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

I informed the House that all the hon Whips of all the parties had been consulted on the cancellation of the sittings on Monday and Wednesday evenings. My information was incorrect, however, because not all the par ties, the NRP included, were consulted. I apologise for this fact.

Mr Chairman, I think it would perhaps be unwise to point out any lessons that may have been learnt over the past week or ten days. I do not think the dust has as yet settled and it would be unwise to take up stances so soon.

I do believe, however, that provisionally two things have happened. Firstly, I believe that in some ways the competing interests of the executive and of the legislature have been shown up. The relationship between the executive and the legislature in this House has been highlighted and this is something that we must remember in future. Secondly, I believe that what has happened has pointed to the importance played by the Whips of all the parties in making sure that the proceedings of this House run smoothly.

All that I want to do at this stage is to say that I accept the apology tendered by the hon the Leader of the House in the spirit in which it was offered.

Mr Chairman, I should like to express my gratitude to the hon the Leader of the House for the apology tendered and accepted here this afternoon. It is good that we clear up these matters and we are pleased that this has happened. Now we can continue with our work as usual.

On behalf of the hon members in these benches that we occupy I want to say that we at no time ever want to be party to anything that will reflect badly on the image of this institution. We on these benches have a great respect for Parliament and, as far as we are concerned, it is terribly important that Parliament should operate smoothly at all times. To enable it to do so, we would like to stress again the importance of constantly observing its traditions and conventions as well as its rules and orders. Again, I convey our thanks to the hon the Leader of the House.

Mr Chairman, I thank the hon the Leader of the House for withdrawing the motion. Let me tell him that it takes a big man to apologise for having made a mistake. We are grateful for the fact that what the CP asked for, ie that we should proceed with the business of this House so as to complete the work on the Order Paper and to endeavour to adjourn the House on Friday if the business has been completed, has been acceded to. I thank the hon the Leader of the House and assure him that the CP will also co-operate in concluding the business of the House.

Mr Chairman, I move:

This is a straightforward technical measure which seeks to increase the number of lecturers appointed to the senate of Rhodes University. It is proposed that the number of lecturers appointed be increased from four to six. The reason for this proposal is to be found in what can only be described as the phenomenal growth in the university over the past 25 years. This has resulted in a situation in which lecturers are underrepresented on the Senate.

If I may, I should like to present a few figures. In 1951 there were only 54 lecturers on the staff and the senate consisted of 46 members. At that time, two members were appointed by the lecturers. In 1966 the number of lecturers had risen to 90 and an additional two members were appointed to the senate.

The number of staff members has since risen to 177 lecturers. The senate has likewise grown to 81 members, but there are still only four lecturers appointed to it. This measure will help to redress the imbalance which therefore currently exists.

It is customary to use an occasion such as this to highlight some of the achievements and special attributes of the university or institution being debated. Last year, however, I was privileged to move a similar amending Bill on behalf of Rhodes University, and I was then able to give hon members a fairly comprehensive picture of the university. For this reason, I will not repeat what I said on that occasion.

Suffice it to say that it is immensely gratifying to see a university such as Rhodes grow and prosper. The fact that its growth has necessitated the kind of measure which is before us today speaks for itself, and it is a privilege for me to move the Second Reading of this amending Bill.

Mr Chairman, I have pleasure in indicating the support of this side of the House for this Bill. As someone who is interested in the universities in South Africa, it is also a great pleasure for me to learn of the wonderful progress being made at Rhodes University, something which the hon member for Albany informed us of this afternoon.

I myself live in a university community in which there are regular discussions about other universities. Their activities, their successes and failures, are discussed. I am of the opinion that the hon member for Albany would be glad to know that Rhodes University is held in high esteem at Stellenbosch too. I should like to place that fact on record here.

This Bill aims at giving the lecturers greater representation on the senate of the university. At that level it is also a broadening of the demoractic base, and that is something that is always welcomed. It could only give rise to greater participation and consultation and improved decision-making. I hope that this legislation will specifically have that effect.

I also just want to wish Rhodes University and its staff everything of the best for the future. South Africa needs the impartial contributions made by academics, now perhaps more than ever before. We must all do everything in our power to help them to achieve that. This Bill is a means to such an end, and therefore I have great pleasure in supporting it.

Mr Chairman, the CP supports this private amending Bill. Here it is chiefly a question of the growth of the university, something which we welcome and on which we should like to congratulate them. It is also a question of correcting an imbalance that developed at the university as a result of the small number of lecturers serving on the senate. We are of the opinion that this was of course, caused by the growth of the university and that the situation is being rectified by this Bill. We therefore have pleasure in supporting it.

Mr Chairman, I rise merely to indicate our support of this measure moved by the hon member for Albany. As an old Rhodian I always find it interesting to see measures introduced from time to time…

Did you say an old Rhodian?

I am an old Rhodian. [Interjections.] A Rhodian, not a rodent.

Rodent!

No, Rhodian. [Interjections.] Hon members may ask the hon member for Albany because he knows what it means to be an old Rhodian.

You are not from Roedean, are you?

No, Roedean is for girls. [Interjections.] Anyway, it is good to see the old university—it was known as Rhodes University College at the time I was there—going from strength to strength.

We on these benches wish it well. May it enjoy a happy growth for many years to come.

Mr Chairman, I should like to thank the hon members for Stellenbosch, Koedoespoort and Umhlanga for their good wishes and support.

Question agreed to.

Bill read a second time.

Bill not committed.

Bill read a third time.

Mr Chairman, I move without notice:

Very nice!

Agreed to.

Second Reading resumed

Mr Chairman, I shall resume my introductory speech where I left off yesterday.

The other related to the fact that whereas section 4 of the two Acts prescribed penalties for any breach of the secrecy provisions, the new sections 105A and 44A do not provide for the imposition of any penalty on a member of a professional body who is found guilty of a similar offence.

I am pleased to be able to tell hon members that both of these matters have received attention during the past few weeks. As far as the former is concerned, an attempt is being made to find suitable wording in which the word “avoid” is not used. As to the latter, it is agreed that there is room for a provision along the lines of that suggested during the June debate. I hope that it will be possible to make the necessary amendments during the 1987 session of Parliament.

†In conclusion may I just say that this is the first taxation measure we have had since the new Commissioner took over from Mr Schweppenhӓuser. I know I speak on behalf of all of us when I wish Mr Clive Kingon, the new Commissioner, well with his great task—particularly at this time when we know that the Margo Commission’s report is on its way to us and that we will be moving into a period of major tax reform. We wish him very well as Commissioner for Inland Revenue.

Mr Chairman, may I in the first place associate myself with the final remarks of the hon the Deputy Minister. I think that we are fortunate to have Mr Kingon in this job, and I am sure that he will acquit himself with great success of his task not only as an efficient tax collector but also as a human being. I think we will find that a good choice has been made in his appointment, and we look forward to co-operating with him.

The second thing I want to say is that the hon the Deputy Minister has of course had a fairly rough passage in regard to this Bill. As hon members will remember, not only was the Bill not available yesterday but he also had to stop halfway through his introductory speech. Secondly, they forgot to refer the Bill to a standing committee. They could not have proceeded with this Bill were it not for the kindness and co-operation of the opposition parties which came about today as the result of some events which took place during the past 24 hours. Therefore, the hon the Deputy Minister has had a fairly rough passage insofar as this measure is concerned.

When one looks at the typed Second Reading speech which we eventually received yesterday afternoon, one will find some interesting things. Among other things the hon the Deputy Minister makes a concession in that at least two of the points which were made earlier this year about income tax legislation and faults therein he is now going to contemplate remedying in the period that lies ahead. I am grateful that the words we utter obviously then do not fall upon deaf ears. Of course, that gratitude is tempered by the disappointment that he never listens timeously when we speak to him, and neither does his Minister. These things always come just a little late and sometimes a little too late. May I therefore suggest that this very interesting example serve as a precedent for future conduct regarding what should happen when there are constructive suggestions made from these benches.

I move the following amendment to the motion of the hon the Minister, namely:

1. (1) takes urgent and effective steps to restore business and consumer confidence;
2. (2) undertakes that it will honour both in spirit and in letter the undertakings given in respect of the phasing out of building society tax free shares;
3. (3) undertakes to introduce an indexed investment for elderly savers; and
4. (4) undertakes to ensure the equitable application of the fringe benefit taxation.”.

I should like to deal with these matters individually and also to relate them to the provisions in the Bill itself.

Firstly, I should like to comment on the tax-free investments of the building societies.

May I have a copy of your amendment?

There is one there for the hon the Deputy Minister.

You failed to distribute it.

Oh no, Sir. In fact, just for the record I wish to point out that copies of the amendment were given to the Government party whereas previously we did not do so. If the hon the Deputy Minister does not have a copy of it, he must blame his Whips again. [Interjections.] I do not expect an apology from the Whips.

To return to the issue of building society shares, I wish to point out that undertakings were given in regard to the phasing out of building society shares, namely that this would be done over a period of 10 years. That implies something specific, namely that the rates of interest would continue to be market-related in the same way as they had been before. It is very easy to destroy the tax-free shares overnight. The hon the Minister has to give his approval in respect of the interest rate or the dividend, if one cares to call it that, which has to be paid on these shares. It will be called “interest” under the new legislation. If that mechanism of approval is used in order to depress those interest rates, the people who have investments in tax-free shares will redeem them because they will no longer be market-related. Therefore, what we require from the hon the Deputy Minister is an undertaking that he will in fact honour what has been said, and that the rates which are going to be allowed on tax-free investments will be market-related in the same manner as they were previously related to other interest rates; in other words, they must follow the same pattern. We expect the hon the Deputy Minister to give us that undertaking. The provisions of this Bill, while they deal with this matter, do not in fact contain such an undertaking.

The second matter is one that I feel particularly strongly about, and particularly at this time in our economy. I am referring to the question of the plight of the elderly person who is the saver, who has provided for his old age and who now finds, due to the policies of the Government in bringing down interest rates, together with the lack of demand for money for investment which is the other factor related to interest rates, that the rate of interest on his investment is going down. At the same time, he finds that the inflation rate is not dropping. He finds that there are no real returns on the investments he makes, with the result that there are thousands and thousands of people in South Africa who have provided for their old age but who are now gradually being impoverished as a result of a situation in which there are no real returns on these fixed interest rate deposits. There are thousands of them, and they are in dire straits. Moreover, nothing is being done to assist them because the reality is that those people do not qualify for social pensions as they cannot pass the means test. They are just above that level. They have certain minimum standards of living and the effect of what is taking place in the economy is in fact to further depress those standards of living every day.

I have pleaded in this House, not once but perhaps half a dozen times, for indexed bonds—bonds which the elderly people of South Africa can invest in, which increase in value by an amount equivalent to the increase in the consumer price index, and which yield a real return over and above that.

On previous occasions the hon the Minister has said: “Well, let us have the details.” However, the details are available. They have been given to him and, in years gone by, they were even given to his predecessor. I now want to repeat what other schemes exist at the present moment so that the details may be placed on record in this House.

Firstly, in the United Kingdom, there are bonds issued by the Treasury which are indexed bonds and which may be bought by anyone. They are quoted on the stock exchange and they yield a return equal to the rise in the consumer price index plus a percentage which is normally 2% but sometimes 3%. Those bonds are available for everyone to buy.

Secondly, there is a scheme in the United Kingdom in terms of which elderly persons of a specified age may acquire a limited number of bonds yielding a real return, ie an amount equivalent to the inflation rate plus a certain basic amount on top of it. Those bonds are available only in limited numbers to elderly people.

Thirdly, there is a scheme in terms of which one may pay monthly. This once again is available on a broader basis and one may pay in so much a month in order to subscribe to this type of bond, which yields a similar sort of return on a limited amount of money. These are the schemes that are available. There are other schemes available in other countries of the world but the basic concept is that this is needed in order to help the elderly people of South Africa who have saved for their old age but who are in fact now becoming impoverished as a result of the erosion of their investments by inflation. We can argue it one way or the other, but the reality is that due to structural problems existing in the economy and to what I regard as certain acts of mismanagement on the part of this Government—due to some factors which are not within the Government’s control, but some which are—there is a high level of inflation in South Africa. Therefore, even on the most charitable basis toward the Government, it must be said that the Government has an obligation to assist those elderly people in South Africa who have saved for their old age.

