House of Assembly: Vol112 - WEDNESDAY 29 FEBRUARY 1984
Mr Speaker, I move:
To commence with, I wish to sketch the economic circumstances within which the South African Transport Services is presently operating.
During 1983 the continued world recession, the high rate of inflation, the increasingly protective import control measures by trading partner countries and the unfavourable agricultural conditions had a further detrimental effect on the revenue of Transport Services. This was largely foreseen in the budget for 1983-84 and a detrimental rand/dollar exchange rate was also taken into account. This ratio in the exchange rate has since weakened considerably and has consequently had a further unfavourable effect on our working results.
The economic recovery in the USA is well under way and it is expected that it will favourably influence the economies of most industrial countries. The demand for South African exports should consequently be stimulated and an upswing in the South African economy is expected towards the end of 1984. The economic growth rate for the 1984-85 financial year is estimated at approximately 2%.
The expected higher international demand for raw materials will have a favourable effect on low-rated traffic, while a possible upswing in domestic economic activity later this year will lead to a moderate improvement in revenue derived from the transport of highrated traffic. The expected lower rate of inflation will, on the other hand, relieve the pressure on Transport Services’ expenditure so that the economic picture does not appear altogether as gloomy as it did a year ago.
REVIEW OF ACTIVITIES
I shall now review the activities of the past year. Except where otherwise stated, the percentage change is in respect of the period April to November 1983 as compared with the corresponding period the previous year.
The total tonnage of revenue-earning goods traffic decreased by 8,4%. The economic slackness and intense competition caused a decrease of 13,7% in the tonnage of high-rated traffic.
The decrease of 13,6% in low-rated traffic can be attributed to the unfavourable agricultural conditions as well as the economic situation in our country and that of our major trading partners.
Coal and coke traffic reflected an increase of 1,9%.
Altogether 0,7% less cargo was handled at the South African ports.
This slight decline, notwithstanding the prevailing economic conditions, is attributable to the increase in bulk imports. Since June 1983 altogether 807 000 tons of maize were imported and as a result of steps which are being taken at the harbours to ensure as smooth a flow of maize imports as possible, it is possible to discharge approximately 18 000 tons of maize per day at South African ports at present. A further contributory factor to the stability of cargo handling at our ports was an increase of nearly 19% in coal exports, while copper exports from our northern neighbouring states such as Zambia and Zaire reflected an increase of approximately 63%. The largest single decline in exports was in respect of ores and minerals which decreased by 18%.
Although revenue from passenger journeys increased by 9,5%, the number of inter-city and suburban passengers declined by almost 4%. Nevertheless, it is estimated that approximately 680 million commuter journeys will be undertaken over the full financial year. Transport Services’ market share in this sector presently amounts to approximately 35%.
The new railway line between Mabopane and Belle Ombre came into use in August 1983. At present some 34 000 commuters make use of the service daily.
In so far as the Airways is concerned, international passenger traffic is 11,8% lower but domestic passenger traffic remained constant.
SA Road Transport experienced an increase in its activities despite the recession in the economy. Passenger kilometres increased by 13,5% and goods kilometres by 18,7%.
Concerning pipeline traffic, the intake of white products at Durban and Sasol I was considerably lower. On the other hand, the local intake at Secunda increased to such an extent that the total intake of white products remained fairly constant. The unprecedented drought caused a marked decrease in the transport of diesel oil to the rural areas with a resultant decline in revenue.
Transport Services continued with the rationalisation of its staff complement and there are already 37 000 fewer employees than there were in June 1982. With this strategy we are concentrating on increased productivity. I wish to emphasise that the services of no personnel in permanent employment have been or will be terminated in the process but it must be borne in mind that there is a relation between the reduction in personnel and decline in transport activities.
I was not in a position last year to grant a salary increase to our employees. As our financial position has improved I have found it possible to grant an increase of 12% to the personnel with effect from January 1984. In addition to the annual statutory increase of 2% in pensions, annuities were increased by 10% from January 1984.
The exercise in personnel reduction led to saving in the salaries and wages account, which includes overtime and Sunday time, of 14,1% in December 1983 as compared with June 1982. Better utilisation of material, equipment and money also contributed to Transport Services’ estimated working deficit of R634 million for the current financial year being reduced to an expected deficit of only R11 million. This favourable result was further improved by an underspending of R64 million on investment. In these circumstances it was not even necessary to present a separate Additional Appropriation to Parliament.
