The final insult to the provincial council system would be the adjournment of this House until August before we dispose of the Joint Executive Authority for kwaZulu and Natal Bill. That would be the ultimate insult that he could heap upon the heads of people who have enjoyed and served the provincial system in this country for the past 75 or 76 years.

We cannot in any way support this cavalier attitude of either the hon the Minister or his party behind him. We regret it but until they manage to get a little bit of the biltong dust out of their heads and allow for the re-introduction of some brain matter we will not be party to it.

Mr Chairman, the HNP is quite unable to support this measure, either. What has actually shocked me recently is that one can best compare the times in which we now live, in which the Government is introducing far-reaching constitutional changes, to the period from 1948, 1949 and thereafter. The NP at that time, too, had to take drastic steps which had the country in turmoil. I would not say that those steps were as drastic as the ones we have today, but for the people concerned—I am thinking specifically of the English-speaking community—they were revolutionary. At that time there was never the accumulation of constitutional measures there is now.

How do you know that?

The hon member asked how I knew that. At that time I was a member of the editorial staff of Die Burger, and those of us that were interested in politics went through these things every day with people such as the late Schalk Pienaar, Prof Piet Cillié and so on. I remember it as if it were yesterday. There were a few nighttime sittings where it was big news that the men brought blankets and pillows with them, but there was no accumulation, one after the other, of drastic measures affecting the constitutional situation in the country, as is the case now.

Now one debate runs into the other, and there is talk of a repetition of arguments and so on, which is unhealthy. Any political philosopher will tell one that when one interferes with a country’s constitutional measures and tampers with established institutions and established political customs, one should be doubly careful. It creates uncertainty and possible confusion. One can then least afford to treat measures such as these, which refer to the provincial councils, kwaZulu and so on, as though they should simply be pushed through like any other Bill.

These things should be considered separately and thoroughly. After every debate one should actually first have time to consider the measure and to see it in perspective before going on to the next debate, because to trifle with a country’s established constitutional customs and political institutions, particularly in a democracy, is to trifle with its life.

I therefore say that if the hon the Minister is going to investigate that era, which was a period of drastic changes in South Africa—people at that time spoke of an Afrikaner revolution that had to be brought to a conclusion—he will see a great difference between then and now. Under Dr Dönges there was certainly not the jumble of Bills we are now experiencing. With all due respect—I mean no harm by this—on some days it looks like a circus here. The way these drastic measures are being tossed around on the Order Paper is terrible. These things did not happen then.

The NP at that time carried out its “revolution” in an orderly manner, and the manner in which it was carried out at that time was a major reason for the acceptance it found and for the relatively rapid restoration of calm and order. I am speaking now of the period that lasted till even after 1961.

One has only to compare the way Dr Verwoerd handled the conversion from Union to Republic with the way the present Government wants to carry out a revolution today, which is taking on even more terrible dimensions than either 1961 or 1948, and one will simply give up and not be able to escape the conclusion that the Government did not plan these things properly, and that it has no conception of the far-reaching provisions it is hurrying through here as if they were Bills concerning general sales tax or rentals.

This has really been a most interesting and enjoyable session. It was for me, personally, an experience I would not swop for anything else, but I am astounded at the ineptitude of this Government, which wants to carry out a revolution, but which collapses into chaos and confusion the longer it is engaged in it. This is not simply being unreasonable towards all the opposition parties as well as the governing party itself; it is criminal irresponsibility towards the public at large! What chance do they have to reflect on these matters, as they should be able to do? After all, these things have to be assimilated! The one step must be absorbed before one can continue to the next step!

I know the hon the Leader of the House as someone who is au fait with agriculture, but I am afraid that for me it is a major question as to whether he and the Government really know what they are doing in pushing through their constitutional changes as they are doing here. I therefore cannot but register my strongest objections to this disorderly jumble regarding the treatment of constitutional measures. The Government should never have allowed such a thing to happen! [Interjections.]

Mr Chairman, four members from the opposition ranks have spoken, and the Whips of the NP are sitting there as if they are electrified sparrows! They do not rise to refute the arguments from the side of the opposition. What is going on in their party? What is going on with the NP and with its Whips? [Interjections.] The hon the Chief Whip of the majority party is sitting there, while one opposition party after another puts its standpoint. As the Chief Whip of the majority party, surely he is responsible for maintaining order and discipline with reference to these matters, but he simply remains seated! [Interjections.] The hon the Leader of the House proposed that the House should adjourn until a specific date in August when we shall begin again. Then he said, however, that this date could be accelerated or postponed. I ask you, Mr Chairman, as an experienced parliamentarian!

All of us who are sitting here, or at least on this side of the House, find ourselves in a new constitutional dispensation which is taking up almost a whole year of the Members of Parliament’s time. We had to be here quite early in the year to attend standing committees. We were told we would have the opportunity to sort out matters in those standing committees. We would have the opportunity to have calm discussions about the legislation that had been tabled. Our caucuses and study groups would discuss it, and we would be able to make our arrangements for the rest of the year. What is happening now, however, as my hon Chief Whip and other hon opposition members have said, is that all these things are being squeezed in at the end of the session

I want to give the hon the Leader of the House good advice. Does he know how he should deal with the hon the Minister of Constitutional Development and Planning? He must not allow himself to be bullied by that hon Minister, because that Minister is a bully. He is trying to bully the hon the Leader of the House into doing these things. Where is he today? He proposed the hours of sitting, but he is not here today. Apart from the hon the Minister of Transport Affairs, who was ill, the hon the Minister of Communications and the hon the Minister of National Health and Population Development, the Cabinet benches are empty. I look at empty benches here every day. Those members are hardly ever here. [Interjections.] The State President is hardly ever in the House.

Pik is never here.

I shall not even mention the hon the Minister of Foreign Affairs. [Interjections.] They are never here I ask you, Mr Chairman, where is the Cabinet? Where are the Ministers? [Interjections.]

They are hunting! They are making biltong!

I want to tell the hon the Leader of the House we are part of the South African system in which we, as members of the House of Assembly, represent constituencies. We have been away from our constituencies for almost six months now. It is the holiday season here in the Cape and it will be the Transvaal’s holiday season soon too. The first standing committee sitting I have to attend is early in August. The Standing Committee on Constitutional Affairs starts meeting during the second half of July. And then session starts. The hon the Minister has told us that the hours of sitting he is proposing can be accelerated or postponed. I want to know from the hon the Minister when a Member of Parliament must have the opportunity to go to his constituency and do his duty to the people who voted for him and whom he represents as a member of the House of Assembly

We are making it possible for you now.

I really want to help the Chief Whip out of this predicament. This is not his fault. He works hard enough. The problem lies with this hon Minister and the Cabinet who are no longer in control of the situation.

Mr Chairman, just look at the hon members on the Government side. Look at them. They are exhausted. [Interjections.] They can no longer make the grade. Look at the hon members of the Opposition. We are here in almost full strength. We are lively and we are fighting. We have conducted the debates recently. An NP member rises only after every third or fourth speaker. This Government can no longer do its work. There is no discipline left in the NP. The hon the Chief Whip of Parliament knows what I am talking about. A few of my colleagues on this side of the House and I sat in those Whips’ benches for some time. That hon Chief Whip was our Chief Whip too, and there was discipline then. He knows what I am talking about. I cannot divulge all the little secrets about what we did to take firm hold on the men. During that time we even tackled the productive absent hon Deputy Minister of Information.

My colleague mentioned how many times the bells had had to be rung this year. Who said last night we should keep on sitting through the supper break? It was not us. It was the Government members. Last night’s supper break lasted about three hours for the hon members on the Government side, with the result that we did not have a quorum in the House.

We are making very serious accusations against the Government. The hon the Minister of Constitutional Development and Planning comes to the House with legislation that is going to bring about far-reaching changes in the country and which he wants to steamroller through the House. Even from the liberal, thinking, leading and cultivated Stellenbosch, there has been a second letter from the person who told the hon the Minister he did not give him replies to his questions. I received an economic report from Trust Bank today, which reads:

Sir, at the beginning of the year we heard from the Government about the gleaming star that was going to shine over South Africa. Yet we are adjourning while the country is in a state of emergency.

Another thing is that we do not see all the Ministers of the coalition cabinet here. We had to hear on the radio last night and this morning that two of the Government’s coalition partners, two Cabinet members, had expressed strong criticism about the President’s Council’s decision.

Order! The hon member must come back to the motion.

Sir, I say that precisely because there is no discipline in the NP. [Interjections.] The NP is down and out and we do not want to fight an opponent who is down. That is why I want to support my hon colleague’s motion that we adjourn now. The hon the Leader of the House must go to the hon the Minister of Constitutional Development and Planning and tell him his team can no longer keep up. He must tell him the NP’s caucus and study groups can no longer do their work and that his Bills must stand over until the second half of the year. Then the hon members can go fishing, go to their farms, go and make biltong and rest so that they can return again later.

The problem with this country is not the opposition parties, but a Government which has forgotten where it came from and has no idea where it is going.

Mr Chairman, we would like to know exactly what the hurry is about going into recess. The situation at present is that what it looks like to hon members of this House and to the population of South Africa, is that the Government is doing two jobs very badly. On the one hand it is saying that these constitutional Bills are critical for the country, while on the other hand it refuses to acknowledge that Parliament should continue to sit while the state of emergency is still in operation.

It therefore uses the hon the Minister of Constitutional Development and Planning like a gambler at a card table, to pull the joker out of the pack and slot in another Bill in order to prolong the session for long enough to be able to come back and say that Parliament did sit during the state of emergency. However, they do not clearly announce to the country that Parliament will remain in session during the state of emergency and that during that process we will continue to deal with vital constitutional measures. What they are doing, therefore, is ruining both causes.

There is a constitutional process going on which is being disastrously handled, and there is a state of emergency outside in respect of which the Government apparently attaches insignificant importance to prolonging the session of Parliament.

Do they wonder that the general public and the electorate are in a state of total confusion, and that there is no direction in the country? They give no direction; they give no indication of their concern either for the constitutional measures or for the state of emergency. Parliament does not know what is going on, and so how do they expect the country to know what is going on? [Interjections.]

We on these benches have had enough of this cavalier, cheap and apparently unconcerned way of dealing with matters of critical importance to the country, and I shall support my hon Whip in submitting that we refuse to be a party to this way of handling affairs.

Mr Chairman, there is one matter I specifically want to raise with the hon the Leader of the House. [Interjections.] If he would only listen to me, we could perhaps complete this debate sooner. I want to know from him why Mr Speaker is able to accelerate or postpone the date of the resumption of business of the House. I should like him to inform us specifically in this regard. Does it bear any relation to the state of emergency, the NP’s congresses, the CP’s congresses, that they perhaps want to sabotage, or does it perhaps bear any relation to an election or a referendum? [Interjections.] We on this side of the House would like to know this.

Hon members of this party from Cabinet level are telling the officials that the CP is responsible for extending the session.

That is, after all, the case.

I now want to tell the hon the Minister, the backbenchers and the biltong hunters behind me here that the items of legislation we are disposing of here at the moment like sausage through a sausage machine, is some of the most significant legislation for the Whites of South Africa. They are some of the most fundamental items of legislation.

You have already said so.

Man, who said what, has nothing to do with the hon member! Mr Speaker is the man controlling this debate, not a backbencher. [Interjections.] My hon colleague was speaking the truth yesterday when he said the NP Whips were the worst ever, because time and again they allow backbenchers to interrupt the Chair, and this is one of the reasons why this session is being extended. [Interjections.]

There is no discipline.

I want to return to this motion. [Interjections.] My party and I regard it as our sacred duty to fight to the last man against this legislation, which is at present being piloted through the House by that party which is capitulating, walking away and selling itself out.

Mr Chairman, if ever there was an argument for the prolonging of a parliamentary session, it is the news we received a short while ago that in Johannesburg two bombs have exploded, one in a Wimpy Bar and the other at the President Hotel in Rissik Street. We do not know the circumstances surrounding this event; we do not know how many people have been killed or injured, if any at all. Parliament should be informed about this, and if we rise tomorrow there is going to be no opportunity for Parliament and the public of South Africa, who are entitled to know what is going on in this country, to hear about events like this. Should the Bureau for Information decide that it will not release the news or give any details, there is no way the public can find out. I believe that this is an absolutely indisputable argument for Parliament to remain in session, and it is certainly an argument against our rushing through the remaining pieces of legislation and denying the country the opportunity of hearing of events that are taking place in our country. It shows contempt for Parliament and it shows contempt for the public of South Africa that the hon the Minister of Law and Order did not take the opportunity at this sitting today to stand up in Parliament and to tell this House what is going on. We say it is an absolute disgrace that the Government is shielding behind the emergency regulations to keep the public from knowing what is happening in South Africa.

For these reasons I believe that the arguments that are being used are fully supported by events that are taking place in this country at the moment.

Mr Chairman, I think we have to try to keep our cool here. I want to ask whether any hon member can go back to his constituency with a clear conscience knowing that the work here has not been completed. If hon members have had contact with their electorate during the past few months, they will have had the same question put to them as I have had put to me: For goodness’ sake, what is happening in the country; we want to know; will you come and tell us?

If we are going to go into recess now, we are going to be putting ourselves, as public representatives, in an invidious position. We know that there is a determined effort to possibly remove the state of emergency. We know that the security Bills which have just been passed by the President’s Council are due to be presented to the State President. We learn though from the SABC about the traumatic experience—that is the impression one gains if one listens to the SABC—that the State President is experiencing at the present time in having to literally battle to get those two security Bills signed. We have even been given to understand that he is being compelled to sign the Bills, obviously with the underlying implication that he would be doing so somewhat against his will. [Interjections.]

Mr Chairman, we will be doing the country a disservice if this House adjourns as proposed in this motion.

Mr Chairman, I do not believe there is one hon member in the House who would not like to go back to his constituency on Thursday. The hon member for Rissik rightly asked: When do we see our voters? The whole purpose of this effort is to conclude the work and go back to our constituencies. The hon member for Pietermaritzburg North spoke about a crisis. We have a state of emergency, but there is no crisis. In a country one governs, one wants the legislative meeting to reach an end so that the executive authority can operate. We cannot keep the Ministers and the officials here while we have to govern. It is impossible to sit here for 12 months. [Interjections.] The longer I have to reply to hon members’ questions, the longer this House will sit. [Interjections.] That is why I say…

Why are the National Party Whips not saying a word?

I asked the hon Whips on this side of the House not to take part in the discussion, because that would only waste more time. We can argue for hours…

You are doing the legislative process an injustice!

As far as this point is concerned, the hon member for Kuruman asked why our Whips were not taking part in the debate.

They cannot!

We agreed that they would not speak. [Interjections.] Of course we can let a whole number of speakers take part in this discussion. If we did, however, we would be proving that we were not serious in saying that we wanted to finish on Wednesday or Thursday.

Let us adjourn tonight!

You are violating the process of democracy!

Sir, I should like to emphasise one thing. All the hon members from constituencies in the Eastern Transvaal were sitting in my office with me—I had called them there—when the bells rang because a quorum was not present in the House.

Of course you were involved with National Party affairs again!

Sir, those hon members were in this building. They were involved in essential work. There was no quorum present in the House at that moment, however.

Constructive party division!

It is not necessary for hon members on the opposite side to become personal. Every now and again they ask where some or other hon Minister is, and why he is not in the House. Very well, then tell me where the hon the Leader of the Conservative Party is!

He was here all week!

Where is the deputy leader of the CP?

He is in America!

What is he doing there? [Interjections.]

Order!

Mr Chairman, I can become personal too, but I prefer not to.

Mr Chairman, could the hon the Leader of the House tell us whether he has any idea when the House is going to adjourn?

Sir, it all depends. The hon Chief Whip of the Official Opposition should be able to judge for himself. Nobody can predict when the House will adjourn because hon members could prefer to continue to talk on matters which are completely irrelevant.

Irrelevant?

Irrelevant? [Interjections.]

Mr Chairman…

Mr Chairman, we were referring to the Bills which still appear on the Order Paper. Does the hon the Leader of the House mean that these Bills are irrelevant? [Interjections.]

Oh, Jan, you are irrelevant!

Mr Chairman, I was not talking about Bills which were irrelevant at all. The hon member must please not distort my words. [Interjections.] Year after year it happens that when a motion of this nature appears on the Order Paper, it is traditional in this House to make a great fuss about it. The hon member for Kuruman himself said the hon members of his party were wide awake. He added, however, that hon members of the National Party were sitting here fast asleep. [Interjections.] Sir, you know, my Whips are sitting here, itching to reply to hon members of the opposite side.

Well, why do they not do so?

If we were to open this debate to everyone who wanted to take part in it, however…

Whenever one of your Whips rises, he is an embarrassment to his House!

Did you hear that, Sir? Now my party’s Whips have to get it in the neck. [Interjections.] I should like to point out that we are going through a process of growing pains. We already realise that the hours of sitting of standing committees clash with the activities of Parliament. We shall have to consider reserving Fridays for standing committee meetings throughout the session. We get together in a wonderful atmosphere in Whips’ meetings and discuss these matters. We want to score a few points here now, however. I must say the Whips of all parties in this House made suggestions. The hon the Chief Whip of Parliament is paying attention to those matters. This is a new dispensation that we have entered.

A rotten dispensation!

We shall try to determine next year whether we cannot use Fridays throughout the session…

It is an absurd dispensation!

The dispensation we have entered is a rotten one!

And apparently we have to sit together one of these days as well!

Not as rotten as you are!

Order! I request hon members to limit their interjections.

No, Sir, that is quite right. I know every hon member would like to go back to his constituency. This is no biltong episode at all.

Of course it is!

I think only about 10% of our people here are looking for biltong. Perhaps it is not even 5%. Hon members want to return to their voters, however. The same applies to hon members of the opposition parties. We are not expecting the impossible of hon members of this House. I request that we try, if possible… The hon member for Soutpansberg wanted to know from me what it meant that Mr Speaker could accelerate or postpone the date for the resumption of business. My reply to that is that anything can happen. We merely want to make timely provision to meet earlier if anything unforeseen should happen. This has nothing at all to do with a general election.

Is Tom afraid of an election?

I merely want to tell the hon member for Sasolburg…

Mr Chairman, may I ask the hon the Leader of the House—in the interests of clarity—whether it is the intention that this House should sit from 09h00 tomorrow right through until Thursday, and again throughout the day and right through the night until Friday, and… [Interjections.] If not, Sir, when will we reach the cut-off point?

Sir, it all depends on the progress made with the items appearing on the Order Paper. If, by tomorrow evening, it appears that we could probably finish by 23h30 we will try to reach some agreement. If it appears it will be impossible to finish we will adjourn and resume again on Thursday morning, carrying on until we have finished. We cannot, however, expect the staff, or even an hon Minister to work round the clock for 24 hours.

*The Whips of my party will make arrangements with the hon Whips of the opposition parties, however.

Mr Chairman, will the hon the Leader of the House please tell us what the Government’s intentions are in respect of Order No 11, the Joint Executive Authority for kwaZulu and Natal Bill?

Negotiations are in progress at present as far as kwaNatal is concerned. The hon the Minister of Constitutional Development and Planning is involved in this matter and therefore I have no finality on it. The general feeling, however, is that six weeks will not make a big difference. In any case, as I have said, the hon the Minister of Constitutional Development and Planning is conducting negotiations in this connection at present.

Mr Chairman, may I prevail upon the hon the Leader of the House to acquaint himself with the facts? Is he not aware that the hon the Minister of Constitutional Development and Planning has already introduced this Bill and that this Bill is, in fact, being debated? Is he not aware that the hon member for Pietersburg has the adjournment on this particular Bill? In view of this, will the hon the Leader of the House please give us a straightforward answer? [Interjections.]

This matter is completely in the hands of the responsible Minister, Sir. Whether or not it is proceeded with depends upon that hon Minister. The hon member for Umhlanga can put that question to the hon the Minister of Constitutional Development and Planning.

You are irrelevant! [Interjections.]

We are wasting precious time.

Yes, 45 minutes has been lost already.

The hon member for Sasolburg said he had enjoyed this session immensely. [Interjections.] Of course he would enjoy it. Freek Swart wrote in Die Burger yesterday that the hon member for Sasolburg had made 51 speeches. That is wonderful! If any one of our backbenchers had the chance to do so, he would seize it eagerly. As the only hon member of the HNP here, the hon member for Sasolburg is 100% representative of his party. In fact, if any of our backbenchers had had that chance, they would have been far more successful than that hon member. [Interjections.]

Which one? [Interjections.]

Any one!

Yes, any one of them.

Which one, Hendrik?

The hon member could select any one. [Interjections.]

*I should have liked to have replied to every point, but of course the essential question here is when we are going to adjourn; and in that connection I request hon members’ co-operation. Let us try to conclude matters before midnight on Wednesday or, at the latest, by Thursday afternoon. At least let us try.

Question put,

Mr Chairman, I move:

The Bill proposes a number of amendments to the Sales Tax Act, all of which are dealt with in the Explanatory Memorandum on this Bill and on the Revenue Laws Amendment Bill which is now being tabled and made available to hon members.

I propose to confine my remarks to some of the more important aspects of the Bill, starting with those provisions which are designed to improve the administration of the Act.

Firstly I come to the exemption of small traders or vendors. Where a vendor’s turnover from sales and taxable services exceeds R10 000 per annum, he is required to be registered for sales tax purposes. In terms of clause 5, the amount is increased to R50 000. An unregistered vendor whose gross receipts and accruals do not exceed R10 000 per annum is exempt from having to charge sales tax on his sales or services but has to pay tax on his purchases. This exemption limit is also increased to R50 000 by clause 2. These amendments do not immediately affect vendors who are already registered. They continue to charge and pay over the tax until their registrations are cancelled.

Although the cancellation of registration is provided for in the amendment introduced by clause 7, those registered vendors who are affected by the increased threshold will be afforded an opportunity to make representations to the Commissioner before their registrations are cancelled. These amendments should benefit small business concerns which will, where the new provisions are applicable, be exempt from having to collect and pay over sales tax on the value added by them. Apart from this, the number of vendors who will have to render monthly returns will, when the provisions become fully operative, be reduced by about 150 000. The sacrifice of revenue is estimated at R72 million per annum, but this will be compensated for in other directions.

Now I come to the prescription period: As the law reads at present, the Commissioner for Inland Revenue is obliged to recover all amounts of sales tax which were payable but have not been paid. Audit inspections sometimes reveal underpayments as far back as 3 July 1978, when sales tax was introduced. In a number of cases the underpayments occurred as a result of genuine mistakes. Clause 9 introduces a prescription period of five years to cover such cases, which is similar to the period for which records must be retained by vendors under the Sales Tax Act. This amendment is introduced in response to representations by organised commerce. It is felt that there should be finality in bona fide cases. Where, however, there was deliberate evasion of tax or there were no reasonable grounds for believing an exemption applied, the prescription period will not be applicable.

A further aspect involves refunds: At present there is a general limitation period of two years within which a refund of sales tax may be claimed, and a further special limitation period of three months which applies where a refund of tax is claimed in respect of a transaction or an event—for example, an import—which occurred more than three months before the date of the application for the refund and the tax was paid in accordance with the practice generally prevailing at the time of the transaction or the occurrence of the event. In terms of the amendments introduced by clause 10(b) and (c), the general limitation period of two years is increased to three years and the special limitation period of three months is increased to six months. This is a concession.

It is considered that these periods give a vendor a reasonable opportunity to claim a refund having regard to the fact that his transactions are within his own knowledge. The three-year refund period may be compared with the five-year prescription period referred to in clause 9. A longer prescription period is necessary because in most cases the transactions attracting tax are not revealed to the Commissioner until an audit inspection is conducted.

Where malpractices or problems arise with regard to the collection of sales tax, the Minister of Finance will be empowered—that is, if the amendment proposed in clause 16 is approved—to make regulations regarding the application of any exemption or the payment or collection of tax in a manner other than provided for in the Sales Tax Act with a view to curbing malpractices or overcoming the problems. The proposed regulations may provide that an existing exemption in respect of specified goods will no longer apply, but in such a case the relevant vendor will be entitled to relief by way of credit or in some other manner. The intention is that the proposed regulations will be of an administrative nature, regulations in terms of which procedures will be prescribed with a view to ensuring that the State receives only the correct amount of tax that would have been payable had the malpractice or problem not arisen. It is realised that there can be no general departure from existing procedures, except in respect of specific trades, and then preferably in co-operation with the affected parties. This brings me to unprofessional conduct. The new section 44A, which is introduced by clause 15, empowers the Commissioner for Inland Revenue, notwithstanding the secrecy provisions of the Sales Tax Act, to report a professional person who is guilty of unprofessional conduct in relation to the affairs of another person, to the professional body of which he is a member so that that body can take disciplinary steps against him. I assure hon members that the decision to take action under this new provision will be taken by the Commissioner personally and that his powers will not be delegated to any member of his staff. The professional person and his client must, before the Commissioner lays a complaint, be advised of the action which the Commissioner proposes to take and will then have an opportunity to make representations.

A fully explanatory memorandum has been provided and therefore it is not necessary for me to deal extensively with all the details of the Bill. I should like to mention that certain exemptions have been provided which require some comment.

Clause 21 of the Bill introduces amendments to Schedule 7 to this Act. That schedule lists the various foodstuffs which are exempt from tax. The words “supplied for human consumption” are deleted in several paragraphs as in practice it cannot readily be ascertained whether the food is or is not supplied for that purpose. The exemption provisions in respect of animals, poultry, green mealies and rice merely repeat existing provisions and are not new.

I come now to one amendment which hon members in this House, including the hon Ministers involved, have called for. The exemption in respect of “dry beans (except when packed as seed) or lentils”—this is the one that I was referring to—is new and will come into operation on 1 September 1986.

Finally, the exemption provided for in clause 20(l)(d), which is to be applicable as from 1 April 1986, should prove to be of value to the deep-sea fishing industry as it includes fishing trawlers, of course provided a recommendation is made by the Board of Trade and Industries. This exemption is closely linked to an exemption from customs duty. Fishing trawlers mainly operate far beyond the territorial waters of the Republic and the exemption in this case is in accordance with the generally accepted practice in other countries.

The problems being encountered with regard to transactions taking place across the borders of the Republic and the TBVC countries continue to receive attention. A solution could be arrived at if a reasonable measure of international tax harmonisation could be arranged. However, the matter is receiving the attention of the Margo Commission. The possibility of structural changes in the tax which may have a bearing on the problems cannot be ignored, but it is not possible at this stage to anticipate the commission’s recommendations.

Mr Chairman, I should like to start off by telling the hon the Deputy Minister that we in these benches were disappointed about the fact that in the package announced by the Government recently GST was not reduced. I think that a reduction in GST would, in fact, have achieved three things. Firstly it would have helped to reduced the cost structure in South Africa, which is important; secondly I believe it would have helped to restore confidence; and, thirdly, I think it will have helped to stimulate demand. In his reply to the debate on the Income Tax Bill the hon the Minister of Finance made some interesting statements. He said that he had taken over an overheated economy and that there was a need—if I listened to him correctly—to actually curb demand, and that the actions that had been taken had, in fact, succeeded in wringing out demand inflation from the economy. He went on to say in his speech—and also in his Third Reading speech—that in South Africa, at the present moment, the inflationary impetus was not of the demand-pull type, but rather of the cost-push type. As a result of this one would have assumed that the Government would have reduced GST in order to give a spur to demand, because I think there is one thing that I would agree with, and that is that demand has been wrung out of this economy. In fact, I think we are a little bit like a patient who is giving blood. So much blood has been taken out of the patient that one actually begins to wonder if there is any patient left at all! It seems to me that the whole philosophy of the Government’s fiscal and monetary policy, in recent times, has focused on our having this grossly overheated economy. I think we should actually debate this point, because if that analysis is incorrect, we have actually prescribed the wrong medicine for this economy.

I have here the Statistical/Economic Review that accompanied the 1986-87 Appropriation, and I am looking at page 11 of this document. If one has a look at this, one notices that expenditure on durable goods—furniture, household appliances, personal transport equipment—has declined in real terms, at constant 1980 prices, every year since 1981. If the economy was that overheated, if there was that tremendous demand, one would have anticipated that there would have been tremendous expenditure on these items by the consumers of South Africa. If one looks at the macro-economic position, however—if one looks at these statistics—what does one notice? In 1985 we spent as a nation, on that particular item—despite the fact that we have a growing population—28% less, in real terms, than in 1981. To me that is not an indication of tremendous pent-up demand. If we look at that very same figure, despite the fact that our population had increased between 1975 and 1985 by, I would imagine, approximately a quarter, we spent 8% less on durable goods in 1985 than we did in 1975. So, in real terms, in 10 years there had been no growth at all.

Let us look at semi-durable goods. Here much the same pattern emerges. Here we did not have a decline. The pattern remained relatively constant over that five-year period, from 1981 to 1985. What happened? In the absence of a growing domestic economy, in the absence of growing domestic demand and in the absence of a growth in manufactured goods for export we find, in fact, that fixed investment has declined every year since 1981 and that in 1985 we invested less, in real terms, than we did in 1975. That is part of the reason for the unemployment problem which we have in South Africa.

The hon member for Yeoville asked by way of an interjection who was responsible if the demand had got out of line. The type of action that one will take to rectify the so-called overheated economy depends on who is responsible for it. I think we must ask ourselves who caused it.

I do not have the detailed statistics that the hon the Deputy Minister will have at his disposal, but if one looks on page eight of the same Statistical/Economic Review that I referred to earlier, one will see there the growth in the contribution to the gross domestic product between 1981 and 1985. To some extent those figures might be able to indicate to us who was responsible. It certainly was not the department of the hon the Minister of Transport Affairs because, if one looks at the performance of SATS over that period, one sees that its contribution to the gross domestic product increased by 42% between 1981 and 1985. It was also not the private sector, as its contribution—it appears under private business enterprises—increased by 56% over that period.

It is when one starts looking at the contribution of Government business enterprises that one sees where the problem for the overheating in this economy originates. The contribution by Government business enterprises went up by 92%, general Government by 107% and public corporations by 137%.

One can see a pattern emerging which I find disturbing, and that is the reluctance of this Government to put money back into the hands of the consumer in a meaningful way. We have this tendency that the Government should decide what is good for us rather than that the consumer should decide how he would like to spend his money. We saw this in the recent concessions. Housing is a good thing, but again the Government decides how the money should be spent.

I must admit that I have doubts about how effective this is going to be, because if the Government expenditure was so effective, we should have had one of the most stimulated economies one has ever seen. Every year the Government has spent considerably more than it has in fact budgeted for.

I want to refer again to the Statistical/Economic Review that I mentioned before. It is interesting to note that the public sector accounted for 22,9% of the gross domestic product in 1975. It is now 29,2% which reflects a considerable growth.

What is needed to get the economy going is to put income back into the hands of the public. I believe that a reduction in general sales tax would have been the most effective way of doing this because it would have benefited everybody in South Africa whether they be rich or whether they be poor. One must have a look at the history of general sales tax. The hon the Deputy Minister will recall the report of the Franzsen Commission. At that stage it was said that individual tax had become too high—that was a correct assessment—and that general sales tax would therefore be introduced which would put a low level of tax on all items. This would then allow the Government to reduce the burden on the individual.

What happened however? General sales tax, which started off as a low tax, is now 12%. If we had had GST of 12% in 1980 and 1981, we could have abolished company tax and individual tax. Today we have GST of 12%. What has actually happened to individual tax? GST was meant to relieve the burden on the individual. The Bureau for Economic Policy and Analysis in Pretoria recently—I think it was last year—did an analysis of income tax in South Africa, and their results are particularly significant. They used the example of a man who earned R5 000 per annum in 1972. If his income had just kept pace with inflation and he had not improved his standard of living, his annual income today would be R20 381. What is particularly significant is that he paid 10% of his income in tax in 1972 while today, without the real value of his money having increased at all, he pays 19%. A man who earned R10 000 in 1972 would now be earning R40 000, while the portion paid in tax would have increased from 14% to 30,9%. It is no wonder that we have squeezed demand out of our economy.

It is also interesting to note that GST, which was meant to reduce the burden on individuals, has not done so because of inflation and fiscal drag. This becomes particularly clear when one looks at the contribution of various types of tax to the total revenue of the State. In 1980-81, 15% of the total tax collected was from individuals. In 1985-86, it was 28,7% and, if the budgeted amounts are to be achieved, the figure for the current financial year will be approximately 31%. GST, which formed 13,5% of inland revenue in 1980-81, has risen to 27,3%.

The burden has thus been placed on GST and individual tax. If the intention in introducing GST was to lighten the load on the individual taxpayer, it has failed disastrously. This is dangerous for South Africa, because—let us face it—at the moment many people do not find South Africa a terribly attractive place to live in. One of the reasons for this is our tax structure. People are now leaving South Africa, partly for political reasons but also partly for economic reasons. Unfortunately, the people who are leaving South Africa are those who could really contribute to this country because they have skills. If one does not have skills, no overseas country will want one.