Furthermore, the argument that indexation in fact causes more inflation, is a fallacious one, as is being clearly demonstrated in the United Kingdom at the present moment; on the contrary, it has in fact been demonstrated in the United Kingdom that the indexed bonds have to some extent lost their popularity because of the ability of the Government to bring down inflation. One cannot argue, therefore, that by having indexed bonds one is increasing inflation. I therefore want to appeal again today that we deal with this particular matter.

The second matter I want to deal with briefly, is the question of the equitable application of the fringe benefits taxation. I am pleased to note that the hon the Deputy Minister has said that the matter is receiving further attention. I have also received some briefing and information from the department, for which I am indebted to them. I must say, however, that at the present moment there are two things wrong. Firstly, fringe benefits taxation is not being equitably applied. It imparts certain benefits to some people which it does not give to others. Even these provisions which we are now enacting have in my opinion been designed not so much to be equitable as to assist the motor trade. This is in fact not an equitable way of dealing with the situation. There are still flaws in the relationship between the allowance which is given for the use of a car and the use of an employer-provided motorcar. That does need attention, and I hope it will receive attention. I hope we will be given an undertaking that by the time we come back next year—I hope we will not have another session like this one in-between—we will have legislation which will put this matter in order.

The fourth matter I want to address—this is perhaps the most important of all—is the question of consumer confidence. Nobody can say that there is actually confidence on the part of the consumer or businessmen to the extent that we want it in South Africa. The fascinating thing is that while some comfort has been drawn from Assocom’s business confidence index which has just been published, one needs to look at this to see what is really taking place. The July 1986 figure of the Assocom business index is 80,9%. That figure is lower than the figures for March and January of this year and, when we have a look at last year’s figures, we find that there were many months when the index was in fact even higher. Therefore, the reality is that the comfort one can take in an increase from the June figure of 80,1% to the figure of 80,9% in July is very small in regard to the restoration of business confidence, let alone consumer confidence.

Let us now look at some of the things which affect confidence. I want to quote from the report of Assocom in this regard. They say, for example:

This body quite clearly draws attention to the one example of the Rubicon speech. Surely this must be a lesson to the Government in South Africa that the political actions and the political statements which are made have a major impact on the economy and on business and consumer confidence. Unless we actually bear that fact in mind and deal with the reality of what influences confidence on the part of the businessman and the consumer, we are not going to solve this problem. This is so because the perception which the individual has of events is as important as the events themselves. If there are repetitions of political statements which cause harm, then we are not going to solve the problem of business confidence.

Let us now look at the analysis of what has actually happened to improve the so-called confidence index. Firstly, one of the effects has been the increase in the price of gold. That in itself has not helped to restore confidence on the part of businessmen and the consumer; it is part of the index. With great respect, Sir, that has not helped the ordinary man in the street at this time. In the long term it will obviously help if the current account is improved because it will have a long-term effect on the economy as a whole. However, in the short term it does not help.

It is stated furthermore that there is an increased investment on the stock exchange. One of the things which shows that there is something wrong in the economy is what is happening on the stock exchange. People are putting their money into shares instead of putting it into new, productive investments in South Africa. One of the reasons why the stock exchange is high is because there is liquidity; there is lots of money. Why is there lots of money? People are not investing it! They are not investing it in order to create new jobs and to build up the economy of South Africa.

One of the messages which I think should come from this Parliament is that if one is a South African, if one will be living in South Africa, if one’s home is here and if one wants to have a future here one must put one’s money into South Africa in order to help to solve South Africa’s problems. That money should be invested in order to create jobs, in order to let people earn money and in order to deal with the unemployment problem. However, by buying shares on the stock exchange and pushing up the prices of the shares on the stock exchange one is solving no problems in South Africa at all. [Interjections.] On the contrary, what one is doing…

You have a good point there.

Thank you. What one is doing is that one is saying to some people: “Look, some of us are getting rich while others are unemployed.” Therefore I want to say to the hon the Deputy Minister that what we need to do is to create such an impression in South Africa, such an image and picture of South Africa, that people are going to decide they are going to put their money where their mouths are. If they are going to be in South Africa, then let them put their money into investments to create jobs and help to solve our problems.

The third reason for the increase in the index is that there is an upswing in imports. That makes me very unhappy, because the reality is that if we have an upswing in imports it will have a long-term effect in regard to the current account and it will also result in a situation where one is in fact in many cases still buying imported goods when one could buy local goods. I have pleaded in this House—and the hon the Leader of the House will remember it—time and again for people to buy South African, for buy South African campaigns, but nobody seems to take any notice of it and now, when we are threatened with sanctions, surely there is even more reason for us to safeguard every penny of foreign exchange which we possibly can safeguard. Again it is time for a buy South African campaign, but it may well be that the upswing in imports is not actually a consumption upswing at all; it may be a stockpiling upswing, one does not know. However, the reality is that as far as the consumer is concerned, where there is a South African product, he should in fact buy the South African product instead of the imported product, because every time one buys a South African product one is actually keeping somebody in a job. If we do that we will in fact go places in South Africa and help to solve our problems.

The other factor which is mentioned here is the reduction in the prime rate charged by the banks. Well, I must tell hon members and I must say to the hon the Deputy Minister that I have consistently taken the view that the way to revive this economy is not merely through manipulation of the interest rates because I think this creates a false impression. It is true that one can get benefits from reducing interest rates but one’s problem is that the businessman is not taking an overdraft today at the lower interest rate because he is afraid of what the interest rate will be in 12 months’ time. Therefore I want to appeal to the hon the Minister of Finance to reconsider the policies which are being applied both by him and the Governor of the Reserve Bank, where so much reliance is being placed upon the manipulation of interest rates. There is much more to reviving the economy than dealing with that. The hon the Minister has done some of the other things; I concede that he has not only dealt with interest rates, but that has been the prime factor in regard to Government policy.

The other thing is the upturn in the number of new motorcar sales. Here comes the rub, according to Assocom’s report. It says:

Everybody likes to pay less tax on fringe benefits, but I am stating now that I think it is unsound economic policy to relate an upswing in the economy to dealing with fringe benefits tax. It is not sound economic principles. Whereas it may be a short-term shot in the arm, it may be sort of quick fix which can be given to try to get things to move, in the long term this will not get our motorcar industry right. There are far more fundamental things that have to be done to the motorcar industry, there are far more fundamental things that have to be done in the Eastern Cape than merely deal with fringe benefits tax.

The other factors which are mentioned are the negative things such as the deterioration in the rand/dollar exchange rate. I think one is hopeful today that one can perhaps get a little improvement there—I do not know what the value of the rand is at the moment but it did not look too bad this morning—but we have to bear in mind that we have to look at inflation in this regard. Here again we have the situation that the negative side insofar as this confidence index is concerned has been the increase in the consumer price index.

One other thing which one would have expected is that in this time of recession inflation would in fact have gone down. It is remarkable, however, that, at the very time when all the economic fundamentals require the inflation rate to go down, somehow or other that rate is kept up in South Africa. That to my mind is something which is horrific in many ways because, as I see it, it actually causes one of the major problems that we have to face.

There are two other things I want to mention. The one is the question of the net emigration from South Africa which is referred to here. I must say, Sir, that insofar as emigration from South Africa is concerned—particularly in view of the statistics I have seen—I believe there is much more talk about people leaving than there are actually people leaving. I believe we are creating a syndrome in South Africa by talking so much about emigration that ultimately we persuade people to leave the country. When one looks at the statistics it appears that the actual numbers that are leaving are not such that we should really become alarmed about it. If, however, we keep on talking about leaving, and if we continue to make it a subject of discussion—not only in the media but over every dinner-table in South Africa—we are really going to persuade people, and in particular young people, to leave South Africa. South Africa needs the skills of its people, and if our problems are indeed going to be solved we will have greater difficulties solving them if we continue to encourage the young and the skilled people to look for greener pastures elsewhere.

I shall give the hon the Deputy Minister an example which is one that upsets me. I hope the hon the Deputy Minister will react to it because I actually intended to raise it before we had the slight difference of opinion causing us to stop debating. I am referring now to the matter relating to the coinage issue. How is it that we have a situation in South Africa in which a man is in charge of the marketing of the Krugerrand, and suddenly that man leaves South Africa, leaves his job and does not go into a new kind of job but enters a situation in which he works in competition with us in South Africa in relation to the marketing of gold coins?

I want to ask whether anybody has ever considered that there should be a restraint of trade or something else in order to ensure that the people who are in possession of all the facts in regard to the marketing of our gold coins cannot go to another country and use that knowledge against us. Sir, I find this unbelievable. I find it absolutely incredible. Somebody should give us an explanation in this regard. Somebody should tell us how a thing such as this could happen. Sir, I imagine that if I were in charge of the Mint and I were to enter into an agreement with Intergold in order to market gold coins, in view of the knowledge and the control of marketing Intergold possessed I would insist on a restraint of trade agreement. So would the hon the Leader of the House, Sir, because he is a businessman. Maybe he should have been there. I do not know. [Interjections.] If he had been there, maybe he would have had a restraint of trade agreement. Who knows? [Interjections.] I do believe, however, that this is fundamental. These, Sir, are things which to my mind need to be looked at.

Let us take another example. I refer now to the question of new companies not being registered. Because the number of new companies is down it affects this index. We are, I believe, not looking at the real issues which confront us in South Africa.

The real issues are very simple. We have a Black population which is increasing in numbers and which increased between 1980 and 1985 at the rate of 2,8% a year while during those five years we created jobs at the rate of 0,7% a year. Those simple figures, Sir, mean disaster for South Africa. They mean disaster for us. Unless we actually deal with this position and create a situation in which more job opportunities are generated, we will be creating a situation of jobless people. If we do this we will not be able to solve the problems of South Africa.

With great respect, Sir, in these circumstances I have to tell the hon the Deputy Minister that unless we receive an assurance from him and unless we see concrete actions indicating that something is being done in order to solve the real problems of South Africa, we are going to continue to indulge in idle debates in this House. We will continue to have the same problems and we will continue every year to quote the same statistics without ever solving the problems of South Africa, and one day the children of today will ask of us why we never did these things and did them timeously, why we did everything too late, and why we waited for crises before we resorted to crisis management instead of trying to obviate the problems that really faced us.

This, to my mind, is the fundamental issue. If we restore confidence in the people of South Africa, if we can get them to regain their confidence in their own future, we will have solved half the problems of South Africa. If, however, we do not restore the confidence of people in their own future, we are headed for a dark and dismal period economically and politically.

Mr Chairman, I should like to associate myself with the hon member for Yeoville’s representations concerning “Buy South African”. It is a very important item on our future purchasing agenda, and in this regard every South African will have to set his priorities straight.

I should also like to convey the congratulations of this side of the House to the recently appointed Commissioner for Inland Revenue. We are glad that Mr Kingon occupies this post. We have every confidence that he will carry out his tasks with great dignity and dedication, and we on this side of the House would like to associate ourselves with the congratulations extended to him.

The measure before us contains no new proposals in regard to taxes. Here we have steps which have already been announced, but which are merely given affect to in this measure. As the hon member for Yeoville has pointed out, the measure relates to tax-free investments made by building societies, tax on fringe benefits involving motorcars and also sales tax.

In regard to interest and dividends on tax-free investments, confirmation is merely being given of the arrangement in terms of which new building society companies and mutual building societies compete for funds on an equal footing.

The primary object of building societies is still to obtain investments, and also the provision of funds for housing. We must not allow this aim of the building societies to be watered down. It is important for the building societies to continue setting this as their primary objective. Housing, and making funds available for the provision of housing, is still of cardinal importance in South Africa. Nothing should be done to make it more difficult for the parties concerned to generate funds for this purpose.