Mr Speaker, Transport Services was one of the first undertakings to identify the intensity of the effect of the world recessionary conditions on the Republic early in 1982 and to take positive action. A Strategic Material Plan was formulated to improve the effectiveness of the organisation as a whole and today we see the results of these initiatives.
Transport Services will meet the future with a great deal of confidence. I shall now briefly review a few of the remedial actions initiated in the recent past with an indication of strategies contemplated so that we may still realise our set objectives in a complex external environment.
In so far as goods services are concerned, the SA Transport Services’ diminishing share in the total transport market is considered the greatest single threat. Briefly, our strategy devolves upon our endeavours, with everybody’s co-operation, to increase our share in the transport market by continuing to render an improved service based on a client-orientated approach and the utilisation of more effective marketing techniques. An example of this improved service is the fast freight concept. It entails accelerated goods and container train services between all major centres in the country which are being provided at normal commodity rates.
Provision is also made for the unitisation of cargo. It entails the use of mini-containers to enable our clients also to enjoy the benefits of containerisation by offering smaller consignments. Not only will it increase productivity in labour and equipment, but it will give greater satisfaction to our clients.
The conveyance of part loads in containers whereby one consignor can despatch various consignment in one container to different consignees at the same receiving station has also just recently been introduced and offers clients who despatch goods in small quantities the opportunity of containerising their goods.
Contract rates will also be extended further.
It is common knowledge that various projects have been launched in the recent past to improve the services to our passengers.
On the Trans-Natal train between Johannesburg and Durban provision is made for Transit coaches. These are luxury air-conditioned coaches with seats similar to those of aircraft and background music is provided.
Another service to Durban is called the Daylight Sitter. This service was introduced at competitive fares mainly for passengers who wish to view the scenery.
A special old-fashioned steam train, Tootsie, was introduced between Mossel Bay and Knysna and appears to be very popular with holiday-makers.
Hon members already know of the new Metroblitz high-speed train between Pretoria and Johannesburg which easily attains a speed of 160 kilometres per hour. At present this service is being utilised to 75% of its capacity.
A new commuter train set has also recently been announced. This set is modern, saves energy and stops and accelerates over shorter distances. As a result, more trains can be operated over the same section during peak periods, while the train also has a larger carrying capacity than the existing sets.
It is also planned shortly to introduce a tourist pass, firstly to obtain better utilisation of our trains and secondly to provide cheap transport for tourists. In this manner we hope to attract more tourists and to assist in earning more foreign exchange for the country as a whole.
The utilization of all train services is continually being monitored to identify uneconomic services. The running time of trains and the number of trains are then adjusted to match the actual demand as far as possible.
If a service in its entirety is not justified and has to be withdrawn, this is effected only after consultation with the local bodies concerned.
During 1983 various adjustments were made in respect of inter-city and commuter services.
South African Airways
The South African Airways is commemorating its fiftieth anniversary this year. Every South African can be justly proud of our national carrier. During the financial year the SA Airways placed two Boeing 747 SUD aircraft in service and today has at its disposal a modem fleet of jetliners equipped with the latest fuel-saving engines. With the commissioning of these two aircraft it has, for the first time, become possible for the airline to fly non-stop from Johannesburg to London. As a result the flying time has been decreased by 1 hour 45 minutes. SA Airways has also extended its weekly Boeing 737 service to Malawi to land at the Comoro Islands in the Indian Ocean.
Apart from the steps which I have already referred to and which specifically relate to our main services, there are also other strategies which will be concentrated upon in the new financial year.
†Rendering of Socio-economic Services
In view of the fact that Transport Services’ share of the transport market is presently only 33%, more rapid progress will have to be made towards cost-based tariffs in order to strengthen our competitive position. The organization is being hampered to a great extent in doing so. The losses sustained in rendering socio-economic passenger services amount to R750 million for the current financial year. In addition, uneconomic goods services are being operated at a loss of R107 million.
The operation of uneconomic branch lines entails a further loss of R134 million per annum. One uneconomic branch line has already been closed and others are in the process of being closed. The closing of such lines and the replacement of these train services by a road transport service is being investigated country-wide.