Why do I say that this is dangerous? The hon the Deputy Minister will know that some years ago prof Sadie of the University of Stellenbosch worked out that the employment of every skilled worker in South Africa provides employment for 44 unskilled workers. That ratio is unique to this country. In Western European countries the ratio might be 8:1, and I think it is about 14:1 in Australia. Every time we lose 1 000 skilled people, we have destroyed the job opportunities of 44 000 unskilled people.

I would like to refer the hon the Deputy Minister to a study done by Keith Marsden for the World Bank on the impact of tax on growing countries. He found that the annual growth in the gross domestic product in the low-tax countries was 6% higher than in the high-tax countries. He also found—and this is very significant for a country like South Africa—that the annual increase in gross domestic investment in the low-tax countries was 8,9% whereas in the high-tax countries it was 0,8%.

I believe we have to look at our tax structure very carefully.

The Margo Commission is doing that.

I know that the Margo Commission is looking at it, but until we have fundamental reform in our taxation system we are not going to get the economy growing. If we wait too long for the Margo Commission’s findings, implementing them will amount to trying to resuscitate a corpse.

I should now like to deal with some specific issues because a colleague of mine, the hon member for Yeoville, has some amendments on the Order Paper. One of the issues to which I want to refer—it was also debated during the discussion of the Income Tax Bill—is that where members of professional associations do something wrong, the Receiver should be able to report them. In terms of section 4 of the present Act he cannot do so. The amendment here is that he should report those people for their misdemeanours. In principle we have no problem with that, but the problem is to whom it should apply. In terms of our amendment it should only apply to those professional institutions which are established by law and not to voluntary institutions.

We should also like to see some protection for the individual. I might go to someone for tax advice in all good faith. He might do something wrong of which I might not be aware, and then I have my affairs opened up to a number of people. This could be dangerous. Let us say the members of the professional association concerned are members of a bank order; then they will be viewing my overdraft or something like that.

It cannot happen.

I am glad that the hon the Deputy Minister says it cannot happen. The amendment which the hon member for Yeoville intends moving will, in fact, ensure that it cannot happen.

It could happen if you accept his amendment.

Fine.

We come now to the question of terminology. I should like to debate the question of tax avoidance and tax evasion because I think a very important principle is involved. In the English language those two words have totally different nuances. If I have taken out a retirement annuity, for example, I have in fact avoided paying income tax. I have thereby reduced my income tax to the extent that I have taken out that contribution. If I take my money out of the special savings account and put it in Post Office Savings Bank Certificates, I have in fact, avoided paying income tax. I do not believe that there is any indication that that is illegal, immoral or indecent, but neither is it much fun.

When we talk of evasion, then we are actually talking of something which is illegal. If the hon the Deputy Minister takes a look at the little book which has been published by Emsley Houghton-Huxton, I think he will agree that they have actually drawn the distinction very clearly. In this book tax avoidance is described as the legitimate arrangement of one’s affairs in such a way as to pay the minimum amount of tax required by law; tax evasion, on the other hand, has the same motive but implies illegal and dishonest behaviour for which the Act prescribes harsh penalties. They go on to say:

I think we must be very careful in this regard. Tax evasion is wrong! A completely different connotation is attached to tax avoidance. If we begin to mix the cannotations attached to those two concepts, then we are going to make tax evasion seem acceptable. If one says that tax avoidance and tax evasion are the same thing and one begins to mix the two concepts, then one is going to have problems.

The same applies to the concepts “undue” and “irregular”. “Irregular” has a stigma attached to it which the term “undue” does not have. Therefore, with regard to clause 15, the hon member for Yeoville put a certain amendment on the Order Paper.

We are also going to move an amendment with regard to fines. We believe that the amount of a fine should be specified. The hon the Deputy Minister will notice that there is an amendment to that effect.

When I was in my constituency this weekend, I attended a function. At that function a lady came to me who is involved in the Housewives’ League. She raised a matter which I think is worth raising here, and that is the question as to what food items are liable for general sales tax. What we have tended to do is to exempt raw foodstuffs from GST, whereas processed foods generally are subject to GST. However, as this woman said, particularly in the pension group and the lower income groups, one might find that people would buy processed foods as basic foodstuffs because they do not have refrigerators and so forth. I should like the hon the Deputy Minister—not now, but at some stage—to ask the department to look very carefully at this. I think our intention is that basic foodstuffs should not be subject to GST whereas foodstuffs which are not basic should be subject to GST.

As I said at the beginning of my speech, I believe that the Government lost a tremendous opportunity in South Africa by not reducing the GST in this last package. I think that to go into the bottom of a recession with a Budget deficit of 2,7%, which is what the Budget showed it to be, was in fact too low, given the present situation in South Africa. I appreciate that we do have problems with the balance of payments, but we cannot allow the domestic economy of South Africa to be destroyed so that we can become a capital exporting country. That is impossible.

However, because the Government lost that opportunity, I move as an amendment:

Mr Chairman, I should not like to enter into an argument with the hon member on the acceptability of GST, and neither should I like to argue with him about the kind of medicine which he prescribed. As the hon member will know there are as many economists on the other side of the scale who prescribe completely different medicine. The story is told that if one gets all the economists to join hands in a world circle, their hands will not meet on the other side of the world. So I should not like to enter into an argument with the hon member about that.

However, I should like to add something to what the hon member said about the amendments to clause 15.

*I find the provisions concerning secrecy quite in order. I want to take the accounting profession as an example. These people stand in very high repute in society. They stand in very high repute in fact in that they protect the public as well as the State. Up to now the profession has not been in a position to protect itself, however, as a result of the provisions concerning secrecy in the principal Act. That is why I should like to support these amendments.

I should like to support these amendments because all three parties involved in the situation, viz the State, the public and the profession itself, are now being put in a position in which the integrity of the profession can be proved and confirmed. That is all I want to say about clause 15.

I think clause 17 which deals with the services rendered in milling maize meal, for example, is excellent because eventually it will decrease the cost of the final product. I also want to support the exemption in connection with the fur industry wholeheartedly, because it will encourage the fur industry in South Africa considerably.

It is a great pleasure for me to support the Bill.

Mr Chairman, I was somewhat surprised that the hon member for Caledon resumed his seat so soon. I expected him at least to make an attempt to reply to the argument by the hon member for Edenvale.

That is not my job.

The hon member is perhaps justified in saying it is not his job, but in fact that of the hon the Minister. We therefore look forward to the hon the Minister’s reply to the good arguments advanced by the hon member for Edenvale.

We all looked forward to a possible reduction in GST. Indeed, there were abundant rumours before the hon the Minister of Finance’s announcement last week of incentive measures to get the economy on the move again in some way. This reduction did not take place.

I agree with the hon member for Edenvale that our knowledge does not stem from recent experience because, after all, the inflation rate in South Africa has for a long time not been due to excessive demand, but is the direct result of cost pressure. We therefore expected the hon the Minister of Finance to include something in his incentive measures that would bring about a better balance in that respect. However much one agrees that the measures the hon the Minister did announce will stimulate certain sectors of the economy—I do not want to deny that—we are nevertheless afraid that they will not act as a stimulus for the economy in the broad sense because they are selective.

I do not, however, want to elaborate at length on the economy. If I may, I want to refer to certain provisions of the Bill under discussion. Before I come to them I want to discuss a subject regarding which I shall always have something to say until it has, in my opinion, been rectified. Where GST was initially levied on all items including foodstuffs, we decided that in the interests of the community as a whole the GST on foodstuffs would be lifted, even though this would apply only to foodstuffs in their unprocessed form. We are grateful to see that dried beans have eventually been recognised as another type of raw food, even though this exemption will be applicable only from 1 September, if I understand the provisions correctly.

Who made the great plea for this?

It was the Agricultural Union.

It could be argued that the imposition of GST on all goods, including foodstuffs, would make it possible to reduce GST. Another possibility is to abolish GST on all foodstuffs with the resultant loss of revenue to the State, which could possibly lead to an increase in GST.

While it is the standpoint of the Government of the day that it is in the interests of the community for foodstuffs as such to be excluded from GST, I cannot understand why one should then not argue that all means of production, in whatever form, needed for the production of foodstuffs—I am referring specifically to all the farmers’ requirements—should not then accordingly be excluded from GST, in order to enable the farming community to produce cheaper foodstuffs for the general public. I have already raised this matter in the Budget debate, this year as well as last year. I am not certain but I think I referred to this in the Third Reading debate, but on none of these occasions did I receive a reply from the hon the Minister.

If I may, I now want to refer to the provisions in the Bill at present under discussion. I am referring to clause 2 which should be read in conjunction with clauses 5 and 7. It deals with the compulsory or discretionary registration of entrepreneurs with a view to the payment of and exemption from GST. There is one thing that worries me in this regard.

I refer here specifically to the increase of that figure of R10 000 to R50 000. Where the Receiver of Revenue used to be obliged to register an entrepreneur whose turnover exceeded R10 000 for the purposes of the Act, so that he could obtain exemption from GST on his purchases, the Receiver now has discretion. I refer here particularly to the position of the smallholder.

It is specifically to help the farmers.

I am concerned that the opposite could happen. It is not stated specifically that the Receiver is obliged to register all farmers. What would be the position of the farmer or part-time farmer whose turnover is less than R50 000? The Receiver is not obliged to register him and, should he refuse, it would mean that such a part-time farmer, for example, would have to pay GST on all his production requirements.

No, man.

The hon the Minister says I am mistaken and if this is the case I should very much like to be corrected. As I read the Bill, however, no exceptions are made for farmers. We welcome this measure in respect of the retail dealer who buys and sells commercial products, because he benefits by it. In fact, the State loses revenue as a result of that provision. I am, however, seriously concerned about the way this measure will affect the position of the small farmer and in particular that of the part-time fanner. We should not in the present circumstances underestimate the role and the importance of the part-time farmer in South Africa. In fact, their importance is recognised.

This reminds me of something. An inspector of education recently visited our local high school. He said to the bookkeeping teacher, who was a very good teacher but also a very successful farmer, that he understood the teacher was one of the teachers that farmed. He received the reply: “No, Sir. Your information is quite wrong; I am one of the farmers that teach.” In the interests of farming in South Africa we should perhaps move away from the term “part-time farmer” and begin to talk about farmers that do other work part-time.

I should like to have clarity from the hon the Deputy Minister on the matter I raised in respect of clauses 5 and 7, so there will be no misunderstanding in that regard.

I have no objection to the powers now being vested in the Receiver of Revenue to bring cases of unprofessional conduct that come to his attention, to the attention of the professional association concerned.

Mr Chairman, before dealing with the Bill itself, I should just like to refer very briefly to a person who was no doubt the driving force behind this Bill, viz the Commissioner for Inland Revenue, Mr Carl Schweppenhäuser, who is to retire at the end of July after a career of 46 years in the Public Service, all of which were spent in the tax department. He has worked in that department from the age of 17 to the age of 63 performing a very thankless task. I think all of us who know him know that he has a great capacity for work and that he is very able and knowledgeable. It is a privilege for me to be able to pay tribute to him from this side of the House and to wish him a very happy retirement.

*Mr Chairman, it is a privilege for me to support the Bill on behalf of this side of the House, because any Bill or measure that improves the utilisation of an existing source of tax must be welcomed.

†This tax is a major source of income and I just want to remind the hon member for Edenvale that when it was introduced in 1978 the point was very clearly made by the then Minister of Finance—Hansard, 29 March 1978—that the intention would always be to keep the rate of the tax as low as possible on the broadest possible base. He then reminded the House of the obvious fact, which all of us here should surely be aware of, that the more exemptions one grants in respect of this tax, the higher the rate will have to be in order to yield a comparable revenue for the Exchequer. We now have a rather strange situation in respect of our good friends in the PFP, who for many years were in the forefront of the chorus asking for exemptions, asking for a lower rate. This happened again today, and was echoed by the hon members of the CP.

*We then get the ironic situation that they actually ask us to tax fewer goods at a lower rate, whilst still attempting to obtain the same revenue. I want to say that it is illogical and simplistic to expect that. I should say that, on the contrary, we should look at the more effective application of the tax, and that is the very purpose of this Bill.

†I do not think there is any one in this House who would not like to see at least a single-digit GST applicable. The fact of the matter is, however, that one of the major implications of this Bill—one which has been virtually ignored up to now—is that which is embodied in clauses 2, 5 and 7 and which involves the raising of the limit from R10 000 to R50 000. I would like to deal with this very briefly because, when these provisions become operative, the number of vendors who apply GST will be reduced by 150 000 from the current number of 300 000 as was pointed out by the hon the Deputy Minister in his second reading speech.

In other words, the number of vendors who will have to be monitored and checked will be greatly reduced and the scrutiny of records in respect of this tax and the raising thereof by the tax department will be drastically simplified, purely in terms of volume. This in itself must inevitably make for a more effective application of the tax.

I should just like to give one interesting statistic in this respect, because it has a bearing on what this new clause will lead to. During the past year, ie from April 1985 to March 1986, this department with its very hard-working staff conducted something like 40 000 desk and outdoor inspections. Approximately one quarter of those—in other words, almost 10 000—generated extra tax and penalties to the tune of R110 million which would otherwise have been lost to the Exchequer. The fact of the matter is, however, that even that figure, which is an impressive one, involve only 13% of the present total number of vendors. This would mean that, on average, a vendor would be visited once in 7 years, which in my view is totally unacceptable.

In terms of the provisions of this Bill what will happen in effect is that the scrutiny will double in effectiveness as a result of the halving of the number of vendors who have to be scrutinised. I trust that the department will be given every resource it requires to eliminate the malpractices—and there are many malpractices that we are aware of—in the field of GST.

Lastly, the only other clause I should like to refer to, is clause 16 which is very important—and which, as far as I am aware, has also not yet been referred to—in the sense that it is an important enabling measure so that regulations can be made by the Minister to adapt the ways and means of collecting this tax where the Commissioner encounters malpractices or problems. I think that many of us who have an interest in matters such as this will know that some sectors of the trade—I do not want to mention names—seem to be more prone to malpractices than others. There is a higher incidence of malpractice in particular areas of trade and I only hope that the hon the Minister and his department will not hesitate to use this particular provision absolutely mercilessly should they be satisfied that malpractices are in fact occurring in any specific sector. With those few words I would like to welcome the Bill.

Mr Chairman, I want to indicate at the outset that we on these benches will be supporting the Bill before us. While I have a great deal of sympathy for the amendment of the hon member for Yeoville as moved by his hon colleague I think one must be practical and realise that the parameters of the Budget have been set and that it is not possible at this stage to tamper to any marked degree with the base of the Budget. However, it is a directive that I would like to support in the context that the question of reducing GST is something that definitely needs to be looked at, and I will be dealing with this aspect later in my speech.

It is not my intention to comment to any great degree on the Bill before us, but I want to deal with one or two of the more important aspects of it. I want to start with clause 5 which makes provision for increasing the limit required for registration purposes in that this is now being increased from R10 000 to R50 000. The widening of this limit is obviously to the benefit of smaller businesses with turnovers of less than R50 000. In other words, it is no longer necessary for vendors conducting business of less than R50 000 to be registered for GST purposes.

Clause 7 lays out clearly the procedures involved in regard to deregistration. I think this is rather important because there are certain concerns which are presently registered with incomes of less than R50 000 per year but which may not wish to be deregistered. This will be dependent obviously on the type of business that they are conducting. It is therefore essential that provision be made in such cases for representations to the Commissioner for Inland Revenue for the continued registration of those falling within that particular category.

One notes with a certain amount of comfort that the Commissioner’s decision can be referred to a sales tax advisory committee for a final decision on appeal. It is quite true as the hon member Mr Schoeman mentioned that extending the limit to the R50 000 mark will involve a considerable saving in administrative work and will make the collecting and the checking of GST payments far easier and more manageable. It is logical too that the prescriptive five year period in respect of underpayment of GST as a result of genuine mistakes be accommodated as provided for in clause 9.

We note too with the certain amount of pleasure that sympathy is being accorded to those who have incurred errors unwillingly dating back as far as 1978. The proposed measure in clause 9 to facilitate the refund of sales tax by extending the limitation period is also welcomed.

An important point of principle is established in clause 15 whereby the Commissioner for Inland Revenue may breach the secrecy provisions of the Sales Tax Act by reporting a person to his professional body in the event of that person being guilty of improper conduct or of an unprofessional act.

The exemption of additional foodstuffs, which has also been referred to by the hon member for Edenvale, is something we welcome. We also support his request for an investigation to see whether GST cannot be removed from certain processed foodstuffs.

I want to touch briefly on the whole principle of GST as such because there is no doubt that GST has had a very considerable impact on the buying power of the public. When one studies the trends that have taken place—since the introduction of GST in 1979, it is interesting to note that the yield from every one percent of GST collected in 1981, in round figures, was R312 million. In 1982 this figure increased to R529 million; in 1984 to R613 million; and in 1986 provisionally to R733 million. The estimated figure for 1987 is a startling R787 million.

When one looks at this from another angle, it is interesting to note that GST accounted for 13,8% of total revenue in 1980 when GST was 4%. This rose to 16,94% in 1982, when GST was increased to 5% and then to 6% later in the year. In 1986 GST at 12% accounted for 29,02% of the total revenue collected, and the estimated figure for the current financial year is 30,4%. This bears out the very point the hon member for Edenvale made in regard to the impact GST and inflation is making on the consumers purchasing power.

Are you for or against it?

We in these benches feel that GST is far to high at the present time. As we all know only to well, it is having an adverse effect on the motor industry and the agricultural machinery industry. While we accept the fact that the base of the budget has been set, the principle of reducing GST to a figure of, say, 10%, or even to a single figure, is something we in these benches feel very strongly about.

The last point I wish to make in relation to this Bill is that it would appear that it is necessary that steps be taken to streamline GST in the TBVC countries. This could be affecting business detrimentally in the “border areas”—if I may call them that—adjoining these independent states. Figures that I have been given indicate that there is a lower GST applicable in the Transkei than in the Republic; there is no GST payable in Bophuthatswana; there is a 6% GST payable in Venda; and Ciskei has apparently recently introduced a 12% GST. So, it is obvious from this that this disparity in the rate of GST is most undesirable. With those few words we support the Bill.

Mr Chairman, in general this Bill deals with administrative improvements which entail the streamlining of the Sales Tax Act to a great extent, and we welcome it.

There are a few matters that I want to add to in more detail briefly. In the first place we think it is a mistake to impose sales tax on advertisements and publicity. Sales tax should be levied on what the Act itself calls a res—the Latin word for “a thing”, and these days services are included in this too. An advertisement is a presentation. It is not a thing or a service. It is a presentation just as a painting is a presentation, and there is no tax on a painting. We want to ask the hon the Minister to give serious attention to this matter. The people in the newspaper world are experiencing hard times. Sir, you yourself know that the SABC almost has to come to their rescue. I have no association with the large newspapers, but we think exempting advertisements from sales tax may be a big step in the right direction.

In the second place I want to refer to the position of containers. Containers are capital goods which are not sold. They have to be returned every time. We feel sales tax should be levied only at the time of purchase and not again. This will solve a large number of administrative problems at the various sales points and will also solve the problem with reference to ships’ containers in which case it is difficult, if not impossible, to determine whether they are always used internally or internationally.

In the third place I want to refer to the position as far as diplomats are concerned. South Africa does not have very pleasant experience of the conduct of some diplomats here. The diplomatic service in South Africa often acts in a way in which I doubt they would act in another country. That is not the reason for my representations, however. My party is of the opinion—this is a standpoint that was stated at one of our congresses—that diplomats should not be exempt from sales tax. They should pay sales tax just like the rest of the residents and citizens of South Africa unless the country they come from grants our diplomats there the same exemption. Discrimination should therefore be applied in favour of South Africa. Diplomats should not merely all be treated alike.

Subsequently I want to refer briefly to the point raised by the hon member for Edenvale, viz that so many people are leaving South Africa in these critical times. My information is that the stream of people leaving the country has more than doubled. I cannot remember the exact figures the hon member mentioned. There is a great increase, however. This was also the case in 1960, when we had the problems of Sharpeville, Langa and Nyanga. In fact, I can remember that friends of mine—people who are still living in Stellenbosch today—bought great bargains at the time because of colleagues of theirs who thought South Africa was becoming too dangerous a place to live in, who moved to Australia. They sold their houses dirt cheap. I know of one house in Mosterdsdrif which was sold for R7 000. The house was sold by a university lecturer who left to go to Australia, and I do not think the purchaser could ever have made a better buy than that one. I merely want to point out, therefore, that people who leave the country at this time are people who either came here or who arranged their lives in terms of their economic and material prosperity. Now they are getting out under the illusion that things will be better elsewhere.

This is an opportunity for those among us who do not live and work in South Africa merely for the sake of our economic and material prosperity—those among us who have a greater loyalty to our fatherland than those who move to Australia or Canada or wherever just as soon as the economic and other circumstances in the country become too difficult.

For the sake of those, however, who are in fact staying here because they have a greater loyalty to South Africa than those who are simply leaving the country—for a completely opposite reason therefore—I want to support the motion of the hon member for Edenvale that the legislation in question not be passed unless the sales tax is decreased. We cannot say by how much it should be decreased. If the hon the Deputy Minister were to do so at this stage, however, and would link it to his wanting to instil confidence and contrast his step with the conduct and attitude of those people who are leaving the country in this way, and also made it clear that he was taking this step to create a position for the loyal people in which it was possible for them to improve their economic position at the expense of those rats who are leaving the country, the measure in question would be acceptable to us. For completely different considerations therefore than those raised here by the hon member for Edenvale, my party will support his motion in this connection.

Mr Chairman, it is true that we are now dealing with an important financial measure. I do not want to repeat arguments which have already been raised by previous speakers, but there is much in what they said with which we wholeheartedly agree. I shall return to some of those aspects in the course of my speech.

With regard to the registration fee which has been increased from R10 000 to R50 000, I want strongly to endorse what the hon member for Barberton said. In addition, I should also like to ask the hon the Deputy Minister another question. Accordingly to recent Press reports the Receiver of Revenue, because of the riot situation in the country, is no longer sending his inspectors out to collect general sales tax. Apparently this is because the security risk involved would be too great. Is it possible, in that case, for the hon the Deputy Minister to provide us with an estimate of the total amount of tax which has not been collected? Could he inform the House what the total resultant loss to the State is going to be?

I should also like to express my thanks for the new provision concerning the question of prescription. A lack of uniformity in matters which are essentially the same always creates confusion. We are, therefore, grateful for the improvement in this respect.

I should also like to refer to the question of the reporting of unprofessional conduct. One most certainly cannot report a person for avoiding tax. As I said the other day, when I am on the road in my car and I avoid an accident, no one will punish me. I shall not have to pay a fine. When someone evades tax, however, it is an entirely different matter. I agree that such a person should in fact be punished. He is clearly guilty of transgressing the law. I disagree entirely with the provision in the Bill under discussion that someone who avoids tax is guilty of an offence.

There is also something that bothers me as far as the aspect of professional people is concerned. I should like to know what the standpoint of the hon the Deputy Minister is on the question of unqualified people who set themselves up as bookkeepers for example. There are many such people who prepare and submit returns on behalf of clients. There are undoubtedly offenders among them. It is actually they who are guilty of the misdeed which the hon the Deputy Minister intends to combat among professional people. Of course I am not suggesting that no professional people make themselves guilty of such malpractices. Everyone who commits such offences should be brought to book. I certainly do not mean that I am in favour of such a person’s getting off scot free. He should of course be punished for his malpractice. There are, as it were, two legs on which we stand in this respect, and I should like the hon the Minister to consider this.

When sales tax was introduced, the idea at the time was to broaden the tax base so that the individual did not have to pay such high taxes. Today, however, taxpayers in South Africa are being asked to pay almost impossible amounts in tax. Since 1978, when sales tax was introduced at 4%, it has increased 200% to 12%. At the same time, direct income tax on individuals has also gone up tremendously. There was a stage at which it dropped considerably, and it is indeed a pity that the hon the Minister did not continue on that basis as far as personal income tax was concerned. In that respect I agree with the hon member for Edenvale.

We are not going to support this Bill until the hon the Minister has brought these taxes down. The question that arises is in what respect our people are being overtaxed. Let us examine the financial documents which the hon the Minister submitted when he delivered his Budget Speech. I refer the hon the Deputy Minister to the same report to which the hon member for Edenvale referred, viz. the Statistical/Economic Review, 1986-87. I shall quote from the section headed: “Gross domestic expenditure” on page 9:

This was attributable to a few factors, the chief of which was tax. The tax that is being levied is tremendously high.

I now quote from the following paragraph:

That was an enormous percentage. The paragraph continues:

We can be grateful for the lower value of the rand against the US dollar, in the sense that it resulted in a remarkable increase in our exports. Of course that increase in exports also contributed to the fact that our balance of payments did not collapse. Growth must, of course, always take place by means of the balance of payments. If a country’s balance of payments is not healthy, that country can do what it likes but its economic growth will not take place satisfactorily. This applies to every country, but particularly to South Africa. If we want to stimulate economic growth, we must do so by means of the balance of payments.

There is another factor which is also ascribed to the high taxes, and here I am referring to gross domestic fixed investment. In the past few years, gross domestic fixed investment has shown a sharp decline.

To what part of the Review are you referring now?

I am referring to page 12. I quote:

Of course the drought also had an effect here, but there are also other factors which played a role. If a country’s total gross domestic fixed investment declines by 20%, it foreshadows one thing only, and that is danger in the future.

Mention is also being made of people streaming out of the country. There are two reasons why people emigrate. As a matter of fact, they make these reasons quite clear to us. I must admit it was with great shock that I heard today that there are almost 800 000 South African citizens who still retain their English citizenship. If these people also flee the country, it will be a great blow to us. In my opinion, high taxes are the most important reason why people leave a country in order to emigrate. One does not stay in a country if the state imposes high taxes, because one cannot then hope to improve one’s net income or to prosper. If one cannot save for the future, it obviously does not pay one to work. That is how people see things.

It is also true that, as a result of the tax system pertaining to married women, we in South Africa have one of the lowest percentages of working professional women in the world. I do not want to quote figures comparing us with other countries in this respect. It is one of the factors which have led to the fact that so many professional people have left the country. It does not pay a professional man to work if he has to pay so much income tax. Nor is it any use my saying that that doctor, land surveyor or whoever must work for his fatherland and pay that much tax. One cannot force someone to work sixteen or eighteen hours a day simply in order to have to pay more tax, without allowing him to save a sufficient and reasonably large amount. Over and above the 50% he pays in direct tax are added this sales tax and all the other things, and they hit him hard.

Law and order are not part of the hon the Deputy Minister’s field, but the law and order situation is one of the reasons why our country is not experiencing the necessary growth and why people are leaving the country.

As a protest we shall vote for the amendment proposed by the hon member for Edenvale, just so that the Government can realise that we cannot continue in South Africa with such a terribly high tax rate as far as direct income tax and other forms of tax are concerned.

Mr Chairman, I should just like to refer to the hon member for Sunnyside before replying to the hon member for Edenvale. It seems to me he does not agree with the hon member for Sasolburg, because he says the people are leaving the country because the taxes are too high. I think this view is simplistic, and the statement by the hon member for Sasolburg that people are leaving the country merely because they are not patriotic is not correct either. There are many people who leave the country for various reasons when conditions like those we are presently experiencing, prevail.

Those who leave now are cowards.

Of course, it is a pity when people leave the country and it is a loss. I am just sorry that the Australians will not be taking the 44 000 people who are going to lose their jobs for every highly skilled person who emigrates, because I think this would have facilitated matters a little. Perhaps my hon friend could suggest this to the Australian ambassador, because I think he has more influence with the ambassador than I. When I wanted to visit them in order to make a speech there, they would not allow me, but they do allow the ANC, Swapo and those people. So I think a solution would probably be to take the 44 000 people who are going to lose their jobs with them, then we would no longer have a problem. However, we are all sorry when people leave the country and we hope circumstances in the country will improve to such an extent that people will no longer feel that way.

†The hon member for Edenvale moved an amendment which was supported by the hon members for Sunnyside and Sasolburg. The amendment reads:

Do I understand from the hon member—he does not mention a quantum—that if we were to reduce sales tax immediately, he would withdraw the amendment and support the measure before the House? Is that a correct interpretation? I see the hon member is nodding his head in agreement. Well, then I suggest that the hon member withdraws his amendment because, if he were to read clause 21 of the measure before us, he would see that there are a great many concessions including the removal of GST, and therefore there is a reduction; a reduction in respect of dry beans which the hon member for Sasolburg spoke about. There is also a reduction in respect of lentils. [Interjections.] So, I will keep my side of the bargain if the hon member will keep his. As I know him to be a gentleman, I am sure he will withdraw his amendment. It is a fact that there will be R9 million loss of revenue from the removal of GST on the beans and R1 million loss of revenue on the lentils. Also, if we were not to pass this Bill in its present form, the GST relief on rice would be lost which would cost rice consumers an extra R40 million. By not passing this Bill, we would therefore in fact be increasing GST and not reducing it. For that very good reason, also, I ask the hon member to keep his side of the bargain and withdraw his amendment. I am sure he will do that because I know him.

The hon member tells us we were overheating the economy in 1984 and then he compares what we are doing now with circumstances which prevailed then. The things are so totally unrelated that one really cannot have an intelligent discussion with him on that point at this time, given the circumstances of this kind of debate. I understand what he was saying, and in many ways I sympathise with him, but the reality of the situation is that the economy was overheated at the time and that we adopted the measures that we did in order to reduce the overheating of the economy. In 1984 the expenditure on semi-durable goods was + 4,2%, the GDP increased by 5,2%, etc. We all know what happened. We all know that the hon the Minister was asked to do what he did, but the fact of the matter is—to cut a long story very short—as the hon member knows, that the circumstances in our country changed completely.

The circumstances with which the hon the Minister now has to deal are completely different circumstances. There is, of course, a difference of opinion about how we should stimulate the economy, but when all the advice had been received and evaluated, and we had had a look at the limited means we have at our disposal for stimulation, the hon the Minister did what I think was the right thing to do, and that was to increase expenditure on things like housing, in regard to which he announced the amount of R750 million. This will not only give employment to people, but will also create better social circumstances for people. The money that is spent will not result in import either, and therefore will place no burden on the balance of payments, and of course the money will immediately be spent on food and housing and products which are available in South Africa. Just for the building of the houses there are five hundred million bricks available. The hon member will know that Coronation Brick alone, I think, is sitting with five hundred million bricks in stock. We therefore have the resources, we have the manpower, we have the land and we have the will, and I hope we have the skill to do the job quickly, because it is very necessary for us to do so quickly. I think that will be a way of stimulating the economy effectively and also of improving the life circumstances of the people in our country who are in distress.

In regard to what the economy looks like, the hon member for Edenvale said numerous things that I myself have said in the past. We do not have any argument with him about that. The question is: What are we doing about it? He asked who was responsible for the overheating, who caused it? Then he went on about how we crowded out the private sector, over the past few years, when it came to Government expenditure. The hon member knows that he is preaching to the converted. The Government has accepted that fact. That is why the Government appointed Mr Wim de Villiers to look into Escom and that is why we have taken the steps that have been taken in regard to Escom. That is why we are looking at the South African Transport Services and that is why the hon the Minister appointed this task force now to look into current expenditure within the State departments, too, why we have the Margo Commission looking into the structure of our tax system—the commission will be reporting quite quickly—and why we are looking at our capital expenditure and need-norms. That is why we are doing so many things—including the policy of deregulation—in order to reduce the number of regulations so that fewer officials will be required to administer the regulations and so that we can have less Government expenditure. There is also the question of getting the Government out of the production process by way of the policy of privatisation, a policy which has been announced and which has a ministry specially responsible for it. I think we shall be hearing some interesting things in that regard in the next while.

So if everything is so good, why is everything so bad?

I do think the hon member was here to hear the arguments raised by the hon member for Edenvale. I am not saying everything is so good. I am merely indicating, in answer to the questions put by the hon member, whether we are tackling the problems. I am merely saying that we are currently looking into the financial problems he mentioned. Whether the product of our deliberations will be appropriate or not, that is something the hon member for Edenvale will have to decide when he sees what, in fact, our response is.

You have wrecked everything except the climate.

The hon member says that GST has not relieved the burden on the individual. Of course it has. He says that we must put income into the hands of the public. I am not sure that that is such a good idea. If we were to reduce GST by 2% we would, in fact, have a loss of revenue of some R1 600 million. Let us take a Black household as an example. I have some interesting figures here that were published recently by the Bureau for Market Research in South Africa on the income of Black households in Pretoria. I do not seem to be able to find the figures now but I will find them for the hon member if he would like me to.

Speaking from memory I can say that the income for the household is something like R9 300 per year. The bureau calculates how much is spent on electricity, rent, transport etc—things which are not subject to GST. When one takes the amount of money that according to the bureau is applied to foodstuffs then one will find that a GST reduction of 2% would only mean a saving of R8 per month to the household.

When one takes into account that the main beneficiaries of that GST reduction will therefore be people who do not need help via the tax route at the moment then one wonders if that is an appropriate way to help the poor.

We in this country have limited resources and very big problems. We have deserving sectors of the population in all the race groups and all the areas of our country. We must apply our resources more directly to those people who are genuinely disadvantaged. We should not shoot with a shotgun and help people who very often do not need help because we do not have the resources and cannot afford simply to do that.