The right to reasonable and practical housing bears the very closest possible relationship to the availability of reasonable funding and the availability of cheap money. South Africa’s need for savings is going to become much greater in future. This will cause the availability of funds to become increasingly more expensive instead of becoming more readily available. We therefore welcome any measure to prevent this. That is why the acquisition of funds for providing housing is of the utmost importance. But it is also a fact that funds for housing should not be made impossibly expensive, but should always be reasonably available to everyone in South Africa, and also at a viable rate which would make it possible for everyone to obtain those funds.

I would therefore just briefly like to refer to that portion of the measure dealing with the sales tax. The truth of the matter is that an increasing number of persons in the small business sector, small businessmen, are gaining possession of sales tax certificates. The purpose of these certificates is to enable dealers to purchase supplies without having to pay GST, the purpose then being to resell the items. We hereby therefore want to identify the bona fide merchant and make a certificate available to him so that he can make purchases without having to pay GST.

What has unfortunately happened, and is still happening, is that people who have such a certificate are employing them for what we could call “hidden purchases”. That is tantamount to a sophisticated way of making purchases without paying GST. We therefore welcome the idea, as embodied in this measure, that only if merchants or persons furnishing a service have a turnover of more than R50 000 may they have such registration certificates.

Apart from the fact that unjustified purchases can be eliminated, it is also greatly going to help to reduce the functions of the department. I think it will also result in the smaller businessman, the more informal businessman, not having to be responsible for making the GST payments.

It is of the utmost importance for dealers who are now going to be subject to deregistration to declare the stock they have in their possession at present. They will then have to pay GST on that stock. It is only logical and fair for such dealers to pay GST on stock which they obtained without having had to pay GST.

A second aspect related to this is the duty now being imposed on dealers to display a notice in their shops or on their premises indicating that they do not collect GST. It is of the utmost importance, because otherwise clients might assume that GST is going to be collected, whether by the inclusive system, ie that of having GST already included in the price, or by way of the exclusive system, that of having GST added on to the price. Clients could be given a false impression. I believe that the displaying of such a notice is therefore of the utmost importance. Due note will have to be taken to ensure that dealers who no longer have to collect GST and make GST payments do display this notice.

We therefore welcome the amendment increasing the deregistration notch from R10 000 to R50 000. We trust that the smaller dealer, the small businessman, will co-operate by deregistering as quickly as possible so that there are no unnecessary registration certificates remaining in circulation.

For the new, smaller person entering the informal business sector, this is also going to prove to be a help, because he does not have to collect GST. Nor does he need to spend his time dealing with the concomitant payment of GST that has been collected. In our programme of deregulating business transactions this can, therefore, only help to facilitate matters.

We gladly support this measure.

Mr Chairman, the hon member for Gezina has given a very good exposition of what is in fact contained in this Bill. To a large extent, of course, I must agree with him because much of it is consequential upon the Bills that have previously been passed during the earlier session of this House, and also as a consequence of trying to improve the situation in certain areas. However, I feel that different people may well have a different feeling to his that it is a very good taxation Bill. As far as we are concerned we do not have quite the enthusiasm for it that he appears to have.

First of all I should like to take up the point made by the hon member for Yeoville regarding the short period we had to study a Bill of this nature. I am aware that taxation Bills do not have to go a standing committee but if that is the case it is a little unfair and unreasonable to expect us—as was the case yesterday—to go straight into the Second Reading of a Bill such as this Taxation Laws Amendment Bill. We have now had an extra 24 hours to have another look at it but even so—when one compares it to the parent legislation—it does not give one the great deal of time when one has standing committee meetings to attend as well. If we are expected to do justice to the Bills before us in this House I feel we must be given adequate time to study them and to draw conclusions.

As has already been indicated this Bill is consequent largely—in the first part at any rate—upon the creation of a new setup for building societies. This is necessary because without the amendment it would be impossible for the new company-type building society to have the tax-free shares that are such a popular element in the building society industry. Furthermore they are vitally important because it is this type of investment that is making relatively low-cost money available for housing development. I think we are all aware of how necessary it is to have a reasonable amount of low-cost money available for housing development. This does not only apply to the White sector of the community but it is hoped that the other sectors of the community will in future also be able to do what the Whites have done over many years, namely to use the building society funds for the development of their own homes. We are therefore very anxious that tax-free investments should be made available.

Again the points made by the hon member for Yeoville are valid in that confidence in this scheme has been somewhat shaken because of the rumours that they would be phased out over a period of so many years, as well as the statement in the Bill that the Minister will control the rate of interest to be paid. As has already been said, unless they are market-related, this will kill them stone dead anyway, because people do not invest in that kind of investment purely and simply for philanthropic reasons. They invest to supplement their income if they are older people or are building up towards going on pension. This is why it is quite important to me that these rates are market-related and that the hon the Deputy Minister gives us an assurance of this, as well as an assurance regarding the satisfactory resolution of the question of their short-livedness.

There is no doubt that in regard to the question of the perks tax on motorcars this Bill is an improvement. I for one, however, in my personal capacity—because I know it was a member of my party at the time who supported the concept of perks tax—have always opposed the question of imposing this perks tax, particularly in respect of motorcars. There are justifiable aspects, to this tax because perks have been heavily abused by some people. I am quite sure, however, that the benefit to the Exchequer from the imposition of this perks tax has nowhere near offset the damage to the motor trade and the motor industry. Not only is one collecting money from the general public and businessmen who are giving cars to employees to use, but where one was also collecting heavy taxation from employees in the motor industry, that money has been lost because the motor industry has been on its knees to a large degree. I hope these provisions will assist in easing the burden to some extent and making it a rather more equitable imposition of what I consider to be a very bad tax in any case.

I also wish to say something concerning the question of the investments people may make in financial interests. In South Africa we are still in the position that a person who relies for his income on financial investments loses money every year, when one takes into account the effect of tax and inflation on the interest that he earns. If there is 20% interest and 20% inflation and one has to pay 50% in tax, one is losing 10% on one’s investment before one has used any of it. With the interest rates having gone down recently, and with an inflation rate which is still high, one would now be losing anything between 12% and 15% on one’s investments.

What incentive is there for anybody to save? What can a person do if he has a certain amount of self-respect and pride and wants to look after himself in his old age by saving?

I would like to remind hon members that when Parliament was dissolved for the general election in 1974—twelve years ago—members were not getting much in the way of remuneration and those who were not returned went on pension with little more than R1 000 per month. Those amounts were meant to be on a par with what we get today, with the very much higher rate of inflation taken into account.

What else can a man do to allow for inflation if he is wise and tries to look after his interests over the years but save? When he saves money, however, half of it is taken back in tax. I really believe that people over a certain age—people might look at me and say that I have a vested interest!—should have a far more substantial easement of their tax obligations in that particular area because such a person is simply not able to save for his retirement and also to make sure, if he lives to a reasonably ripe old age after his retirement, that he is still going to be able to maintain the standard to which he is accustomed.

As the hon member for Yeoville said, one of the most important things in South Africa today is to build confidence in South Africa. I know of businessmen who have actually closed their doors because they are just not prepared to work under the circumstances prevailing here today. The taxation structure is killing them and the problems they experience with their labour and the various problems they are likely to face in the not too distant future as a consequence of sanctions and matters related thereto make them say, “Let’s get out of it whilst we can”, and some of them do a disappearing act overseas. However, most of them are certainly not doing that. They are just putting their money into these loss-making financial investments and hoping things will even out.

Somehow the Government has got to do what it has not succeeded in doing so far and that is rebuilding the confidence of the public in South Africa. We have got to have jobs for our people, we have got to have homes for our people. It is one of the functions of Government to build that confidence. I am afraid, Sir, that that confidence is presently lacking.

The one area in which I believe the Government is taking an interest is in the development of small businesses. This I must commend them for but I am afraid that what is being done so far is not nearly enough to get the show on the road although I realise that everything cannot be done in one go.

While I accept that this tax Bill before us does bring about a certain amount of improvement insofar as certain areas of taxation are concerned, I am afraid that I will not be able to support it and will be supporting the amendment of the hon member for Yeoville.

Mr Chairman, I should like to begin with the hon member for Yeoville. He made relatively extensive use of Assocom’s projection, according to which things are a little better now. Of course that is an attitude analysis, and I agree with him that things are going better, but I do not agree with the way in which he analysed it and then tried to break down that total analysis and said that things are not really better.

If one looks at the latest figures of the Reserve Bank which indicate what happened in the second quarter this year, one finds that those statistics already reflect an improvement in our economy. Having listened to the hon member for Yeoville, it seems to me that he is between the devil and the deep blue sea, since on the one hand he says that there is no consumer confidence, but on the other hand he attacks the Government about its excessive State expenditure. My view is that when a country is experiencing a recession, it is the responsibility of the State to increase State expenditure, and this Government has recently announced a number of plans to increase its expenditure.

I want to go further. If one analyses it, one sees that it is expenditure on housing and infrastructure, expenditure that is not excessively inflationary. We must be clear about many of our critics who say that there must be less State expenditure, State expenditure must be controlled and State expenditure must be frozen, but the next minute they say that it is the function of the State to restore the confidence of the consumer.

I also want to react to another point that has often been raised here. Yes, we have had a recession, particularly in the first quarter of 1986, but if one looks at the financial reports of our exporters—I saw Anglo American’s report the other day, and the same applies to all our goldmining houses—one sees a tremendous increase in profits. Those people are not in a recession; I therefore want to ask what those institutions are doing to stimulate the economy in this country with all those big profits they are making. I think that they, too, have a responsibility—it cannot be left entirely to the State to get the economy going again.

I should also like to mention something the hon member for Yeoville forgot. Talking of sanctions, we already have total sanctions when it comes to foreign investment and capital from abroad. At present we are an exporter of capital, and the sum that is being mentioned in respect of short-term money that has recently left the country, is R2 billion. Now I ask what a government can do if its country is an exporter of capital. R2 billion! Have hon members considered how that money would have helped our economy if it had been assimilated into our money supply?

We are not going to get sanctions; we have them! We should really be filled with admiration when we look at the statistics of the past seven or eight months and see the improvement that is taking place. I therefore feel that we are on the road to recovery despite tremendously difficult circumstances, and I think the confidence of the consumer is recovering.

I want to ask the hon member for Yeoville just to go and look at the second-hand car market. That is why I think he is completely wrong when he claims that we are trying to keep the motor industry alive by the one element of the change in fringe benefits tax. That is not true. It is simply not true. As a result of the recovery of the economy that is on its way, we already have the first movement in the second-hand car market. That market is the first to show that a recovery is on its way.

If only it would rain like it has been for the past two weeks in our country, if it continues and confidence in our agriculture is restored, I believe we are once again on our way, despite overseas politicians who want to push us into a corner.

I want to deal with another point the hon member for Yeoville raised. I also have a great deal of sympathy for our older people. I agree with him that we should try to assist our elderly where possible. Once again, however, I want to ask the hon member for Yeoville a fundamental question: Must one allow exemptions everywhere in one’s tax structure as one goes along? Where are we going to end up if we make adjustments to, and deviations from, the tax structure everywhere?

Why was the Margo Commission appointed? It was appointed to see if we cannot remove the vast number of deviations and exceptions from our tax structure. I think the statistic has already been mentioned that as a result of the many exemptions that are granted at present, the Receiver of Revenue loses approximately R15 billion. Can the hon member for Yeoville imagine how we could have helped the aged if we had in fact collected that R15 billion?

Furthermore, I want to ask the hon member for Yeoville this: If we are going to grant this one exemption, what is going to become of all the other old people who do not have those investments? I think that the hon member for Yeoville must get the principles he is aiming at reasonably clear.