Owing to its socio-economic commitments, the organization finds itself in an unequal competitive position. Transport Services’ Strategic Plan for 1984-85 is, therefore, aimed at restricting, where possible, the rendering of uneconomic services or obtaining greater compensation for services of this nature. This matter is at present receiving the attention of the Committee of Investigation into the Capital Requirements and Financing Policy of the SA Transport Services under the chairmanship of Prof Franzsen. Inasmuch as the State has a commitment in this respect, I wish to remind my colleague and friend the Minister of Finance that Publilius Syrus once said: “He gives twice who gives soon.”
In the interim we will be compelled to continue to apply cross-subsidization by imposing higher tariffs on other services.
In my Budget Speech last year I referred to the service in South West Africa. The loss in providing this service has increased and is at present R90 million per annum. It is not possible for Transport Services to continue with services in the territory on this basis. I have, therefore, requested the Management of Transport Services to conduct an in-depth investigation into our services in the area. The time has come for South West Africa to accept financial and operating responsibility for transport services in the territory. We are prepared to negotiate with South West Africa in this connection.
During the coming financial year we will continue to give serious attention to the rationalization of our personnel complement with a view to further increasing the productivity of Transport Services’ labour force. An effective leader corps is of primary importance to implement the Strategic Plan and all the actions emanating therefrom. For this purpose the SA Transport Services has at its disposal refined systems for the provision and development of manpower. To date more than 3 000 managers on various levels have already been identified and trained.
In view of the threat to our country, Transport Services also places a high premium on security. In this connection I wish to give the assurance that some of the most modern techniques are being applied to protect the interests of our employees. The safety of our passengers and the property of our clients continue to receive high priority.
Mr Speaker, in compiling working estimates for the 1984-85 financial year, not only did I take into account the normal environmental factors and trends, but also held in-depth discussions with various organizations in the private sector and organized commerce and industry to obtain their views on the expected domestic and international economic situation. I am indebted to them for the openhearted discussions we have from time to time.
We have budgeted for total revenue of R6 607 million and working expenditure of R7 227 million, leaving a deficit of R620 million for the 1984-85 financial year. To compensate in some measure for this deficit, I have no alternative but to increase tariffs on average by 9,4%, calculated on a year basis, with effect from 1 April 1984. I wish to point out that goods tariffs were last increased 15 months ago. The tariff increase will provide additional revenue of R514 million which still leaves us with a deficit of R106 million. In addition, provision will also have to be made for selective salary adjustments for us to be at all competitive in the labour market.
Extensive flood damage was caused in Northern Natal by the two cyclones. The bridge across the Umfolozi River was totally destroyed and must be replaced at an estimated cost of R6 million. Many kilometres of track and other Transport Services assets were seriously damaged. The loss in revenue already amounts to several millions of rands since the flow of traffic has come to a standstill.
This unexpected additional expenditure and loss in revenue will have a further detrimental effect on Transport Services’ financial position.
While the consumer price index rose by 232% over the past ten years, Transport Services’ tariffs were increased by only 167%. In addition, the rise in costs in respect of our most important consumable components, namely fuel, electricity and steel, was considerably higher than the consumer price index. Notwithstanding all these disparities, it has been decided to keep this tariff adjustment conservative and to compensate only partially for the expected deficit. In this manner Transport Services will contribute towards keeping the rate of inflation as low as possible. I am fully aware that increases in tariffs are unpopular and wish to remind you of what Edmund Burke said in the eighteenth century: “To tax and to please, no more than to love and to be wise, is not given to men.”
Commodity rates for rail goods services will be increased on a differentiated basis. High tariff classes, namely tariff classes 1 to 10, will increase on average by 10,9%. The tariff line for high-rated traffic, with a tapering effect over distance, is being simultaneously adjusted by increasing tariffs by 1,7% over the longer distances.
The low tariff classes, namely tariff classes 11 to 15, will increase on average by 15,2%.
Certain structural changes in respect of the rail goods tariff structure are absolutely essential.
To encourage containerization of highrated traffic, country-wide container rates, regardless of the mass and contents, are being extended to all routes on our network. Although Transport Services can ill afford it, this step will result in our forfeiting an estimated R26 million in revenue.
A truck tariff structure based on full truck-loads and the best ulitization of trucks will be introduced for certain low-rated traffic.