Mr Chairman, may I ask the hon the Deputy Minister a question? I would like to ask whether the idea of food stamps helping the disadvantaged has ever been considered by the Government. That system is used in the USA to help those who really need it.

I will investigate it and enquire from the department and I will let the hon member know after this debate. At the moment, however, I do not know.

When we look at the question of food we find that the total expenditure on food in South Africa in 1985 was something like R15 billion. The value of the foodstuffs exempt from GST was some R10,8 billion. If one calculated the GST rate of 12% on this amount it meant a loss of revenue of some R1,3 billion last year and R1,5 billion this year. The fact is that over two thirds of the foodstuffs sold currently are already exempt from GST.

Are we subsidising food now?

My own view is very clear—I believe that we should rather have everybody in and have lower tax rates than to have some people out and have higher rates. However, that is something for the Margo Commission who will look into the whole matter. I am sure that they have addressed themselves also to that fact.

The hon member for Edenvale discussed the proposed amendments of the hon member for Yeoville. He said that we should exclude the word “voluntarily” and include the words “by or under any law”. I want to say to the hon member that the effect of this amendment would be that the Institute of Chartered Accountants would be excluded because they are not established by any law and that the Institute of Chartered Secretaries would also be excluded. Clearly therefore we cannot accept that amendment.

I think the hon member should read the word “professional” with the word “association” because the word “professional” qualifies “association”. We are clearly not aiming at coin dealers—I think this was the problem of the hon member for Yeoville—but only at professional bodies. We therefore cannot accept those amendments either.

It was also suggested that the word “irregularly” should replace the word “unduly”. I can promise the hon member that we will look into that and if the suggested word is more appropriate we will use it. If we add the penalty that the hon member suggested—and that we accept in principle—then it would perhaps be a good thing to replace “unduly” with the word “irregularly” because the latter does convey more clearly that a misdemeanour has taken place.

The hon member had a lot to say about the words “evade” and “avoid”. If he had read the Bill carefully, he would have realised that “avoid” was used in connection with an obligation or duty and did not refer directly to tax. If it had, that would have been a different matter, but in the terms of that Bill is trying to say the two words are synonymous and “avoid” is perfectly adequate. In any case, no judgment delivered in a South African court has given “evade” a higher meaning than “avoid” even as far as taxes are concerned although there is British case law on this subject. As we regard the two words as synonymous, we have no objection to investigating the use of the word “evade”. If it should prove to be more appropriate, we shall make the necessary amendments at the next opportunity.

The hon member also referred to other amendments, but I think all his points were discussed during the debate on the Income Tax Bill. I am prepared to repeat our arguments if the hon member wants me to, but I do not think that is necessary. As I have said, we will look at the hon member’s suggestion that we should try to control the leaking of information from the controlling bodies. I do have a problem, however, with the penalty suggested by the hon member for Yeoville in that he suggested the inclusion of a penalty of R500 in the Income Tax Bill and one of R10 000 in the Sales Tax Amendment Bill. I cannot for the life of me see any reason for this great disparity, but the hon member can rest assured that we will look at his suggestion. He will know that we never take such steps without consulting the official and professional bodies concerned.

I very much appreciate the short, supportive contribution made by the hon member for Caledon. He drew the attention of those involved in agriculture to the fact that raw maize meal may now be milled without GST having to be paid. A great many farmers will be pleased about that. The hon member for Heilbron and others have mentioned this in the past, and we have now responded to their representations.

*The hon member for Barberton expressed concern about the small farmer and asked whether we were now not going to register him if he exceeded the limit and perhaps had a turnover of less than R50 000. It is true that there are at present registered farmers with a turnover of far less than R10 000. The idea is not to exclude small farmers or people with reasonable requests. Nothing is changing. All that is happening, is that the registration limit is being increased to R50 000.

The main object of this is to help small farmers and to ensure, in other clauses as well, that we shall be able to recover tax in those areas where it is impossible for the seller to collect it himself. The hon member knows what I am talking about.

Mr Chairman, can the hon the Deputy Minister give us the assurance that if a small farmer with a turnover of less than R50 000 should apply for registration, that farmer will be registered under all circumstances?

I can give the assurance, Sir, that bona fide farmers who are registered in terms of the existing measures will in future also be registered in terms of the new measures. There is no dissatisfaction at the moment and I do not expect any dissatisfaction in future either. I should like to give the hon member for Barberton that assurance.

The hon member also said that all inputs, as far as farming is concerned, should not be taxed. The fact is that many of the inputs are not taxed by means of general sales tax. He is fully aware of this. I am referring to nitrogen, seed, livestock, tools, diesel, etc. We are trying to apply the policy that the inputs, excluding capital goods, are not taxed.

This brings me to the hon member for Sasolburg, who requested that the inputs of advertisers—this affects the newspaper industry too—should not be subject to GST either. I do not doubt the merit of the hon member’s argument; in fact, I am at present considering it. I recently held discussions with a delegation about this matter, and we have also asked the Margo Commission to look into this. When the Margo Commission reports in July we shall look at this again. We are fully aware of the problem in this regard which the hon member has mentioned. We are not unsympathetic and we shall investigate the matter. This is all I can say to the hon member as far as this matter is concerned. [Interjections.]

Order! Judging by the merriment in this House no one would believe that a tax measure was being considered! Hon members must please lower their voices. The hon the Deputy Minister may proceed. [Interjections.]

What I fail to understand about what the hon member for Sasolburg said, is that when the first motion on the Order Paper was discussed today he said that we were not after all, talking about “insignificant little Acts such as the Sales Tax Act”. Yet he expounded at length on this so-called “insignificant” piece of legislation! Now I am not sure whether his contribution was also an insignificant little contribution! I do not think so, however, and I thank the hon member for the points he made. He will understand that I cannot agree with him on his reason for opposing the legislation. In view of the good reasons why the hon member for Edenvale is not going to move his amendments any longer I think the hon member for Sasolburg will no longer support the amendment that is not going to be moved.

As far as diplomats are concerned, I just want to say that the situation is reciprocal. If we do not pay tax in other countries we do not demand tax from the people here. Therefore it is a very simple principle that is contained in the Act. We do, therefore, agree with the hon member for Sasolburg on that score.

If I am not mistaken I have already replies to all the questions by the hon member for Sunnyside.

With these few words I thank hon members for their support. Finally, I just want to repeat that I do not support the amendment which I hope will not be moved.

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

Mr Chairman, in the course of my Second Reading speech I actually motivated the amendments on the Order Paper. For that reason it is not my intention to discuss them in any detail.

I accept the point made by the hon the Deputy Minister concerning the question of voluntary associations, and therefore I will not move that particular amendment.

We now come to the question concerning the terms “avoid” and “evade”. I understand the context in which the hon the Deputy Minister says that those terms are used synonymously, and I would agree with him. What I am in fact saying, however, is that in the context of income tax in total, those terms are loaded, if I may use the word. It does not matter whether we are talking about tax avoidance or tax evasion…

Super tax. It is an obligation.

Yes, I know. What I am saying is that the word “avoid”, whether one uses it directly or indirectly, has a particular connotation if it is used in relation to tax and therefore I think that the use of the words “evade” and “irregular” actually meets the need better, I think they express our intention better. If the words are synonymous, I would suggest that those words are better words to use.

I now come to the second group of amendments. I want to make one thing very clear. We have no problem in the situation where a member of a professional association has done something wrong and disciplinary action is taken against him. We support that. Our concern is, though, that the affairs of the client could be made known. I am sure that the Commissioner for Inland Revenue will treat that with tremendous discretion. If I, in all good faith, go to a tax adviser who is crooked and I do not know he is crooked, it is actually wrong to some extent that I should be penalised. He should be penalised and action should be taken against him. I think it has been a principle of our law that income tax matters are not made publicly available. It has always been a principle of our law. However, when we are in fact going to take action against the professional who commits a misdemeanour, we must be careful not to penalise the other person concerned.

If your counsel lies, you are responsible.

Yes. We had a long debate concerning the hon the Minister of Constitutional Development and Planning telling the hon the Minister of Finance that he had good counsel. Here is a case where, if one has bad counsel and one’s council has lied, one could actually bear the brunt of it and not one’s counsel. What we are saying is: Let the professional bear the brunt and not the individual.

Order! I wonder if the hon member could indicate which of the nine amendments he intends to move. Does he intend to move them all or only some of them?

Mr Chairman, I shall move amendments 2, 3, 4, 5, 6, 7, 8 and 9 which appear on the Order Paper in the name of the hon member for Yeoville. I shall not move amendment No 1 because I think the explanation given by the hon the Deputy Minister was a perfectly valid one.

As far as amendment No 9 is concerned I think it is necessary that we do specify a fine. Instead of leaving it open-ended let us have a figure. In the present context a fine of R10 000 or six months’ imprisonment for a serious misdemeanour is fair. The hon the Deputy Minister asked me a question about the amendment moved previously by the hon member for Yeoville. As far as I am concerned I think R10 000 for tax evasion is in the present context a fair figure.

With those few words I move the following amendments:

1. 2. On page 15, in line 6, to omit “avoid” and to substitute “evade”.
2. 3. On page 15, in line 6, to omit “unduly” and to substitute “irregularly”.
3. 4. On page 15, in line 9, to omit “avoidance” and to substitute “evasion”.
4. 5. On page 15, in line 10, to omit “undue” and to substitute “irregular”.
5. 6. On page 15, in line 38, after “(c)” to insert:
   and no objection has been lodged by the client
6. 7. On page 15, in line 39, after “lodged” to insert:
   by the client or the person against whom the complaint is to be made
7. 8. On page 15, in line 40, after “objection” to insert:
   by the person against whom the complaint has been made
8. 9. On page 15, after line 62, to insert:
   (6) Any member of the controlling body or any of its officials or employees who contravenes the provisions of subsection (5) shall be guilty of an offence and on conviction liable to a fine not exceeding R10 000 or to imprisonment for a period not exceeding six months or to both such fine and such imprisonment.

Mr Chairman, I cannot accept that figure merely because the hon member says he thinks that R10 000 is a good idea. He may also think R20 000 or R5 000 is a good idea. We cannot legislate on that basis and the hon member knows it. It would be irresponsible in the extreme.

The hon member for Yeoville, whose amendment this is, on a similar Bill only two days ago, suggested that a penalty of R500 would be reasonable, but here he says that the penalty should be R10 000. I do not know what the hon member for Yeoville has in mind. Maybe there was a misprint—which is possible—or maybe he was misunderstood—which is also possible. I should like us first to consult the hon member for Yeoville which I think is a courtesy to him that he deserves. I think we should also consult the parties that are going to be affected by this, the associations themselves, and therefore the hon member will understand that I cannot accept that amendment now. However, I have given him the assurance that we accept the principle and we think it is a good idea.

As far as the other amendments are concerned, I do not know whether the hon member wants me to go through the whole performance again. He shakes his head and so with those few words I conclude.

Amendment 2 negatived and amendment 4 dropped (Official Opposition dissenting).

Amendment 3 negatived and amendment 5 dropped (Official Opposition dissenting).

Amendments 6 to 9 negatived (Official Opposition dissenting).

Clause agreed to.

Clause 16:

Mr Chairman, there is just one very minor amendment to this clause in the name of the hon member for Yeoville, and that is to omit the words “vendor or”. I think those words are actually superfluous because there is a reference to “any class of vendors”. The amendment merely serves to tidy up the legislation. That is all it is there for. I therefore move:

1. 1. On page 17, in line 12, to omit “vendor or”.

Mr Chairman, quite frankly I can take it or leave it alone. The only reason why it is worded in its present form, is that there are occasions when a monopoly exists, where there is only one vendor, and is clearly not a class of vendors. Sometimes the only way one can identify a particular class of vendor is to mention the name of the vendor itself. It is not the intention, however, to isolate people. We share the spirit in which the the amendment is moved, and I therefore ask the hon ember to withdraw the amendment.

Amendment 1 negatived (Official Opposition dissenting).

Clause agreed to.

House Resumed:

Bill reported.

Bill read a third time.

Mr Chairman, I move:

The Bill gives effect to the taxation proposals relating to estate duty, marketable securities tax and stamp duty which were tabled earlier this year as part of the Main Appropriation.

Hon members will recall that considerable relief from estate duty and increases in stamp duty and marketable securities tax were proposed. The Department of Finance is constantly engaged in carrying out research with a view to ensuring the effective and fair implementation of the laws relating to stamp duty, transfer duty, etc. Regular attention is consequently being paid to the possibility of changes designed to bring the relevant laws into line with changing circumstances and to restrict tax avoidance to a minimum. It must be borne in mind, however, that the Margo Commission is examining the whole spectrum of our taxation system and that it was consequently decided not to propose any drastic changes in regard to stamp duty and transfer duty until the Commission’s report became available.

†The reasons for the proposed increases and the stamp duty relating to transfer of marketable securities, the stamp duties on debit entries in cheque and credit-card accounts, and the marketable securities tax were dealt with in the budget debate. These are purely revenue-raising proposals which do not require any further explanation apart from the explanations given in the explanatory memorandum which has been provided.

As the present Bill is not long or complicated it has been found convenient and cost effective to combine the explanations of the provisions of this Bill with those in the current Sales Tax Bill in one memorandum.

As far as the estate duty amendments are concerned, may I remind hon members of what the Minister said in his Budget Speech last year, namely that in the Government’s opinion estate duty in its present form can no longer be regarded as appropriate to the needs of our time.

The present proposals, as the Minister stated in his Budget Speech this year, must be seen as a further step in the phasing out of the duty. Apart from this it is in any case necessary to grant some measure of relief by having adjustments made to the fixed deductions and the progressives rates of duty, which have become unrealistic because of the effects of inflation.

Mr Chairman, this is a very simple Bill which really does four things. Firstly it increases marketable securities tax from 1% to 1½%, and it also increases stamp duty from 1% to 1½%.

We on these benches are very seldom in favour of any increases whatsoever. However, I suppose that if one does not like increases, then the one group of people which can in fact bear the burden, are those who invest in Stock Exchange shares. Therefore, if we need extra income, that is one area from which it can come without doing too much harm. We will support this because I think the doubling of the estate duty abatements is particularly useful in that they are keeping pace with inflation and with the rates at which estate duties are levied.

I would like to say to the hon the Deputy Minister that I just wish that individual tax rates could be adjusted as generously as estate duty rates are adjusted. This is obviously something that we have to do of necessity. In a highly inflationary environment one has to adjust one’s tax rates fairly regularly.

I think the key question that we are all waiting to have answered, relates to the fact that the hon the Minister of Finance has said that estate duty in its present form is outdated. I think he is hoping to add to some skilled unemployment by putting certain people out of jobs who have made quite good money out of this. The key question though is what is going to replace it. I think here again we are waiting for the report of the Margo Commission. The sooner we get that the better, because I think a tax regime which is uncertain is in fact bad. People like to plan their income tax and they like to plan their estates so that they will pay the minimum estate duty possible.

The fourth thing this Bill does is that it increases the duty on debit entries from five cents to ten cents, but this only affects cheques and credit card accounts. It does not affect savings accounts. The burden again, like the marketable securities tax, falls on those who can afford it rather than on those who cannot afford it. For this reason we will be supporting the Bill.

Mr Chairman, I should like to thank the hon member for Edenvale for his party’s support and I also want to assure the hon the Deputy Minister of the support of this side of the House. In considering the matter again, we see the hon the Minister of Finance has outlined all these steps in the Budget and this measure is in fact only the implementation of the Budget address as made by the hon the Minister. [Interjections.] I therefore want to agree with the hon member for Edenvale.

Language usage remains an interesting thing. The hon member said “this is a simple Bill”. In Afrikaans it would sound terrible, but it sounded quite good in English.

Like “a simple hon member”.

The hon member for Brakpan and I have much more to discuss than this kind of thing.

In association with the hon member for Edenvale, I say the question arises as to what the report of the Margo Commission holds in respect of the abolition of estate duty. One hopes in anticipation that one evil will not be exchanged for another, because as, the saying goes, better the devil one knows than the devil one does not know; at least then one knows what it is all about. One’s hope, nevertheless, is that estate duty will be abolished and will not be replaced by something that may be worse.

If one follows up the remark made by the hon member for Edenvale, one sees that South Africa is not the only country in the world that is struggling with the development of new tax structures at this stage. If we look at a world leader like the USA, we find that that country is also debating new tax structures at the moment. Perhaps the Margo Commission will present their report, according to which we may be able to begin building our new tax structures, during the second half of this year. One wonders whether it is not possible for us also to become a world leader in the sphere of the reform of tax structures.

Mr Chairman, May I ask the hon member whether he knows something that we do not know?

Certainly, Mr Chairman, I always know something the hon member does not know, but it depends on what he means. If it is in connection with tax structures, I must admit ignorance, but on various other fields I may have some answers for the hon member.

*What I am really trying to say is that South Africa is one of the world leaders in the sphere of labour legislation, for example. I believe the inputs of the Margo Commission may give us the opportunity to become world leaders in the sphere of tax structures as well.

If one looks at the marketable securities tax that has been increased from 1% to 1,5%, it is probably this facet which can best be afforded by those who take part in it. One is pleased, therefore, that it has not taken place in other spheres. I want to thank the department for choosing that facet and not something else.

I really want to call attention to the committee that advises the Minister on a continuous basis. In my opinion we do not appreciate this committee sufficiently. We have experienced the advantage of the work done by this committee in the past. We have once again had the benefit of the advice given to the Minister on a continuous basis this year.

I think that avoidance by means of this legislation is being restricted to a minimum and that is why it is easy for me to support it.

Mr Chairman, we are dealing with a very short Bill which is really just a consequence of what the hon the Minister said in his Budget speech. It is all about estate duty, marketable securities and stamp-duty and we have no problem with any of these aspects and will support the Bill.

As far as estate duty is concerned, I wonder if the hon the Deputy Minister can give us an indication of when we will have more clarity about this. There were indications that the Margo Commission might report at the end of this month and I should like to know how far that commission has progressed with its work. Will the report of the commission be published immediately, or will the Government peruse it first and issue a White Paper on it later? We hope the Margo Commission will recommend that estate duty be abolished in due course. The hon the Minister expressed that prospect in so many words. I am not worried about what will come in its place, since the committee that has to advise the hon the Minister on budgetary expenses will definitely make recommendations about savings so that it will not be necessary to obtain that revenue in another way. I think a great deal of money is wasted in South Africa and that we should save a lot more.

Mr Chairman, it is a privilege to say a few words about this Bill, since it announces exceptional relief for us as farmers in that the non-taxable part of an estate has not only been increased by 100% from R50 000 to R100 000, but we have also received a 100% improvement in the percentages made applicable on various intervals. If the net value of an estate exceed R50 000 in 1980, for example, estate duty of 13% was payable on the next R50 000, whereas the Bill determines that this limit is now being increased to R100 000. This is a great advantage to farmers. On average farmers have three children, which means that an estate has to have a net value of just less than R600 000 so as not to be subject to estate duty. If one looks at land prices however, and the prices of implements, etc, I want to ask the hon the Deputy Minister whether he cannot do even more for us.

I am not very concerned about whether or not estate duty will be replaced by anything else, since as far as I know, estate duty which is collected at present does not make up even 1% of the country’s tax revenue. It is very expensive to collect this tax and many man hours are spent on this in an effort to ensure that people do not have to pay this tax.

That is why one wonders if it is all worthwhile. As far as paying estate duty is concerned, the fact of the matter is that the really big owners, such as big industrialists and mine-owners pay hardly any estate duty because they control most of their assets by means of trusts which of course are not liable to estate duty. On the other hand, the small entrepreneur—the businessman in the rural areas, the farmers, all of us—is really hit hard by estate duty. One must ask oneself whether we are succeeding in controlling the multiplication of assets of certain people by means of estate duty and whether we have any success in obtaining useful funds for the State by means of this kind of tax. At this stage I think both questions must be answered negatively. I am sure the Margo Commission’s report in this connection will be very favourable for all of us.

Mr Chairman, this Bill is a relatively simple Bill and I do not think any of us have very much difficulty with it. I do, however, have a little bit of a problem with the increase from 1% to 1,5%. That is a 50% increase in one fell swoop. [Interjections.] This is how the Press would put it, naturally. I realise that one cannot do very much less than give an increase of 0,5%, but I would suggest that one exercise a little caution here because although it is a relatively minor increase one of the favourite small punters’ sports in South Africa is tic-key-snatching on the Stock Exchange. It is beginning to get a bit expensive if one has to pay 1,5% on the purchase price, plus 1,5% registration fees. One has to be sure that one gets darn good increases in one’s shares before one can sell them. Please do not spoil the fun of a lot of people who play the Stock Exchange.

Insofar as the increase in abatements in respect of estate duty is concerned, we also welcome this. I was very interested to hear the comments of the hon member for Heilbron. It seems to me that when I walk around here I only hear of poverty-stricken farmers. However, it does appear that they are very wealthy when they die! This obviously will help them. Perhaps it would be a good idea to make a few suggestions so that they could be more comfortable when they are alive. They might appreciate that.

The increase in stamp duty on cheques and credit card transactions is obviously just an additional cost. As one has inflation on everything else I suppose we have little option but to accept that the cost structure is such that it is justified. With those few words, Mr Chairman, we will be supporting the Bill.

Mr Chairman, the hon member for Umbilo says that we have a 50% increase. The fact is—and the hon member knows it well—that this was announced in the Budget a long time ago. Any harm that could therefore have been done or any reaction from the Press has already been done or took place a long time ago. I might just tell the hon member that it used to be 4%. Many years ago, in the time I think of Dr Dönges, it was 4%—2% on the buyer and 2% on the seller. Then it was reduced to 2% only on the buyer and now it is only 1%. That we have now increased to 1,5%.

When one looks at the number of listings and at the trading that has taken place over the past months, then clearly this is not having any impact. It is a tax which is resting fairly lightly. However, that does not encourage us now to greater heights as far as this tax is concerned. It should not and I am sure it will not.

*The hon member for Heilbron conveyed his thanks but also asked whether we could not do more. He must not bedevil a good thing here. The fact is, however, that this relief is R20 million and therefore means a great loss of income for the State. I agree with what my hon colleague, the hon the Minister, has said a number of times in the past, viz that it is an unproductive tax. One does not really catch those people who should pay, because they have all kinds of ways of evading it. Possibly it is an outdated tax that has to be modernised. We therefore look forward to what the Margo Commission has to say. With the hon member for Vasco I therefore hope, however, that the unknown nuisance will not be as bad as the reality is now. We shall have to wait and see what happens, however. My reply to the hon member for Sunnyside, therefore, is that the report of the Margo Commission will be published by next month—at least that is the latest information I have. Naturally we shall study the report before we issue a White Paper on it. The hon member will realise that we are involved in a great task. It is a task which has an immense impact on every sphere of life. We shall therefore have to take the greatest caution in considering the proposals and, naturally, our reaction to them. There will be more than sufficient opportunity for contributions, for discussion and for the consideration of the proposals when they are published, however. I am sure the hon member will be fully informed on this. He knows my door is always open whenever he needs information and so he will always be able to obtain it. I am prepared to give him a hearing whenever necessary.

I believe I have replied fully to the speech made by the hon member for Vasco. All that remains is for me to thank all the hon members for their support of the Bill in question.

Question agreed to.

Bill read a second time.

Bill not committed.

Bill read a third time.

Mr Chairman, I move:

As is customary, this Bill deals with diverse matters affecting the State Revenue Fund. The different clauses are fully explained in the Memorandum on the Objects of the Bill. Therefore I will deal only with the more important clauses.

Clause 2 provides for the surplus in the State Revenue Fund at the end of the 1985-86 financial year to be transferred to the Special Defence Account. As hon members know, the purpose of the Special Defence Account is to have a fund out of which unscheduled deliveries of defence equipment can be met. It follows that the Special Defence Account must be in credit to fulfil its function. This clause puts the account in funds, as envisaged in the Special Defence Account Act.

A question that may arise is why this augmentation of the Special Defence Account was not included in the Budget for the 1986-87 financial year. It has become customary to utilise the surplus in this manner, instead of carrying it forward to the next financial year. The quantum of the surplus only becomes known when the books are finally closed at the end of August of each year. Even now the exact amount of the surplus is still not known. Besides other technical problems, it is not possible to include an unknown amount in the estimates.

*In coming to clause 4, let me say that it is with a tinge of sadness that we take leave of the Decimal Coinage Act. We all remember the little jingle we heard so regularly 25 years ago, and I quote:

Hon members will remember that. That Act has served its purpose, however, and must therefore be deleted from the Statute Book.

The provisions of clauses 5 and 6 reflect the increasing computerisation of the Public Service. The proposed amendment to the Bills of Exchange Act will speed up the preparation of warrant vouchers, with a concomitant saving in manpower and time.

Clause 9 is explained fully in the memorandum. I do, however, want to emphasise the fact that the conversion of loans to the South African Transport Services into permanent capital, and a consequent reduction in interest costs, means in effect the subsidisation of commuter services, particularly those for the less well-to-do.

Clauses 10 to 12 bring trust money and trust property into the ambit of the Exchequer and Audit Act. The money and property handled by Government departments on a temporary basis will consequently have the added safeguard of being subjected to better control by the Treasury.

Clause 14 reflects an interesting development in privatisation and will enable the Auditor-General to use private auditing firms on a far wider front. The capacity in which private auditors can be used will be extended from the present situation, in which they are used to audit the accounts of statutory bodies, to one in which their services can be employed by the South African Transport Services, the Post Office, provincial administrations, Government departments, etc.

†Clause 18 is fully explained in the memorandum. I wish, however, to thank members of the standing committee for their positive contribution in finalising this clause. The addition to section 6(2) of the Finance Act of 1978, as proposed by the standing committee, will enable the Government to provide the extended reinsurance. As difficulty ought no longer to be experienced to distinguish between political and non-political disorder, possible disputes as to the motivation for causing loss or damage to property will be eliminated. This will reduce claims settlement costs and eliminate many of the delays experienced in settling claims.

Clauses 21 to 24 apply the user-charge principle to the activities of the public investment commissioners, as do clauses 25 and 27 in respect of the Local Authorities Loans Fund. This in fact means that administrative expenditure incurred by these funds will no longer devolve upon the State Revenue Fund, but must be paid by the institutions to which the services are rendered.

As I said earlier, the Finance Bill traditionally addresses diverse matters that affect the State Revenue Fund. The Bill before this House is no exception and contains a variety of matters which are mainly textual and are fully explained in the Memorandum on the Objects of the Bill.

In conclusion I wish to avail myself of this opportunity of thanking members of the Standing Committee on Finance most sincerely for their work and for their contribution to this Bill.

Mr Chairman, this is an omnibus Bill which was amended in the standing committee, and we support it. Therefore I should like to comment on only a few clauses.

The first clause on which I should like to comment is clause 3, which actually relates to the debt standstill. I believe in South Africa, at the present moment, there seems to be a lot of confusion. The value of the rand fluctuates tremendously. One hears lots of rumours. There seems to be an air of speculation about exactly what the situation is. Therefore, Sir, I wonder whether the hon the Deputy Minister, in his reply to this debate, could not actually tell the House a bit more about the situation. In particular, I should like him to tell us how much of the money we leased has been rolled over, how much is to be paid this year, and is anything being contemplated in this regard. I should also like him to tell us about the liabilities of the State in this regard. What assets does the State…

This clause has nothing to do with the debt standstill.

Sir, that clause deals with certain provisions relating to the debt standstill. What I am trying to do is to give the hon the Deputy Minister an opportunity of clarifying the situation with regard to the debt. If he does not want to do that, then it is all right. I do believe, however, there is an air of uncertainty about the foreign debt situation. The value of our rand is fluctuating up and down, which in fact makes it very difficult for people who have to rely on foreign exchange.

I should like to refer, too, to clause 4, which seeks to repeal the Decimal Coinage Act, 1959. In relation to this clause the hon the Deputy Minister might recall that in 1960 and early 1961 we had the concept of Decimal Dan. I believe that was one of the most innovative Government marketing activities that one has ever seen. I believe, too, that there is a lesson to be learned from that. It was carefully thought out. It was professional. It was catchy. It brought the public along, and decimalisation was in fact—if one thinks of it—quite a far-reaching change for a large number of South Africans. Yet it went off remarkably smoothly. I mention that because, as the hon the Deputy Minister will know, in 1980-81 a draft Bill on pensions was actually made available. I think the hon the Deputy Minister’s department, together with the then Department of Health, Welfare and Pensions, was responsible for that particular Bill. Although the Bill was never presented to Parliament, a draft Bill was made available. Should we not, then, when we come to look at a new pension dispensation, consider replacing the “error” of Decimal Dan with the “error” of Prudent Pete? Prudent Pete will actually be the man who takes steps to provide for his retirement so that he does not become a burden on the State in the future. That is very necessary.

As the hon the Deputy Minister will know, the social pension system is becoming tremendously costly. We need to instil in people, therefore, an awareness of the need for them to provide for their own retirement. I am glad to see the hon the Minister of National Health and Population Development here because I really think the Government should consider this concept of Prudent Pete along the same lines, perhaps, as the concept of Decimal Dan.

I come now to clause 7 of the Bill. In the standing committee we, as well as the representatives from the other two Houses, opposed the amendment contained in clause 7 as it appeared in the original Bill. It would have allowed a Treasury for each of the own affairs administrations to decide on the appointment of accounting officers for Votes or portions of Votes falling under the control of the relevant administration. Our viewpoint has been that there should be one single body, namely the Treasury, which should be ultimately accountable for all funds spent by the Central Government. What we are saying, in other words, is that central control should vest with the Secretary to the Treasury. The deletion of clauses 7(a) and (b) of the original Bill means that we return to the status quo. We will, therefore, be supporting the Bill and we will not be voting against that particular clause.

On this question I should like to refer the hon the Deputy Minister to two books that have been published recently. One is In Search of Excellence, and the other is The Winning Streak. In Search of Excellence deals with private business organisations in America, while The Winning Streak deals with the British situation. The hon the Deputy Minister will recall that the successful companies had what the authors referred to as a “hard loose system” is that in respect of certain key functions, these companies exercised very tight centralised control, while in respect of other areas they allowed decentralised control.

Why is he not listening to you?

No, it is the hon the Deputy Minister, and not the hon the Minister, who is handling this.

In any event, I want to say to the hon the Deputy Minister that I think that system is a good one. In South Africa too, we should keep the control and the accountability in one central area, which the amended Bill does in fact do!

If he gets to read those books, the hon the Deputy Minister will see—I find this quite interesting—that accounts and finance was the one area which these companies did not decentralise. They tended to keep that separate.

Clause 14 allows the Auditor-General to utilise the services of private auditing firms on a wider basis. We are in favour of this. We hear a lot of talk about privatisation. That one word, “privatisation”, has various connotations, however. The one connotation is that a Government enterprise is broken up and the private sector is then allowed to take it over. The other connotation—Sasol is an example of this—is where ownership actually changes altogether or where the public is given the opportunity to participate in the ownership of the institution. The third connotation—I am glad the hon the Minister is here to hear this—is that the Government nominally keeps control of the services. The Government is ultimately responsible for the services, but they are broked out or sold out to the private sector. This system has met with a lot of success in the USA. There is a lot of scope for this. The hon the Deputy Minister might some day look at the State Pension Scheme and consider whether that should not be broked out to various institutions. We believe that what is happening in clause 14 is good and we support it.

I come now to clause 18 which relates to the activities of the South African Special Insurance Association. This is a very important clause. The original Bill has in fact been amended. We were very unhappy with that clause in the original Bill. What in fact has arisen is that there has been difficulty in getting satisfactory reinsurance because of the difficulty of separating political and non-political losses. The original amendment went too far for our satisfaction because we believe the original amendment could have made the State accountable or responsible in the end not only for the underwriting of political risks but also for ordinary commercial risks.

There are two important points that arise here, I think, with regard to the legislative process. The one is that there is a danger involved when professional interests and bodies come to the legislature and say that they need a particular Act. One listens to them and they present a good and compelling case. However, one also has to hear the other viewpoint. I can see that the original Bill would have been very good for the insurance industry. I am not so sure, however, that it would have been as good for the public or for the taxpayer. The first point is, therefore, that one has to be careful of an industry dominating the legislative process.

The second point I want to make is that, if the private sector wants the benefits of a free enterprise system, there is another side to the coin. That other side of the coin is that they then have to be prepared to take some of the risks. What we had here, I think, was that the insurance industry said they wanted the profits but if the risks really became too bad the Government had to take over those risks. That, for us, was in fact unacceptable. In its present form we are happy with the Bill and we will therefore be supporting it.