I agree with the hon member for Yeoville that the levelling off of the fringe benefits tax burden is one of our most difficult tasks. The case of the adjustment to, and the alteration of, fringe benefits tax on motor cars is an example of this. One could draw a comparison between what an employee gets from his employer when he uses his private vehicle for company purposes, and the benefit to someone who has a company car and drives 10 000 kilometres in it for private purposes. This is a difficult subject, and no country has yet had complete success in distributing the tax burden absolutely equitably amongst the taxpayers.

When we come to the changes in terms of the clause concerning building societies, the hon member for Yeoville advanced an interesting argument, in my opinion. He said that the interest rates on those building society shares that are exempt from tax, should be market-oriented interest rates. I agree with him. However, I want to ask him whether he agrees with me that we should strive gradually to let all our financial institutions, all our deposit-accepting institutions, fall under one Act. If one were to take away this benefit, one could have building societies under the Bank Act. On the other hand, how does one lend assistance in respect of the building industry and loans to the home owners? It is therefore not as simple a solution as the hon member for Yeoville suggested here.

I want to dwell for a moment on the change that is being proposed in connection with fringe benefits. We must accept that the motor industry in South Africa plays a very important role in our economy. Since about 1958-59 we began developing a motor industry in consequence of the Viljoen Report, which was followed by a special report by the Board of Industry, and linking up our motor industry, which is the tail end of the engineering industry, with the steel industry, the plastic industry and the glass industry. Our motor industry therefore plays a tremendously important role in the economy. Of course we could be criticised for having too many models, for having too many manufacturers, but our motor industry has been through a very difficult time. At present we only have one large manufacturer of the more expensive models—I think Mercedes manufactures 80%, and BMW, 20%.

I am very pleased, and I want to thank the hon the Deputy Minister once again, since I know how hard he worked on this new formula with Naamsa. The previous formula was based on the purchase value of the car. The cost of using a car is interesting, however. For example, one gets more expensive cars in respect of which the annual depreciation is much less than in the case of cheaper motor cars. It also surprises me that the petrol consumption of some of the more expensive cars works out cheaper than that of the cheaper ones. I am therefore pleased that this formula, which is based on engine capacity, has now been introduced. According to this formula, however, 1% of the value of the motor car is still added as income to gross taxable income. We must bring those excessive fringe benefits given to people under control, but at the same time we must be careful not to kill the turkey or the duck that lays the golden egg.

The goose!

Yes, the goose. [Interjections.]

I think that even that 1% on the value of the cars could still be a little too high, and I hope that we can look at that again later.

I want to go further. At present the tax on motor cars with a value of more than R25 000 is increasing tremendously. Hon members are aware that the larger cars all cost more than R25 000 in any case. When one compares this tax with that of the USA, the United Kingdom and West Germany, one finds that after a certain value, there is no longer an increase in the fringe benefits tax, and I think we could take another look at effecting an improvement in that regard.

In conclusion I want to say that in this Bill we are also dealing with the problem of allowances and scheme motor cars. Our businessmen are clever. As soon as the companies came under pressure in respect of their company cars, they all switched to a system of allowances for their employees. Unfortunately, instead of covering the cost only of the use of the car, these allowances also happened to include a few other expenses, which amounted to considerably more than the expense that person incurred in using his private vehicle for company purposes. I know that there are a number of complaints from those who have the scheme cars, and who are asking that the 40% they are being taxed on at present be summarily frozen. However, we cannot go against the principle in order to reduce exemptions in our tax structure. How is the man who does not have benefits to pay higher tax? It is unfortunate that we will have to tax that additional allowance of the people with scheme cars. Then I just want to say that the 80 cents or 60 cents per kilometre, depending on the motor car, is perhaps a little too low and could be adjusted somewhat so that many of those people can be satisfied.

Mr Chairman, I want to say thank you very much once again for this concession to the motor industry. We could not have destroyed one of our basic industries. I support this Bill.

Mr Chairman, I should first of all like to thank the hon member for Water-kloof sincerely for the words that he addressed to me. I appreciate it. He is correct, and in my view gave the hon member for Yeoville a very good reply, since the hon member for Yeoville created the impression that we are now trying to use the tax on fringe benefits to help the motor industry and that this was a vain attempt. He asked why we were doing this and said that it was not enough. The fact remains that this is not the case.

†I shall come back to the hon member on that issue in a moment.

As far as the motor industry is concerned, this was not all that we did. We did not alter the perks tax structure in order to stimulate the motor industry although I think it had the effect of stimulating the motor industry. What it did do was that it removed a factor that was depressing the motor industry. There was not a problem with the phasing in of the first 40%. However, people who were going to buy company cars looked at the 40% and reasoned that it was 40% then but that it would be 60% the next year and then 80%. They did not want to let themselves in for that, and reasoned that they would rather keep their old car or buy a scheme car. [Interjections.] We were therefore not so much looking for relief as trying to bring equity into the tax system because there were major inequities in the tables as they existed.

We also had to address it for a reason which the hon member for Waterkloof mentioned here. If we are stimulating the economy—we were dealing with a stimulation package—we must realise that the motor industry is a major locomotive in the economy. If that locomotive does not pull, then the economy will not pull. Therefore, if there are hindrances to that locomotive pulling, we must address them insofar as it is possible for the Government to do so. We have not only addressed the question of fringe benefits; hon members will know that we are also looking structurally at the whole industry. We are, for example, looking at Phase 5. The hon member is fully aware of that. We looked at the question of excise duties and at the surcharge on intermediate goods which affected the motor industry vitally, except for the kits. We were trying to get that locomotive to pull. Therefore, hon members must look at what we did in perspective—we were trying to bring basic equity into the system.

As to the question of whether or not there is equity now between this company car scheme and the allowance scheme, I think there is. However, the fact of the matter is that we do not have all the wisdom. We have therefore asked Naamsa and Assocom to form a joint committee with us. We are looking into the matter and, if there are inequities which we discover, which are pointed out to us or which emerge from the studies, we will address them.

I said the whole thing is an inequity.

Sir, that hon member himself admitted that he was unable to persuade his own party on the question of perks tax. Therefore, he can hardly expect to persuade the House.

The hon member for Umbilo mentioned that inflation is a problem. Of course it is. It is the problem that remains public enemy number one. It does affect the aged. The hon member also said that we must address the question of confidence in the economy, and I will talk about that in a moment.

I want to respond to one thing which the hon member said. He talked about tax-free shares and said that they make low-cost money available for housing. I want to say to the hon member that I do not believe what he has said is correct, and I will give him my reason for saying so. When one spreads the benefit of the tax-free investment over all the bondholders of South Africa, the amount of benefit which any particular bondholder gets is very, very small. It is fractional. It would seem to me that our task in South Africa, with the limited resources we have, is to concentrate on the resources which we have…

[Inaudible.]

Just a moment, please. We must concentrate on the resources we have, and apply them to the benefit of people who are genuinely disadvantaged and needy.

Then why have you not done it for 38 years?

That may be, but we are in a time of reform. Times have changed. If the hon member for Yeoville has not realised it yet, I must inform him that times have changed. This party also has different attitudes to many things.

Oh, times have changed? That is interesting!

Yes, Sir.

The hon member for Umbilo talks about low-cost bonds. Of course there should be low-cost finance available but most of the benefits of low-cost bonds come from the Government subsidisation schemes and not from the tax-free investments. However, I am not taking a stand on the whole question of tax-free investments here this afternoon, and neither is the Government. We have said that if we are to phase them out, we will study the recommendations of the Margo Commission in this regard. We will liaise and do all the things necessary in response to the recommendations of the Margo Commission. If in the time of review we feel that we should discontinue that particular investment, then it will be phased out over ten years. What will then happen, I think, will be that anyone who currently has an investment, will continue to have it. It will be phased out over ten years and new investments will not be allowed in that particular direction. However, to suggest, as the hon member for Yeoville did, that we will somehow gerrymander interest rates to make it unattractive and thereby kill the scheme is to accuse the Government of dishonesty and I do not think that the Government…

Give us an undertaking!

I do not accept that this Government is dishonest and I do not accept that we would gerrymander interest rates in order to kill a scheme. If we are going to address it we will address it head-on and until such time…

Give us an undertaking!

The hon member can quote me on that. While I am in this job and have any responsibility for that it will not happen.

Then you must speak for the Government, not for yourself.

Mr Chairman, I am sure that any successor that I have will also deal honourably with the situation. The fact is we will not gerrymander the thing; we will go about things in the usual way and when we come to address the problem again we will address it de novo and we will deal equitably with those people who are already in the scheme.

*The hon member for Gezina made a very good speech. He emphasised the necessity for housing in the process of economic growth in our country too, and I want to agree wholeheartedly with that. The fact is that the Government has taken steps in this connection over the last weeks by pumping R320 million into housing and the infrastructure, and this amount is going to be spent over the next six to nine months. The housing bonds are going to be added to the R400 million which we have given to the private sector as a dowry, which will attract investment in the pension funds and assurance companies and can then be used for low-cost housing. The private sector can then play a part in the tremendous challenge we are confronted with.

Many people talk about the future of our country. They say urbanisation is a tremendous problem which has borne down on us and they ask how we can live with this. But I want to say that this is the biggest challenge for any economy and it presents enormous opportunities.

†It is a challenge, most certainly, but it is not a threat. It is a challenge and a fantastic opportunity. We have this growing population of economically active people that can make a major contribution to our economy and therefore in housing those people, the sweat equity we allow and the way we engage those people in the provision of their own houses and help them along that road in itself can be a major contribution to the economic growth of our country and that is what we are busy with. Therefore I thank the hon member also for drawing the attention of this House to the importance of that policy.

The hon member for Yeoville said we must restore confidence. He says we are not doing anything in that regard and that we must really restore confidence. I accept what the hon member says—that confidence is an important factor. We understand the reasons why there is a lack of confidence; there are a variety of reasons in our country. However, the fact is that the hon member is like the preacher who preaches to an empty church and harangues the people for not coming to church when they are there. The fact is he must address his remarks to those people who are not investing.

Who made the Rubicon speech?

Mr Chairman, I want to say to the hon member if he wants to take the speeches of hon members of the governing party and the speeches of hon leaders and members of opposition parties in this House and outside and put under a microscope what hon members on that side of the House often with their tongues in their cheeks say about South Africa, I am not surprised that people do not want to invest in South Africa. [Interjections.] I am not including the hon member for Yeoville now because I think he is an exception. I am not including him. [Interjections.]

Whom are you referring to?

I am referring to hon members like the hon member for Walmer who has already talked a depression into Port Elizabeth, and other hon members on that side on the House who stand up and make the most appalling statements on South Africa in the most extravagant terms. I could not only give examples; I could write 12 volumes on the subject! Therefore for that hon member to accuse this side of the House on that issue I think is the height of chutzpah, if I may use the word. [Interjections.]

You do not believe a word you are saying.

I believe every word I am saying and so does the hon member for Yeoville. [Interjections.]

Fact is, what have we done? I will just give the hon member a few examples. During this session of Parliament we have come forward with major reform of the building societies unleashing a huge, slumbering giant. New financial concentrations, new leases on life and a mass of energy will be unleashed as this overregulated, slumbering giant is allowed to take its place in our society. Yesterday we passed legislation improving the Board of Trade thus making it possible for it to react more swiftly, more efficiently and more innovatively. [Interjections.]

Earlier this year we had the whole new competition policy and the effect of that in relation to overconcentration, in instances in which that had become a problem with regard to vertical and horizontal price fixing and a variety of other identified malpractices. We have also had the positive response of the Government in relation to its urbanisation policy. We have had, as I mentioned earlier to the hon member for Gezina, the flotation of the housing trust which, I believe, was a major development. We have had the policy of deregulation which, with the passing of the Bill, will take effect and will allow Parliament to cut this Gordian knot of regulations which often threaten to choke this country’s economy—something that must really be done with the greatest urgency.

We have also embarked on a policy of privatisation, which is now gaining ground, and if we want low taxes we must realise that we cannot have that together with big government. In order not to have big government, deregulation and privatisation become essential elements of our strategy, and it is for that reason that we follow the current policy.