To encourage the use of private sidings and also to promote consolidation of cargo, handling charges will be taken out of high rates and raised separately in those instances where traffic must be handled physically. At the same time private siding levies are being rationalized and will be raised on a truck basis.
The tariff for livestock was last increased two years ago and is being increased by only 9,8%.
The average increase of 18,6% in the tariff for the conveyance of fuel from 1 January 1983 is being made good to Transport Services until 31 March this year by my colleague the Minister of Mineral and Energy Affairs from the Equalization Fund. The tariff is now being increased, on average, by a further 10,3%.
In the case of harbours, marine tariffs will increase on average by 11,3% while goods and cartage tariffs will rise on average by 8,7%.
Main-line fares for first, second and third class, will be increased by 7,5%, 12,5% and 17,5%, respectively. Commuter fares will increase by 9,1% for first class and 12,8% for third class.
As in the case of rail passenger fares, domestic air fares were last increased on 1 August 1983 and these fares are now being increased by only 6%.
I am pleased to announce the South African Airways is to offer additional concessions with effect from 1 April 1984 for travel on its domestic services. Hugh Casson said that there is more power in an open hand than in a clenched fist.
The new fare types, together with the special late-night flights which were recently announced, are aimed at offering a more comprehensive service to the travelling public.
In this new structure we are also making a further concession to national servicemen by increasing the existing discount of 30% to 40%. An air fare at a discount of 40% will be available to senior citizens of 60 years and older during off-peak periods.
To provide further encouragement for air travel, a late-night service is being introduced with effect from 2 April 1984 between Johannesburg and Durban and from 4 June between Johannesburg and Cape Town via Port Elizabeth. Passengers will be able to travel on these flights at a discount of 50%.
To promote tourism, a concessionary ticket will be made available to the tour leader of domestic groups, apart from the existing group travel facilities.
To afford more people the opportunity of spending week-ends at the coast or with their families, a week-end excursion fare at a discount of 25% will be offered under certain circumstances with effect from 1 April 1984.
CAPITAL BUDGET 1984-85
The Capital Budgets for the past three years amounted to R1 994 million, R2 300 million and R1 751 million respectively.
As a result of the economic recession and the expected shortage of funds, the Capital Budget for the 1984-85 financial year has been limited to R1 750 million.
Transport Services remains responsible for providing an effective transport infrastructure and consequently a number of new projects are included in the Capital Budget for 1984-85. I shall mention but a few of the more important schemes.
The capacity of the bulk handling appliance at Richards Bay harbour will be increased at an estimated total cost of R60 million. The carrying capacity of the South Coast line in Natal between Umbogintwini and Port Shepstone will be increased at a cost of R25 million while the Bank/Welverdiend line will be doubled at a cost of R26 million. Comprehensive improvements between Langlaagte and Johannesburg comprising the sextupling of the line, remodelling and resignalling at Langlaagte, Braamfontein and Johannesburg and the provision of a traffic control centre will be undertaken at an estimated total cost of R48 million.
Mr Speaker, I wish to emphasise that the SA Transport Services has up to the present fulfilled its role in the development of the country. It is this very progress that, as a result of relatively new developments in the transport market, poses a threat to the profitability of Transport Services. In principle I wholeheartedly support development and, therefore, competition as fundamental requirements for conducting sound business, but then all parties rendering transport services should be able to compete on equal terms and a tighter rein should be kept especially on those who contravene the Road Transportation Act. The solution to this problem lies in a new approach whereby each supplier and consumer should bear his fair share of the costs involved in providing and maintaining a specific service. On achieving this objective the SA Transport Services will be able to compete more freely in the transport market, increase its share of the market and place its profitability on a sound basis.
Mr Speaker, any organisation is only as good as its people. Without them our expensive infrastructure would have been of little value and I wish to thank each member of Transport Services, from Dr Bart Grové, the General Manager, and his competent management team, right down to those at the most humble level, for their personal contribution towards the success of our organization and our country and the sacrifices they have made during these difficult times.
The economy measures which were introduced as a result of the unfavourable financial position of Transport Services, as well as the decline in the purchasing power of the rand, caused much hardship and many of our employees found it extremely difficult to make ends meet. The staff association nevertheless displayed exceptional understanding for Transport Services’ financial difficulties during negotiations in connection with possible financial relief and exercised remarkable self-control in their claims for salary adjustments. This attitude of the staff associations and the sacrifices made by the personnel, deserve the highest praise and appreciation. Mutual trust and open-hearted consultation have always been the basis for sustained and successful deliberation between Transport Services and its staff associations and I trust that we may rely on their continued loyal support.