Mr Speaker, I want to speak on only one clause of this Bill and that is clause 13. Hon members will remember that last year the South African Police Special Account Act was passed which established a special secret account for the Police. In terms of that Act the money was to be used for such services of a confidential nature as the Minister—presumably the Minister of Law and Order—may approve of. In terms of that Act the Commissioner of Police was accountable for the administration of those monies and the Auditor-General had to audit the account. That is as far as it went. Now we have before us an amendment in terms of which the Auditor-General shall audit the account, but he must now do so—

What interests me is to what extent anybody is going to know what is being done with that money and who is to determine exactly what is in the public interest. I ask that question in the light of the written reply I received this afternoon to two questions which I had asked the hon the Minister of Law and Order who is responsible for the Police. Both questions were deemed by him not to be in the public interest to answer. In one question I asked him how many persons had been detained under emergency regulations since the declaration of the state of emergency on 12 June, and in the other I asked him whether any of the persons detained were under 21 years of age. I also asked for the name and the race of each person. The hon the Minister decided that it was not in the public interest for this information to be revealed. As I read this new amending clause, it seems to me as if the hon the Minister of Finance is the man who determines, in the end, who shall limit the extent to which the report may be revealed. I have here lists and lists and lists…

What is that, Helen?

These are the names of people who have been detained. The hon member may take this list home and have a look at it. If the hon member has a look at clause 13, he may know what this has to do with it. [Interjections.] I believe that the money we voted last year for special services for the Police is largely being used for this sort of operation, and that is why it is relevant to this particular clause. I also have another list which has something like 1 500 names on it—the other list contains 300 names, some of which are the same. Yet we are to be denied this information by virtue of the fact that the hon Minister deems that it would not be in the public interest to reveal such information

I do not believe that we should allow this to go unquestioned, because amongst these names—and I have only just glanced at them—there are well-known academics such as Mr Ngcobo of Wits, Mr Maake of the University of the Western Cape and staff members of the Natal Medical School and of the University of the Western Cape. There are well-known trade unionists like Piroshaw Camay and Dennis Neer, just to give some examples. There are members of the clergy, and lawyers such as Cachalia, Watters and Smit—of course, not our Watters here! There are journalists such as Jill de Vlieg, Mike Loewe and Cliff Steerman and doctors such as Asvat, Motala and Nkomo, and political activists such as Rayond Suttner and many members of the UDF.

Order! Perhaps the hon member is drifting away from the gravamen of the legislation.

Well, Sir, I must say that I have really been shocked to see the lists of people who have been detained since the emergency was delcared… [Interjections.]… and I want to know whether this special fund—the millions that have no doubt been allocated to the fund—is being used for these purposes and, if so, why some of that money is not being used, at least, to inform the relatives of the fact that the people have been detained. The hon the Minister of Law and Order told met that that was general practice, but I want to tell him that from the enquiries we have had, through our monitoring office here, that does not happen. South Africa is in the process of becoming a country like El Salvador and Argentina where thousands upon thousands of people go missing and the government refuses to give any indication of where those people are, whether they are even alive or dead. Money allocated for the Police secret account is being used for this sort of thing. We want to register the strongest possible objection to this practice.

Mr Chairman, I should prefer not to devote too much attention to the hon member for Houghton, because in her life there is only one thing she hates, and that is the Police. If that hon member did not enjoy the protection of the the South African Police, where would she be today? Likewise, if the Police did not protect the Blacks in the Black residential areas of South Africa, there would not have been only 57 or 69 people—whatever the number might be—burnt alive; thousands of them would have been burnt alive. The hon member should please take note of that and stop bearing such malice toward the Police.

This is of course omnibus legislation. When I came to this Parliament, the Department of Justice’s omnibus legislation was well known to all of us. At that time I also went through a night session. In those days I was a man who just sat and listened but I must say that such a night session involving the Department of Justice’s omnibus legislation was really very interesting.

I should also like to refer to clause 4. It is now 25 years since Decimal Dan made his appearance. He spoke on the radio every morning and evening and it was his job to eradicate the pounds, shillings and pence in South Africa. I wonder how many of us are still familiar with the system of pounds, shillings and pence? The sign for pounds was a capital L with two stripes through the stem, for shillings an s and for pennies a d. I find it interesting that I still know them all.

The pound consisted of 20 shillings or 240 pennies. Then there were also the ten shilling piece and the half crown. If one had four half crowns, one was really quite rich. A shilling was equivalent to twelve pennies, two sixpences or four threepences, the latter being generally known as tickeys. When one made a telephone call in those days, one did so with a threepence and that is why the telephone cubicle earned the name “tickey box.”

I think it would be a good thing if the SABC and the newspapers were to take note of what I am saying here this evening. After all, the newspapers always publish a brief article about what happened the previous day in Parliament. It would be a good thing if they were to devote some time over the radio to Decimal Dan so that the younger generation, who no longer know how pounds, shillings and pence look, can at least hear how it sounded in the days when Decimal Dan was in the limelight. [Interjections.] With those words I close the obituary for Decimal Dan. I think he did a good job.

It is a good thing that a Bill which is no longer applicable, should be repealed. I have no problems with the Bill, and we on this side of the House support it.

Mr Chairman, I would like to thank the hon member for Edenvale and the hon member for Sunny-side for supporting this measure. As the hon member for Edenvale said, it is an omnibus Bill that covers some 12 separate individual Acts. It was thoroughly discussed in the Standing Committee on Finance. As the hon member pointed out there were amendments which we in these benches agreed to support with the result that there was a large degree of consensus on this Bill.

I would like to refer briefly to certain amendments. There are certain measures contained in this Bill which could result in savings when it comes to State expenditure. One finds these measures in clauses 5 and 6 where there are new definitions for “Post Office cheque” and “warrant-voucher.” This has been brought about in order to enable the authorities to use modernised computer machines in the drawing up of various types of bills. It will lead to a certain amount of savings.

The hon member for Edenvale also mentioned clause 14 regarding a certain degree of privatisation in the use of private sector auditing firms. I want to say to the hon the Deputy Minister that I hope this clause will result in a certain amount of savings in his Budget. It is all very well to talk about privatisation but if there is not pay-back to the State I do not think it is so commendable.

In clauses 21 to 24 and 25 to 27 there are measures which will pass back the costs of administering certain funds on behalf of certain institutions and local authorities onto those institutions and local authorities rather than to have the central State Revenue Fund paying for them. There are therefore certain measures contained in this Bill which should result in a reduction of State expenditure and these we welcome.

As I have said, this is an omnibus Bill and it was agreed to by all concerned. I cannot say I was very surprised when the hon member for Houghton raised the question of clause 13, because we have come to expect that sort of thing from her. This clause is however, purely a consequential amendment resulting from a Bill which was passed in this House last year after being considered by the Standing Committee on Finance.

[Inaudible.]

The clause instructs the Auditor-General to audit this particular special account.

No…

The fact that the hon member used this opportunity to compare South Africa once again with the military dictatorships of the world shows that members of the PFP are the Lord Haw-Haws of the ANC and other subversive organisations fighting South Africa. [Interjections.] They are propaganda agents… [Interjections.]

Sock it to them, Georgie!

Order! The hon member must withdraw the words “Lord Haw-Haws”.

I withdraw them, Sir. [Interjections.] We dealt with this Bill calmly and quietly in the standing committee, members of which happens to be hon members of the party to which the hon member for Houghton belongs. [Interjections.]

Go back to your task force!

They did not see fit to make any comment whatsoever on clause 13 during the standing committee meetings. With those few words I support this measure. [Interjections.]

Mr Chairman, …

Now you speak softly, Derrick! Softly, softly!

Why must I speak softly? If he could shout as loudly as he wanted to, why can’t I? [Interjections.]

Mr Chairman, everybody has told everybody else all about this Bill, and we all know that it is an omnibus Bill covering quite a number of aspects. The one that I would like to mention is the authority to transfer surpluses from the State Revenue Fund to the Special Defence Account to ensure that the fund is solvent when deliveries are received ahead of schedule.

This is, of course, a very necessary measure and I support the concept without hesitation, but I am concerned that the clause is ambiguous in that we have no idea what sort of money we are talking about. I appreciate the necessity for this measure, and I realise that the surplus cannot be much other than a residue, but still it is not impossible to manipulate it. I remember that, when I was Chairman of Finance of a certain institution, such a residue was transferred to another fund and there was deliberate manipulation of the original budget to ensure that certain sums were made available in the area to which the transfers were to be made. Although I support the clause, I feel that one must ensure that no manipulation can take place.

Clause 3 legalizes the repayment of foreign debt and, as the hon member for Edenvale so rightly said, people are speculating as to what the situation really is in respect of our foreign debts. It would be of interest if the hon the Deputy Minister could give us some indication of the true current situation.

Clause 7 authorizes the Ministers’ Council to administer own affairs accounts. This was heavily opposed in the standing committee—I believe quite rightly so—for the reasons put forward by the hon member for Eden-vale. As I understand it, the standing committee members from the House of Representatives and House of Delegates opposed this clause for entirely different reasons. They may have agreed with the objections of the hon member for Edenvale, but their main reason for opposing the clause was the fact that the concept of own affairs was anathema to them to some extent. I nonetheless agree with the point put forward by the hon member for Edenvale, and the Clause was amended to our satisfaction and we can support it.

Clause 14 touches on the question of the privatization of auditing. I find this mildly amusing, because it has been the norm for many years in provincial government for private auditors to do the job of the provincial auditors. I would estimate that in respect of more than half of the local authorities in Natal, for instance, the services of private auditors are used. We privatised in that field a long time ago. Therefore, I am very pleased to see that the state is extending this to private auditors because, without doubt, it is impossible for the State auditors to do all the work which is thrust upon them.

I should just like to comment on the Police Special Account. When it was first introduced, we were opposed to the Police Special Account. However, it now exists and, quite obviously, it has to be audited. Perhaps I have also read it wrongly, but I read it the same way as the hon member for Amanzimtoti: It is now a question of getting on with the auditing of the account. If I was perhaps wrong, I would appreciate it if someone could correct me and tell me what the score is.

I suppose one could go on at some length in covering various points of this Bill because there are so many aspects to it. However, I cannot see any particular point in that because it has been explained fairly adequately by the speakers who preceded me.

Therefore, I will conclude by saying that we are supporting the Bill.

Mr Chairman, I wish to thank the hon member for Umbilo for his support.

Full consensus was reached on this Bill in the standing committee. Even the hon members for Yeoville and Edenvale were quite satisfied, with clause 13 as well. I am honestly of the opinion that the hon member for Houghton only used clause 13 to launch an unjustified attack on the police because what she said really had nothing to do with this clause. [Interjections.] I think it was really scandalous of her to raise this in this debate! [Interjections.]

Clause 7 concerns the practical implementation of the principle of general and own affairs. Whereas now each House can decide for itself on the utilisation of its funds, the intention in the first draft Bill was that each House should have its own treasury. After in-depth debating in the standing committee, to which the hon member for Umbilo referred, it was decided to leave this responsibility to the central treasury. The hon member for Edenvale referred to that. However, I am not so sure that it was wise not to transfer the responsibility for control of the expenditure, too, to the respective Houses, since a specific House is itself in charge of the utilisation of funds. In my opinion we would do well to take another look at this in future.

Clause 9 is specifically aimed at reducing the burden of interest of the SA Transport Services. However, instead of specifying, as in previous years, that the loss of interest simply be written off, a total amount of loans amounting to R1,67 billion is being converted into permanent capital. The motivation for this is that the SATS provides certain socioeconomic railway passenger services, and that the losses on these services impose an unreasonable burden on other rail users. Therefore it is no new principle that the State accepts responsibility for the interest on the investment in these railway passenger services, but instead of granting a subsidy on interest, the problem is now being dealt with on a permanent basis.

I should also like to welcome wholeheartedly the stipulation in clause 14. It gives effect to a recommendation which the Standing Committee on Public Accounts submitted as far back as 1985, namely that the Auditor General be authorised to make use of the services of private firms of auditors on a far wider scale for the auditing of the State’s finances. In the past this was limited largely to statutory bodies. Now it is being extended to the SATS, the Post Office, provincial administrations and also certain state departments. I am convinced that this clause is in everyone’s interests, and that it will be very much to the benefit of the administration.

Clause 18 amends section 6 of the Finance Act of 1978 to enable the Government to grant extended reinsurance. Since as a result of this amendment no further problems ought to be experienced in disputes about the reasons for the loss of or damage to property are eliminated.

The hon member for Edenvale also rightly referred to this, but nevertheless there is still a degree of doubt in the industry itself about the amendments effected by the standing committee. There will still be opportunity to effect these adjustments if the amended measure perhaps does not work in practice. It is a privilege to support this Bill.

Mr Chairman, there is no person in the House who has a more thorough knowledge of the accounts of Parliament than the hon member for Smithfield.

†An aspect of his speech that I should like to consider is the reference he made to clause 9. It just strikes me as a little bit odd that the subsidy for passenger transport should be related directly to the equity which is really being produced now for the SATS. I would actually have thought that it would have avoided future difficulties and that it would have been more clear-cut bookkeeping if we had assessed, as a subsidy that had to go through this Parliament, the amount that was required for this purpose each year and the amount then went in as equity to the SATS to enable them to compete in the way in which they will have to with the new arrangements that are being made.

I should like to spend most of my time speaking about clause 13. I am particularly concerned about and interested in the provision now being made in this Bill for the auditing of the South African Police Special Account. Every country in the world has secret accounts. In fact, every country in the world has to be involved in things like espionage, counter-espionage and the procurement of certain assets. Whether we like it or not, it is a fact of life and there is no country in the world that does not have special accounts. However, they cause problems because they are difficult to control and to monitor and they are almost impossible to audit. They can be interpreted by the people who operate them as a licence and that can lead to all sorts of difficulties. It is easy to do contentious things with them without being held responsible. In a sense they contradict the whole basis of democracy which is that there should be public scrutiny. These accounts can create little autocrats because they give a sense of power and remove democracy’s ordinary checks and balances. According to our estimates a lot of money can go into this type of account.

Consequently people who make decisions should be level-headed and balanced. They should have a sense of democratic values and they should be checked constantly by their superiors to see that abuse does not creep in. It is an area in which all countries actually have abuse. So-called secret projects in particular should be analysed very carefully before they are proceeded with. Because they are removed from public scrutiny, they are very public-sensitive. The public is worried about such accounts. That is demonstrated by the Watergate scandal in the USA and the problems which were caused there, and by our problems with Renamo and our Information scandal. They are sensitive issues. [Interjections.]

When there is a state of emergency, there is in any case a blanket covering the country in respect of information being made available. There is censorship and selected and, consequently, distorted news and there are rumours. Rumours can be a major problem. Regulation 7(l)(c) has the effect of prohibiting—

All these things have definite relevance to an account of this nature.

We must remember the damage which has been done to us internationally over the Crossroads situation and the KTC situation concerning which our papers were full of the conflict between the “Witdoeke” and the “Comrades” and allegations of partisanship on the part of…

Mr Chairman, on a point of order: Could the hon member please tell us what this Bill has to do with Crossroads and “Witdoeke”, etc?

Order! The hon member for Walmer will indicate to us what this has to do with Crossroads.

Mr Chairman, we are dealing with a secret fund and the uses to which secret funds may be put. In this particular instance I am dealing with the rumours that may surround the uses of a secret fund…

Order! The hon member is drifting much too far away from this particular clause. The hon member must confine himself to the clause. As I understand it, it deals primarily with the audit of an existing account and with regard to the special nature of such an account etc.

Mr Chairman, could I address you on this issue? The hon member for Walmer was developing an argument to point out how moneys from a special fund could be used. As I see it, the function of an audit is to determine that moneys are being properly used. The hon member had not even finished his argument to explain how as he saw it, moneys could be used from a secret fund. With respect, Sir, I would like to point out that if you listen to his argument, I venture to suggest that you will see that he is dealing with a relevant matter in terms of this clause.

Order! I have listened to the hon member’s argument. I suggest that the hon member for Walmer comes back to this particular clause.

Mr Chairman, I am referring to irregular actions that could be carried out by using a fund of this nature and the problems that one would have in auditing the use of the money for those actions and the expenditure that would take place through such an account. I used that as an illustration but on the basis of rumour because we do not have that information. As I develop this argument and give an instance of what I am talking about, perhaps you will see how what I am saying could be a special action financed by a fund like this, which would require auditing.

Order! Clause 13 provides that an audit will be required in any event. The hon member may argue that an audit is not required or that it is required. That is what the hon member may argue. Certainly, however, the security situation is very far removed from the report of the Auditor-General on the SA Police Special Account. That is my ruling. The hon member may proceed.

May I address you, Sir?

Order! I have given my ruling. The hon member may proceed.

Mr Chairman, I have another point to raise. It is not just the audit that is concerned here. The account has always had to be audited. The original Act lays down that the Auditor-General shall audit the special account. What happens now is not only that that special account is now brought under the audit of the Auditor-General, but that there is also a report on the audit which was not the case before. Therefore, the hon member for Walmer is stating that the report should contain information which it is in the public interest to know.

Order! Will the hon member for Houghton indicate to me the amendment underlined in this clause which now makes the report a new matter? Will she please indicate that to me because I do not read the clause that way?

Mr Chairman, if you look at the original Act you will see that it states that the Auditor-General shall audit the SA Police Special Account. That is what the original Act states. What is being done now is that it is also being made necessary for the Auditor-General to report on the account. He has never had to report on it previously. That is the amendment. Now the SA Police Special Account is brought into the same section which makes it necessary for the Auditor-General to report on the Foreign Affairs Special Account, the Security Services Special Account and the Defence Special Account.

Order! Will the hon member kindly indicate to me which section of the original Act she has mentioned is now being amended?

Section 45.

Section 45 of which Act? I do not want to waste the hon member’s time but this needs to be cleared up.

Mr Chairman, we are dealing with Act 74 of 1985, the South African Police Special Account Act which was passed last year.

Order! Is the hon member referring to section 45(1A)?

No, Sir, I am simply referring to the original Act which stated in section 5:

There was no mention of a report on the account. By bringing the Police Special Account under the ambit of the principal Act, the Finance Act, it now lays down that the Auditor-General shall also report on the audit.

I understand the hon member’s argument. However, clause 13 reads as follows:

However, there is no reference here as far as I can see to the particular section of the SA Police Special Account Act to which the hon member for Houghton referred. Section 45 of the principal Act is being amended by the inclusion of “or the South African Police Special Account Act”. That is how I read this.

That brings it in.

That brings it under the original section 45 of the Exchequer and Audit Act but I have given my ruling and I stand by it. The hon member for Walmer may proceed.

Mr Chairman, just so that we know where we are I should like now to read a pamphlet which is circulating in the Black townships of Port Elizabeth. I believe a prima facie case can be made out that this could have been financed through the special account and it would highlight the problems of auditing such an account. Is that acceptable, Mr Chairman?

The hon member may put forward his argument and I shall see how it develops.

This first pamphlet is called “Soweto Day” and reads:

Obviously, Sir, that was not put out by the UDF and I do not imagine that it would have been put out by Azapo. One must ask who would be interested in issuing such a pamphlet and from which fund could it possibly be financed.

And will Parliament ever know?

Then there is another pamphlet which states:

Mr Chairman, on a point of order: Are we not dealing with the Exchequer and Audit Act? [Interjections.]

I think the hon member must now discontinue that line of argument.

Mr Chairman, what it goes on to say…

Order! I have just instructed the hon member to discontinue that line of argument.

Mr Chairman, my line of argument is simply that I believe a case could be made out here that the Police Special Account could be financing things like this pamphlet which says that people can go to the Black Sash and get a R110 per week and so on. This is obviously being done to cause embarrassment to the Black Sash, the UDF, legal resources, all Methodist, Anglican and Catholic Churches, TB House, soup kitchens…

Mr Chairman, on a point of order: We are dealing with an amendment to the Exchequer and Audit Act; we are not talking about the South African Police Special Account Act at all. [Interjections.] We are merely dealing with an amendment to the Exchequer and Audit Act which tells the Auditor-General that he must now audit this particular account. [Interjections.]

Order!

Mr Chairman, I do not want to repeat the arguments that have already been advanced, but if you would look particularly at clause 13 of the Bill before us, the Finance Bill, you will see that what happens there is that certain words are being inserted in section 45 of the principal Act. Those words are underlined in heavy print. In other words, it is reproducing section 45 of the principal Act, and the only amendment it is seeking to procure is the insertion of certain words which are heavily underlined. What that does, is to bring the one fund, namely the South African Police Special Account which was created by last year’s Act, under the requirements for a report. In other words, the amendment we are now dealing with constitutes the addition of one more fund to the other special accounts that are set out in subsection (1A). As I understand the argument of the hon member for Walmer, all he is seeking to do is to say that he has prima facie evidence that there is something funny going on in the Eastern Cape—and I would put it no stronger than that. Secondly, he understands the difficulty of monitoring such things. Thirdly, however, I submit with great respect that if he is going to be permitted to get to the point, he will ask how that report is going to be dealt with by Parliament—if ever. [Interjections.]

I agree wholeheartedly with the arguments advanced by the hon the Chief Whip. I understand his arguments and I agree with them. However, I do not agree wholly and completely with his conclusion. The situation is simply this: If the hon member wants to say how the report is to be dealt with by Parliament, that is quite in order. However, the hon member must come to that point and not talk about peripheral matters which really have nothing to do with this. Moreover, I am afraid that at this stage I have made my ruling clear three times and the hon member must now abide by it.

Mr Chairman, there is a major problem in auditing such a venture, if indeed it is a venture. I am not saying it is a venture; I am letting the House look at this issue and decide for itself whether it believes that this is something the auditor will have to look at. He then has to say how he is going to look at it, and this House must be concerned with that, and he then has to report to this House. This is not just an embarrassment to the UDF or the Black Sash. If Mr Chairman, you will allow me to complete my argument you will see that it could be a major move towards creating the kind of situation whereby two sections of the Black community are brought together in conflict.

Order! There are many occasions when this could be discussed. The Vote of the hon the Minister would be one of them. The situation is this: Unless the hon member now abides by my ruling, I am going to order him to resume his seat. The hon member must therefore now decide whether or not he is going to proceed.

Then, Mr Chairman, you must decide whether or not I should resume my seat.

The hon member may proceed, and at the opportune moment I shall so decide.

The next pamphlet I want to read, is addressed to the head of the house in the Black townships of Port Elizabeth, and it is purported to have been signed by Henry Fazzie. He rejects that statement. He says he had nothing to do with it and, as I read the statement, you will see that unless he was quite crazy he would not have had anything to do with the issuing of such a pamphlet, because among other things it says the Comrades…

Mr Chairman, on a point of order: With great respect, does this mean that in future if at any time we discuss an amendment to the Exchequer and Audit Act, we can then discuss the content of any account in the entire bookkeeping system of the State that is affected by that particular amendment? [Interjections.]

Order! The hon member has thus far not read out anything which Fazzie has said. The hon member may proceed.

Thank you, Mr Chairman. In this particular pamphlet there is a statement to the effect that Comrades will visit a house…

Mr Chairman, on a point of order, what I mean is that I cannot, with great respect, for the life of me understand how the hon member can discuss what is in his imagination perhaps the content of an account to be audited now as a result of the amendment of the Exchequer and Audit Act. If therefore in the future we amend the Exchequer and Audit Act affecting the auditing of any account in the State bookkeeping system, I must from this example conclude that we will then be able under the Exchequer and Audit Amendment Bill to discuss any topic of our own choice. I cannot understand that. [Interjections.]

Order! Let me explain what has happened. I have requested the hon member three times to discuss the appropriate legislation, because I do agree that what he has said so far has not been relevant. I have also told the hon member that I will order him to resume his seat unless he confines himself to the Bill. The hon member then told me that I would then have to decide whether he had to resume his seat or not. Since then he has said nothing which might constrain me to instruct him to resume his seat but, should he do so I shall so instruct him. The hon member may proceed.

Thank you, Mr Chairman. With reference to the hon the Minister’s remark I would suggest if such an alteration were brought in in future and additional accounts were brought into the ambit of the Auditor-General’s authority then that should also be a question of whether he was in a position adequately to audit those accounts or not. That seems perfectly reasonable to me. [Interjections.]

The final pamphlet that was sent out was sent out by an organisation that nobody has ever heard of and it called upon the Black people of Port Elizabeth, saying:

Order! The hon member will now have to discontinue his speech and resume his seat.

Mr Chairman, I would like to discuss the new clause 18 which replaces the original amendment which was to scrap section 6(2) of Act 94 of 1978 which deals with the reinsurance of loss due to political risk. I quote from subsection (2) of clause 6 of the Finance Act, No 94 of 1978:

certain political causes. I want to put a case to the hon the Minister that the loss referred to should also cover loss of earnings.

I want to substantiate this by for instance referring to this morning’s newspaper in which it was said that the four last accused under the treason trial had now been released and that all charges against them had been dropped. This all stemmed from the old embassy sit-in in which some UDF leaders and other people were detained after they had left the embassy. This happened in December of 1984.

What clause are you busy with?

Why are you so touchy?

I am talking about the amendment and I have read out that there is now an amendment to make the purpose of section 6(2) more clear.

It seems to me you know nothing about those things.

Is that so? Should I speak Afrikaans? [Interjections.]

†In addition to what was covered before, the amendment now also includes damage as a result of any strike, riot or public disorder, or any act or activity which is calculated or directed to bring about a riot, strike or public disorder. What I am saying is that we are talking about loss or damage to property as a result of these things. My argument is that I think there is also another type of loss which is in fact not covered here, namely loss of earnings as a result of the hon the Minister of Law and Order’s locking up people and thereby causing them loss of earnings. In the case of, for example, the embassy sit-in people, they suffered loss of earnings for more than a year, and now the trumped-up treason charges against the last four have been withdrawn. They have been in prison now for almost 18 months. I claim that they could in fact have claimed under section 6(2)(b), which provides:

Order! Will the hon member please indicate what clause of the Bill he is speaking to?

Mr Chairman, I am discussing the new provisions of section 6 of the Finance Act inserted by clause 18 of the Bill. What I am saying, is that if this paragraph also included loss of earnings, it would have in fact covered those people who have been so harassed by the hon the Minister of Law and Order for more than a year, but who could not as the law now stands, claim that as a loss.

I want to refer to another example. In Kimberley certain members of the PFP were taken to the police station during the last few days and while they were there their houses were searched. In one case a lot of liquor was stolen. Luckily, they were members of the PFP and the branch chairman could go to the Police and reclaim the liquor. The police officers involved were afterwards severely reprimanded. Anybody who is anybody in politics should take out insurance these days to safeguard themselves from excesses by policemen.

It was reported in this morning’s paper that Messrs Dickson, Hassim and Cajee were released in Pietermaritzburg after they had been in custody since 12 June. No charges were laid against them and I say again that if these gentlemen—they are all solicitors and I know them well—were covered against loss of earnings they would at least be able to recover some of their losses suffered at the hands of the Minister of Law and Order simply because he wanted to put the fear of Louis into them.

Mr Chairman, what we have heard from the hon member for Greytown and the hon member for Walmer is nothing short of scandalous. [Interjections.] It has nothing whatsoever to do with the Exchequer and Audit Act and they know it. I will not be drawn into discussing what they have said, because they know perfectly well that what I am saying is true.

The hon member for Greytown who has just sat down tried to do exactly the same thing by talking about an element of Sasria which has nothing to do with the measure before the House. As a matter of fact, if people want to insure themselves against loss of earnings they are perfectly at liberty to do so and they do not need this legislation.

I want to thank the hon member for Smithfield for his support of this measure. I also want to thank the standing committee for its work on the Bill. As a matter of fact, the hon members of the Official Opposition who have participated have passed a vote of no confidence in their own members who served on the standing committee. The matters that were raised by the hon member for Houghton and the hon member for Walmer were never raised in the standing committee at all. Members of the standing committee never discussed the matter. [Interjections.] They never discussed the matter and there have also not been any amendments on the Order Paper. The hon member for Eden-vale, the chief Opposition spokesman on this measure, did not even mention the clause in his opening address. It was only when the hon member for Houghton came sniffling around in her usual manner to which we have become accustomed, that it suddenly became an issue. She does herself harm as a parliamentarian when she uses this kind of ploy.

Mr Chairman, is the hon the Deputy Minister suggesting that the hon member for Houghton served on that standing committee?

The hon Chief Whip of the Opposition did not listen to what I was saying. The hon member for Edenvale, who is a member of the standing committee, and the hon member for Yeoville, who is not in the House today but who is also a member of the standing committee…

But they are not spokesmen on law and order.

We are talking about the Exchequer and Audit Act; it is a finance measure, not a law and order measure. All that happens is that that clause contains a consequential amendment to the Exchequer and Audit Act which flows from the Police Special Account Act and which has to do with reporting procedures and auditing. It has to do with nothing else. What is more, the hon member for Edenvale sits there smiling but knows as well as I do that the hon member for Houghton has abused the Bill.

The hon member for Umbilo supported the measure, for which we thank him. He also expressed the hope that through this privatisation measure the Government will spend less money. We hope that is the consequence of it.

*I thank the hon member for Sunnyside for supporting this measure. He told us a very interesting story about Decimal Dan. One starts feeling rather old when you listen to these things. He spoke about all the coins we used to know when we were children and he ended with the penny. He did not mention the halfpenny or the farthing. These things are far behind us now, but it is a good thing he mentioned them.

†I think the hon member for Amanzimtoti dealt very well with the hon member for Houghton and I also thank him for his support of this Bill.

The hon member for Edenvale spoke about our foreign debt situation and he wanted more information on that, as did the hon member for Umbilo. I do not think the House wants me to provide them with reams of charts or statistics which I have available, but I undertake to pass this on to the hon member. I think he will be satisfied with the latest information in that regard.

He also spoke about Prudent Pete. I think I agree with him on that. It is not pertinent to the Bill, but in response to him we all know what the future looks like when we start looking at future pensions commitments and the cost of these commitments to the State. I would support that. I think it is a good idea that we should do something—the more we do the better—to deal now with this impending problem which will become an enormous problem unless we take appropriate action now. To that extent I agree with the hon member.

The hon member also mentioned two books that I should read. I have read them both and I share his thoughts on them.

The hon member supported clause 18. The hon member for Smithfield also spoke on that clause. We received representations from industry after the standing committee had dealt with the Bill. We do not want to overturn—it would be neither proper to do so nor would we wish to do it—the proposal of the standing committee, which we accept at this stage. At the same time, however, one must allow people to state their point of view, and listen to them in fairness. We have, by way of negotiation, arranged that the standing committee will hear them at the first convenient opportunity in order to establish whether there are any real merits in their arguments to substantiate their fears. If there are real merits in their arguments, I am sure the standing committee will make the necessary suggestions to us with a view to amending the legislation if necessary.

With those few words, Mr Chairman, I thank hon members for their support of this Bill.

Question agreed to.

Bill read a second time.

Mr Chairman, I move:

On 29 April 1986 I indicated to the House of Delegates that I intend to propose that the salaries of judges be increased during the present session of Parliament. This is the purpose of this Bill. A general salary increase was granted to functionaries in the public sector with effect from 1 April 1986. The salaries of judges, which are determined by section 1(1) of the Judges’ Remuneration Act, were last increased on 1 January 1984. Clause 1 of the Bill therefore makes provision for an increase, whilst it is proposed in clause 2 that the increase shall have retrospective effect from 1 April 1986.

We are proud of the high esteem in which our judiciary is held. The State, and notably Parliament, once again expresses its appreciation for the work done by judges of the Supreme Court of South Africa.

*Mr Chairman, in my Second Reading speech elsewhere I indicated that this legislation was the result of the general salary increases of functionaries in the public sector. Nevertheless the measure under discussion also takes into consideration the fact that Parliament still honours the uniqueness of the judiciary.

Mr Chairman, on a point of order: It may well be that you would want to consider whether in terms of the rules of this House—when an hon Minister has already delivered a second reading speech in another House—it is proper for him to make a different second reading speech in another House. The rules provide that when an hon Minister delivers a second reading speech, that speech is circulated to all hon members of all three Houses. There are two important aspects in relation to this, Sir. First of all, that is a formal act on the part of the Secretariat of Parliament. Secondly, Sir, hon members of Parliament are issued with copies of that speech, and believe that that is the speech to be delivered. Now, it is theoretically possible for an hon Minister to come forward with a completely different motivation for the legislation in question by way of delivering a completely different second reading speech.

Perhaps, Sir, if you will be prepared to consider this aspect at some future stage, I should urge you to do so indeed.

Order! To my knowledge there is no specific reference to this in the Standing Rules and Orders. It is, however, convention that a second reading speech in the new parliamentary structure is held either at a joint sitting or before one of the three Houses. That second reading speech then pertains to all three Houses. It is difficult for me to give a ruling until the Committee on Standing Rules and Orders has considered this matter. I would therefore appeal to the hon the Minister, if he has any additional remarks over and above those contained in the second reading speech, copies of which have already been circulated, to consider making those additional remarks in his reply to the debate that follows now.

Mr Chairman, I am prepared to oblige. In fact, I have already done so by delivering copies of my written notes to the chief spokesmen on Justice of the various political parties in this House.

Of all parties?

To all spokesmen of all parties?

Mr Chairman, the hon member representing the NRP was not there. He was missing. [Interjections.]

Was everyone missing?

Order! I request the hon the Minister briefly to resume his seat while I read out the applicable rule, as follows:

In other words, if the speech has been delivered in one of the other two Houses, it shall be laid upon the Table in this House as being the Second Reading speech that has been delivered by the Minister. The normal procedure is that, after a Second Reading speech has been delivered, the debate is open and other members participate.