We have also experienced a whole revamping of Escom. Now we have a modern, much more efficient Escom operating in its new form. We have also had the study on the SATS and are waiting to see what will flow from it. So one can go on, Mr Chairman. This Government has done an enormous job, and we have confidence in the future. If we did not have that confidence we would not be embarking upon schemes such as the new Mossel Bay scheme on which thousands of millions of rand are being spent. We would not have done that if we did not know it was going to bear fruit in four or five years’ time. If anybody wants to know whether the Government of South Africa has confidence in the future he need only look at something like that particular project, Sir. [Interjections.]

The hon member for Yeoville says we must look at the real issues facing this country. I agree with him, Sir. I am not announcing anything new now. The hon member knows exactly where we stand in relation to Mossel Bay. We are seriously looking at long-term projects. We are looking at the…

Have you consulted the hon member for Mossel Bay?

Mr Chairman, the plans in respect of Mossel Bay are well known. We are doing research and exploration work on long-term projects. We are carrying out viability studies, and we are interested in the future of that area just as we are interested in the future of other areas. That is why we are trying to evolve some sort of modus vivendi in respect of the Lesotho Highlands Water Scheme in order that we can also undertake that long-term project together with Lesotho. We do all these things because we have faith in the future of the major industrial areas of our country.

[Inaudible.]

If the hon member for Bezuidenhout wants to ask me a question he should go ahead and do so. He should, however, stop yapping across the floor of the House.

Are you going ahead with the Mossel Bay project then?

I am not saying we are going ahead with it. [Interjections.] Really, Mr Chairman, the hon member should go and wash his ears. I have said to him we are clearly committed to undertaking—if they prove to be cost effective—long-term projects which will only yield revenue after a long period, and we have also revealed our thinking in this regard. The hon member should therefore know what the state of affairs is in that regard. I do not think, however, he is very interested in progress. He has demonstrated that lack of interest on his part so often before. He is simply interested in sitting here in the House grumbling and complaining, trying to foul the nest of South Africa.

Now he is cross!

The hon member for Yeoville talked about the net emigration figure…

Tell us now whether you are going to go ahead with the Mossel Bay project or not!

The hon member for Yeoville is unhappy about people leaving this country. Nobody is happy about that. I am unhappy when one single person leaves the country. I believe it is bad for our country. It is also a sad thing for our country, and I believe we must try to create circumstances of such a nature that people will not wish to leave South Africa.

Indexed bonds!

Well, Mr Chairman, I am not so keen on the index. Some people tell me the confidence index is moving sideways. Well, even if it does, I am happy. I want to tell the hon member for Yeoville that I know the economy of this country is moving upward. I know it should. I also know there is every possible reason why it should move upward right now. There is accommodation in the banks. There is accommodation in the Reserve Bank. Interest rates are down. We know there is spare capacity in our production processes. We know we have such a magnificent capital infrastructure in this country that we do not have to build a power station in South Africa until the year 2000. So, on an incremental use of this capital base we can expand this economy for years without allowing interest rates to go the way that hon member says they will go. He alleges we are enjoying a false summer and that people are scared they are going to collide at the same intersection at which they collided before, and therefore they will not make investments because they know the interest rates will go up again.

That hon member knows as I do—in fact, we all know—that interest rates will only rise after a sustained upswing; and I think we are in for a sustained upswing. So I agree with the hon member for Waterkloof when he says we are in for a sustained upswing. I concede that under normal circumstances we could have been heading for a boom period. As things are, however, we probably will not experience a boom period. [Interjections.] I am convinced, however, that we are heading for an upswing.

The hon member for Waterkloof was correct when he said that it is a tremendous challenge for a young country to export capital and grow. It is indeed miraculous that we have responded in such an appropriate fashion. [Interjections.] One need only look at some of the Second World countries that have not had to face even half the challenges we have had to face; countries that have not had to fight an international media war; that have not had “death by celluloid” imposed upon them. The international media have taken the worst side of South Africa into every living room in the world. Their reports have been laced with disinformation and other wrong information that has, had the effect of projecting a totally false image of our country. We need only look at countries like Mexico. Everybody is trying to help Mexico, and Mexico’s oil price did not fall as much from its high to its low as the gold price did. Yet anyone who looks at that society will concede that what we have managed to do under the circumstances is something quite magnificent.

I asked about the index bonds.

The hon member knows that the “granny bonds” in England have not been a success.

Who says they have not been a success?

The hon member says that is what we must implement.

[Inaudible.]

The hon member says we must implement them here. He has said the “granny bonds” have been implemented in England, and he has given me all the facts and figures. I know, however, that they have not been a success in England.

That is not true.

All right, then, I concede that there may be some substance in the hon member’s idea. I will undertake, therefore, to consider the merits of it and look into the idea of a “granny bond” scheme. The information I have received to date, however, indicates that the scheme has not been a great success. Nevertheless, I am prepared to look into the idea again. I know that that hon member does not always give bad advice; he does sometimes give good advice, even very good advice. So we will look into his idea. If I may say so, however, he has not given very good advice today.

I do not think there is anything else the hon member has said that I can comment on.

What about the question of gold coins and the man who left this country to promote the sale of Australian gold coins?

Yes, I am with the hon member on that. I think it is appalling. I really do.

Well, why do you not do something about it?

Well, I will look into it. I think it is appalling. I think there should be a restraint of trade. The hon member is absolutely right, and I will look into the matter. I do not know what the circumstances actually were. I do not know whether an associate company was involved or whether this was a transfer. Nevertheless, I will look into the matter, because on the face of it, it is appalling.

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

Order! I have received a message from the House of Representatives informing the House of the concurrence of the House of Representatives in the resolution relative to the appointment of a joint committee to inquire into and report upon a complaint of alleged breach of privilege.

Mr Chairman, I move:

Mr Chairman, it appears to me that the hon the Deputy Minister of Finance is working overtime. This may mean either that he is earning his keep or that this is a forerunner of coming events. It will be very interesting if it is the latter. If it merely means that he is working hard it is quite pleasant nonetheless. All in all I am rather pleased that he is rather busy here.

On the face of it this Bill is a relatively simple measure. It deals with the introduction of two new Protea coins which we dealt with in the previous discussions. However, certain implications arise from the passing of this Bill and I think we should look into these.

Firstly, there is no doubt that insofar as coins are concerned—in particular the coins which are referred to here—these can be either in the form of an investment for the individual or alternatively they can be a collector’s item for people who regard it as a hobby or who combine both investment and collection. To that extent the minting of a new coin such as the Protea was an idea which would encourage at least collectors to purchase the coins. There is no magic in buying a Protea instead of a Krugerrand, because on the face of it they both have identical values, they are both legal tender and therefore there is no reason why there should be any difference in investment value; except, of course, when it comes to the question of proof coins. In this connection I would like to ask the hon the Deputy Minister to give us some information as to what his attitude is towards proof coins, the marketing of proof coins and the creation of a market for proof coins.

As far as we are concerned, we have seen a situation in South Africa where a major market for proof coins has completely collapsed. Many people have, in fact, suffered very heavy losses as a result of it. So the question that has to be asked, is: Bearing in mind that the Mint produces both ordinary gold coins and proof coins, is there not a need or a desirability that the Mint should take the lead in creating a market for proof coins? In other words, instead of merely being a marketer of the coins which it produces and having the outlets which it now has in various places, should the Mint not really be creating a market for the coins as opposed merely to selling its own coins? That, Sir, is a question that I would like the hon the Minister to deal with.

The second issue is the fact that if anybody ever had the idea that the Protea could be used in order to overcome sanctions or boycotts, it was a stupid one, because the legislation against the importation of Krugerrands quite clearly prohibits the importation of all coins emanating from South Africa. Therefore, to suggest that one could overcome this merely by minting a new coin, was ridiculous, if that was the idea. If that was the concept, as some people have suggested, then it was quite meaningless.

There is another issue which arises, and that is the whole question of the sale of gold coins. At the present moment this is conducted mainly in Krugerrands and is operated on a tender system. I want to ask the hon the Deputy Minister why such a tender system exists. If there is such a system, why is it presently constituted in such a way that only the banks can tender? Why are the coins not fed into the market through the stock exchange and the stockbrokers? Why is it necessary to deal with the banks in this way?

Let me deal with another factor. Why is it not possible for the small investor—the man who wants to buy a single coin—to do in regard to the Krugerrand exactly what he can do in regard to the proof Protea, and that is to go to the counter at the branches of the Mint, for instance, and say, “Here is my money; give me a coin”? Why cannot one do that in respect of the Krugerrand? Why cannot the Mint market these coins through its outlets in the ordinary way?

The ordinary small investor who would like to invest in gold coins finds himself having to deal through a bank where he incurs a premium and a handling charge. The result is that he is, to some extent, put off investing in Krugerrands and other gold coins.

Perhaps the French are the best examples. There is hardly a Frenchman who does not have some gold coins hidden in his mattress or elsewhere. They know what can happen to a currency which depreciates.

To my mind we are doing the opposite of encouraging South Africans to buy gold coins. I can understand that we are limiting the number of coins for foreign exchange reasons, but the ability of the small man to buy a Krugerrand or a Protea across the counter, not in a proof form but in an ordinary uncirculated form in order to have the gold value, should be encouraged.

I would like to see every branch of the Reserve Bank becoming a branch of the Mint. There is no reason why the Reserve Bank buildings which exist in all the larger cities should not also be marketing the coins. As an ordinary citizen one should be able to go in there, put one’s money on the counter and buy a Krugerrand instead of going through this whole procedure. At the moment one has either to buy it on the stock exchange or to go through the banks which have to tender according to this particular method of tendering which I have asked the hon the Deputy Minister to explain.

Another matter I want to raise with the hon the Deputy Minister—and I intend to pursue this further—is whether a gold certificate should not be issued in addition to the coins, a certificate which in fact represents say an ounce of gold or, if there is a problem because of the legislation dealing with unwrought gold—you are familiar, Sir, with the fact that one should not be in possession of it—then it could be a question of a certificate representing a coin in that sense. The safekeeping of coins, having to pay insurance and placing them in a safe deposit box creates a great deal of inconvenience. To my mind, if one had a gold certificate, one would have portability; one would have a store of value; one would have negotiability; and all the inconvenience of having to look after this type of investment would be removed. In addition it would enable the Reserve Bank to have its gold reserves turned into a negotiable form which could actually be available in the community. The Reserve Bank always has to keep a store of gold as part of its reserves, and it could in fact make that available.

What would be remarkable is one would eventually have that certificate representing a form of what one could almost call secondary rand, which could not lose its value, but which would go up with the gold price or fluctuate downwards as the case may be. It would create a new form of currency. The hon the Deputy Minister must not laugh about a new form of currency because the Krugerrand is a currency. In fact it is legal tender. That is what this whole Bill is about, and that is why I am raising this point.

[Inaudible.]

That is right, and one can actually take one’s Krugerrand today and exchange it for R1 200 in notes—R1 200 in notes which are meaningless.

One can take any note—and I ask the hon the Deputy Minister to take out a note now—whether it is a R2, R5, R10, R20 or R50 note; on it is written “I promise to pay… R50” or whatever the case may be. Now, I want the hon the Deputy Minister to take his note—it is under the signature of Dr De Kock—to Dr De Kock and show him this promissory note which says he will pay the bearer R2 and ask him what he will give him. What is he going to give the hon the Deputy Minister? He says there that he promises to pay R2, but what is he going to give the hon the Deputy Minister? He is going to give him another piece of paper. [Interjections.]

That is underhand!

The wording on the banknote is a bluff because he promises to pay nothing. He says he promises to pay, but he will be giving him nothing except another piece of paper bearing another statement saying “I promise to pay”. One can carry on with this for ever. [Interjections.]

Promises! Promises! Promises!

One can go there with a note and they will give one another note and another note and another note, and one never ends up with anything. [Interjections.] No, what I am saying is that I would like to see a certificate which says “I promise to pay one ounce of gold”. This should be given to the public. They should be able to buy it and exchange it either for an ounce of gold or for a coin.