I wish to express my appreciation towards the three commissioners of the South African Transport Services Board, Messrs Dupel Erasmus, Piet Aucamp and Koos Albertyn, for their loyal support during the year. My sincere thanks also to the personnel of the Ministry for their loyal and dedicated service.
I now lay upon the Table:
- (1) Estimates of Working Expenditure of the South African Transport Services for the financial years ending 31 March 1984 and 31 March 1985 [RP5—84];
- (2) Capital Budgets of the South African Transport Services for the financial years ending 31 March 1984 and 31 March 1985 [RP 6—84];
- (3) Working Estimates of the South African Transport Services for the financial years ending 31 March 1984 and 31 March 1985 [RP 7—84];
- (4) Memorandum setting out the estimated results of working of the South African Transport Services for the financial year 1983-84 and anticipated revenue and expenditure for the year 1984-85, together with the latest traffic and other statistics [WP A—84].
Mr Speaker, I believe there are two aspects of any Transport Budget which should concern us. The first, and possibly the most important, are the business aspects of the Budget and secondly, one should also look at its political aspects, especially as SATS is a State-run organization.
The hon the Minister gave several quotes in his speech and I believe a particularly apt one under the given circumstances is one made by Alfred Lord Tennyson, who said:
I believe this is particularly apt as regards SATS at this stage. I can but add my congratulations to those of the hon the Minister on the effort of SATS over the last year. I believe to turn a budgeted loss of R634 million unto an actual loss of only R11 million, is indeed a very great achievement, and I believe that that achievement is to a large measure due to Dr Grové and his team. It is worth noting that this is the first full year that Dr Grové has been in charge of SATS and consequently I believe he has done an outstanding job. Thanks are of course also due to the staff. When one considers, as the hon the Minister has told us, that some 37 000 less people have accomplished this result, one must obviously realize that efficiency and productivity have improved considerably. I believe there was room for improvement, and I hope that we will see that improvement continuing in the coming year of business. The commitment to sound business principles is a good one. One hopes that increasingly SATS will accomplish its results without being overly protected by organizations such as the Road Transportation Board.
When one gets to the political aspects of this Budget I am afraid one has to look at a somewhat different picture. We see that tariffs are to be increased by 9,5% on average. We are told by the hon the Minister that the fare increases over the last 10 years have not exceeded the CPI. That is the comparison over 10 years. If, on the other hand, one looks at a comparison since 1 January 1980, then I believe that the increases of SATS are greater than the increase in the CPI, particularly the increases of SA Airways and passenger service fares. Since that time normal tariff increases have virtually doubled, and in the case of the SA Airways and passenger services they have more than doubled, whereas the CPI has not doubled over the equivalent period. It was interesting that the hon the Minister should have referred to a Burke quotation on taxation. In other words, he also subscribes to the viewpoint that tariff increases by SATS are virtually a tax on the public of South Africa. I believe we have to look at the situation in a very serious light, particularly as far as the nature of the increase is concerned. When one considers that the rich are being affected the least and the poor the most then one does not arrive at a very happy picture. Third class mainline fares are increased not by 9,5% but by 17,5%. Third class commuter fares are increased by 12,8%. These increases are both far greater than the current rate of inflation. These are the people who after the increase in general sales tax and the increase in the bread price can least afford it. I want to warn the hon the Minister that these increases hold definite dangers to those who can least afford it. I want to plead with him to watch the situation extremely carefully.
Finally, on a more cheerful note, we note that SA Airways has now achieved its 50th year of operation. Again I want to pay tribute to the services of SA Airways. I believe it is one of the safest, if not the safest, airlines in the world in terms of its safety record in the air.
Sir, I think it would be the correct time to move, as I do now:
Bill read a First Time.