Mr Chairman, may I ask the hon the Minister a question?

I am afraid it is difficult for me to discern at this stage whether the hon the Minister has risen on a point of order or whether he has done so with the desire to continue his Second Reading speech.

If I may address you on this, Sir, that hon Minister has just made a categorical statement that is not true, and I should like to ask him a question on that!

Order! The hon member for Umhlanga rose to ask a question, not on a point of order, and at this stage I cannot allow a question. [Interjections.]

Mr Chairman, the only purpose of my moving the Second Reading in this rather lengthy manner, if I may put it that way…

The second Reading. [Interjections.]

I really do not want to waste the time of the House, Sir, but I have to point out that there is no rule which prescribes to me that, when I move the Second Reading anywhere, I should do so in two or three or four paragraphs. [Interjections.]

Order! As I read this rule, if a Second Reading speech has been delivered in one House, no additional Second Reading speech—I emphasise, no additional Second Reading speech—may be delivered in another House.

I do not purport to be making a Second Reading speech, Mr Chairman, but I honour the spirit in which the various points of order were taken.

There is only one course open to a gentleman and that is to sit down. [Interjections.]

With due respect, Sir, each hon member is entitled to take a point of order or move a motion in his peculiar fashion.

I take it, then, that the hon the Minister has moved the Second Reading.

I have moved the Second Reading and I honour the spirit of your reprimand, Mr Chairman.

Now let us get down to the Second Reading debate.

Mr Chairman, I want to say that we have no objection to the statement the hon the Minister was going to make. We would ask him, however, to look at the rules and make his statement at the appropriate time. I will not respond, therefore, to the statement which I have already read, but which I have not yet heard the hon the Minister making.

We will support this Bill, Sir. Basically, it grants to the judges of South Africa an overall 22% increase in their pay package.

In supporting this Bill, I would also like to associate myself with the words of tribute which were paid to the judiciary by the hon the Minister…

In his first Second Reading speech.

… in his first Second Reading speech. [Interjections.] We are certainly proud to be able to boast of an independent and competent Bench in these times of political trauma.

In past months the judiciary have played an important role in softening the hammer blows of authoritarian legislation, and recent decisions on appeals against actions of the Executive have gone some way in evening up the balance between Executive authority and Executive accountability.

There is much more, however, that the judiciary should be doing in these times. Since unrest became endemic in this country, and most certainly since the state of emergency was declared, …

Order! I should like to point out to the hon member for Sandton that the only matter for discussion on this Bill is not even a clause, but merely the Schedule. I repeat, only the Schedule is under debate.

I hear you clearly, Sir.

Thank you.

I hear you clearly, Sir, and I am quite convinced that I am speaking well within the bounds of this Bill. After all, if we are going to grant a 22% increase in salary, we want a 22% increase in productivity and in value to the country from the judges. [Interjections.]

Sir, since unrest became endemic in the country, and most certainly since the state of emergency was declared, thousands of South Africans have been arrested and detained.

Order! That is not an issue under debate. My firm ruling is that that is not an issue under debate.

Mr Chairman, I beg to differ with you, and I should like to address you on this if you will be so good as to hear me.

The hon member may address me on the ruling.

On your ruling, obviously, Sir. That is all I am addressing you on.

Judges are the only people in this country who have unlimited access to detainees and to prisoners in prison without having to make appointments and without having to warn people that they are coming. I wish to address this House on the duty of the judges, now that we are giving this increase, to take certain actions in regard to detentions at this time.

Order! I regret that that is not an issue under discussion. My ruling is that the Schedule is the only issue under discussion.

Mr Chairman, may I…

Order! The Rules state specifically that in an amending Bill only the specific amendments may be discussed.

Mr Chairman, may I address you? As I understand the amending Bill before us, there is an increase envisaged in the salaries for various categories of judges. May we perhaps just test the situation as follows: Would you permit a debate on whether the judges deserve an increase in salary?

That is precisely what it is all about.

The first question is therefore, whether they do in fact deserve an increase in salary under the present circumstances in South Africa. Secondly if they do deserve an increase, can we test it further by asking whether they deserve this particular percentage increase at this time. Thirdly, having decided that one can discuss that, surely, with great respect, one can discuss the ambit of the judges’ responsibilities and duties? Mr Chairman, surely I can point out to you that a judge does or does not work 40 hours a week? Are you going to stop me when I say that? Are you going to stop me when I say that he normally goes on circuit once, or twice a year? Surely you have to allow debate on the ambit of the judges’ duties because we are actually being asked to spend public money on an increase in salaries. I do request you to reconsider because otherwise it means that whenever this House is asked to increase any salaries at all, we will not be permitted to debate the ambit of the increase in salary of those involved.

My ruling is that I cannot allow a debate on the periphery of what could be deemed to be the duties of a judge. Otherwise the whole justice debate could be repeated. That is not within the ambit of this amending Bill. For that reason I am not prepared to allow a debate on that issue.

Mr Chairman, that is the most unfair ruling I have ever heard in this House and it stifles free speech. I protest…

Mr Chairman, on a point of order: I wish to submit that the hon member is attacking and insulting the Chair and I request that you apply strict discipline to the hon member.

Order! I want to make it quite clear that I stand by my ruling and that I am not prepared to allow the hon member for Sandton to debate a number of aspects of the administration of justice now.

Mr Chairman, may I address you? The only person who may visit a prison without getting permission from the hon the Minister of Justice is a judge. The point that has been made by the hon member for Sandton is that it is not peripheral now to the duties of a judge, but it is indeed going to become the kernel of a judge’s duties to pay visits to prisons which are now holding detainees.

2 000 of them.

Therefore I think the hon member should be allowed to develop that argument because we are increasing judges’ salaries by a considerable percentage by this Bill. We want to show that the judges are indeed entitled to that providing that they take on the extra duties.

Mr Chairman, on a point of order: my interpretation is that the hon member for Sandton insulted the Chair. I request that he apologise to the Chair.

Order! We are still dealing with points of order. The hon member for Sandton expressed an opinion on a point of order. The rules do not allow for a ruling by a presiding officer to be questioned. I want to tell the hon member that I have taken note of what he said. It is wrong for any hon member to question a ruling in that way. If the hon member does not agree with the ruling there is a prescribed procedure to follow. The way in which the hon member put it is not permissible.

Mr Chairman, I feel so strongly about this matter that I ask you to refer it to Mr Speaker immediately. [Interjections.]

Mr Chairman, may I address you on this matter, because I think we can ill afford to have this sort of thing? Do I understand that you are allowing the hon member for Sandton’s words about your ruling stifling the freedom of speech in this House to stand—and I do understand that he perhaps spoke in a moment of emotion? Are you allowing those words to stand?

Order! No, I am not prepared to allow that. In terms of the rules, the hon member may refer the matter to Mr Speaker himself. There is however, no need for me to refer the matter to Mr Speaker at this stage, at this moment. The rules should be clear to the hon member. I therefore request the hon member for Sandton to apologise for the reflection he cast on the ruling that was given.

Mr Chairman, I apologise for having offended you, but I wish to tell you that I feel very strongly that your ruling is incorrect. May I therefore please refer the matter to Mr Speaker?

He has not given his ruling.

Mr Chairman, may I then be allowed to proceed? If not, may I refer the matter to Mr Speaker?

Order! I am prepared to allow the hon member to continue in accordance with my ruling.

Mr Chairman, I shall do my best.

Mr Chairman, on a point of order: Do I understand the ruling you have given to be that in all cases where a person’s salary is sought to be increased by this House, you will not permit a discussion on the ambit of his responsibilities…

Order! I have indicated…

Mr Chairman, may I please just finish my sentence, with great respect! Is there perhaps something peculiar about judges that gives rise to this particular prohibition? Or is there something peculiar about this particular amending Bill that gives rise to this particular prohibition? May we have clarity on that?

Order! I refer the hon member to the way in which this Bill has been drafted. The schedule is the only issue under discussion. It is not an ordinary Bill in which a salary is being increased or discussed. The Bill merely states that the amendments in the schedule are at issue. That is all that is at issue and I cannot allow a wide-ranging discussion on all the duties and the responsibilities of a judge and the normal judicial system. The hon member for Sandton may proceed.

Mr Chairman, I must just tell you that I shall be raising the issue of the rights and duties of judges in relation to the visiting of detainees. That is the purport of what I am going to say and I am going to relate that to the fact that the schedule evidences a 22% increase in the salaries of judges. I must warn you, Sir, that that is what I am going to do this evening in the space of five or ten minutes.

Judges are not paid for their judgments. They are paid for being judges.

That is right. [Interjections.]

Let me say in reply to the interjection from that hon Minister… [Interjections.]… that it is obviously the position that draws the salary. [Interjections.]

Order! The hon member may proceed.

Let me just quote the last paragraph of the Second Reading speech which my hon Chief Whip has just pointed out to me:

That is a comment on the work of the judges. It is not a specific comment about the specific work that they do…

And it is not a comment on the schedule either.

… and it is not a comment on the schedule, as the hon member for Houghton points out. It is a comment, however, on the work of the judges, and that is what I intend to do, using examples to illustrate this. I shall not be very long, but I do believe that it is correct that this be done.

The truth is that once a person is detained, his name may not be published in this connection and he can receive no visitors, except with hard-to-get special permission. Certainly he has no access to his own laywer or to this doctor.

It was reported to me this very weekend that a prison directive has decreed that family and all other visits to detainees have been stopped until individual detainees have been interrogated.

Order! The hon member is now discussing aspects of detainees and not the judges.

Sir, you have not allowed me more than one sentence. Basically I want to raise the issue that judges should look into this matter as well. That is the issue that I am going to raise and I think it is extremely relevant.

Order! I think the hon member will appreciate that he is aware that I am aware that he is trying to circumvent my ruling.

With great respect, Sir, that is casting a reflection on me. I am not allowed to cast a reflection on you, therefore I ask you not to cast any reflection on my integrity as a member of this House. I told you before I started speaking exactly what I was going to say and I am about to say it.

Mr Chairman, on a point of order: May I request you to withdraw that remark that you made to the hon member for Sandton? You said that he knows that you know that he is attempting to circumvent your ruling. [Interjections.]

Order! The hon Chief Whip of the Official Opposition is aware of the fact that we have debated this issue by way of points of order that have been raised all along. The whole issue revolves around what I see as an effort to circumvent the ruling that has been given. All the points of order raised revolved around that issue. I have given my ruling very specifically.

Mr Chairman, in that case we will take the obvious course open to the Official Opposition.

Walkies!

Order! The hon member for Sandton may proceed.

Mr Chairman, on a point of order: It is my contention that you have ascribed ulterior motives to the hon member for Sandton in making this speech. It is the first time in my 12 years in Parliament that I have heard a presiding officer do that and I am now asking you formally to withdraw that remark.

Mr Chairman, on a point of order: I wish to submit that the hon Chief Whip of the Official Opposition, just like the hon member for Sandton earlier, is undermining the authority of the Chair by the statement he makes, and is also reflecting on the Chair. I believe the hon Chief Whip of the Official Opposition should withdraw what he said.

Order! I will rephrase my statement and say that the hon member for Sand-ton was in fact circumventing my ruling.

Mr Chairman, are you implying I circumvented your ruling “unintentionally”?

I have nothing to add to what I said.

Sir, I will proceed if I may.

Mr Chairman, on a further point of order: Before the hon Chief Whip of the Official Opposition put his point of order a while ago the hon member for Sandton had resumed his seat and I want to submit that his speech is completed.

Order! No there were quite a number of points of order. I am prepared to allow the hon member for Sandton to proceed.

Thank you, Sir. Whatever the situation about that prison directive may be, it is true that these people can be held incommunicado for long periods at a time. When the new law takes effect, it will be for up to 180 days at a time. [Interjections.] I would like to mention just one or two cases. I think of Adam Jaffer…

Order! If the hon member is not prepared to abide by the ruling that the issues which he is now raising are not under debate, then I am afraid that I will have to ask the hon member to resume his seat.

Yes!

Mr Chairman, it is obvious that you are supported in your ruling by hon members who do not wish to hear the truth in this House.

Order! This is not at issue!

Mr Chairman, I am not referring to your ruling, but to hon members in this House.

I said a few moments ago that in these times there is more that the judges should be doing. That is what I said. Unlike ordinary citizens, judges have unlimited access to our prisons and may enter them and visit whomever they wish without warning or appointment. Our Government has a sadly appalling record of deaths and ill-treatment of political detainees in custody. [Interjections.]

Order! I regret that I have no option but to ask the hon member for Sandton to resume his seat.

Mr Chairman, on a point of order, I would like to ask that this matter be referred to Mr Speaker.

Mr Chairman, on a point of order: The hon the Deputy Minister of Constitutional Development and Planning said: “Die agb lid lieg.”

Order! Did the Deputy Minister say that?

Yes, Sir, I withdraw it.

Mr Chairman, I should like to thank the hon member for Sandton and through him the hon members of the Official Opposition for their support of the Bill. I say this in all sincerity but unfortunately I must add that the conduct of the hon member for Sandton surprised me completely because in the standing committee there was no mention at all of what the hon member for Sand-ton attempted to argue here tonight.

Was there a state of emergency then?

As a matter of fact, within five minutes or so, the hon members of the standing committee, decided unanimously to approve the Bill. Not a single member of the standing committee had any doubt whatsoever that this measure…

Mr Chairman, on a point of order: Are you prepared to give a ruling that hon members may only refer to matters which were discussed by the standing committee? [Interjections.]

Order! No I have not given any such ruling.

In that case, Mr Chairman, may I ask the hon member for Mossel Bay why he is taking the hon member for Sandton to task?

My reply to the question is that I was extremely surprised by the attitude adopted by the hon member for Sandton.

Why?

I was surprised because there had been no dispute whatsoever in the standing committee about the provisions of this Bill.

So what?

He is supporting the Bill!

I find it strange that the hon member should now avail himself of this opportunity in this House to raise matters that are not remotely relevant to the Bill [Interjections.]

Not to you perhaps!

He simply used this debate to raise matters that have no bearing whatsoever on the provisions of the Bill.

Mr Chairman, may I ask the hon member what his opinion would be if certain events had intervened between the time of the deliberations on the standing committee and the Second Reading debate of the Bill in this House? I am referring to events such as 2 000 detentions. Does the hon member seriously contend that those are no longer to be regarded as issues?

As you correctly pointed out, Sir, the Bills deals only with a schedule reflecting the remuneration of judges.

That has nothing to do with the remarks of the hon member for Sandton.

There is no reference whatsoever in the Bill to the duties of judges or the way in which they preform those duties. It merely refers to the increase in their remuneration. [Interjections.] In reply to the hon the Chief Whip’s question I would say that if there had been a dramatic increase…

Like 2 000 detentions!

… in the cost of living, for example, or in other matters appertaining to the remuneration of judges, I would have agreed with the hon the Chief Whip that such a matter could be discussed here although it was not discussed in the standing committee. However, to use this opportunity to discuss the whole sphere of the duties of judges goes far beyond the ambit of the Bill under consideration.

Mr Chairman, may I ask the hon member for Mossel Bay whether he has read the hon the Minister of Justice’s introductory Second Reading speech to this Bill in which he referred to the high standard of the judiciary, the esteem in which it is held and the work which the judges do? Was that discussed on the standing committee?

Sir, if I remember correctly, the hon member for Sandton started his address by expressing himself favourably in respect of the high standard of the judiciary. That was allowed; I am not disputing the right of the hon member to refer to that. However, the hon member for Hillbrow will agree with me that if the hon member is allowed to discuss one aspect of the duties of judges then he should surely be allowed to discuss the entire sphere of the duties of judges!

Correct.

Why not?

That would reopen the whole debate on the Justice Vote! [Interjections.]

Mr Chairman, may I ask the hon member for Mossel Bay whether he is speaking as the member for Mossel Bay or as the Chairman of Committees?

Sir I am speaking in my capacity as the member for Mossel Bay and also as chairman of the standing committee but certainly that does not mean that I should close my mind entirely to the rules of the House! Surely I cannot divorce my mind completely from what is proper to discuss under a Bill such as the one under consideration.

*Sir, we on this side of the House should like to support this measure because the remuneration of judges was last increased with effect from January 1984. Since then inflation has assumed grave proportions and the cost of living has increased considerably. Since the remuneration package of other functionaries in the public sector was increased with effect from 1 April this year it is only fair that the salaries of judges be adjusted accordingly. As a matter of fact, the question may be put whether the salary increase for judges proposed in this Bill is adequate.

The salaries of judges are not directly linked to those in the Public Service because their salaries are determined by the Remuneration of Judges Act of 1978. A fairly generous increase of 22% is now being granted and we on this side of the House take pleasure in supporting the measure.

Mr Chairman, the CP welcomes the proposed increase in the salaries of judges, as set out in the schedule to the Bill. [Interjections.] We should like to say to the hon the Minister that we have already had feedback in this regard from various judges. They are very grateful for the salary increases. As the hon the Minister did in his second reading speech, the CP, too, wishes to express its great appreciation of the judges of South Africa for the very important and responsible task they perform.

When we look at the schedule to the Bill, we will note that at present judges earn a salary of R66 000 per annum. However, when we look at the value of the Rand today and at the earnings of the most junior advocates who appear before the Bench every day, it is striking, as you yourself know, Sir, that those advocates often have a far higher income than the judges before whom they appear. And then I am not even speaking about the most senior advocates who earn incomes up to three to four times higher than those of judges at the moment. For that reason it was desirable and necessary to make an adjustment, and we are pleased that this has happened.

Now I think it is necessary for the Government perhaps to decide to institute a thorough and scientific survey at a high level into the whole structure as well as the basis of the remuneration of judges. We know this investigation will be capably handled and we are satisfied that the discussion of the increase in judges’ salaries will also, in that event, be removed somewhat from the limelight.

With these few words I just wish to say that the CP supports and welcomes the increase in and adjustment of judges’ salaries.

Mr Chairman, we will be supporting this amending legislation, and I should just like to say that we want to join the hon member Mr Theunissen in welcoming the inquiry into the salary structure of judges.

I think, if anything, the debate which has gone on in this House this evening concerning this amending legislation leaves one with the feeling that the matter has not been treated with the dignity which we all seek to achieve in regard to the whole question of judges’ remuneration and the maintenance of high standards in respect of our Supreme Court judges and like matters. We find it unfortunate that the opportunity was used as it was. At the same time it would appear that if we are going to continue with this type of legislation, there will have to be a definite ruling as to whether or not this sort of thing can be discussed. Quite clearly, the memorandum itself makes mention of a comparison with the public sector and discussion in the standing committee made mention of various factors which line the discussion up with the function of judges—their function in the broader sense—and it is very difficult to see how a decision is going to be made.

In order to maintain the dignity of this type of discussion perhaps it would be a very good thing if this sort of amendment was stated clearly in the Standing Rules and Orders to be one which does not allow for any discussion outside the Schedule.

I just want to ask the hon the Minister whether, whilst accepting the fact that I was out of the House, he will recall that there was an occasion when there was a problem getting copies of speeches. At the time the hon the Minister’s department was one of the best in making sure that hon members involved in the Justice Committee received copies of speeches. So we accept it in that light, but on the same basis my hon colleagues feel that they should have received the same information seeing that, should I not have been able to return on time, they would have been at a distinct disadvantage.

So with those few words I want to say that we find the matter unedifying. It is unfortunate that the dignity which we all seek to maintain in this matter was lost on this occasion. We hope that this matter will receive due attention from the standing committee in order to prevent this in future.

Mr Chairman, I thank the hon member for Mossel Bay, the chairman of the standing committee, who during the past session has, together with other hon members, dealt very judiciously with various pieces of legislation in a way which does them credit. The same goes for the handling of the Bill at present before the House. I can understand the amazement of the hon member for Mossel Bay at the fact that a Bill which enjoyed such unanimity in the standing committee, elicited so much discussion on this occasion. However hon members are fully entitled to do so, and I have nothing to say about that.

I hasten to refer to the speech by the hon member for King William’s Town.

†I think I owe him an explanation. Reference was made to two documents. The first was the Second Reading speech which was tabled as if read in this House. That document I assume was duly tabled and a copy of it delivered to the hon member.

I also considered it opportune, when moving the Second Reading here to make a short announcement on the issue of judges’ salaries. With that in mind and treating the spokesmen on justice with the respect due to them, I wish to point out that I handed a copy to each of them but unfortunately the hon member for King William’s Town was not in the House at the time and it was for that reason that he did not receive a copy. I apologise to the NRP.

I come now to the speech of the hon member Mr Theunissen.

*I must accept that it was in good faith that the hon member Mr Theunissen announced the point that I was going to announce. It was the contents of a document which, out of respect for him, I had sent to him to examine. However the hon member used it as an announcement. [Interjections.]

I was afraid they would stop you again!

To tell the truth, I think the hon member is being a little over-hasty. The time when that party comes to power is still far in the future, and to tell the truth, it is not even beyond the horizon. However that hon member already wants to go making announcements as if he were the Minister! [Interjections.] No, that is not how it works! The Press must take cognisance of the fact that the hon member had not meant to make an announcement. He meant to ask a little question, one of the very best sort. [Interjections.] During the past session the hon member has cooperated so well, and for the rest he does his work as an hon member so thoroughly, that I am amazed that he is sitting where he is. However that is just by the way and I shall now forgive him. [Interjections.]

The fact is that I must take opportunity to say the following about this matter. [Interjections.] If my colleagues would give me the opportunity and not follow the example of the hon members of the Official Opposition, I should be able to say my say. [Interjections.]

In the Second Reading speech that I delivered elsewhere—in one of the other Houses—I indicated that this legislation followed the general salary increase of functionaries in the public sector. Nevertheless the legislation takes into account the fact that Parliament always respects the uniqueness of the Bench. Thus, while the present adjustment is taking place in the normal course of events, nevertheless it has by no means taken into account the specific contemporary needs and circumstances of the judiciary as they may have developed over the past number of years. The hon member Mr Theunissen referred to those circumstances, namely the capacity of advocates to earn a large annual income in comparison with that of the members of the judiciary. I do not wish to debate the point, but this is a factor to be taken into account.

It is therefore a pleasure to announce that the Government has decided to institute a thorough and scientific investigation at a high level into the whole structure and basis of the remuneration of judges. This investigation will also take into account the possible elimination of public adjustments of judges’ salaries. The investigation will be undertaken by a competent and unbiased person or persons, and details will be made known in due course. That, then, finalises that matter.

Finally, however, I just wish to react to the speech by the hon member for Sandton. I had considered not referring to it at all. However I think I would be failing in my duty were I not to react to his speech.

There is nowhere any prescription as to what exactly a judge must do or how he should do it. In terms of the Constitution the administration of justice is entrusted to the Supreme court of South Africa. This is so comprehensive that the convention has developed that the Supreme Court has inherent jurisdiction which provides inter alia for powers of review in regard to the executive as well. This is a power which we ourselves jealously guard and which we protect with the might of the State. We shall see to it that every judgment of the court, even though it be against the State, is put into effect.

However I have never encountered a case in which Parliament sought to prescribe what a judge should or should not do. Indeed, over the years such a rich tradition has been built up over the years in regard to the content of a judge’s findings that if this House were to wish to discuss any particular judge, it would only happen after the House had officially adopted a resolution to that effect. [Interjections.]

If the hon member for Kuruman would afford me the opportunity to speak to the hon member behind him, I could just finalise this point. We must not depart from this tradition and the spirit in which this House has always approached legal questions. If we did that we should be on the wrong track.

As far as the issue of detainees is concerned, I wish to point out that apart from the power a judge has in terms of prison regulation No 104 to visit a prisoner at any time as of right, I in turn recently addressed a request to the judges president, on the request of the State President, to designate judges specially to visit detainees in order to investigate the circumstances of their detention and treatment.

Order! The hon the Minister must now drop that point.

I shall do so, Sir. I had to deal with it, otherwise there would have been no reply in Hansard to the speech by the hon member for Sandton.

Question agreed to.

Bill read a second time.

Mr Chairman, I move:

Agreed to.

Report adopted.

Mr Chairman, I move (on behalf of the Minister of Constitutional Development and Planning):

In terms of Rule 25 of the Joint Rules and Orders I announce that I am acting on behalf of the hon the Minister of Constitutional Development and Planning in dealing with the Regional Services Councils Amendment Bill. I do not know how it will go because I left my glasses in Pretoria last night. [Interjections.] With my wife.

Do you want mine?

I do not know whether it will work.

One does not need glasses to see in the dark.

In his Second Reading speech on the Regional Services Councils Bill on Friday 14 June 1985 the Minister of Constitutional Development and Planning said that regional services councils were a most complex matter and that the last word concerning them had not yet been uttered. In fact, he went on to say that it was a new system which would have many growing pains during the process of application and would require adaptation.

The Government is serious about seeing to it that regional services councils are established as smoothly as possible and furthermore, we must ensure that regional services councils, after they have been established, function effectively so that all communities within the region of such RSC’s may physically reap the benefits of the system as soon as possible. In the light of the aforementioned the Amendment Bill presented here before you today is the direct consequence of many suggestions received and investigations undertaken during the first year of the existence of the Act.

In this regard I should like to express my gratitude to the Co-ordinating Council on Local Government Affairs and its action committee which during each meeting this year considered possible amendments and procedures which could be followed to ensure the successful implementation and functioning of regional services councils.

Let me first deal with non-financial amendments. These amendments relate to the improvement of existing procedures in the principal Act or proposed new procedures. In clause 1 the description of management body is amended to provide for the inclusion of local bodies instituted in accordance with the Black Administration Act, 1927. Botshabelo outside Bloemfontein is such a body which lies in a trust area not yet incorporated into a self-governing national state. This amendment will ensure that Botshabelo can also become a member of an RSC.

Section 2 of the principal Act determines that when an administrator delimited, changed or revoked a delimitation he would have to consult with the regional services council of each region situated partly or completely within the relevant province.

In practice it would mean that should the Administrator of the Cape, for example, wish to establish a regional services council for the Cape metropolitan area and there already existed regional services councils for Port Elizabeth and surrounding areas and East London and surrounding areas, he would have to consult with them before he could establish an RSC for the Cape metropolitan area. This is not functional due to such areas being hundreds of kilometres removed from each other and having nothing in common. This could also result in an unnecessary delay in the establishment of RSC’s.

By means of clause 2 section 2(2)(b)(ii) of the principal Act is therefore amended to that the Administrator need only consult with the RSC’s in the region which will be effected by the delimitation, change or revocation. Clause 3 of the amendment Bill makes provision for the inclusion of section 2A in the principal Act which enforces the authorisation of all vital preparatory steps which must be taken before an RSC can be established, for example the purchase of a computer system for the proposed RSC. The administrator is also authorised, in accordance with this section, to enable a local body to take certain preparatory steps in the name of the yet to be established RSC. Such a local body is also entitled to a reimbursement from the RSC for the steps taken.

Clause 4 amends section 4(3)(a)(ii) of the principal Act by making provision for a local body to collect the levies in a region on behalf of the RSC. This is further proof of what has been said repeatedly, viz that RSCs are not to consist of additional large bureaucratic structures but that as far as is possible the personnel and equipment of the existing institutions are to be made use of to execute functions on behalf of an RSC on an agency basis. A new section 4(6) is inserted in the principal Act to empower the Administrator to declare that a reference to a local authority must also be interpreted in an Act as being a reference to a regional services council. In that way it will also be possible to make a reference in an ordinance on medical funds or pension funds applicable to employers of an RSC.

The system of committees with delegated powers which expedite and facilitate the decision-making process and functions of local authorities is an old and recognised practice. It is this same goal which clause 5 wishes to achieve wherein provision is made for the institution of committees by an RSC. The RSC would institute the committees and determine their powers. The Chairman of the RSC will ex officio be a member of each committee but as in the full council, will not have voting rights in the committee because in terms of the principal Act the chairman is an appointed independent chairman.

Clause 6 is purely a procedural amendment to prevent a representative of a local body delaying the decision-making process of an RSC by staying away from an RSC meeting without reason and then at the next meeting insisting on a reconsideration of the matter. Clause 6 amends section 11 of the principal Act and determines that a local body desiring that a decision be reconsidered must have been present at the meeting when the relevant matter was considered and resolved. In the case of the absence of the representative of the body its application will only be considered if the reasons submitted to the chairman are in his opinion adequate.

The Demarcation Board for Local Government Areas has already made good progress with investigations into the demarcation of RSC’s for the Greater Bloemfontein area, Port Elizabeth-Uitenhage, the Greater Pretoria area and the Cape metropole. The establishment of RSC’s is soon to be a reality and I am therefore convinced that the abovementioned amendments will ensure that teething problems regarding their establishment are kept to a minimum. This amending Bill is also further proof of the Government’s willingness to promote effectivity at all levels of government.

We now come to the financial amendments. In view of the fact that the most important amendments proposed in this Bill are financial ones, and the fact that in terms of section 12 of the principal Act, the Minister of Finance is responsible for financial matters, I agreed to pilot this Bill through on behalf of my hon colleague.

The amendments proposed are mainly practical ones aimed at facilitating the application of the Act and specifically the institution of the regional establishment levy and the regional services levy.

†The Deputy Director-General of the Department of Finance, Mr Gerhard Croeser, has discussed the proposed amendments with representatives of various sectors of the private sector on two occasions. These discussions often became long debates on the underlying principles of the two levies which are already contained in the principal Act. I appeal to hon members when debating this matter to make a clear distinction between two matters namely the principles which underline these two new sources of revenue for RSC’s which are already provided for in the principal Act, and secondly, the proposed predominantly procedural amendments contained in the amending Bill.

As to the proposed amendment relating to financial matters, the position is briefly the following:

Clause 1 amends the definition in section 1. The first one to be referred to is the definition of Venda. Because the sales tax base is no longer used, this definition has become a necessity and is hereby deleted.

As far as the definition of “enterprise” is concerned, the regional establishment levy is imposed in relation to the carrying-on of an enterprise. This expression is now defined as any type of trade, business or profession and includes any operations of a business nature which are not carried on for profit, eg the supply of electricity by Escom, municipal bus services, Post Office telephone services, etc.

Order! Will the hon member for Elsies River please return to his seat.

Sir, the amendments brought about by the standing committee make it clear beyond any doubt that any religious, charitable or educational institution of a public nature will not be an enterprise for the purposes of this Act.

As regards the definition of regional services levy, remuneration for income tax purposes already includes the value of fringe benefits, the specific inclusion of benefits in this definition is unnecessary and has been deleted. Farm labourers earning less than R2 400 per annum are not subjected to employees’ tax and farmers therefore do not have to calculate the value of labourers’ fringe benefits such as free housing and rations. To avoid requiring farmers having to make these calculations only for purposes of the services levy it is provided that in such cases the levy is to be paid on cash remuneration only.

As far as the definition of “regional establishment levy” is concerned, the present definition of this expression uses the taxable value determined for sales tax purposes as a starting point. Because the sales tax base is too narrow, a large number of sales and services are exempt. The definition is replaced by a general provision imposing the levy on all enterprises. Hon members are also requested to study the definition of “enterprise” in this regard.

I now come to the definition of “drawings”. The principal Act provides that a partner or proprietor is subject to the regional services levy on his drawings from the business for the reason that these drawings are equivalent to salary paid to an employee. The term “drawings” is now defined and includes expenditure incurred by the business on assets or services used by the partner or proprietor for his private purposes, the equivalent of fringe benefits granted to an employee. The definition of “employer” is purely a consequential amendment.

Clause 8 amends section 12. The principal Act determines only the broad principles upon which the regional establishment levy is to be based. Section 12 (1) of the principal Act gives the Minister of Finance, in consultation with the Administrator and the council, authority to determine instructions to be published by way of a notice in the Gazette. For ease of administration and to avoid uncertainty it is considered essential that the levy should be imposed in accordance with uniform rules applicable to all regions. The proposed amendment accordingly empowers the Minister of Finance, after consultation with the Council for the Co-ordination of Local Government Affairs, to determine by way of a notice in the Gazette the manner in which the two levies are to be calculated and paid.

With regard to the possible exemption of persons or vendors from the responsibility of paying the two levies—an aspect on which the standing committee deliberated at length and introduced amendments—the general principle will be to cast the net of responsibility as widely as possible. From a policy point of view, this is necessary for two reasons. Firstly, the wider the net is cast, the lower will be the rate at which the levies will be determined. For example, it was mentioned in the Budget Speech that during the first financial year the two levies would not exceed in the case of the regional establishment levy 0,10% and the regional services levy 0,25%, Secondly, the administration of the two levies is made much more complicated if there are a series of exemptions. The fewer the exemptions, the simpler the application of the system is.

Section 12(10) of the principal Act provides for the mandatory imposition of interest where levies are paid late. It is considered—particularly in view of the fact that the imposition of the new levy will inevitably give rise to genuine misunderstandings regarding liability and payment—that the Commissioner for Inland Revenue should have the power to waive interest in appropriate cases.