If we do that and if we had an understanding with the overseas banks, it would not only be a national medium of convenience inside South Africa; we could also market such a gold certificate overseas. That is not unique. One can actually get documentation overseas which deals with it in that form. It is a market which we must explore. I want to appeal to the hon the Deputy Minister to give consideration to these concepts, so that the people of this country, which is the greatest producer of gold in the world, become more conscious of gold in that respect.

The hon the Deputy Minister knows what my views are on the benefication of gold and the jewellery industry. We are missing the boat in relation to that.

He is right.

However, I would like to see this community becoming a more gold conscious community and actually holding gold as a means of storing wealth and as part of its whole existence.

Mr Chairman, the hon member for Yeoville exchanged some very interesting ideas in his speech, and it would be interesting to read over these again. I am convinced that one will be able to use some of his hints very profitably.

I think everyone agreed with the hon member for Yeoville when he spoke about “missing the boat” in connection with the refining of gold in the jewellery industry. One of the interesting things he said was that the Reserve Bank should sell the Proteas. For many years the State has traditionally issued money in the form of coins, throughout the whole world as well as in our country. Notes are issued by banks. Coins are the property of the State, as minted by its Mint; notes are the property of the banks, as issued by them.

The South African Mint and Coinage Amendment Bill took a very interesting course before it reached its Third Reading. In fact it is a very simple amendment to the existing Act which merely gives the Mint the authority to mint the Protea, a gold coin which is being minted and issued in commemoration of Johannesburg’s centenary. In addition it is defined in the Mint legislation as a legal means of payment, as the hon member for Yeoville indicated.

As I said, the small amendment in this Bill has taken an interesting course. This Bill was submitted to Parliament on 17 March 1986. At the time Johannesburg was approximately 100 years and two and a half months old. The first Protea coin was minted by the hon the Minister of Finance at the opening of the Gold Reef City branch of the Mint on 25 April. All the stages of this Bill were concluded by the Houses of Representatives and Delegates by the end of May and the beginning of June. As a result of reasons known to all of us, the Second Reading debate on this Bill was discussed here only on 28 August, viz last Thursday. Interestingly enough, there was not a single word from the side of either the PFP or the CP…

If you want to start another war with this kind of debate…

Yes, now they are crying.

We can deal with this thing again…

Yes! [Interjections.]

If you do not want co-operation, just say so…

What did they achieve with that? [Interjections.]

Talk to your Whips…

When there is war among Whips, the interests of the country… [Interjections.]

Order! There is no point in talking to the hon member that harshly. The hon member for Yeoville must give him the opportunity to complete his speech. The hon member may proceed.

Just repeat what you said!

You are looking for…

We concluded the Second Reading debate on Thursday without a word being said by the opposition parties. When the hon the Deputy Minister moved that the Bill be read a second time, there was not a word from the side of the opposition, and no one had problems with the Bill. No one crossed swords with anyone on the matter. [Interjections.] When the hon the Minister of Finance moved that the Committee Stage be taken directly, there were objections. [Interjections.] Let us leave things at that for the sake of peace.

It is in your interests.

Yes, it is in the interests of everyone.

This legislation should have been launched by this House as early as May. [Interjections.] The disadvantage of the fact that we are only reaching the Third Reading Stage of this amending Bill now, is that we had to pilot an amendment to the Bill to make it retrospective from 25 April so that the buyers of the coins which have been minted since then did not have to pay sales tax and other tax on them. Another disadvantage was that the SA Mint’s production was affected by this, because since April the machinery for the minting of the Protea has served no purpose.

This coin is being minted for Johannesburg’s centenary. Johannesburg is 100 years and nine months old at the moment. In the meantime the publicity that was associated with the first coin has lost virtually all its value. The single great benefit—and I must give the opposition credit for that—is that the gold price is very much higher now than it was in April, and I believe the Mint will make much more money out of the Proteas now than we should have made since April.

Mr Chairman, I want to thank the hon members for Hercules and Yeoville for their support of the Bill. Nobody has mentioned it, but, according to the memorandum, ever since the date in March of this year on which 25 coins were minted when Gold Reef City was opened, it has become necessary to move the date back to rectify the situation so that those coins are not accorded an undue value. Otherwise, if this is not approved, people will have to pay the tax on those coins.

The hon member for Yeoville is a coin collector. He is an expert in the entire field of coins and it is interesting to listen to him.

†He says we must not look at the Protea as a replacement for the Krugerrand. That would of course be naïve and anyone who were to think that we could acquire new markets with the same product under a new name would be naïve. That is not the intention. The intention is, as the hon member for Hercules has said, to meet the need for commemorative coins. There are certain events from time to time which need to be commemorated and one can therefore use…

It is not for Johannesburg only. He has got it all wrong.

No, it is not for Johannesburg only; it is for any kind of event from now onwards. It is rather like the issuing of commemorative stamps. If the Boy Scouts are 100 years old, for example, or if there is any other event deserving commemoration, one may apply to the Mint. Although they would obviously not do so in the case of a trivial event, for some important event they would listen to requests and could well strike a commemorative coin.

As far as the Mint is concerned, it is a manufacturer and a wholesaler. It manufactures to order. Therefore whether they should be in the business of creating a new market for proof coins themselves, when they are basically a production unit, brings to mind the question—and it is just a question—of whether the whole operation could not be privatised.

Yes, I will buy it! [Interjections.]

For the moment that is not a serious suggestion but it is the kind of thing one could look at. They are manufacturers and they make to order. There are already a number of orders for the Proteas that are to be struck and, as soon as this Bill is passed, they will be able to give effect to those orders.

Why do they operate through banks? They operate through banks because that has traditionally been the way in which they have operated and one is also dealing with items of very high value. One is talking about an item that is worth over R1 000. Clearly there has to be security. There have to be facilities to safeguard the coins. There has to be the wherewithal to handle that kind of high-value product, and the banks are clearly in a position to do so.

I quite like the idea of the hon member of issuing a promissory note or a certificate. Instead of necessarily selling the coin itself, a certificate is issued as proof of ownership. It has a number of benefits. He is, of course, not advocating a return to the gold standard. The fact of the matter is that if we had that kind of certificate, it could help. One area, for example, is that people smuggle these things out of the country. However, if one held the Krugerrands and gave people certificates, they would not be able to smuggle because the certificates have no intrinsic value and cannot be cashed. I think that there is possibly also room for certificates of this kind with regard to platinum—that a certificate of value could be issued. This is in fact done by Johnson Mathie in London.

I know that it has been looked at in the past. How seriously it has been looked at and how professional that particular study was, I do not know. However, I will give the hon member the undertaking that I shall look at it again and talk to him about it, privately if necessary, in order to explore the possibility that he has raised.

What will happen if I go to see Dr De Kock about the note?

He will give you a new one.

The same thing?

The same thing: We will give you a new one; a nice, clean, crisp, new one.

In closing I would like to refer to a matter which the hon member for Yeoville has raised and about which he and I have been in conversation over a period—as we have also been with people from the industry—and that is that there is no question that the whole area of benefication is something that we in our particular stage in history must explore and exploit. There is no doubt about that. We must explore it in the field of copper, diamonds, gold and many others. I can give the hon member the assurance that we are looking at the possibilities of benefication, particularly with regard to the jewellery industry but not only as far as gold is concerned. He will be kept informed on an ongoing basis on that because he himself has so often spoken about and initiated discussion on the subject.

With those few words, I thank hon members for their support of this measure.

Question agreed to.

Bill read a third time.

Mr Chairman, when we adjourned yesterday afternoon, I was replying to the arguments put by the hon member for Berea. I see he is not in the House at the moment, and shall have to leave some of the arguments at that, since I should like to put them to him personally.

I should like to conclude my speech with the statement that the legislation before us deserves the support of the House for four main reasons. In the first place, in terms of this Bill further effect is being given to the provisions of the Trust Act of 1936, which earmarked land which has to be transferred to Blacks. In the second place certain agreements concluded by the South African Government with the governments of the relevant national states, are being complied with in terms of this Bill. In the third place decisions which have been agreed to by this Parliament in respect of a section of the land to which reference is made in this Bill, are being carried out. In the last place, generally speaking, the Bill intends to transfer land to the relevant states because those states need the land for their own development.

It is very striking that we are opposed by the Official Opposition whenever we have to deal with this kind of legislation—precisely those people who try to inform us at all hours about the unfair distribution of land among the various peoples who live in South Africa. While they accuse us of that, they are blocking every effort that is made to improve upon that situation.

This House should reject the objections raised against the legislation by the hon member for Berea. Other hon members on this side of the House will deal more fully with other aspects broached by the hon member, and with these words I should like to support the legislation.

Mr Chairman, the hon member for Ermelo’s speeches—particularly the one he made yesterday—indicates that the hon members of the Governing party have been taken in tow by the Official Opposition, as has often happened in the recent past.

Yesterday the hon member for Ermelo, just like the Official Opposition, was very concerned about the labourers who lived on the farms affected by this legislation, but not one word was uttered on the owners of the farms involved.

The CP however, cannot support this Bill, but this is not because we are opposed to consolidation. [Interjections.] We are in fact in favour of consolidation—not only of territories, but also of peoples. But we are also strongly opposed to the way in which the Government is setting about things in this case. According to estimations there are approximately 230 000 ha involved here, which have to be transferred to independent states. A part of that is land which has to comply with the provisions of the Act of 1936. To that we have no objection. According to my own estimate—and it is difficult to make a correct estimate—this is approximately 30 000 ha of the total 230 000 ha. Approximately 200 000 ha of this are extra additions, however, over and above that land which was set aside in terms of the Act of 1936. That is land with which the State President played Santa Claus when he visited the various states to go and buy peace and goodwill. [Interjections.] Yes, Sir, it is true. Besides in this case there is no mention of consolidation, excepting perhaps in one single exception. Only in one case is greater consolidation being brought about. In all the other cases there is no mention of a greater measure of consolidation. [Interjections.]

On the basis of this it is the CP’s standpoint that after the provisions of the Act of 1936 have been met, consolidation can and should be continued. In regard to this I also want to strongly emphasised the aspect of consolidation. This of course should take place on a completely different basis to that on which it was done in the past.

Our standpoint is that after the provisions of the Act 1936 have been complied with, consolidation can continue to take place by means of both the exchange as well as the purchasing of land. This means that pasella wêna would be something of the past as soon as the provisions of the Act of 1936 have been met.

Do you people want to continue to refuse to move beyond the Act of 1936?

Oh, but what I am saying is precisely that after the provisions of the Act of 1936 have been complied with, exchanges can take place and land can be purchased with a view to consolidation. [Interjections.] That is why we say that this land should be purchased. This land should be purchased, and the financial obligations in connection with this should no longer rest on the Government of the Republic to bring about the change in land-ownership under discussion. This will result in the private ownership of land being promoted. We shall then have private land tenure which, together with the principle of the purchase of that land, will create a sound economic basis on which consolidation can be carried out. That is why we know the CP has the real answers as far as this matter is concerned.

But the Government has acted completely incorrectly, as is often the case, in regard to the question of consultation. The Act prescribes certain procedures, which have to be met. One of them is that the State President can declare land to be an open area after approval has been given by the Houses of Parliament. I repeat, “after approval by the Houses of Parliament”. However, what have we found in this connection? In the second half of last year the Department of Constitutional Development and Planning issued a Press statement in which it stated that the State President and President Mangope had decided to add certain parts of this land in the northern area of the Marico district to Bophuthatswana.

Now I ask the hon the Deputy Ministers to tell me in which section of the Act of 1936 it is provided that the State President and President Mangope should decide what land should be added to Bophuthatswana. This was gross contempt of this Parliament as an institution! [Interjections.] An investigation was carried out before, certain decisions were taken, and announcements were made, to the effect that a few farms near Braklaagte and Leeufontein were going to be added. After this was made known, the matter was then accepted as being closed. Then suddenly out of the blue the announcement was made that President Mangope and State President Botha had decided that the land was going to be added—even before Parliament was approached!