Mr Speaker, I move:
This Bill has as its purpose the harmonization of income tax payable by all population groups in the Republic. At present Black taxpayers pay taxes in terms of the Black Taxation Act, No. 92 of 1969, while the other population groups pay taxes under the Income Tax Act, No 58 of 1962. In terms of clause 10 of this Bill, the Black Taxation Act is to be repealed with effect from 1 March 1984. The Black Taxation Act, or an Act similar to that Act, is in force in each of the self-governing national states and in order to complete the exercise it will be necessary for each of those states to repeal that Act and at the same time to adopt the Income Tax Act. Agreement on this has been reached with all the states concerned: kwaZulu, Lebowa, Qwaqwa, Gazankulu, Kangwane and kwaNdebele. Hon members will be aware that these states have the exclusive right to impose direct taxes on their citizens, and although the Income Tax will be in force throughout the Republic, the tax payable thereunder by the citizens of a self-governing national state will be a tax imposed by that state. This will occur by reason of the fact that the Income Tax will be adopted by the national state as a law of that state.
Under agreements between the Governments of the national states and the Government of the Republic, the terms of which have already received informal approval, the Commissioner for Inland Revenue will be responsible for the administration of the Income Tax Act within the national states. This is necessary in order to ensure that the Act is uniformly applied. The Commissioner will provide suitable training for personnel allocated by a national state for revenue duties. Collections of income tax within a national state will accrue to the revenue fund of that state.
As far as collections of income tax from citizens of the national states who are living outside those states are concerned, it is not administratively feasible to identify payments as coming from members of the various ethnic groups, and an acceptable formula has been devised for the determination of the amounts payable to those states on a globular basis. This formula is based on the formula at present applicable in regard to amounts payable to those states under the Black Taxation Act. The income of Black persons have over a period of some years shown a tendency to increase, with a corresponding increase in general tax collections. The formula which is to be applicable in respect of income tax collections will provide for annual increases of the amounts due to the national states on the basis of the percentage increase of overall collections of income tax, assuming, of course, that overall collections continue to increase. Increased tax collections are not necessarily related to tax rates but are in a considerable measure due to increases in the number of economically active persons. In view of the fact that most Black persons will pay less income tax than the general tax that they would have paid under the Black Taxation Act, it has been necessary to give the national states a guarantee that their collections under the Income Tax Act will not be less than their collections under the Black Taxation Act. Although, on the face of it, there may appear to be an additional charge on State revenue, it is anticipated that the more efficient collection of income tax by Inland Revenue will within a reasonably short period more than make up for this.
*The principle that liability for the payment of income tax should be determined according to the ability of the taxpayer to pay tax, is generally accepted. For that reason progressive scales are prescribed and rebates in respect of children, dependents, insurance premiums, etc., are allowed. As hon members are aware, liability for the payment of general tax by Black people commences when taxable incomes exceed R1 800, and the highest progressive scale of 48% is applied on that part of the taxable income which exceeds R28 020. Marital status is not taken into account and tax rebates are not allowed.
In the Income Tax Act, on the other hand, the principle is built in that the ability to pay tax varies according to family circumstances. Under the Income Tax Act liability in the case of an unmarried person begins at a taxable income of R3 575 and in the case of a married person without children, at a taxable income of R4 384. When a married person has one child, liability begins at a taxable income of R5 216 or where he has two children, at a taxable income of R6 050. Under the Income Tax Act the highest marginal tax rate is 50% which is applied on that part of the taxable income which, in the case of a married person, exceeds R40 000. Although it is estimated that as from the 1st of March 1984 between 80% and 90% of Black persons will pay less tax, it is also true that some of those persons will pay more. This will happen in the case of unmarried taxpayers whose incomes amount to more than R4 200 per annum or R350 per month, as well as in the case of some married couples earning separate incomes, as a result of the fact that their incomes must be combined in terms of the Income Tax Act. The income notch on which liability for taxation will increase, in a case like that may vary, of course, according to the ration between the amounts earned separately by the husband and his wife. In most cases this point will be reached when the joint income exceeds R7 000, if the couple have no children. If they have one child, the amount is R8 400, and if there are three children, it will be R2 000. However, problems may arise where employees’ tax deductions from the salary of a married woman are too high in relation to the joint liability of her husband and herself. In a case like that, the Commissioner for Inland Revenue is prepared, in terms of the provisions of the Income Tax Act, to issue a suitable instruction to the employer to reduce the deductions. This, of course, applies to all population groups.