I come now to clause 9, which amends section 15. The Income Tax Act and Sales Tax Act bind the Commissioner for Inland Revenue to secrecy with regard to the affairs of taxpayers. However, as it is proposed that the Commissioner will assist the regional services councils in the administration of the principal Act and the collection of the levies payable thereunder, the Commissioner is authorised under section 15 of the latter Act to furnish information to the councils. The amendment to that section proposed by this clause makes it clear that a council will not be entitled to require the Commissioner to furnish any information other than that which the Commissioner considers necessary. The furnishing of information is thus limited and not extended.

Further, I wish to talk about clause 10, which amends section 16. The State and statutory bodies will be liable for the services levy and in certain instances the establishment levy. Many laws, however, contain exemptions from taxes and duties in favour of the State and such bodies. It is now provided that no such exemption, enacted before the commencement of the principal Act, will apply to these levies.

In conclusion it is the Government’s conviction that all communities will derive much benefit from the establishment of regional services councils. Some of these benefits are: Joint participation and decision-making on general affairs on local government level on matters affecting all communities; improved and more efficient rendering of services and rationalisation of bodies rendering services to make optimal use of scarce resources; and additional new own sources of revenue to upgrade the infrastructure in the region, especially where the greatest need for this exists.

These proposed amendments should expedite the establishment of regional services councils and streamline the functioning of the councils.

Mr Chairman, I am trying to find out who is handling the Bill in this House. Thank you, I see the hon the Minister of Finance over there. The hon the Minister will not be surprised, I suppose, when I tell him that this side of the House is very strongly opposed to this Bill. I move at once, as an amendment to the motion that it be read a second time:

[Interjections.] Let me begin by saying—not only on behalf of this party, I believe, but on behalf of all the opposition parties in this House—that I very strongly object to the fact that we are again being confronted with such an important Bill at this late stage. It is a pity that we should detract in this way from the proper functioning and indeed from the dignity of Parliament.

We have come to the end of this part of the session, and at this stage we are being confronted with a Bill of this nature, just as we were last year. We debated the principal Act on the last day of the session last year; and now we have a repetition of that. The motion on the hours of sitting of the House will be discussed again today but I nevertheless wish to object once again to the fact that we are being asked at the end of the session to decide on such important matters.

Our attitude towards the regional services councils is well-known. In the light of the advanced stage of the proceedings in this House, and in view of the arrangements maintained in respect of the previous Bill, I would probably have been tempted not to come back to the question of the establishment of the regional services councils and our fundamental objections to them. I see that the hon the Minister’s Second Reading speech was delivered on his behalf by the hon the Minister of Finance—that is what it says here. I quote from this speech:

With that the hon the Minister reopened Pandora’s box, if I may use that expression.

Under these circumstances, Sir, you will not take it amiss of me if I repeat our fundamental objections, as stated last year and again on the standing committee this year, to the introducing of regional services councils, because they are relevant to this amending Bill. I want to sum up our objections briefly, because I am not going to repeat the speeches hon members made last year.

In the first place, we cannot accept regional services councils because they are based on separate local authorities on the basis of race and colour. In this connection I want to point out that it was very clear from the discussion on the standing committee, and in this House at the time, that the people who drafted that Bill were acting within the framework of Government policy and were guided by that policy. In other words, they could not draft a Bill outside the framework of that policy. For that reason, this legislation does indeed reflect the Government’s policy in respect of separate local authorities. If the fact that we have stated here, that we know that…[Interjections.]

Order! Hon members are conversing too loudly.

Thank you, Mr Chairman. Whether we want to admit it or not, the Black local authorities as well as the management committees and other local bodies established for the other communities are basically unacceptable to those communities.

Another objection we raised was that the regional services councils would actually place unqualified, autocratic powers in the hands of the central Government, via the Minister and the Administrator. At that stage, the new system of provincial government was still being envisaged. Since then the relevant Bill, the Provincial Government Bill, has been passed, and it is clear from that measure that the new Administrators under the new provincial system are nothing but the agents or instruments of the central Government. In other words, as far as regional services councils are concerned, we have direct interference and domination by the central Government to a far greater extent than we had in the past in respect of local authorities.

Furthermore, we objected to the system of taxation on which the regional services councils were based, and we did so for several reasons. In the first place, we very strongly believed that it was unwise to introduce a new system of taxation while the Margo Commission was investigating the whole tax system. That commission has still not produced its final report. I want to repeat that in respect of this Bill, too, it seems senseless and ill-judged to implement tax proposals before the Margo Commission has completed its comprehensive revisions of the system of taxation.

We said two things about this tax. Firstly, we said that in so far as a tax was being levied on employers in the present economic climate, it would increase the possibility of greater unemployment. It is no use saying that the levy will be only 0,1% or 0,25%, especially not with regard to this Bill, as I shall indicate later. The sober fact remains that every additional tax which is levied on employers can and, I believe, will affect the employment of people. I am not blaming the hon the Minister of Finance for this, but during the discussion of the original Bill and other related legislation, we were repeatedly told that this legislation should be seen within the context of the repeal of section 3 of the Physical Planning Act. It was very clearly stated, and the chairman of the standing committee will confirm this, that the financial provisions in the principal Act were directly linked to the repeal of section 3 of the Physical Planning Act. It was made very clear to us there that the introduction of the new tax would serve the same purpose as the original section 3 of the Physical Planning Act, namely to restrict the employment of Blacks. I want to repeat that in the light of the present economic climate, such a motivation is highly irresponsible at this stage.

Our standpoint with regard to the financial aspect was that more funds would definitely have to be provided for the provision of services, especially to the underdeveloped communities. It was and remains our belief that those funds should be obtained through the normal channels and should be provided by the Treasury, and should not be obtained by way of a special tax. [Interjections.]

Mr Chairman, on a point of order: We are quite unable to hear what the hon member is saying.

Order! I shall have to start mentioning the names of hon members who converse too loudly. The hon member may proceed.

We believe that there is room for co-operation among local authorities with regard to the provision of infrastructures, “hard” services, etc but that that co-operation should preferably take place on a voluntary basis and should not be imposed from above, as provided for in the Act and in this Bill.

Two important objections were raised. One of them applies in this case as well. On the standing committee—I know the hon the Minister is not primarily to blame for this—we repeatedly requested that the many bodies which had submitted memoranda setting out their well-founded objections to the proposed Bill of that time should appear before the committee, but this was refused. Strong objections to the provisions presently contained in the Regional Services Councils Act were received from various people all over the country, including people involved in the economy and in finance, and from employers. We had the same experience with this Bill.

The original intention was that the Bill should be referred to the Standing Committee on Finance, but for some reason this was not done. The chairman of the Standing Committee on Constitutional Development and Planning was usually very accommodating with regard to our requests that memoranda be called for and evidence be heard. In this connection the hon the Minister said in his Second Reading speech that Mr Croeser had consulted many persons and bodies. Let me say at once that all who served on that standing committee have the highest regard for the officials and the people responsible for this measure. Certainly no one could fail to appreciate the efforts made by those people.

In his Second Reading speech, the hon the Minister said that many people had been consulted, but time and again the debate came back to the fundamental objections to the Bill voiced by those people. I am now referring to this Bill, Sir. The hon the Minister said that the Government eventually decided to proceed with the measure in spite of those objections. The standing committee repeatedly referred—the hon the chairman will confirm this—to the strong objections that had been raised to the previous Bill. The question was repeatedly asked whether it was not essential that we should request bodies such as Assocom and the FCI to give evidence on the Bill before the standing committee. It was said—I do not think the hon the chairman of the standing committee will mind my saying this—that it was not necessary, because surely, if those people had had any objections, they would have submitted them to the standing committee.

The hon the chairman of the standing committee will recall that it was even said that these people, such as the Federated Chamber of Industries, worked very closely with Parliament—their offices are in the French Bank building on the opposite side of the street just down from the Parliamentary building—and that they had certainly had the opportunity of studying the Bill, and that the fact that they had not objected to it should be taken to mean that they did not have any fundamental objections to the provisions. I was surprised and rather shocked, therefore, when representatives of the FCI telephoned me yesterday and told me that they did not quite understand the matter because they had only received the Bill from Pretoria the day before. They said that they had not had time to study the Bill. They had relied on the Order Paper, from which it had appeared that the Bill would only be considered by the standing committee on 22 July. Consequently they were surprised to see on the Order Paper that the matter was now to be dealt with during this session.

Sir, allow me to quote this letter addressed to the hon the Minister of Constitutional Development and Planning—copies were sent to me and, I believe, to other people as well—because I think it is important, since the procedure which we followed was in fact not correct.

In the light of these objections, I want to make a serious appeal to the hon the Minister not to proceed with this Bill tonight, but to refer it back to the standing committee so that we may give further consideration to it and hear further evidence during the recess without having to rush matters. I want to make a serious appeal to the hon the Minister. I know he is aware of the strong resistance to the establishment of regional services councils which exists all over the country. The fact is, of course, that the legislation which we passed in this House last year has proved to be so inadequate that it has been impossible to establish a single regional services council so far. The fact is that the resistance to the establishment of regional services councils has not waned, but has in fact been gathering force.

Moreover, I want to say that not even a full two months will elapse between the adjournment and the resumption of the session. The Act is already in existence. There is nothing to prevent the Government from proceeding in the meantime to take the preliminary steps towards the establishment of regional services councils if they so wish. There is nothing to prevent the Government from doing that. The Act is there. The authority already exists, therefore. The procedure has been laid down. It could indeed be said that the Government should wait for the new financial basis which is contained in this Bill. In that case, however, I want to put it to the hon the Minister that the objections are in fact concerned with that very financial basis. Once again, therefore, I strongly urge the hon the Minister to consider heeding those objections and referring this Bill back to the standing committee.

In their letter in this connection, Assocom says, and I quote:

These are the Federated Chamber of Industries and the Associated Chamber of Commerce—

Then the writers of the letter proceed to set out some other objections as well, and they say, among other things:

The letter goes on in this vein, and then the following statement is made:

†Finally they say:

This letter is addressed to the hon the Minister—

*I seriously object, therefore, to the fact that those people did not have the opportunity of appearing before the committee, and I repeat my appeal to the hon the Minister to refer this Bill back to the standing committee.

As the hon the Minister indicated in his Second Reading speech, the Bill contains two kinds of provisions. Some provisions are of a procedural nature, while others are more concerned with financial aspects.

With regard to this first group of amendments—of course, we voted against the principal Act and against several of its provisions—there are indeed certain improvements, such as the inclusion of the particular group of bodies which now makes it possible for Botshabelo, for example, to be included, as well as the fact that the Administrator has to consult the regional services council concerned before demarcating a region.

I want to say, however, that we strongly object to clause 3—the hon members on the Government side will also be faced with these objections in their own constituencies—in terms of which the Administrator may direct local authorities to take all the preparatory steps which may in his opinion be necessary for the establishment of regional services councils. It is true that provision is made for the cost incurred by these bodies to be repaid. As the provision reads at the moment, however, an urban local authority can be directed by the Administrator to take the necessary steps for the establishment of regional services councils, whether it wants to participate or not and whether it is interested in a regional services council or not. No other interpretation of clause 3 is possible in this connection. It was also made very clear on the standing committee that it was essential that that power be exercised.

Generally speaking, we may say that as far as clauses 4, 5 and 6 are concerned—clause 6, of course, contains a provision relating to absence from meetings—these amendments are in a certain sense improvements on the principal Act.

However, there are certain principles contained in the second set of amendments, those dealing with financial basis, to which we object. The hon the Minister will concede that this group—the financial amendments—actually forms the essence of this whole amending Bill. These amendments deal with the regional establishment levy and the regional services levy.

I need not provide any particulars, as these can be found both in the Bill and in the hon the Minister’s Second Reading speech. The point I want to emphasise in this connection, however, is that there is a total change as far as the basis of the regional establishment levy is concerned. It is that change that is in fact creating problems for us.

The old basis, namely sales tax, has been found by the department to be unsuitable for the introduction of this new method of funding of the regional services councils. This proves only one thing, and that is that last year’s Bill was not properly worked out and thought out. We really must not make the same mistake a second time by producing something which after a few months is again found to be impracticable or undesirable.

As long as we do not afford people who have a direct interest in these matters the opportunity of appearing before the committee or at least making representations to the committee, we shall be running the risk of having the same thing happen all over again; in other words, of having to admit in a few months’ time that this basis does not work well either.

What we find particularly disturbing is the discretion which is being given here to the hon the Minister of Finance … [Interjections.] … yes, in consultation with other parties, to determine the rate or tariff of all the taxes as he sees fit. We are faced here with a totally uncertain situation, therefore. The hon members on the Government side will also have to answer for this to their local authorities, because there is no real certainty. It can be laid down by the hon the Minister, but he may change that basis at any time after consulting the parties mentioned in the Bill.

The hon the Minister said in his Second Reading speech that it had originally been estimated that the two levies would not be higher than 0,1% and 0,25% respectively. In that speech he gave no indication of whether this still applied. He gave no guarantee that the hon the Minister would not decide tomorrow or the day after that that percentage was too low. That is where the uncertainty comes in. We have found that governments, the bureaucracy—with all due respect—and the receiver of revenue begin with a low tax burden. After a while, however, they say that they are not receiving enough money, and that the tax must be increased. It is that arbitrary discretion which is being given to the hon the Minister that we find completely unacceptable.

We have repeatedly tried to get an indication from the Government—the hon member for Umbilo has repeatedly asked for it—of the amount they hope to raise for the regional services councils by means of this tax. The hon member for Umbilo will confirm that the Government has given him no answer. We still do not know. We still have no idea how much money will be collected and used, for example, for the upliftment and upgrading of the underdeveloped communities and their infrastructures.

Finally, I want to refer to clause 9, which deals with secrecy. I concede that an improvement has been effected to the Bill in that the Commissioner for Inland Revenue may now decide for himself which particulars he will furnish to the regional services councils for the introduction of these services. However, the fact remains that a principle which we had all regarded as sacrosanct with regard to our entire income tax system is now being violated again. The amount declared by a person as his income must be a confidential matter between him and the receiver of revenue. That principle was violated in the original Act and is being violated again in this Bill in spite of the improvement. In the light of this, we have no option but to oppose this Bill.

Finally, I want to repeat my plea and my request to the hon the Minister. We must not make another mistake. Let us refer this Bill back to the committee for proper, calm and leisurely consideration, and let us hear the evidence of people who have a direct interest in this matter.

Mr Speaker, when the hon the Minister of Constitutional Development and Planning originally introduced this legislation on 17 June 1985 he said that the matter of regional services councils was a very complex matter and that the last words concerning them had not yet been spoken. I fully agreed with that statement at the time, and this Bill verifies the statement in the sense that before the first regional services council has even started its work, this mass of amendments is necessary to make it operational at all. When the hon the Minister of Finance introduced the Bill, he stated that these amendments were consequent upon many suggestions received and subsequent investigations undertaken. Frankly, these amendments clearly indicate the inadequate consideration that was given to the original Bill and the problems that can arise when ill-prepared Bills are rushed through Parliament in the closing stages of a session.

Clauses 1, 2 and 3 are absolutely essential, in fact, to be able to get the RSCs started. I believe this should have been known and should have been in the original Bill. This is additional work imposed on Parliament because, in my opinion, the initial work was totally inadequate, as many of us said at the time.

Clause 4, which gives the local authorities the right to collect levies, does not make me very happy, and I say this for a number of reasons. One of the reasons that makes me particularly unhappy is the fact that the Income Tax Act and the Sales Tax Act can now be breached at a local level. This, I believe, is a very unfortunate situation. I realise that the Receiver or the Commissioner himself has the authority, and I also realise that he can refuse to divulge information, but the point is that this is a local council obtaining local knowledge from people who are not geared or trained to accept the secrecy that is inherent in the original legislation and those administering the laws. Quite frankly, I do not think that local authorities will, in any way, be in a better position to collect this money than anybody else, in spite of what some people in Government circles feel about this.

Before I came to this hon House, I was in local government, as were many others in this House of Assembly. I also had the job of being Chairman of Finance of the City Council of Durban and I know pretty well how that operation works. Incidentally, I was one of those who was fortunate enough to be part of the group that initiated and operated the system that made Durban a debt-free city, but I merely say that in passing. I wish somebody could make South Africa a debt-free country!

You should become the Minister of Finance.

That would be very helpful. [Interjections.] Mr Speaker, local authorities will have to establish new systems, re-gearing and re-organising themselves for the collecting of this money. I am not sure, even at this stage, whether payments are expected to be made on a monthly basis, an annual basis or what basis, because even in this Bill it is not clear when the money is to be paid. All one knows is that it has to be paid by somebody to somebody, somehow. So in respect to that particular clause, whilst I have no objection to the possibility of local authorities doing this, I do not believe it is a very smart ideal to get local authorities to do it. In the Second Reading speech this is actually regarded as a virtue, the argument being that one is actually saving money by getting the local authorities to do this. I think that is a bit of a joke. Anybody who knows local authorities will know that they will exact their pound of flesh for anything they do for anybody else.

Clause 5 refers to the establishment of committees by the regional services councils. Obviously no one can object to the concept of a regional services council having some committees. I am afraid that I am most unhappy at the concept of people, who are not elected to those regional councils, being able to serve as members. When I say elected I mean they are nominated by local authorities of one sort or another, local affairs committees, management committees or various other institutions that have elected personnel, and that, such people have public accountability.

When one has nominated people, however, who will have certain rights to undertake functions specifically allocated to them as opposed to only being members of committees—it says so elsewhere in the Bill—then I believe we are extending membership on further than it need or should be. Again one has the situation where one will have additional expense because people will not be expected to serve as ancillary or additional members of regional services councils without being paid for it. One will have another avenue of “jobs for pals” if one is not careful. I think it is not unlikely that that will happen as it is fairly prevalent elsewhere.

There will also be no public accountability on the part of these people. I am sorry but concerning this particular aspect I believe it is merely extending the autocratic attitude that the Government is developing insofar as government on the second and third tiers in South Africa is concerned. I am most unhappy about his aspect.

Clause 6 of the Bill give the chairman the power to refuse to reopen a subject upon which a majority was not obtained if the local body that wants to bring up the subject was not represented at the meeting where the decision was taken. I must concede that circumstances do arise in which the reconsideration of decisions should be subject to some of control to prevent delays in decision making. However, here again this is left to, virtually, the whim of a person who has no public accountability. The chairman will be a nominated person and he will say to the representatives of properly elected local authorities whom they nominate to that committee that he will not reopen the subject for whatever reason he may choose. The boss of the elected people will again be a non-elected or nominated person who has no public accountability. I am sorry but I cannot accept that as being reasonable.

That is broadening democracy!

This is some people’s concept of broadening democracy, but in my opinion it is a method of getting rid of it. [Interjections.]

I am afraid that I am unhappiest of all with the financial aspects of this Bill. We consider the proposals here unfair, difficult to administer and costly to implement. As I mentioned earlier, if they are followed logically they can contravene certainly the spirit of the secrecy clauses of the Income Tax Act and the Sales Tax Act. When this matter came up in the standing committee, I put the question as to what revenue was expected to be collected and whether the Receiver of Revenue could not collect these revenues more easily. The chairman advised me that it was irrelevant and I was more or less ruled out of order as the principles has been accepted in a previous Bill.

It may well be that the principles of collecting money from businessmen had been accepted in the original Bill, but I do not believe that, when one is in a standing committee where one discusses how that money ought to be collected I could have been considered to be out of order on the subject. I believed it was our duty on the standing committee—even accepting the obnoxious original Bill, as I saw it—to look at all possibilities and to consider whether it was in fact a reasonable way of collecting the amount of money concerned. Quite frankly, it was almost impossible to find out what sort of money was being talked about. After I had made a few inquiries, I found out from various sources that the country-wide figure would probably be something in the region of R800 million initially.

If that is indeed the sort of money we are talking about—I must confess that I have nothing to back that estimate up except odd comments I have heard—this is about as complex and expensive a method as it is humanly possible to devise. This money could easily be obtained by increasing GST by 1%.

I would never contemplate an increase in GST happily, but if one uses that medium the expense is at least spread right across the country and is not only suffered by businessmen, who are ultimately going to put whatever it costs them onto the customer’s back anyway. By collecting the required money through GST, we would be using a system of collection which, through the Receiver of Revenue is already in operation, and no problem would be presented at all.

I am sorry to say this, but I fear this was found to be too simple an approach to suit the hon the Minister of Constitutional Development and Planning. I regret his unfortunate absence tonight. I assume he is at the moment dealing with this or some other Bill in one of the other Houses. [Interjections.]

As I have said, I consider this method to be very complex. I did not succeed in establishing the correct figures to I have to use estimates, but perhaps the hon the Minister of Finance who is piloting this Bill through the House will be able to give me an indication of whether this estimate is near the mark.

When I mentioned to someone that this was possibly the case, I was told that the big problem was not the collection of the money but its distribution. I have some very grave doubts about that.

The money will be collected from businessmen through the local authorities, possibly on a monthly basis and possibly on some other basis. The Lord alone knows how this will be done, because the method is not specified in the Bill. Perhaps the people who have to administer this do not realize that efficiently run businesses, particularly those in the range of medium and smaller businesses, do not have hordes of people running around, as they have in Government offices, just waiting to do odd jobs. It is going to cost private business money to administer this. The hon the Minister of Finance may smile quietly to himself, but I imagine he should know something about private business because he was at one stage involved in that field.

You can say something serious in a funny way. That is why I am smiling. [Interjections.]

I see what he means.

Private businesses do not have the necessary additional staff. When one looks at the various financial impositions already made on private businesses by local authorities and the State, one realizes that they are virtually being persecuted, and this applies particularly to the smaller businesses. They have to complete masses of forms and, more seriously, send masses of money which they are not really earning to various State and municipal departments.

As far as this particular tax is concerned, every employer is expected to pay all the way up the line. Has anybody given serious thought to what the multiplier effect on the cost is going to be as the cost builds up from employer to employer, involving a chain of up to four employers? How is this going to affect the amount paid by the person who ultimately has to buy an item, even if the sum involved was relatively small to start with? In the end, the man who has to pay, that is the man in the street, is going to have to pay quite a lot. It is no use anybody telling me that the figure concerned is a miniscule one, because, in the case of GST it also started off that way—it was initially 4%—but has now risen to 12%! Overseas—I will say this in fairness to South Africa—GST has in some countries got a darn sight worse than 12%, having started very modestly and humbly! I believe this can start in exactly the same way and carry on in exactly the same way! We believe that this is quite wrong and that it is a very, very poor system of accumulating this sort of money.

Before I conclude, I must comment on the fact that originally it was proposed in this Bill that we should also extort money for these regional councils from religious, charitable and all educational institutions. This was to some extent alleviated through the standing committee, but not totally, because, in addition to these institutions, there are, for example, certain old-age homes included. They are run for profit, it is true, but they do not make very much profit and the end effect can only be to jack up the cost to these old-age people. There are also private schools included which do not fall within the restriction applicable to educational institutions. Furthermore, there are included crèches, private hospitals and section 21 companies which are not charitable institutions but non-profit organisations. Blocks of flats will be affected, so landlords will ultimately either have to take a smaller return or increase the rents again. Housing utility companies are still affected and, of course, many other organisations will also be affected.

It is said that this burden is being spread across as broad a front as is humanly possible. In their magnanimity, State departments are going to pay. Electricity and transport undertakings are all going to pay. However, who the deuce is kidding whom? None of these State departments and organisations to which I have referred are wealth-producing organisations! They get their money from the public!

That’s it!

The public will ultimately have to pay more so that these organisations can pay more tax! In other words, we are going to find ourselves in the ridiculous situation where we will have to raise more in the way of ordinary tax to pay these various service and State departments so that they can pay the regional services council levies. [Interjections.] How ridiculous can one get!

I regret that I could not attend the final stages of the standing committee meeting; I had to attend another meeting elsewhere. I would have liked to have asked certain questions and, since I did not get the opportunity of doing so there, I should like to do it here. This Bill calls for the payment of a levy by employers in respect of their turnover and staff but, as far as I can see, it does not make any concession in the event of them suffering losses. If an employer is suffering losses, one must presume that he is still expected to pay the levy. I go one step further. If a company goes bankrupt as a consequence of having to pay this, together with all the other vicissitudes he may experience, is the taxman also a preferential creditor at the expenses of other creditors who have done legitimate work and business with that company? Those are points which I should like to have answered. [Interjections.]

One other point which I should like to mention is that clause 1(e) actually gives the right to discriminate against different categories of enterprises for purposes of this tax. I wonder who is going to discriminate in this regard and on what criteria. Can it possibly be abused? There is no clear definition as to how that discrimination can take place. I concede that there may well be the desirability under certain circumstances to have some sort of discrimination.

Order! Hon members must lower their voices.

Thank you, Mr Speaker, I realise that I have a gentle, dulcet tone and that hon members feel that they can shout as loudly as they like and I can overshout them, but even so I would appreciate it if the odd hon member in this House felt that what I was saying was interesting enough to listen to it occasionally.

I definitely do so. I do believe it is good. [Interjections.]

However, Mr Speaker, I appreciate that hon members have the right to miss the pearls of wisdom which emanate from my luscious lips! [Interjections.]

Finally, I want to conclude by saying that we in these benches consider this to be a thoroughly bad piece of legislation. We believe that it was ill-devised, ill-designed and poorly presented. I am sorry, but this is how we feel about it. I have the deepest sympathy with the hon the Minister of Finance who has had this rubbish foisted on him, but I do believe that the hon the Minister should have been wise enough to have had a good look at it and to have said “Please, just handle this piece of nonsense for yourself.” It is not doing him or his reputation any good.

In conclusion, I shall surprise all hon members by saying that we will not be supporting this piece of legislation.

Mr Speaker, the hon member for Umbilo only did what is expected of hon opposition members, and that is to examine critically a Bill which is…

You will only do what is expected of an hon member supporting the NP! [Interjections.]

The hon member for Umbilo examined certain aspects of this Bill critically as it is his duty to do. I shall return later to some of the points raised by him, and deal with them.

*First I should like to refer to another aspect, and that is that for a moment, after the first hon speaker of the Official Opposition had resumed his seat, there seemed to be some confusion about which hon member should rise as the next speaker. I just want to say that it is customary in this House for hon speakers in the opposition and on the Government side to alternate but since there are four opposition parties and one governing party, and because we are nearing the end of the session, the hon Whips of the Government have decided that an equitable way of arranging this debate would be to allow two hon opposition speakers to speak in succession, to be followed by a Government speaker, especially in view of the number of speakers who are going to participate in the debate. In this way, it has been possible to divide the time fairly between the opposition and the Government. I am not criticising anyone, because no one is obliged to comply with this arrangement, but I just want to say that this may have been the reason why there seemed to be some slight confusion about who the next speaker would be.

It is the right of any hon member not to rise, in spite of the list which the Whips have submitted, on which a certain order of speakers is indicated.

Methinks the lady doth protest too much!

I was not protesting at all. I was merely stating a fact. [Interjections.]

†I should like to come to some points raised by the hon member for Umbilo. He mentioned some aspects of the discussion in the standing committee. What I should like to say about the hon member for Umbilo is that he is very knowledgeable about matters of local government, provincial government and, consequently, also about those matters which are dealt with on regional services councils. At the same time, however, it is necessary to state as a fact that when the hon member for Umbilo feels strongly about an issue he certainly says so in no uncertain terms. We have also had experience of that in the standing committee. Sometimes the hon member for Umbilo later regrets the fact that he had said something in no uncertain terms.

The hon member for Umbilo levelled criticism at the imposition of a levy under the regional services council as proposed in the principal Act. He suggested that the problem could have been overcome merely by increasing general sales tax by 1%. It is true that by doing that the amount in question could possibly have been raised. By following such an approach, however, we would be ignoring the principle that those who are responsible for meeting certain needs should also pay or at least substantially contribute towards the payment for the provision of those needs. With the establishment of regional services councils and with the co-ordination of the provision of infrastructure and regional services especially, the approach followed was that those who could pay and those who had to meet the needs should also contribute towards the payment for the provision of those needs.

For a moment I just want to refer to the PWV area. If infrastructure—roads, houses and transport—is required because of the substantial housing needs, one may analyse this and deduce that it is because of the economic development in those areas, the factories, commerce and industry, that workers are brought from outside into those areas and that the infrastructure is therefore necessary. That again will result in the need to improve the infrastructure to bring people into central business districts for the purpose of maintaining normal commercial activities. Then one must realise that because it is those firms, the huge supermarkets and industrial undertakings which employ people whose employment adds to their economic well-being—the supermarkets sell their goods to a whole cross-section of people—a levy—not a tax—on the turnover of those supermarkets and on the wages of their employees is surely a fair way to contribute towards the raising of funds to pay for that infrastructure.

Another aspect the hon member for Umbilo mentioned was that he thought it was ridiculous that the State should now also pay a levy on wages. However, it is a fact that certain local authorities have experienced difficulties. It used to be the case that Government-owned properties were exempt from municipal taxation. In areas such as Pretoria or Cape Town or even in certain areas in Natal, there is a high percentage of Government-owned property which was at that time exempt from the payment of municipal taxation. Those municipalities suffered as a result. I know that since then the Government has accepted that they should also contribute towards the funds of those local authorities…

Mr Chairman, may I ask the hon member a question? Could the hon member for Klip River tell me whether he is not aware of the fact that the Government is not making any productive contribution, even if it does pay tax, because it obtains its funds from taxpayers? Moreover, does the hon member not know that for the past 5 to 10 years, municipalities have already been levying municipal rates on all Government buildings in the country?

If the hon member had listened to what I said, he would have heard me say that the State does pay municipal rates on Government buildings today. With regard to the hon member’s other point, namely that since the State obtains its funds from the taxpayer, it does not make a productive contribution, I want to point out to the hon member that the Railways employs many thousands of people in Germiston, for example, people who live in houses and who have to be transported from their homes to their places of work. So it is not an argument to say that the Railways in Germiston gets its money from the taxpayers or from the railway users in general. Even if they get their money from the taxpayer or the people who make use of the railways, the fact remains that one has a concentration of needs here, and a levy must be imposed on the employer who causes that concentration of needs. That is the principle that is enshrined here.

The principle is that regional services levies are essential to provide infrastructure and certain services. Surely it is a logical approach to impose the levy on those organisations that make the services necessary.

Municipalities have been experiencing the imbalance in their financing for years.

The State has been paying municipal rates for the past five years.

I would appreciate it if the hon member for Langlaagte would tone down his interjections.

Precisely because there was an imbalance in municipal funding, first the Borckenhagen Commission, then the Brown Commission and later the Croeser Working Group were appointed. A President’s Council report was issued on the matter. It was also investigated by a co-ordinating council. Eventually an equitable, proportionate basis was found for the financing of these services that have to be rendered. Merely levying municipal rates on property was not found to be an equitable financing method for local authorities. Adding 1% to the GST was not found to be equitable either. The funding of municipal or regional services must be spread in such a way that those organisations that are responsible for the need should pay the levy on a fair and proportionate basis.

The hon member Prof Olivier said that objections had been received from the private sector and from public commerce and industries. Naturally there have been objections. They have been dissatisfied all these years, and it is merely logical and human that anyone should object to a new levy, especially when a new service is being introduced, and in particular because they do not know what effect it will have on their businesses and on them personally. Before the principal Act was passed, however, many people were consulted, and the directors of Nafcoc, Assocom, the Afrikaans Handelsinstituut and the Federated Chamber of Industries agreed, in talks with the department, to the principle of the spreading of financing on the basis of levies. They undertook to impose levies on wages and on turnover, and that principle was accepted. Subsequently private organisations belonging to these sectors began to raise objections. However, the fact that the limited levies have been announced is sufficient reason, I believe, for saying that the dissatisfaction that has been voiced is unfounded.

I want to refer to one other matter raised by the hon member Prof Olivier. He quoted from a letter from the legal representative of the FCI and Assocom, and he said that they had been under the impression that this matter would only be discussed on the meetings to be held on 22, 23 and 24 July. This may be so. It was in fact scheduled for those dates on the committee meeting agendas. However, one cannot arrange future meetings without giving any indication of what the subject of discussion will be. The result is that on the agendas for all future meetings that are announced to enable hon members to plan accordingly, those Bills are indicated that are already under discussion and have not yet been finalised. In this way, for example, the agendas for the meetings on 17 and 18 June indicated that the Pension Benefits for Councillors of Local Authorities Bill would be discussed. However, every member of the standing committee knew that it would not be discussed, because it was a matter which the committee had decided to postpone until further negotiations and investigations had taken place. That is why it is parliamentary procedure that if it is indicated on the agenda that those Bills will also be discussed at that stage, we must indicate something which will be discussed, and we did not yet have those Bills which will in fact be discussed during July and August. So there was nothing wrong with the agenda. I can understand that the representatives of commerce and industry may have been genuinely under the wrong impression. Consequently I do not wish to criticise them in this connection, but their attention should perhaps be drawn to the fact that this is the correct procedure for announcing the dates and agendas of future meetings.