When I look at the Order Paper, I want to tell the hon the Minister that it is indicated here that the report of the standing committee has not yet been dealt with by Parliament. Nonetheless the hon the Minister introduced this legislation to transfer this land. The fact that the standing committee could not reach consensus, is above all a confirmation of the contempt with which the Government treats this Parliament. Before even the standing committee has come to a decision, the legislation is being dealt with in Parliament. This is typical of the Government which is tired, worn-out and weary of life. It thinks it can act like an old man, and do whatever it likes and get away with it because everyone will pardon it for behaving in a confused way and going about everything in the wrong way. This is the legal procedure, but the Government has just simply stampeded over it and has held Parliament in contempt. Apart from this there is also still the solemn agreement which the Government has with the agricultural unions to consult these unions, and the owners involved, before such additions of land take place.

In the standing committee I tried to question the hon the Deputy Minister about this consultation, but the chairman of the standing committee silenced me and said that I may not do so. I was not allowed to question whether the Government had consulted others, because it was a sensitive matter as the Government had not consulted these people. Before I was silenced I received two replies from the hon the Deputy Minister. From those replies it was clear that consultation had once again not taken place, that the Government had simply gone ahead and that the State President and Pres Mangope had decided to add to this land to Bophuthatswana.

Let me tell the hon the Deputy Minister that this is a crass violation of the solemn agreement that the Government has with the agricultural unions and the farmers to consult them. What is happening here now? The Government is not consulting its citizens. It holds them in contempt, but the State President goes to consult with the head of state of another country for the purpose of adding the land of South African citizens to that state. [Interjections.] He therefore does not have the slightest respect for his own citizens, and his own solemn promise to them is of no importance. He plays Santa Claus and gives handouts in the attempt to buy the goodwill of others.

Some of the land under discussion here is of cardinal importance to the safety of South Africa. In connection with this I want to return to that northern area of the Marico district. It is known that this is the main through route of the terrorists. Their main through route is between Derdepoort and Ramatlabama. It is a fact—and we give credit for this—that Pres Mangope acts against terrorists and communists. It is much more difficult for him to take action against them, however, because those people merge with the local population. It is much easier to handle that situation when the farms belong to White owners. Action can then be taken more easily against the terrorists and communists. The Government is now making the use of through routes much easier for those people.

I now want to refer to another aspect of the matter. The Government is consciously strangling agriculture by withdrawing its support from it. It has been said in debates here before that there has to be a radical redistribution of land in South Africa. The Government no longer wants White farmers, it takes no notice of them, but it wants their land. It wants to redistribute it radically in an undivided South Africa.

We shall not support this Bill because the Government has treated the owners with contempt, has not followed the correct procedures, acts incorrectly and has also been contemptuous of the institution of Parliament itself.

Mr Chairman, today we heard the voice of Lichtenburg, but saw the hand of Parys. It is very clear that the hon member is involved in a process of negotiation with his fellow right-wing group, the HNP. Today he even adopted the terminology of that party, when he spoke of adopting a mendicant attitude and said that the Government was contemptuous of the farmers. The hon member put certain questions to the hon the Deputy Minister, and I trust that he will be given replies to them.

Land is always a very emotional issue for the people involved. Clashing interests have to be reconciled where rulings have to be made on the allocation of land. In that respect the task of the Commission for Co-operation and Development is a very formidable one, and I should therefore like to take up the cudgels for the members of that commission who had to carry out this task, particularly for the hon member for Ermelo, who acquitted himself of his task with so much distinction, just as he also performed his duty on the standing committee. He gave us insight today into the laborious road which the negotiations followed.

I accept that the hon member for Berea did in fact receive certain objections from individuals and small groups, but one can surely not be so naive as to think that there will never be any objections. The hon member said that he had decided not to initiate a “major debate” on this matter. I suggest that it really was a wise decision, because according to the policy of the hon member’s own party land will also be divided up into federal states which will have maximum autonomy. The will even have the right to form their own kind of government and to determine their own franchise system, subject only to a few conditions of consensus, proportional representation and no discrimination on grounds of race, colour or creed. Discrimination based on income, education or training, however, is still possible.

The PFP also states that borders will be determined by a commission which will be appointed and to which they will give certain guidelines, i.e. community interests, homogeneity, economic viability and potential, administrative effectiveness and existing autonomous areas.

Now one would expect that the hon member for Berea would assess the proposals contained in the legislation in terms of these guidelines, but he merely bases his objections on two reasons, i.e. the transference of jurisdiction and the question of citizenship. I shall return to the question of citizenship later on.

When his national convention has determined the borders of certain states—we can assume for the sake of argument that such a nebulous body could in fact reach consensus on this—surely there are also going to be individuals and groups who are not going to accept it. Is the hon member then going to give in to these minorities, if the guidelines which he has set, have been met? I accept there will be people who are going to say that they do not like the form of government in the state in which they now have to be, and that they would rather be in another one. I could mention another example. We can also imagine that states could agree amongst themselves on the movement of borders. Would the hon member then say that if there is any objection, it could not be done even if it were to bring about an improvement?

The hon member also has an objection on the question of citizenship. He also aired that objection on the committee and the hon the Minister of Home Affairs explained the Restoration of South African Citizenship Bill which was not before this House then, to the committee. After that that legislation was placed onto the Statute Book and precisely with consideration of the passage of time between these two pieces of legislation becoming effective, the committee was accommodated by an amendment in clause 11 of that Bill, in accordance with which the Bill is deemed as “to have come into operation on 1 July 1986”. Hon members have therefore been fully accommodated by the assurance that the Bill that we are now dealing with will not come into effect before the Bill on the Restoration of South African Citizenship has been promulgated. I do not want to discuss that legislation, but just to show that it obviates the problem of citizenship completely, I just want to quote one clause, i.e. clause 1(2), which reads as follows:

There can therefore be no question about citizenship when certain areas are added to states.

The hon member for Ermelo has given a very good explanation of the reasons why this Bill is necessary, particularly by indicating that this follows up on undertakings and that it is a negotiated agreement which is now being added to the schedule of the Principal Act. For this reason I should like to support this Bill.

Mr Chairman, the standing committee dealt with the citizenship question at length; in fact, the delay in this legislation going through the standing committee was largely determined by that factor. I think the hon member for Nelspruit is partly correct in his argument, but the point made by the hon member for Berea is a valid one. It is all very well to say that a person may retain his South African citizenship if he is a citizen of an independent state. What if they are not allowed to have dual citizenship within that country, however, having opted to retain South African citizenship? Would the South African Government have an alternative arrangement for them to go somewhere else in order to retain their South African citizenship? That is the issue. In Bophuthatswana and probably in Venda too, as I understand, there is some doubt as to whether they will be able to live there and retain their South African citizenship.

Whilst we on these benches, together with the Official Opposition, accepted the Act on citizenship as an improvement of the situation in this country today, there is no doubt that further action in that direction is going to be necessary. This is because the same situation as I am describing now already exists in terms of the citizens of the independent countries of Ciskei and Transkei, who in terms of the new measures with regard to influx control and freedom of mobility, are now moving to the Republic of South Africa at will. There is no question of their having to have documentation as if they were from a foreign land and they do in fact have a right to seek work on that basis. This is really a farcical situation in which we are bluffing ourselves and the same circumstances will prevail in respect of these people. The situation, therefore, is not clear and we in these benches have been saying for many years that either a single nationality or a dual citizenship as a result of a properly structured confederation is the only way we are going to get out of this sort of dilemma. We are simply creating new problems for ourselves.

There is another point that I wish to take up. Most of the other points have been adequately dealt with by other hon members, but this is one which I feel very strongly about. When we attend standing committee meetings on land matters we are often presented with fairly detailed descriptions of farms, or point to point descriptions in the clauses of a Bill without any real indication in front of us as to the position of a particular line or boundary.

Go and have a look at the map.

I am coming to that. Often a map is made available by the departmental officials but the scale of it is such that in effect one depends entirely on the description of the particular area given to one by the department concerned and by the chairman.

There have been many occasions where the verbal description of a boundary, for example of as obvious a thing as a railway line or a road, has in fact not been the boundary which is finally articulated by way of legislation. The verbal reply to one’s inquiry is that the boundary is the railway line from a certain place to another or a specific road but when it is all over—not bar the shouting because that happens as well!—one finds that the surveyors or the people in that particular department have taken a cadastral boundary which coincides with some magisterial district or something of that nature as the boundary, and that brings about…

Mr Chairman, may I ask the hon member, in view of the fact that he is complaining about the scale of the maps, whether he has ever approached the department or my office to have a look at the 1:50 000 scale of maps?

Sir, I have been there on many occasions but I have not yet come to the point I want to make.

One is ultimately dependent on the word of the person who says that that will be the boundary. However, in the final analysis it often happens that it is not the boundary. [Interjections.] There are circumstances—the hon the Deputy Minister and the chairman of the committee, the hon member for Ermelo, know about them—where pieces of land cross those boundaries and land legally belongs to an independent state. The hon the Deputy Minister is then left in a terribly difficult position. The negotiations referred to by the hon member for Ermelo have already taken place, and the result is that there is an ongoing diplomatic battle about the way in which that boundary can be re regulated. Just such a situation will follow as a result of this legislation.

One was given an assurance on the standing committee concerning a piece of ground next to the Waterdown Dam in the district of Cathcart. This is described in clause 4 on page 13 of the Bill and it concerns the farm known as Lange Draai. One was given verbal assurance that the line drawn there would not leave any cultivated land on the Ciskeian side of the boundary. One was given that verbal assurance, but that is in fact not the case.

What has happened is that the efforts of organised agriculture to ensure that that boundary would be a tenable one on which cultivated land would remain on the South African side of the boundary in order to ensure that there would be no settlement immediately adjacent to that boundary and thereby preserve a good relationship between our value system of farming and the other value system, which creates problems when there is a large settlement adjacent to another farmer’s boundary, have not succeeded. That is the whole intention, and time and again in this House we have requested and had the assurances from Deputy Ministers who have had this portfolio that everything possible would be done to prevent that sort of situation being brought about but, despite verbal assurances that there would be no cultivated land, we are in the same situation again.

We protest. This sort of thing must not be allowed to happen. It is a result of insufficient on-the-spot inspection of these boundaries and insufficient negotiation with the people who live there and who will have to live with this new international boundary situation.

For that reason we are unable to support this legislation. That boundary situation is going to result in enormous problems which could have been obviated. The only reason for us originally going along with that clause was because we were misinformed as to the existence of that cultivated land on the wrong side of the boundary. As a result of more recent information we have received we now find ourselves unable to support this legislation.

Mr Chairman, the hon member for King William’s Town would probably pardon me if I do not react directly to his arguments. But he has touched on specific technical aspects, to which I, seeing as I was not a member of the commission of the standing committee, really am not qualified to reply. I am of course certain of the fact that the hon the Deputy Minister will react to the hon member’s problems.

What I should just like to say in connection with this is that consolidation in the South African context, is a process which makes much sense. By this I mean that it does not matter what one’s vision of South Africa’s future is—whether it is the vision of the conservative party or whether it is the vision of the PFP. It in any case still makes sense to subdivide the population of South Africa into meaningful geographic units. This certainly does make sense.

The hon member for Lichtenburg, for example, indicated that he did not object to the process of consolidation, but certainly to the way in which we are doing this. The hon members of the PFP, on the other hand—as the hon member for Nelspruit also indicated—also proceeds from the standpoint that geographic divisions will have to play a part in South Africa. That is why this process is in operation, a process which from all points of view is in fact of importance in South Africa. It is also a fact that when one is busy with this process, one transferring territory—and specific people along with it—from the jurisdiction area of one authority to that of another authority. It is equally true that thorough investigation must be carried out into the conditions of the people and of the land and of the effect that it would have on the people as a whole. Here we also have the assurance that the Commission for Cooperation and Development is in fact set to carry out investigation of this kind into the minutest details. On the other hand it is also a fact, however, that it will never be possible—as the hon member for Nelspruit also indicated—to fully satisfy all people in this connection.