I should like to refer briefly to certain aspects that were touched on during the discussion of this amending Bill, in order to indicate that there were certain aspects on which the committee held fairly strong views. In connection with the definition of “enterprise” in clause 1, the committee discussed the possibility of excluding religious and welfare enterprises, and it was very strongly argued that churches and welfare organisations should be exempted from the levies. In the preparatory work done by the officials, a possible amendment was in fact proposed in terms of which churches would be exempted with regard to church activities, and welfare organisations with regard to welfare activities. However, it is not normal practice for such exclusions to be mentioned in the definitions.

For this reason, the standing committee decided not to include that proposed amendment, which had not been finally accepted, in the final draft of the proposed amendments, but a request was made to the Commissioner for Inland Revenue and the Department of Finance to take into consideration the fact that church and welfare organisations should not pay levies on church activities. I just want to add that there are church organisations which also run certain businesses for the purposes of general fundraising. I have been told, for example, that the Church of England in Britain has invested millions and millions of pounds in industries, including liquor industries. So it would be wrong to say that the church should be exempted from taxation on dividends merely because it holds shares in liquor companies which yield a dividend income for the church. In so far as church organisations are engaged in church activities, however, those activities should be exempted from levies and taxation. In my opinion, the same norm ought to apply to welfare organisations which have both a registered welfare number and a registered fund-raising number. Discretion should therefore be exercised in the granting of these exemptions.

Over and above this, there should be an equitable distribution in the way in which levies are collected in order to pay for the infrastructure which is to be provided by the regional services councils.

Finally, I wish to express the hope that when legislation is being prepared which is likely to be contentious, it will be submitted to the standing committee sooner in order to enable it to examine and discuss it more thoroughly. [Interjections.] In that respect I can understand the criticism voiced by the hon member Prof Olivier as well as other hon members. Their criticism is not unjustified, and it is desirable that this kind of legislation—especially measures which may be controversial and which will then merit further intensive investigation—should be submitted to the standing committees at an earlier stage of the session, so that they may be examined in detail. With these words I support this Bill.

Mr Speaker, I should like to agree with the last remark made by the hon member for Klip River. I agree that particularly such contentious and complex legislation such as this, which is going to have a far-reaching effect on the pockets of South African taxpayers, should have been submitted to the standing committee at an early stage of the session so that it would have been meaningfully discussed and investigated. I shall be coming back to this subject, however, but I agree with the point made by the hon member in this connection.

The hon member for Klip River tried to explain this evening why he, as the main government spokesman in this debate, did not speak immediately after the PFP spokesman. What is interesting is that all four of the opposition parties in this House are, as far as my knowledge goes, opposing the Bill. They are opposing it by moving that it be read a second time this day six months. If one wants meaningful debating in this House, it is surely essential for the governing party to reply—man to man—to each of the opposition parties. [Interjections.] That is why we find it very strange indeed that the governing party’s Whips cannot make arrangements to do so. I want to predict that the hon member for Wellington, who is making such a noise over there, will not have the courage to participate in this debate. The interests of the South African Agricultural Union, which we wanted to have consulted as far as this Bill is concerned because farmers are going to be hard-pressed with the taxes that have to be paid, will not be raised this evening by that hon member, even though he does represent many farmers. I am sure the hon member does not know what the Bill is all about.

The NP Whips must tell us if they need some lessons in how Whips should conduct their affairs. We do not receive a list from them and then have to jump up to speak in accordance with their prescriptions. If they introduce changes in accordance with the normal procedures, they could at least discuss the matter with us. We are accustomed to the governing party only folding at a later stage in the debate. We did not expect them to throw in the towel at the very start.

The hon member for Umbilo made a very good contribution. He is a very knowledgeable member when it comes to local authority matters in the standing committee and I have frequently said that I would not mind having as much knowledge of local authority matters as the hon member for Umbilo does. [Interjections.] Just as frivolous as the Chief Whip of Parliament is now being in calling me a “jingo”, we found that when the hon member for Umbilo was making a very substantial contribution here, members on the opposite side of the House were talking so much that I could hardly hear the hon member, in spite of his powerful voice. When that hon member was putting forward arguments to indicate why the Bill should be consigned to the trash-can, hon members opposite were not even listening. Next year, when the South African voters have to pay for the consequences of this Bill, the frivolous members of the NP can put it in their pipe and smoke it—we shall see to that.

The hon member for Umbilo referred to the fact that even Escom would have to pay for the services it furnished. In the memorandum to the Bill, as introduced, there is the following:

Those are the kinds of services which are not profit-orientated but which will have to pay. Escom must furnish a service to regional services councils, a service that must be transferred to the various participating local authorities, but this organisation will nevertheless have to pay. It will have to include the amount of the levy in its tariffs. Who is the one who will eventually have to pay? The one who will eventually have to pay is the consumer of Escom power. [Interjections.] The hon member Dr Vilonel and his party, however, are not at all sympathetic towards the South African consumer. The cry “Stem Nasionaal en betaal” is being heard far and wide in South Africa. This is another case of “Stem Nasionaal en betaal”. In the dying moments of the 1984 session of the House of Assembly the Minister of Constitutional Development and Planning introduced the Regional Services Council Bill and the PFP then proposed that the Bill be referred to a select committee because Black people could not participate in the regional services councils. On the Wednesday evening, shortly before midnight, the hon the Minister withdrew the Bill.

Yes, but he then had to go to Douglas.

What did he have to do there?

He had to go kudu-hunting.

Mr Speaker, the other morning the debate was adjourned, and I think the hon member for Barberton is right: 14 days later I picked up the hon the Minister’s trail on that farm. On that day the hon the Minister told the PFP: No, I cannot accept your amendment that Blacks should be incorporated. Later that year, however, Rev Hendrickse and Mr Rajbansi were appointed to the Cabinet. What is more, in January 1985 the State President announced that Blacks would be incorporated in regional services councils. What the PFP could not manage, these two Ministers apparently managed to convince the Cabinet about. And then, in the dying moments of the 1985 session of the House of Assembly, this Regional Services Councils Amendment Bill came before the House of Assembly once more and Blacks could become members of these regional services councils. In spite of the overall opposition of the CP, we then found this Bill passed in the dying moments of the session.

And now, Mr Speaker, in the dying moments of the 1986 session there is another Regional Services Councils Amendment Bill before this House.

Where is the hon the Minister now?

He asked the hon the Minister of Finance to pilot this Bill through for him for the third time in the dying moments of this session. I now hope that that hon Minister will take the Bill, on behalf of the hon the Minister of Constitutional Development and Planning, and throw it into the trash-can after we have finished with him this evening. In the dying moments of the 1986 session we again have this Bill before us. And as yet not one single regional services council has been established. After the Bill was passed in 1985, the Minister announced—they jump from the one development association to the other—that regional services councils would come into operation before 1 January 1986. Not one regional services council has yet been established, and now the hon the Minister and his department state that the first regional services council must come into operation on 1 January 1987, that being the reason why this legislation is necessary.

Mr Speaker, in the standing committee it was put to us, however, that as far back as February of this year the department discovered that there were certain shortcomings in the Regional Services Councils Act preventing them from giving substance to this Regional Services Councils Act. It was at that stage that the hon member for Parow, in a motion, sang the praises of this second tier of government. At that stage the department had discovered that these regional services councils were being hamstrung as a result of certain shortcomings. That was in February 1986. But, Mr Speaker, the hon the Minister and his department did not come to us within the space of a month or two; last week this Bill was referred to the Standing Committee on Constitutional Development and Planning. In this connection I agree with the hon member for Klip River: We did not have enough time to take a meaningful look at this amending Bill.

Mr Speaker, in this debate the PFP asked for the amending Bill to be referred back to the standing committee. The CP says: Do not refer it back to the standing committee; throw it in the trash-can, where it belongs. Throw it in the trash-can; that is where it belongs. There is a fair degree of unanimity about the fact that the Bill should be referred to a standing committee. To tell the truth, I do not think the hon member for Bellville will take it amiss of me if I say this evening that he was the one who advocated most strongly that we again take evidence.

You are in trouble again, André!

No, Sir, I want to make it clear here this evening that I have the utmost appreciation for that colleague of ours who adopted an honest, straightforward standpoint. I have the utmost appreciation for that hon member for Bellville. I think that many hon members opposite could take a lesson from the hon member for Bellville. [Interjections.]

All the opposition party members, including certain hon members of the governing party, were convinced that the standing committee should ask the hon the Minister provisionally to hold the Bill in abeyance so that it could come before Parliament just two months later—in August of this year. In that way the standing committee could enable Assocom, the SA Handelsinstituut, the SA Agricultural Union and other interested parties to give evidence. There was, moreover, enough time in which to do so. Then, however, the hon the Minister first had to be consulted, and the hon the Minister’s reaction was, of course, that this legislation had to be accepted by Parliament before tomorrow evening. I also believe that that is one of the reasons why he was so eager to have a start tomorrow morning at 09h00.

Sir, we would like to have this Bill thrown in the trash-can. If the hon the Minister of Finance, who is dealing with the legislation this evening on behalf of the hon the Minister of Constitutional Development and Planning—the Minister who also has to handle the finances of regional services councils, and whose department is largely going to be responsible for getting the money from John Citizen—this evening agrees, at the conclusion of the second reading debate, to withdraw this Bill, we would very greatly appreciate the fact. We are asking him to do so, so that before the resumption of business in August of this year, the standing committee can once give attention to this measure—in an attempt to determine whether it is not possible to discover another method of financing for regional services councils, without people being financially impoverished in the process.

This year the SA Transport Services allocated R23 million in its budget for the financing of regional services councils. That was 0,001% of the total turnover. If it were 0,1%, it would represent R230 million which the SA Transport Services would have to contribute next year to the financing of regional services councils. Who is going to pay for that? Is Parliament going to have to pay for it, because then it is going to be the taxpayer who will have to cough up? No, when all is said and done it will be the consumer who will have to pay for it. Those who make use of the services of the SA Transport Services will have to pay for it. Ultimately it is once again the consumers of South Africa who have to pay for this expensive multiracial local authority. [Interjections.]

Yes, that’s it exactly!

Yes, Sir, those hon members can have a good laugh about that now. They laugh whilst the consumers of South Africa have to pay up.

They will still have to foot the bill!

In a previous debate we pointed out here that wheat-grain, from the farmer’s farm to where it eventually ends up on the consumer’s table, has a turnover levy imposed on it seven times. Seven times a levy is paid on that wheat-grain, from the time it leaves the fanner’s lands until it ends up on the consumer’s table. Who must pay those levies, Sir? [Interjections.] The farmer, the co-operative, the Wheat Board—everyone that fits into the process at some point or other has to pay the levy. [Interjections.]

You are talking absolute nonsense!

How do you explain those statements to intelligent people?

[Inaudible.]

Mr Speaker, the hon member for Randburg will have to stand up and do some explaining, because each of those entrepreneurs will have to pay up. [Interjections.] What I am now saying is that each one of them will have to pay. The farmer who has to produce the wheat does, after all, have people in his employ. He must therefore pay a regional services levy. [Interjections.] Each of those people will have to pay, Sir. Ultimately it is people with food on the table who will have to pay, and then hon members of the National Party will sit there laughing about it! [Interjections.]

The hon the Minister said in his Second Reading speech:

The hon the Minister is therefore saying that this Bill must be introduced to allow the establishment of regional services councils to proceed smoothly. If the establishment of regional services councils proceeds as smoothly as it has from 1984 to the present time, I doubt whether this Bill will allow regional services councils to proceed any more smoothly. I still doubt whether these multiracial local authorities will come into operation on 1 January 1987. [Interjections.]

The hon the Minister goes on to say in his speech that he hopes that these regional services councils can be established as quickly as possible so that one can physically reap the benefits of the system. When the legislation was debated on a previous occasion, the hon the Minister of Constitutional Development and Planning and the hon Chairman of the Ministers’ Council of the House of Representatives said that the Coloured, Indian and Black residential areas, which had lagged behind over the years, would now have to be uplifted. They said that money would now have to be invested in these residential areas. A redistribution of wealth would have to take place. The Whites of South Africa would have to pay so that this redistribution could take place.

That is right.

It could also happen that 80% to 90% of the revenue of a regional services council would come from the White taxpayers’ pocket, but that White taxpayers would, at most, have a 50% vote in those regional services councils.

Let us, for example, look at the functions of the regional services councils that will have to be paid for. As far as water supply and electricity supply are concerned, I have already said that Escom, which has to supply the power, will also have to pay levies.

These regional services councils, these multiracial local authorities, will also have to look at civil defence. In the standing committee it was stated that these regional services councils are to be non-political organisations. The majority of the members who will serve on this multiracial local government body here in the Cape metropolitan area will, however, be members of the PFP. I take it they will serve on this council on behalf of the Cape Town City Council, but it is also quite possible that representatives of the UDF could obtain seats in that regional services council to serve on behalf of people in the Coloured, Indian and Black residential areas. [Interjections.] That is quite possible.

What will these people have to look at when serving on these regional services councils? They will have to deal with health services, airports and civil defence. [Interjections.] It is quite possible, notwithstanding the security situation in which we find ourselves at present, that members of the UDF and the PFP could be in the majority in the regional services council in the Cape metropolitan areas. As I have said, they serve on that council to keep a watchful eye, amongst other things, on civil defence in this country. [Interjections.]

That depends on the voters.

The hon member says it depends on the voters. The voters of Cape Town have already elected the majority of PFP members for the Cape City Council. Moreover, the voters in the Coloured and Black residential areas are not going to ask the NP to put their case there. No, if they want to send members of the UDF to represent them there, they will do so.

Let us now speak about the country as a whole. [Interjections.]

Those are, amongst other things, the functions for which payment will have to be made.

In addition recreational facilities are also to be placed under the control of these regional services councils. That is why we find, in the Cape metropolitan area, that there are virtually no more recreational facilities reserved exclusively for Whites. They have already been thrown open to all races by the “PFP City Council”.

What happened when a referendum was held last week on the use of the beaches in Port Elizabeth? The citizens of Port Elizabeth said, in a majority vote, that they wanted White beaches. At the time the NP sat on the fence, whilst the PFP mobilised its entire organisational force in Port Elizabeth. [Interjections.] The PFP disseminated this letter in which it stated that a vote against open beaches could perhaps jeopardise one’s job. The people in Port Elizabeth were threatened with the possibility of losing their jobs if they voted against open beaches.

They were intimidated. [Interjections.]

The PFP says Port Elizabeth is dependent on overseas undertakings and that if there were discrimination on Port Elizabeth’s beaches, these undertakings could perhaps withdraw the investments from Port Elizabeth, causing this area to decline. [Interjections.]

The NP sat on the fence. Only the hon member for Newton Park had the courage of his convictions—I take my hat off to him—and went to Port Elizabeth to cast his vote in accordingly. The hon members for Port Elizabeth North and Algoa, however, remained in the House of Assembly, sitting on the fence. [Interjections.]

The recreational facilities on our beaches are now also being placed under the jurisdiction of these regional services councils of which a Black man can also be the chairman. That can happen in Port Elizabeth, and if the influx to Cape Town continues at the present rate, it could also happen here one of these days.

Let us look a little further. The Black Local Authorities Act has already come into force, and these Black local authorities now have representation on the regional services councils. The PFP is opposed to this Bill because separate local authorities are being given representation on these regional services councils. The Black local authorities of Langa, Nyanga, Guguletu and Khayelitsha are also being granted representation on these regional services councils.

I now want to speak about the funding of these regional services councils and quote the hon the Deputy Minister of Constitutional Development and Planning. This legislation is dealing a death blow to development boards, and the services they furnished must now be furnished by the regional services councils. The development and service functions of the development boards must now be taken over by the regional services councils. I quote the hon the Deputy Minister (Hansard: House of Assembly, 1986, col 1175):

These powerless Black local authorities are now being represented on the regional services councils which are responsible for bulk water and electricity supply and for other services. They are local authorities which are not able to collect their funds.

The hon the Deputy Minister of Constitutional Development and Planning said on another occasion:

I then put the following question to him:

The hon the Deputy Minister then gave the following answer:

The same also applies to electricity. He says it should normally be cut off. In these Black residential areas—also in these residential areas, the “orderly squatter towns” such as those now being created at Khayelitsha—it is possible that a whole area’s electricity and water is cut off when people are not able to pay for the service, because the services are not furnished to individual houses.

In his second reading speech on the Black Local Authorities Amendment Bill the hon the Minister said:

This Black local authority can participate in the functions of the regional services councils—it can even change tariffs—but present evidence indicates that these Black local authorities do not pay their water and electricity accounts. Millions of rands in taxpayers’ money is lying with these regional services councils and the powerless Government and powerless Black local authorities and development boards cannot collect it. [Interjections.] What, however, does the hon the Minister of Mineral and Energy Affairs say:

Then the hon the Minister says:

I can also understand the hon the Minister of Mineral and Energy Affairs’ statement. Electricity is supplied in bulk to these regional services councils. They must pay the accounts or the power is cut off.

Order! I also have to cut off the hon member’s speech now, because his time has expired.

Mr Speaker, once again we find ourselves siding with the Conservative Party in opposing the Bill which is before us. Whilst I agree with a number of the submissions made by the hon member for Kuruman, I do not agree with the main gravamen of his objection, namely the fact that they are opposing this measure because here we are dealing with the establishment of a multiracial body. That we do not agree with. I do not, however—and here I agree with them—really think that this legislation is necessary at this late stage of the parliamentary session.

I want to clarify the point made by the hon member for Kuruman. We have moved an amendment that this Bill be read this day six months, which is the strongest form of opposition. We therefore agree with the hon member that the Bill should be assigned to the wastepaper basket. We do not want this Bill. We do not want to see regional services councils established in South Africa at all. We would therefore be quite happy to see this Bill assigned to the wastepaper basket. Since the Bill now has to be discussed, in saying that it should go to a standing committee the point that the hon member Prof Olivier is making is that the Bill has not yet been properly discussed by the standing committee. If the standing committee had received the objections from FCI and the Associated Chambers of Commerce—if they had had an opportunity of placing arguments before the committee—that would have been a different story. Perhaps then an altogether new concept could have been developed, a new concept of giving local authorities the revenue which they need, which their tongues have been hanging out for these past 25 years. Despite Borckenhagen, despite Browne, despite Croeser, despite Niemann and despite Driessen they still do not have adequate sources of revenue. I must say that I do have a measure of sympathy for the hon the Minister of Finance. I think he is quite a brave man to have come to this House with a prickly-pear tossed into his lap. I think the discomfort is showing all over.

This is a Bill that has thus far been piloted through by the hon the Minister of Constitutional Development and Planning. It was his brainchild. It is part of some plan, but as yet we do not have the full picture and therefore do not know how this aspect fits into the overall picture that he has in mind. Because it has financial implications, however, this hon Minister has been given the task of subsequently piloting the Bill through Parliament. Let me say at once, if I may, that our attitude is very clear. We condemn the attempt by the Government to further institutionalise apartheid through the RSCs on the basis of racially structured and segregated local authorities. I think that must be made absolutely clear. We say further:

We submit that there has not been adequate or proper consultation with Blacks in so far as their acceptance of this structure is concerned. We say further:

We submit further:

This view is backed by someone who is altogether outside of Parliament and who I think is held in high esteem in South Africa. I am referring to Prof Lawrence Schlemmer and I think the Government holds him in high regard. Prof Schlemmer says the following on regional services councils, and I quote from the Cape Times:

Then there is the financial argument as well as the political argument. I would like to take the political argument further. I submit that the problem in bringing the Blacks together in the regional services councils is the fact that they do not have credibility among their own people because they will be elected from Black local authorities, Black community councils and other bodies structured by them in polls with a percentage vote of 3%, 5% or 7%. They therefore will not enjoy the credibility of their own people. If they do not have that credibility there is no way in which they can give it to the regional services councils.

Whilst the idea of the Government was simply to create a regional service council where all the groups in the country could come together they have gone about it in the wrong way. It should evolve from the top and not from the bottom. Some of the Black local authorities are not functioning properly today and neither are some of the Black communities. Some have management problems and the councillors have resigned. There is no proper administration and the rents and fees are not collected. There is absolute chaos.

There is another reason why the whole idea of regional services councils should be shelved at this stage. This reason is the state of emergency. What is the hurry to pass this Bill? Perhaps the hon the Minister of Finance can ask his colleague the hon the Minister of Constitutional Development and Planning. I must add that I do not blame the hon the Minister of Finance who is under pressure from the hon the Minister of Constitutional Development and Planning. The hon the Chief Whip of Parliament is also under pressure from the hon the Minister of Constitutional Development and Planning to have his Bills passed before this session ends.

The idea is to provide funds for the Black local authorities in order that proper services can be provided. I am referring to matters such as proper water supply, a proper sewerage system, proper sanitation and electricity. However—I ask this with great respect—how can this be done in the state of emergency that exists today? Surely the state of emergency is a good reason why the regional services councils should not be established at this time.

As I said before, this Bill also has other financial implications in that definitions in the Act have been changed. It is being introduced at a time when the economy is at its very worst—the hon the Minister of Finance is probably the best man here to judge that. Insolvencies and liquidations are running at an average of 20 per day. Businesses are struggling and can hardly make ends meet, and yet the hon the Minister of Finance is imposing a payroll tax and a turnover tax. It is all very well to say that the amount involved is deductible for income tax purposes, but businesses are struggling to such an extent that they will still not be able to cope. This is the worst possible time to impose new taxes.

These taxes are being imposed at the very time when the Margo commission is discussing new forms of and approaches to taxation in South Africa. [Interjections.] The hon the Minister of Finance cannot deny that he is on record as saying that these taxes are being considered by the Margo Commission.

It has been said that Botshabelo will be incorporated in the area served by the Regional Services Council of Bloemfontein. This was initially planned for January and then June. Is it now intended to come about in October or November? I am not sure. Since that is the case, the hon the Minister of Finance will have to provide financial regulations to govern the administration and collection of the two levies which are to be imposed if this Bill is passed.

I would therefore like to ask the hon the Minister a very simple question. What will he do if the Margo Commission rejects the regional services levy and the regional establishment levy? What if the Margo Commission proposes a far better method of raising funds to give poor local authorities the finance they require to attain the upliftment and quality of life they need? The hon the Minister will then already have crossed the Rubicon; how is he going to retreat? [Interjections.] It seems that “Rubicon” is a dirty word! How is the hon the Minister going to go back on the whole system of taxation to which he will already have committed himself? [Interjections.]

The hon the Minister can confirm that we were told the other day that Mr Justice Margo is going to report back within a month. Why do we have to fly in the face of a report on this very question? Why do we have to beg the issue and perhaps take the wrong road entirely by promoting forms of taxation which are thoroughly unpopular, are rejected by the business world and will lead to a great deal of dissatisfaction?

We submit that the regional services levy will lead to more unemployment, and what could be worse in South Africa today than further unemployment? Considering all the unrest around us at the moment, do we want to promote something which will increase unemployment?

The levy is based on the number of employees, and labour-intensive industries will therefore be most seriously affected while capital-intensive industries will benefit. Why is a system proposed which favours capital-intensive industries at the expense of labour-intensive industries which offer more people employment? Industries will be encouraged to reduce the number of their employees and thereby increase the number of unemployed.

As far as the regional establishment levy is concerned, that is the tax on turnover, there has been a change. It seems that the hon the Minister and his department have responded to the argument submitted initially that a higher turnover could produce a smaller profit, and similarly, a smaller turnover a higher profit. He has therefore changed the tax base. The hon member for Umbilo mentioned this point, and I take it that that particular argument has been met. I presume that is why the hon the Minister has changed that definition.

Since that is the case, let me take my argument a step further. Is the hon the Minister of Finance aware of the telex which was sent to the hon the Minister of Constitutional Development and Planning as recently as 20 June? The hon member Prof Olivier raised certain points in it but there are others which I should like to bring to the hon the Minister’s attention. If he has read this, I can perhaps just remind him about one or two things, so that he can reply to these points during this debate. The first point concerns the definition of “drawings”. It is recommended that all drawings should not be taxed as some may represent withdrawals of capital from business and not necessarily profits. We should like to have this matter clarified.

The second submission which is made is that the two levies to which I have just referred require closer scrutiny. In their opinion the scope of the hon the Minister to determine rates of taxation is unnecessarily wide and open-ended. If that is the case, is he going to be able to vary the rates or is he going to leave it to the regional services councils to do that?

Concerning the question with regard to differentiation, is the hon the Minister going to impose a heavier levy on the more profitable areas than on those which are not so profitable? The question of secrecy has also been raised by the hon member Prof Olivier.

Insofar as the local authorities’ sources of revenue are concerned, can the hon the Minister of Finance tell us what benefits the local authorities will get? In this regard I am not referring to those poor local authorities which need the additional funds but to existing local authorities. I am thinking, for example, of local authorities on the Reef such as Johannesburg, Germiston, Brakpan, Benoni, Boksburg, Roodepoort or any of those towns which are now being run by local authorities. What specific financial benefit will they get? They are going to get no direct benefit from their regional services councils or the established levy. That is common cause…

Peaceful, stable neighbourhoods.

I see, peaceful, stable neighbourhoods. Is this the only way in which peaceful, stable neighbours can be provided? The local authority is really going to derive no direct benefit from this. I therefore find the hon the Minister of Finance’s reply very interesting. All of this therefore has nothing to do with Bockenhagen, Croeser, Niemann and Driessen—the whole bag of tricks! All this is concerned about is peaceful neighbours! [Interjections.] These two levies are therefore being imposed merely to obtain peaceful neighbours. Well, I am sure the hon the Minister of Constitutional Development and Planning is going to be very interested in that argument. It is the first time we hear that this is the reason for their imposition

There could possibly be some benefit to the local authorities in the field of services which they are presently supplying which are running at a loss. If those services are taken over from them, then they could benefit from it indirectly but that is the only way in which they can benefit.

I may just mention that the core cities will have to run the administration alone. It has been argued that the RSCs will not be larger bureaucracies and that they will not have to expand into larger bureaucracies. That may be true but the core city is going to be charged with the duty of collecting those two levies, the payroll tax and the turnover tax. They will have to employ additional staff and obtain additional machinery. They will have to ascertain who is liable to pay those levies. As far as this is concerned, I have already seen the results of an estimate made by the Johannesburg City Council. There will be an initial outlay of at least R1,5 million on capital expenditure, the appointment of additional staff, for example, secretaries and the procuring of additional space. Additional stationery will also be needed because accounts will have to be sent out and they will have to collect the payments.

Furthermore, I should like to know what relationship there is going to be between the local authority and the Receiver of Revenue. Here we are touching on the question of secrecy. If the taxes cannot be collected, who will be finally responsible for collecting them? Is it the Receiver of Revenue or the local authority? Who will issue summons and to which court should they go, to the tax court or to an ordinary magistrate’s court?

How are the funds going to be allocated? It is clear that we have a hiatus situation here. It is very difficult for the local authority to establish precisely how it is going to function now that new services are to be introduced.

I have seen a report in which the local authorities have, in most cases, more or less agreed to act purely on an agency basis as far as the scheduled services are concerned. The Rand Water Board should, for example, act on an agency basis and supply water and, as far as electricity is concerned, Escom should act on an agency basis and supply the electricity. The whole approach is wrong.

Whilst I am talking to the hon the Minister of Finance and whilst we are looking at sources of revenue, I should like to ask the hon the Minister whether he has done, or will do, an exercise on this basis. Just a little while ago I looked at the Budget and I noticed that the provincial subsidies for the 1985-86 financial year was R5,231 billion. However, for the 1986-87 financial year it is R3,5 billion. That is R1,7 billion less. Has the hon the Minister done an exercise whereby he has worked out which services have been taken away from provincial councils, for example education which has now gone to central government, and the cost involved as well as the cost of the organisations that have been set up to handle own affairs, and compared that to what they are now saving in having abolished the provincial councils and not now having to provide the provincial councils with those subsidies which have had to be provided in the past? [Interjections.] I do not have the facilities or the staff to do it, but the hon the Minister has, and I think he may well find that in the R5,2 billion subsidy which used to be paid to the provincial councils he has sufficient money to give direct compensation and financial assistance to the very local authorities which we are now trying to uplift. I think one of the main reasons for this Bill is to give them such an upliftment. I want to say with great respect that I should like some clarity about the results of such an exercise.

I think the whole approach with regard to the establishment of the regional services councils is incorrect and should have been approached differently. It would have been far better if the provincial councils had not been abolished. If local authorities had been given direct representation on the provincial councils, on bodies that already exist, they would have been able to elect their own people whether they be White, Coloured, Black or Indian. There would have been no need to establish the regional services councils which are being established in terms of the legislation with which we are dealing now.

They can start right at the top, and I want to suggest that if they want to give credibility to the system—it has been announced in a special Government Gazette that a national council is going to be established—surely that national council is the body which should consider the whole system of local government, the whole Constitution of South Africa and the whole question of the participation of Blacks, in particular, in the Constitution. This council should consider these things, make recommendations and get the people behind them to accept their credibility. The voters must know that the people they elect will participate in a proper constitutional structure and in a proper form of government. Would that not be a far better approach than for the Government to decide bureaucratically and autocratically that this is going to be good for Black local authorities and impose the system on them?

As far as regional services councils are concerned, why must local authorities be forced into regional services councils and into sharing regional services councils when they do not want to? Surely it would have been quite possible for a co-ordinated planning committee to have worked out on a voluntary basis precisely what services it would be convenient for contiguous local authorities to share on regional services councils. Would that not have been a more humane and proper approach to the whole issue of local authorities?

I think the whole idea of the establishment of regional services councils is a total disaster. We want the Government to halt all further steps. Let the regional services councils be still-born and let the national council itself give consideration to a new dispensation for South Africa which involves all the local authorities. They should be consulted. Let us start again and, for heavens sake, let regional services councils be scrapped.

Mr Speaker, I actually find it quite difficult to react to the two hon members who have just spoken, because on the one hand, the hon member for Kuruman said absolutely nothing about the Bill, and on the other hand, it is extremely difficult from where I sit to hear anything that is said by the hon member for Hillbrow.

However, I did gather that the hon member for Hillbrow was saying that one of the reasons why he believed that the regional services councils should not be established at this stage was that there was a state of emergency in the country at present, and it would be difficult to do the work which a regional services council is supposed to do as long as a state of emergency exists. That argument is exactly the opposite of what it should be, because the state of emergency is in fact the best reason for establishing the regional services councils.

The regional services councils are in fact one of the instruments that the Government is creating to bring home to ordinary people the fact of reform and the tangible effect it is having on their level. We are continually being accused of wanting to contain the violence by means of force alone, but this is indeed an instrument with which we want to bring about positive and tangible reform at the same time. That is why it is so important that the regional services councils should be established as soon as possible.

The hon member for Hillbrow also argued that the RSCs should not be established at this stage because of the present unfavourable economic conditions. I know this is a valid argument. The additional levies which will have to be paid will undoubtedly create a problem for certain enterprises. Paying is never pleasant, and it is even less pleasant when one is finding it difficult to make ends meet. On the other hand, it is so much more essential under these circumstances that those reform and aid projects that have to be undertaken in the less affluent areas in particular should in fact be undertaken at this particular time. Those people can no longer do without the benefits which the RSCs are supposed to bring, precisely as a result of the economic situation.

The hon member for Kuruman said that the regional services councils would not render any new services. However, the point is precisely that the regional services councils are essential because at the moment, the services they have to render are either not being rendered at all, or not being rendered at the level at which they should be rendered. In this regard I am thinking in particular of the social services in terms of which attention should be given to the infrastructure and housing, especially in the less affluent areas.

Only after the hon member for Kuruman had spent 15 minutes talking about the circumstances surrounding the legislation did he come to the Bill itself. Then he said at one stage that the consumer was the one who would have to pay. That is true. The consumer will certainly have to pay. Then the hon member said that the Whites would be the ones who had to pay. Now I do not know what the hon member means by that. Is he implying that the consumers are all Whites? If he looks at the Bill, he will see that if the consumer has to pay, the Blacks are going to pay just as much pro rata, because the purchasing power of the Blacks is almost as great as that of the Whites.

If a White person does not pay, you cut off his electricity!

I shall come to that argument of the hon member’s in a moment.

It was very interesting to listen to the hon member for Kuruman and to see the extent to which his speech was based on suppositions. It was actually a speech about all the things that might happen. The hon member kept using terms such as “this may happen” or “this is likely to happen”. His arguments were all based on suppositions, therefore.

One of his suppositions was that because it was not possible to cut off individual consumers’ water and electricity in the older Black townships, it would probably not be possible in Khayelitsha either. That supposition of his is quite erroneous. The older Black townships were not built with the idea that people were going to live there for a very long time or permanently and that they would become major users of these services. In any new township that is built, however, it is assumed that this will in fact be the case. His assumption that the same would apply in Khayelitsha was just as erroneous as most of his assumptions, therefore.

It has been argued that since Government institutions…

[Inaudible.]

Order! The hon member for Langlaagte should look ahead of him and not turn his back on the Chair. If he wants a turn to speak, I shall give him one. The hon member for Helderkruin is now speaking, and the hon member must allow him to make his speech. The hon member for Helderkruin may proceed.