Therefore when we are dealing with a process of geographic redivision—regardless of the standpoint from which it is being approached or of which Government or political parties are doing it—there will nonetheless always be a measure of dissatisfaction. At the same time, however, this measure demonstrates to the hon members of the Conservative Party that when they argue that this Government and the National Party have lost interest in separate development, they are certainly quite incorrect. Here we are, however, dealing with that same process.

On the other hand it is also true—and this we also always say—that this process of creating Black states and consolidating them in a meaningful way cannot be the whole answer, as we along with them hoped at one stage it would be. But to make the allegation that the Government has abandoned its policy of separate development completely, is simply not true either. [Interjections.] The Government has merely downgraded that policy from a complete and all-embracing solution to a component of the main solution that must be found in South Africa.

Now you are talking exactly like the old United Party members always talked!

This process is therefore a meaningful process of consolidation, Mr Chairman.

The other aspect which was touched on here, ie that of citizenship, is also of importance. It is a fact that to a certain extent uncertainty, even a measure of incompleteness, exist in regard to the regulations which apply to citizenship.

It is linked to the fact that any reform affecting one’s status is a tremendously complicated process, because if one wants to wrap it up nicely and tie all the loose ends, it would take many years before one comes up with a single reform measure. When one therefore bears in mind the necessity as well as the urgency for reform, or to put it differently, when one has decided at a particular stage that something has to be done, it makes sense to follow out the essentials even if one has not necessarily tied up all the finer details. This is how I view the situation concerning the restoration of citizenship rights as well.

We know that there are still certain negotiations taking place with the independent states on the points affecting the restoration of citizenship to both inhabitants and potential inhabitants of those states. I therefore shall not, on the one hand, propose that this legislation be held back until those negotiations are completed. On the other hand again, I think it is perhaps a good idea to wait a little bit until the final uncertainties concerning the status of the people who are being affected, are cleared up with the lawyers on the one hand and the independent states on the other, before the areas are in reality transferred.

Mr Chairman, I was originally one of the members serving on the standing committee which considered this Bill. This Bill has had a long and chequered history; and so, I believe, have I. [Interjections.] I was replaced on the standing committee by my colleague, the hon member for Cape Town Gardens, because he is our spokesman on Black education, and part of the subject matter considered by this particular standing committee is of course Black education. Our representation on the standing committee then consisted of the hon member for Berea and the hon member for Cape Town Gardens. However, I came back to the committee at the final stages of the consideration of this Bill because of my earlier acquaintance with the details.

The hon member for Berea spoke briefly last night when the conflict situation between the opposition and Government benches still existed. He deliberately kept his speech short, in terms of the arrangements which had been made by our Whips. He was therefore unable to cover in detail the content of the Bill and he simply devoted himself to one particular aspect and covered that as best he possibly could in the short time at his disposal. He would otherwise have made a much more comprehensive speech on this subject.

As he mentioned, there was no consensus on this Bill in the standing committee because the representatives of the House of Delegates, the CP, the PFP and NRP voted against it. What the ultimate fate of this Bill will be remains of course in the hands of the House of Delegates. If they do not accept the Bill the hon the Deputy Minister obviously will have to decide whether to drop it or to refer it to the State President who in turn will decide whether to refer it to the President’s Council.

The hon member for Berea made it clear that we are not going to support this Bill be cause it involves, first of all, the forced removal of people. Secondly there was no consultation with the people concerned, and thirdly it has adverse effects on the land rights of the people concerned.

A major issue which of course still has not yet been resolved is the very important one of the return of South African citizenship. This has now become particularly important in view of the abolition of influx control and the pass laws. We are not yet certain whether the people who are resident in independent homelands like the TBVC countries and any other homeland which might decide to take its independence, are going to be considered as aliens and will have to have work permits. That decision is still in limbo because we do not know whether the exemption which those people enjoyed under, I believe, section 7bis of the Aliens Act, has been withdrawn or not. I am told that for the next three months there are going to be consultations between the Government of the Republic and the governments of the independent homelands.

I know that Pres Mangope of Bophuthatswana has already announced that if his citizens want their South African citizenship to be restored they will have to renounce their citizenship of Bophuthatswana. I have no doubt that that will be an inhibiting factor insofar as people living permanently in Bophuthatswana are concerned. It will also affect about 1,7 million people who are permanently resident in South Africa and who are citizens of the TBVC countries in that they can regain their South African citizenship if they apply for it.

These were all considerations which came to the minds of members of the standing committee when they had to consider whether areas of land containing people, were going to be transferred either within the territorial boundaries of the independent homelands or were going to be put under the jurisdiction of independent homelands.

It absolutely amazes me that we are still dealing with Bills of this nature when the Government has assured us ad nauseam that the old-time, Verwoerdian concept of territorial apartheid has gone; that it is not the Government’s intention to continue with the vast consolidation plans and that Verwoerdian apartheid has gone. This is strange in the light of the fact that there is nothing more typical of old-time, Verwoerdian consolidation plans than the Bill we are considering today.

Although I understand the objections which were voiced by the hon member for Lichtenburg I still am surprised…

“Die lig van Lichtenburg”!

Yes, “die lig van Lichtenburg” if you like… I am still surprised that the overwhelming consideration of this Verwoerdian concept would not perhaps have influenced their decision.

When one looks at this Bill one sees that the plan for the Transvaal consolidation, which it includes, is rather like a game of musical chairs. It is the most extraordinary thing to work out, so let us look at what is involved. I am going to devote my observations to clause 2(g)(ii) which reads as follows:

These areas will be incorporated. The explanatory memorandum attached to the Bill blandly states the following:

That sounds fine and dandy, but what does it mean when one examines it in detail? It means that the people living on those two farms, Bloedfontein and Geweerfontein, are going to be moved, willy-nilly, to a portion of the area known as Rust der Winter and will be incorporated into kwaNdebele. They will have to leave the area in which they now reside and will be moved to their new allotted area in kwaNdebele.

Order! The incessant talking in the background makes it difficult for me to hear the hon member. The hon member may proceed.

Thank you, Sir. I also have a horrible throat to contend with!

We now know what is going to happen to the people on those two farms, but what is to happen to the land itself? Those farms will be incorporated into Bophuthatswana which will thereby gain, apart from the territory itself, its infrastructure. Those people have been there for a long time. The farms were purchased way back—in 1917, I think—and the people have been living there ever since and have built up an infrastructure. They have three primary schools, a high school, a clinic and a post office which have all been erected by means of contributions from a community which must be pretty poor. One can be sure of that, because it is a rural Black community. It took hard work but they gradually managed to collect enough money to construct the infrastructure needed to keep the community going—the schools, the clinic and the post office. All this is going to be handed over to Bophuthatswana, but Bophuthatswana does not want the people. So, the people are going to be moved to Rust der Winter, and Rust der Winter will be given to kwaNdebele. It is a most extraordinary thing to work out.

This arrangement, I want to point out, affects the lives of not just a few dozen families as the hon the Minister of Constitutional Development and Planning said. I am informed that something like 15 000 people are affected by this move. I think the hon member for Berea mentioned that figure as well. These people were never consulted. The people living on those two farms were not even given the courtesy of a visit by the Government to explain to them their plans to move them and to ask them what they had to say about it.

The first that they heard about this intended move was when an article appeared in The Star in September 1985. There they read not only that they were going to be moved but also the hon the Minister’s statement that they had been consulted. I have here a copy of a letter which was addressed to the Minister of Co-operation and Development, but it was obviously meant for the hon the Deputy Minister of Development and of Land Affairs. This letter is dated 1 October, and it reads as follows:

I might mention that that turned out to be a fraud because these people signed not as nominees but in their own names for themselves, and they claimed the land for themselves, although the people of Bloedfontein and Geweerfontein have receipts to show that they in fact paid for the land.

The letter goes on as follows:

The letter was signed by the Chief of the Senotlelo community authority on 1 October.

The hon the Minister replied as follows:

Indeed a further reply was forthcoming on 26 November of last year, from Mr B H Wilkens, MP, Deputy Minister of Development and of Land Affairs. His secretary says by direction the following:

Then there was another letter from the hon the Deputy Minister of Development and of Land Affairs to Mr Tema, dated 18 December. This letter reads as follows:

Now these people say they do not want it.

Well, it has indeed landed on deaf ears. The matter was handed over to solicitors who sent a telex to the hon the Deputy Minister of Development and of Land Affairs. They referred to the letter he wrote to them and they say that the people were never consulted, that they are angry at the decision, that everything was done without consultation, and so on and so forth. They ask that certain questions be answered as a matter of urgency regarding which land is to be incorporated, and inquire whether it is intended that the owners be relocated in the Rust de Winter area.

There was thus no consultation whatsoever. The only people the Government consulted were the governments of kwaNdebele and Bophuthatswana. However, 15 000 people are actually going to be forcibly removed, because these people will not move voluntarily, and despite the promise that there would be a total suspension of forced removals, we are now witnessing another of the Government’s broken promises. I think it is totally disgraceful that this is happening.

I have a copy of a petition here which has been sent to the hon the Deputy Minister and which I understand was signed by 2 500 people in the area protesting against the removal. The petition reads as follows:

1. (1) object to any plans to move us from our homes;
2. (2) refuse to move:
3. (3) wish to remain part of and citizens of the Republic of South Africa.

One has to remember, of course, that this petition was drawn up before the recent meeting of the kwaNdebele assembly where they decided to reverse their decision about taking independence. They have now changed their minds. Whether that will make any difference to the decision of the Bloedfontein and Geweerfontein people, I do not know. However, what I do know is that the Government, before it proceeds one step further, should consult with the people of Geweerfontein and Bloedfontein.

It is scandalous, Sir, that these unfortunate people are to be moved around like pawns on a chessboard; that they are to be shifted around without any concern for what they themselves want to happen to them in the future. If this takes place, there is no doubt that there will be trouble. There is no doubt it will be considered a forced removal because these people say they will not move. I believe they are determined not to move, and it is not because agitators are telling them not to move. These are simple, rural people who want to stay on the land on which they have lived since 1917. That is a long, long time. Those people have lived there for almost 70 years.

I think one also has to mention here that although the hon member for Lichtenburg tells us that the Rust de Winter issue is not included in this Bill, it is affected de facto by this Bill, because the people from Bloedfontein and Geweerfontein are to be moved onto part of the land anyway—I gather the non-irrigated area—of Rust de Winter. If they are to be moved there then that land has to be expropriated, because the farmers of Rust der Winter do not want to give up their farms, and so it appears to me that the White farmers have not been consulted either. Sir, here we have a situation altogether… [Interjections.] No, it is not; it is a Second Reading debate, therefore I will finish my speech. [Interjections.] Sorry, Sir, but they should have told me before. [Interjections.] I must carry on. I am sorry, but I have lots of important things to say. I am now talking about White farmers. Hon members of the CP cannot expect me to stop when I am talking about White farmers! [Interjections.] I mean I could talk about… [Interjections.]

Order!

Mr Chairman, may I ask the hon member if she does not wish to move that the debate be adjourned now so that on Thursday she can continue to fight for the White farmers? [Interjections.]

Hear, hear!

It will not be necessary, Mr Chairman, because the House is likely to adjourn. Tomorrow, after my private member’s motion on Soweto, I will fight for the White farmers. [Interjections.]

You can go on doing so. [Interjections.]

Yes, I am proceeding.

Move the adjournment of the debate.

Mr Chairman, I move:

Agreed to.

on behalf of the Chairman, presented the Sixth Report of the Standing Select Committee on Environment Affairs and Tourism, dated 2 September 1986, as follows:

Bill to be read a second time.

Mr Chairman, I move:

Agreed to.

Mr Chairman, I move:

Agreed to.