Thank you, Sir. The point has been made that since Government institutions are not directly productive institutions and are supported by means of taxes, there is no point in making them pay these levies as well. On the other hand, the hon member for Umbilo argued that we should obtain the funds from an additional 1% in sales tax, so that the burden could be widely spread. It is true that the part paid by Government institutions will come from general revenue sources, but owing to the nature of the levies, it will be paid at a specific place, where that Government institution performs its functions.

Moreover, Government institutions are not entirely unproductive. Apart from the Railways, other Government institutions also contribute to general productivity in the sense that it is their task to provide the infrastructure, to provide services and generally to regulate society. In this way, the other institutions are enabled to devote all their attention to income-generating activities. For this reason Government institutions are also indirectly productive and responsible for the productivity of society.

However, Government institutions impose a burden on the infrastructure in that they employ people who have to be transported and housed and provided with other services. Therefore it is merely logical that they should also pay the levies at the point where they make use of the infrastructure, and not simply in general.

The advantage of this kind of levy is that it is naturally channelled to the point where it is needed most. The levies are collected and subsequently spent at the point where the services are used. If they were collected in the form of a general countrywide tax, that natural connection would be lost and the question would again arise of how the total amount should be divided. What is the merit of each region? How much money should be spent in each region? Now the money for a particular region will be generated in that region, which is much more natural.

These levies have a further natural effect in the sense that where the creation of the infrastructure is the most expensive, the levies will also be the highest, and where the creation of the infrastructure is cheaper, the levies will also be lower. This would act as a natural force which would channel activities to those areas where the creation of infrastructure is cheaper, and divert them from the areas where it is expensive. In this way the economic growth of the community would be stimulated.

The consumer will eventually have to pay in some way—I come back to the hon member for Kuruman in this connection—because those levies will be recovered from them. This is true, but the reason why the consumer has to pay is that when he buys that product or that service, he has also indirectly made use of the benefits of that infrastructure which the regional services council has had to create. It forms part of the cost of that product, which used to be concealed in a general tax in the past in that the tax was paid and that tax was then used for this purpose. All that is happening now is that the cost of the product and the input cost in the form of infrastructure are being more directly related to each other. Those services have to be provided, and they have to be paid for in some way or another. Therefore it is only logical to make that connection a little closer.

I want to make one final point, and that is that a great deal has been said about the defects of the legislation and the fact that the existing legislation has already had to be amended even before it has actually been implemented. Reference has also been made to the fact that these amendments have been submitted to this House at such a late stage of the session. It is true that all these things complicate matters for us as legislators, but we must also sympathise with the people who have to produce this legislation. I am talking about the officials and the hon the Minister who have to produce and implement this legislation. This is an extremely complex matter.

We have to break new ground here, and one has to bear in mind that reform is not a very elegant process. If the movement of the most elegant and graceful ballerina were to be filmed and shown at twice the speed at which it was filmed, the movements of even that most graceful ballerina would appear very inelegant, jerky and sometimes even ridiculous. That is exactly what is happening here. The process of reform in which we are engaged has been accelerated to the maximum, and for that reason it is bound to be inelegant. Obviously, therefore, we sometimes have to go back and repair deficiencies we did not notice at first.

Mr Speaker, I listened with interest to the hon member for Helderkruin. I think he succeeded in going into this matter in greater detail, which is of course a good thing. He also made a statement which to my mind indicated that he had a very good grasp of what we were dealing with here in general. He said: “Regional councils are creating reform”. That is a very good, a very sound statement. It therefore makes that clear in any event.

Then the hon member for Hillbrow stated—to my knowledge he is the first one who said this so far—that this whole matter should be left in abeyance until the National Statutory Council had been established. Here steps are actually being taken in advance to involve Blacks closely on a very personal and local level, so that the matter now in fact becomes prescriptive. It should have been left in abeyance until the National Statutory Council had been established, to enable Blacks to express their opinion on the highest level on what had to happen on a lower level.

I shall not dwell on this now, Mr Speaker, but with your permission I just want to say that it was of particular interest to me that the previous two speakers indicated that this measure would introduce multiracial government in South Africa and that we were heading for a dispensation which would be multiracial from top to bottom. There is no doubt about this any more. I want to thank the hon member for Hillbrow for doing what he did, because this is the first time this has happened. However, we as right-wing politicians are far more concerned about the fact that reform is a risk. This implementation of reform and the insistence that one should not even wait until another reform body, the National Statutory Council, has been established, is in itself an indication of the risk attached to reform.

I can find no better authority for my statement than the hon the Minister of Education and Development Aid. At about the time when this legislation came into existence, he said that reform was an extremely risky undertaking in any country and even more so in South Africa, for which he then gave three reasons. One reason was, according to him, that it was by its very nature destabilising. To turn the whole country over like an omelette at the local level in a time of destabilisation and unrest is really doing what the hon the Minister of Education and Development Aid had warned against.

Secondly the hon the Minister said that in this case one was dealing with a spiral of rising expectations; not among the Whites, but among the Blacks. This, too, is one of the most dangerous things we can do in a time of unrest and rioting. Thirdly the hon the Minister of Education and Development Aid warned that reform was even more dangerous in South Africa because the First and Third World communities were living cheek by jowl. [Interjections.] This brings us to the root of the evil. We are now bringing the Third World and the First World together on the local government level and that is going to lead not to some but to great deal of friction. [Interjections.] I am grateful that the hon the Minister also warned against it.

When the hon the Minister delivered his Second Reading speech on this amending Bill, he put it more mildly, but he emphasised it, nevertheless. In the second paragraph of that speech the hon the Minister said that it was a new system that would probably manifest many growing pains during its initial process of application. In a subsequent paragraph of his speech he repeated this by saying that he hoped that the teething problems experienced during the introduction of these new regional services councils, would be limited to a minimum. In this case the hon the Minister was therefore only emphasising what the hon the Minister for Education and Development Aid had said. I cannot recall when such an important matter as local government had been reformed so drastically by legislation, which in this stage was already followed up by two statutory amendments, even before a single regional council had been established. It shows how difficult it is to reform local government.

While I was still practising as an attorney, I was closely involved with local government on all the various levels in the Worcester electoral division. Theoretically speaking local government may not always have been the most difficult matter, but it works well in South Africa and it has worked well because everybody understands it. If one now flips the whole omelette over, the problem arises that one has to go on explaining. Look how difficult it is, with due respect to all the clever people who are involved in this matter, to understand precisely what is going to happen here and how it is going to work. Nothing has been established here yet, but when attempts were made to establish regional services councils, some of the local governments backed out as rapidly as they had become involved in the matter.

Does anyone in Government have an idea how many tentative attempts at establishing regional services councils there are still going to be? As soon as it appears as if one is going to become established, some of the local governments back out again. My big problem is—and I hope the Minister concerned is going to try and shed some light on this matter for us, for the sake of the whole of South Africa—that if the date—it was supposed to have been 30 June—for the introduction of RSCs is possibly 1 January, the position is more likely to be and the Government should realise this, that regional services councils may be established in certain places, while there will be councils in other places which will be disbanded after almost being established and there also will be councils which will not get off the ground at all. Some do not want to be established at all. One is going to find all the possible development phases while there is also going to be some backsliding. It is going to be virtually impossible to say that regional services councils will be established on a certain date.

I cannot imagine how the Government is going to accomplish that. That is why there is so much confusion in this field.

The object of regional services councils is not being explained to us clearly enough. We take this amiss of the Government. The time for disguising what we are actually dealing with, what the real objective is, is long past. The Government should have said from the start, without mincing matters, that this was an attempt to establish multiracial government bodies on a local level, for then most people would have understood it better. However, this is not being said anywhere. It does not appear in the Bill, it does not appear in the memorandum it does not appear in the Second Reading speech of the hon the Minister concerned and it does not appear in the Press either. It has not been emphasised anywhere that one is dealing with multiracial local governments here. If that had been the case, people would have pricked up their ears and, on a local level, they would have gone and established with great trepidation and zeal what the position was going to be. However, the Government continues to speak in such vague terms that the greater part—I think the greatest part— of the public still does not know that we are heading for multiracial government.

I have here a document compiled by a professional man in Pretoria who had to advise a local government body. First the man quoted the object of the Regional Services Councils Act of 1985. The object is firstly to place the services and facilities of the non-White areas on the same level as those of Whites. He then went further and said that it had nothing whatsoever to do with more effective and cheaper services, as had been alleged. He gave only a very vague indication of the Act, but his advice was much clearer. In his advice to the body in question, he stated the following very frankly:

If that had been said from the start, there would have been much more clarity about it by this time.

A second matter is the object behind this legislation with regard to finances. I know that the hon the Minister who is now dealing with the legislation does not like it at all when we emphasise that in South Africa the country’s wealth is going to be transferred from the Whites to the non-Whites by way of taxation and other methods.

But surely that is not true.

It is true. The hon the Minister received his letter and if necessary he will get another one. We shall continue, however, until he understands that. He just does not want to accept and admit it, but says that other people are telling lies.

Sir, here we are dealing with a case in point again. In this connection I want to quote Mr Obie Oberholzer who said at a congress held last year or the year before that we would have to pay. By this time experts on local government know that this is the case and this is the basic reason why some White local governments are backing out. The objective is the transfer of the finances, more specifically of White government bodies, to non-White government bodies, it is being said that aid must be given. Aid must be given by the Whites. Their income is the largest and they have the biggest resources and they will have to share them with the non-White government bodies. They are going to be on the receiving end and the White government bodies are for by far the greater part going to be on the giving end. The consultant concerned advised the local government body as follows:

That is what the consultant said. Let us look at an explanation of the finances of regional services councils and how the bodies are going to be financed. In Die Burger of 8 May 1986 an article covering eight columns, with a photo of Dr Andreas van Wyk, appeared on this matter. Up to a point it is a good article. I read it a number of times, but this article mentioned practically nothing about the concrete aspects. With all due respect to Dr Van Wyk’s capabilities and to his willingness to serve the public, no layman or anyone with a reasonable amount of knowledge could discover exactly how the finances were going to function from this article. The explanation to the public and in the explanation to the Press, the whole matter is hanging in the air as far as the public is concerned.

Further proof that in general funds are going to be transferred from Whites to non-Whites, is the fact that in the Free State for example the three regional services councils have to grow and develop around the three city centres, namely Bloemfontein, Welkom and Sasolburg. These are the three most important concentrations of White buying power and sources of taxation. The three regional services councils must develop around these three centres. One could perhaps make out a case for this when looking at it from the left-wing of politics. One could accept that the PFP and the hon the Minister who is deputising here, can say that it is fit and proper in view of their approach and philosophy. On 18 August last year the hon the Minister of Constitutional Development and Planning said on television that Blacks were entitled to co-responsibility in decision-making. This will happen in the regional services councils! That is where the Blacks will now have co-responsibility! They are acquiring co-participation at least!

Powersharing!

They are acquiring co-participation in the decision-making process at least. That is where they are now going to share power! There is no doubt about that! That is the one point on which there is clarity. [Interjections.] But there is no equal participation as far as bearing the financial burdens of local governments is concerned!

That is what they call co-responsibility!

Co-responsibility must surely include the carrying of financial burdens! The Blacks and the other non-White communities as privileged people from the Third World are therefore making contact with the First World in a way which enables them to participate in decision-making and to share power, but, Mr Chairman, without having to share the financial burden on an equal basis with the Whites. That, Mr Chairman, is an injustice to the White man.

Now I know that of course the hon the Minister concerned and others will say that the Whites have the most money in any case. But, Mr Chairman, the Whites did not steal that money which they have! They worked for it! Their expertise and their capabilities in the economic field—that is why they are known as the First World—are greater than that of the Third World. Whatever they achieved in South Africa and in other parts of the world, they did not achieve by stealing other people’s things. They achieved these things mainly through their efforts, their willingness to make sacrifices, their planning, their expertise and their capacity to take care of themselves.

It is therefore unjust and unfair to the White man to introduce a system on the level of local government in South Africa now through which wealth will in time be transferred and moved and pushed from the First World to the Third World. That, Mr Chairman, is an injustice against the White man of this country.

Finally I want to point out that the hon the Minister of Constitutional Development and Planning also said last Wednesday that full reform would not be completed during his lifetime. Now I must say that I do not know about the rest of the reforms, but this system of local government, this establishment of regional services councils, will not take place during the lifetime of the hon the Minister of Constitutional Development and Planning. We are certain about that. Finally I want to point out that the hon the Minister of Constitutional Development and Planning said that if Blacks became part of the envisaged new constitutional dispensation, South Africa would be destroyed because the protection of minorities would then disappear.

Even before the establishment of the National Statutory Council there is already complete integration of Black and White. This is happening shortly after the hon the Minister for Constitutional Development and Planning said that a Black could also become an Administrator.

The same Minister who said that if Blacks were to become part of the new constitutional dispensation, South Africa would be destroyed, also said that a Black would now be able to become an Administrator. [Interjections.] Now I want to advance a reason why we in the right-wing of the political spectrum are so opposed to this system. Why are we pointing out insoluble problems? Why are we pointing out the uncertainty? Why are we pointing out the lack of success so far? I want to admit candidly that it is inter alia because a multiracial government on the local level means votes for us. Secondly, however—and I want to admit this as well—it also means votes for us when we point out that the Blacks do not carry an equal burden with regard to the financing of these regional services councils.

Thirdly, however—and this is the most important point—it is precisely in this area that one has to appreciate that it is not a good thing at all to cram Blacks and Whites together on such a level and in one system and then to expect them to make a success of it. As a reason for this I want to point out what an English-language author, who had given a great deal of thought to the question of racial matters made quite plain when he referred to the question of the Americans and the Amerindians—the non-Whites of South America. He mentioned them in his book, but he emphasised the fact that after further consideration the differences between these two groups could also be applied to the differences between Blacks and Whites. He said the following:

Hon members must read “Black” for “Indian”:

[Interjections.] The White man has his thought patterns, his spiritual world, his talents and his aspirations; and those of the Black man are different. That is what this man is emphasising.

We are making the mistake of creating tension and friction in each of these government bodies, these RSCs, by combining that which cannot be combined, instead of applying a policy of segregation.

Mr Chairman, I think the hon member for Sasolburg dealt very effectively with the actual problems we are faced with here, ie to bring people from First-World countries and those from Third-World countries together at a level at which people’s normal living conditions are most intimately affected. [Interjections.] Those are the problems which we are now faced with and which we are increasingly going to be faced with, particularly at this local authority level.

When we look back to see where the idea of regional services councils originated, we find that a long time ago—probably more than a decade ago—the idea thought up by White local authorities was that by establishing regional services councils, particularly in urban areas, we could probably effect a reduction in the costs of services. One must concede that this could, in fact, happen. It was, however, White local authorities that they had in mind at the time.

Now the hon member for Helderkruin—I see he is no longer in the Chamber—comes along and asks whether it will only be the White consumers who will pay. Let me, however, ask him: Who are the entrepreneurs in this country? Who are the employers in this country? It is pre-eminently the White section of the population, is it not! And it is the White section of the population which is going to be subject to this tax too.

The hon member for Helderkruin says, too, that this is a way in which a natural distribution of tax can be brought about, because it will only be levied in certain areas. I now want to put a question to the hon member in connection with the farmers in the Messina district. In terms of the provisions of this amending Bill the farmers in the Messina district are going to supply the funds for the Black residential area of Seshego and for the Black residential area in Lebowakgomo. So it is indeed, as the hon member for Sasolburg has said, a transfer of the funding of the White entrepreneurs or employers and the farmers of South Africa which I estimate to be a very important sector at this time. [Interjections.] Funds are going to be taken from them and channeled to the non-White residential areas. [Interjections.]

The hon member Prof Olivier rightly said here that bodies such as Assocom were a bit upset at not having been consulted. I am reminded that on 5 March we had a meeting with Assocom. I listened to those discussions and there were people who made very relevant contributions and who had doubts about this form of taxation. Many of them thought there should rather be some form of GST so that the burden could be more equally distributed. Now the hon the Minister says, about this Bill, that bodies such as Assocom were not consulted. The only bodies to be consulted were the Council for the Co-ordination of Local Government Affairs and the Department of Finance. That is probably why the hon the Minister of Finance is substituting for his colleagues this evening. This evening we have the exceptional experience of seeing the hon the Minister of Finance dealing with legislation on behalf of the hon the Minister of Constitutional Development and Planning in this House. We know that the hon the Minister of Constitutional Development and Planning is building up an empire in which hon Ministers of local government at the own affairs level, for example, are already participating in his co-ordinating council—he himself being the chairman of that council. Now the hon the Minister of Finance is, in fact, also becoming part of the hon the Minister of Constitutional Development and Planning’s empire and is dealing with a Bill here on behalf of this hon colleague.

At the same time, however, the hon the Minister of Education and Development Aid has been dismissed. In his Second Reading speech the hon the Minister says thank you for the good and faithful service that hon Minister has rendered throughout the years. The underlying philosophy, however, is that the hon the Minister of Education and Development Aid was still the last remnant of separate development. He was the Minister entrusted with handling all the affairs of Black people—particularly in White South Africa. That is now disappearing. Now there will be a single ministry dealing with all the affairs of various people—in this case constitutionally too.

Let me ask the hon the Minister why the farmers were not consulted in this respect. They are going to be a very important factor. As far as my knowledge goes, the South African Agricultural Union and the Transvaal Agricultural Union were not consulted on this matter. The hon the Minister himself knows in what desperate straits the South African farmers find themselves. I just want to quote something, and then we must judge for ourselves whether we are going to tax these people, who are in such dire straits, even further. When it comes to income tax, for those farmers who have had large crop failures, there are at least rebates in regard to income they did not receive. Therefore they do not need to pay tax. In this case every farmer who pays salaries, however, will have to pay a portion of that money to a regional services council. I just want to remind hon members what the hon member for Lichtenburg said in this House ealier this year about the plight of the farmers. Let me quote him (Hansard: House of Assembly, 25 March 1986, col 2440):

The hon member for Barberton may correct me, but I think these figures on the average income of farmers are correct. In spite of this situation, that hon Minister is now going to levy an additional tax on the salaries paid out by the South African farmers. It is going to be levied, regardless of whether the farmer has had a good crop or whether he has felt the pinch of high input costs or droughts.

If we look at how this legislation came into being as a whole, legislation which already had a few years of history behind it, we see that it is a typical example of the precipitous way in which this Government wants to introduce the reform plans. [Interjections.] In 1984—as the hon member for Kuruman has rightly pointed out—we also had legislation before us in the dying moments of that session. The hon Official Opposition was very strongly opposed to that legislation, and their most important objection was the participation of Black people… [Interjections.]

Order! I find the dialogue here extremely disturbing for the hon member who is making his speech.

Thank you, Mr Chairman. On that occasion the hon the Minister of Constitutional Development and Planning stood up and asked: But do hon members not understand this? In this new dispensation we are not making provision for Black people at that level of Government. Provision is being made for them in a different manner. When the legislation came back from the committee, however, the PFP standpoint was adopted and then Black people were also included. The legislation was accepted last year—Act 109 of 1985—legislation in terms of which Black people will now also be part of the dispensation.

The serious misgivings that many of our people had involved the fact that in the course of time these regional services councils would take over the most important functions of local authorities and that local authorities would, in the process, be reduced to less important community councils chiefly entrusted with social order and having to carry out protection services—and that is in conflict with the whole principle of fully autonomous authorities. The people who represent the ideology of this side of the House issued a warning that if the small-scale commercial services such as water supply, sewerage and electricity were transferred to the so-called regional services councils, it would have catastrophic consequences for the primary local authorities because it would leave them with insufficient sources of revenue. The people who represented us in the United Municipal Executive said that if the regional institutions were seen as a further tier of Government, there would no longer be any functions left to the local authorities. They issued a further warning—and this is now happening—that the local authorities would be politicised, because of necessity one would find a political orientation taking place at local government level because the various people were being accommodated in one power-sharing situation. At that time those people warned against the transfer payments from local authorities to the regional services councils, the transfer of assets from local authorities to regional services councils—all the situations that did, in fact, materialise in the process of the development of this Act.

After the legislation came back from the committee in 1985, the Black people were involved, and on those occasions, let me just say, this side of the House adopted a very strong stand against this legislation. The hon leader on this side of the House moved last year that this legislation be read “this day six months”, the strongest form of parliamentary protest. The most important principle we were opposed to was the principle of power-sharing—the fact that Black people would now also be represented, together with Coloureds, Whites and Indians, at the third tier of government.

We also said, as the hon member for Sasolburg rightly indicated here, that in terms of section 4(2) and section 12(6) assets, powers, duties and funds would be transferred from the local authority to the regional services councils.

In addition our very salient objection was that section 5 provides that a local authority could not unilaterally relinguish its participation in such a regional services council. We therefore have a situation in which, if a local authority is taken over by a right-wing regional services council, it cannot tell the regional services council that it wants to create its own facilities. In terms of the Act its hands are tied.

The financial aspect of the legislation is very important, and here I am thinking of the question of cost increases. That is also why the hon the Minister of Finance is here today.

Who is going to pay for partition?

What the whole question of a regional services levy, to be imposed on all employers, and the regional establishment levy, to be imposed on every entrepreneur, really boils down to is that municipal voters are largely going to be taxed even further. The taxation information needed for this purpose will, in terms of section 15 of the principal Act, be made available to the regional services councils by the Commissioner for Inland Revenue. There has been a slight amendment to the effect that he does not simply need to give them all the information they ask for. That is perhaps a slight improvement, but there is still the principle that information held by the Commissioner for Inland Revenue can be made available to the regional services councils.

The Act also provided that these levies could not be recovered by an employer, an entrepreneur or any other person by adding it as as a separate item to the prices, tariffs or costs of their services or by deducting it from the salaries or wages they pay. The hon the Minister said, in fact, that heavy fines would be imposed for contraventions of this provision.

The hon the Minister, however, did not give us any indication of how this was to be implemented. How is one going to prevent those regional services levies from being deducted from the salaries of employees? How is one going to check to see that the regional establishment levies are not added to a businessman’s prices?

One cannot control this, and the hon the Minister of Constitutional Development and Planning said it in so many words in that debate when he intimated:

It is therefore a fact that this measure must give further impetus to the high inflation rate in South Africa. It is only logical that this is an extra form of taxation which will cause costs to soar to dizzy heights—the hon the Minister himself acknowledged this.

In looking at the amendments embodied in this Bill, we see the hon the Minister saying the following about clause 1, and I quote from the memorandum on the objects of the Bill:

The Transvaal MEC entrusted with local affairs said, in one of his last speeches in the Provincial Council this year:

There is something I now want to ask the hon the Minister. In reading the MEC’s speech, one comes across words such as “verreken”, “persepsies” and “haalbaar”. I really wondered where this MEC’s speech emanated from.

Chris Heunis wrote it.

I now want to ask the hon the Minister whether the MEC is correct in saying that all rural areas will, before the end of the year, be divided up into regional services council areas. If there are going to be rural councils, how is the relevant representation going to be determined?

We subsequently saw a publication of the Department of Constitutional Development and Planning, with the printing about as lopsided as the Bill. I have a copy here, and it is very interesting to page through it. Of the photographs which are included, about eight of the nine are solely of Black people. It is therefore clear, is it not, who this legislation focuses on. Only on the ninth photograph does one see at least a few Whites.

The Coloured Afrikaners!

The most significant portion of the publication is the organogram of local government. As far as the representative bodies are concerned, the non-viable communities, the farmers and the farmworkers are placed alongside each other, precisely at the lowest level.

We must therefore accept the farm-workers must also, in some way, be accommodated in the rural councils; after all, that is what is stated here. That is why I should like to know in what way that is going to be organised. I see the hon the Minister now asking his officials, and I see him nodding his head in confirmation. I can confirm that this is the case, because that is said in this publication. It seems to me the hon the Minister has not yet read it. I nevertheless want to know exactly how this is going to be implemented. How are the farmers going to be organised to obtain representation in the rural councils and how are the farm-workers, for whom provision is being made here, too, also going to obtain representation in the regional services councils?

By way of trade unions!

The hon member says they will be represented by trade unions. That is probably true. [Interjections.]

As far as clause 4 is concerned, I should like to quote from the memorandum on the objects of the Bill:

Does the hon the Minister therefore foresee local authorities having to place an additional item on the normal monthly accounts they send out to consumers in order to collect a levy for the regional services councils? In what way is the hon the Minister going to have this done by local authorities on behalf of the regional services councils? How are the local authorities going to be compensated for this?

I quote what the memorandum says about clause 5:

In clause 6 it is provided that a decision of a council can be reconsidered. The memorandum reads as follows:

According to the speech to which I referred, the reasons indicated for this are that there could perhaps be local authorities which wanted to boycott such a council and would therefore not attend meetings. The chairman of such a council, who is a wholly appointed chairman, then unilaterally determines whether the application should be reconsidered or not. We say that this conflicts with every democratic principle of this country. It is a total violation of democracy.

On clause 8 I should again like to quote from the memorandum:

Uniform rules will be applicable in all regions. That is why I just want to ask the hon the Minister whether he still foresees, as he indicated in his speech during the discussion of the Budget Vote, that there can be various levies in various regions.

Clause 8 also makes provision for the Minister’s relevant powers to be extended. We on this side of the House are opposed to any situation in which the powers of the hon the Minister of Constitutional Development and Planning are extended.

In section 12(10) provision is made for the mandatory imposition of interest where levy payments are made after the due date. The hon the Minister says this amendment is necessary, since the opinion is that the imposition of a new levy will inevitably give rise to genuine misunderstandings regarding liability and payment and that the Commissioner for Inland Revenue should have the power to waive interest in appropriate cases.

I now want to ask the hon the Minister in what way these monies are now going to be payable. Are they going to be payable in the month following the month in which those wages are paid, and how long a period of grace is the employer going to have before he will have to make the payment? If all the misunderstandings have been eradicated, we want to ask the hon the Minister what the additional interest is going to be and whether he has possibly considered imposing fines. [Interjections.]

I want to focus on one further amendment that is now to be added. [Interjections.] It concerns the definition of “drawings” in the legislation. In terms of this legislation a partner or proprietor is subject to the regional services levy on the grounds of his drawings from the business since those drawings are equivalent to a salary paid to an employee. The term is now being defined and includes expenditure incurred by the business in regard to assets or services utilised by the partner or proprietor for his own private purposes. According to the hon the Minister this is equivalent to fringe benefits granted to an employee.

Do hon members realise what the implications of this are? I wish to contend that this means a greater built-in disparity as far as private one-man businesses are concerned. A managing director of a large firm draws his salary, and those who own a one-man business make a drawing, but tax still has to be levied on the drawing and, what is more, provision has to be made for possible fringe benefits.

The salary of the managing director of a large company is therefore not directly affected, but the income of his counterpart in the one-man business, or that of a professional person such as a doctor or lawyer, is in fact directly affected. Why must a laywer or accountant, for example, make a contribution to political objectives, something which comparable taxpayers do not do? In this connection let me again mention the example of the managing director of a large company.

We say that there are a wealth of problems embodied in this whole question of regional services councils. In his second reading speech the hon the Minister said that it was now the intention to get the first five regional services councils off the ground. I foresee, however, that serious problems are still going to be experienced, for example, with the delimitation of regional services councils. Like the hon member for Sasolburg, I want to say that I really wonder whether this can be done properly.

We on this side of the House say that we shall participate in these regional services councils. We shall not tell our town councils not to participate, because in effect we find ourselves, at the moment, involved in a system that we are opposing in every conceivable manner. For that reason our town councillors will also participate in regional services councils when they are nominated by the local authorities, but they will take up their seats there within the framework of the CP’s principles and will negotiate on behalf of their people within that framework, as we do here for the Whites of South Africa, because we are irrevocably committed to the policy of freedom with justice for all the peoples in Southern Africa.

Mr Chairman, the hon member for Pietersburg has as usual made an extremely careful study of the legislation he was discussing. He has raised some very interesting points such as the question of what farmers can afford which raises the whole problem of the viability of many of these regions. There is no way in which a fanner whose average profit is in the region of R5 000 per annum and whose investments average R600 000 is going to be able to make a substantial and meaningful contribution towards the running of regional services councils. The whole question of the design, the cutting up and the delimitation of these councils has not really been properly addressed as yet.

Another point that he made, which I think is very important, is the fact that Assocom was not even consulted. There was no negotiation with them even though Assocom is the body which represents the bulk of the commercial traders in the country. However, that is not the point. It illustrates the fact that there was no proper “raadpleging” in any case with anybody over the design of this critically important structure.

The hon member also referred to the diminished role of local authorities. The diminished role of local authorities is one thing, but when one relates that also to the immense powers of the Administrator and his executives now, one begins to conceive how unbalanced this thing has actually become.

He speaks of local authorities being bound to hand over their assets. Possibly an even more serious consideration is that a local authority is bound to accept the charges for services which it actually gets.

The hon member for Sasolburg speaks as if the First World and the Third World are oceans apart and as if these things are not bound closely together. He speaks of the White creation of wealth in this country and of the building up of the structures of our economy. He speaks about our “kundigheid, vaardigheid en arbeid”, but he ignores the fact that none of that would have been possible if we had not had other factors of production such as the capital from overseas to make this possible. I am afraid that that is something which the hon member for Sasolburg as well as the CP overlook all the time. They are much more honest in their approach to any debate than the NP, but all the time they overlook the fact that the country has virtually come to a grinding halt because the policies which they advocate deny them capital, deny them markets, deny them growth of the economy and deny them the ability to employ people.

I really feel grateful to the hon member for Helderkruin. I really liked his remark that “hervorming is nie ’n baie elegante proses nie”. That is the understatement of the year! [Interjections.] The thought of Dame Chris Heunis being an “onelegante” ballerina is something which captures the imagination!

Yes, he is a “New Prog”.

Yes. Mr Chairman, we already have a Regional Services Councils’ Amendment Bill. This is symptomatic of the speed with which this legislation has been introduced. It is precipitate, ill-considered and it will be totally inadequate. It is worse than inadequate and, actually, it is wrongly structured. The hon the Minister who is responsible for its design is, I believe, the most dangerous Minister we have in the Cabinet. There has been no negotiation with anybody as far as this is concerned. There certainly has not been negotiation with Blacks who are going to be included. The crux of this whole legislation is its acceptability. If it is not accepted it will not work.

We must ask what is happening at the moment with the other structures that that hon Minister has largely been instrumental in designing. We see that there is a rejected system of local government. Blacks want nothing to do with it. Uncollected rents and service charges in the Eastern Cape alone are in excess of R11 million. They have taken from capital account an amount which nine months ago was approximately R23 million to use for running costs. When one looks at the country as a whole, one sees that nationally there is no quorum in over 40 of the Black local authorities. Credibility cannot be bought. It has to come as a result of participation.

The delimitation of the regions and the size of those regions is going to become a burning issue. What we are doing now is taking these rejected structures of government, in regard to which the hon the Minister is designing himself a multi-layer cake. He is putting the custard underneath and the cake on top. If one is going to construct a reasonably good building, one has to put the concrete into the foundations so that they will be solid and sound. However, this whole crazy structure of Black local government, regional services councils, the Administrator and his executives and the tricameral Parliament are piled up on unaccepted Black local government authorities, it is going to be a massive and unstable structure. The concept is flawed. In terms of clause 4 of the Bill a local body, a person or an institution may claim a levy. This point has been made before. I do not know whether all this is part of a privatization programme or whom they are going to farm this out to, but all I can say is that the question of confidentiality is going to become increasingly important.

The Bill gives definitions of “regional establishment levy” and “regional services levy”. The hon the Minister is given enormous discretionary powers in terms of this Bill to decide on the different rates for different categories of business. It gives to the hon the Minister the discretionary power to load and unload different categories of enterprise, which may be extremely dangerous. The Minister has been given too much discretion already and it can distort the whole system of taxation. Companies that should never be loaded may be loaded while other companies may be released from a financial burden which they should not be released from.

We should consider that we are talking about levies that could quite quickly amount to R2 billion. The transport subsidy which will largely come out of the levies indicates that the levies will have to be of that order. One must also consider that one’s deficit before borrowing when one produces one’s annual budget is something like R3,5 billion. People look at that deficit before borrowing with great care. If it is up or down by 0,5% they actually start wondering at the soundness of this particular type of financing and how the deficit before borrowing is going to be financed. These regional services levies must be added to that deficit before borrowing because they are a tax just as much as any other tax although obviously the amount of tax paid must be taken into consideration because that tax is deductible. Regional services levies are deductible as an expense.

One must also consider the expectations of Black townships and of rural areas. I do not believe that the expectations of Black townships and the rural areas are going to be met in many cases by the bigger towns in that regional services council. There is no way in which they will be able to afford it and that is going to lead to a great deal of dissatisfaction in those rural areas.

We believe that the introduction of these structures of Government is fundamentally wrong because the lack of prior consultation dooms them to failure from the start. One can argue that these regional services councils do embody a degree of multiracialism, and the CP has gone to some length to accentuate that, but it will be an unsuccessful participation because of the failure to involve Blacks in the negotiations that resulted in these councils. Unless that problem is sorted out we are going to have nothing but the kind of difficulties that we are experiencing in the country today, only in an exacerbated form.

Consequently we shall not be able to approve this measure.

Mr Chairman, at this stage I want to move:

Agreed to.

Mr Chairman, I move:

Agreed to.