Hon members have already been furnished with an explanatory memorandum in which the reasons for the various amendments proposed in the Bill are fully explained. Some of the amendments, for example, those proposed in clauses 5 and 6, will eliminate a great deal of unnecessary administrative work for both the employer and Inland Revenue. To be efficient, tax provisions must be cost effective as far as possible.
During the debate on the Part Appropriation Bill allegations were made that there was misunderstanding and uncertainty in regard to the proposed changes. The hon the Minister refuted the allegations, and I do not intend to cover the same ground now. I am convinced that most Black people have already been fully informed. That does not mean that the Commissioner and his staff have relaxed their efforts to provide employers and employees with further information. On the contrary, although employers and others received a comprehensive printed notification in November it has been decided, in the light of questions put to revenue staff at numerous meetings, to send a further notification to employers and trade unions. It is in the form of questions and answers, and has already been posted. Those who are interested, may borrow an interesting video tape in very simple language from revenue offices. It is available in six languages, and free of charge except for a refundable deposit of R25.
I trust that hon members will agree with me that this Bill is a great step forward in the pursuit of an improved, fair and uniform taxation system.
Mr Speaker, as the hon the Deputy Minister has pointed out, with the passage of this Bill the Taxation of Blacks Act of 1969 will be scrapped and all South Africans will be taxed under the Income Tax Act of 1962. There is an irony in the scrapping of the Taxation of Blacks Act because before 1969 Blacks were in fact taxed on the same basis as Whites. If my information is correct, between 1914 and 1969 we actually operated under a system whereby people of different races paid the same tax on the same income. Once again therefore we witness a situation where progress is measured by a return to the original status quo.
The PFP support his Bill for a number of reasons. Firstly, it will mean that income tax laws in South Africa will be desegregated and all taxpayers, irrespective of their race, will be taxed in the same manner. For many years we have called upon the Government to introduce a non-racial basis for taxation and we are glad that this has eventually come about. We furthermore support this Bill because it removes one of the worst anomalies of the old system where lower-income Blacks actually paid more tax than their White counterparts in the same situation. The hon the Deputy Minister pointed out that under the previous system Blacks became liable for Tax at an income of R1 800, whereas under the new system they will become liable at a much higher income. I will not expand on the figures mentioned in the Second Reading speech. We support this Bill also because it will allow Blacks to claim rebates for dependent children, which up to now they could not do. Under the new dispensation Blacks will also be able to claim medical deductions and rebates for insurance premiums. We support the Bill also because it will reduce the amount of tax which approximately 80% of Black taxpayers will pay. In the present day and age anything that reduces the tax burden of any individual is to be welcomed.
Despite these very good points in the Bill one must ask oneself why it is that this particular Bill, this new dispensation, has actually generated so much heated discussion. I have actually read articles written by industrial leaders, people involved with trade unions and even by employers, in which they state that in their opinion this particular Bill might have—and we hope that it does not—the potential to be as disruptive as the recommendations concerning the vesting and transferability of pension benefits in the early 1980s. I think we must explore this question.
In the first instance it is clear that some Black taxpayers are going to pay more income tax than they did before, particularly married women and, as the hon the Deputy Minister and the Minister of Finance would have learnt by now, women can get quite heated when discussing tax matters. I should like to remind the hon the Deputy Minister of Oscar Wilde’s saying that the female of the species is deadlier than the male. I believe that women feel very strongly on the question of tax. A married woman earning R350 per month, for example, will under the new system have to pay about R22,83 tax, while under the old system she only paid R7,20. Blacks in the higher income category may also find themselves paying more tax than they do at present. Of course, single Blacks will also find themselves in the position where they are paying more tax under the new system than they did under the old. From that point of view one can understand that sections of the population were unhappy because they were paying more tax as, indeed, all of us complain if we have to pay more tax.
I want to come back to the point raised by the hon the Deputy Minister concerning the way in which this change has been put forward. We will only be able to judge whether it has been successful or not in five or six months’ time. If we could have this system implemented without industrial unrest, then, in fact, it will be successful. However, what worries me about the introduction of this system is whether we have actually learnt anything from the problems we experienced in 1980 with the transferability and vesting of pensions. Let me state clearly that in my view it was actually a tragedy for South Africa that we did not go ahead with that particular legislation because I think the taxpayers of South Africa will eventually rue the day that we did not actually introduce transferability and vesting of pensions. However, what we should have learnt from this, is that one cannot leave something like this entirely in the hands of the private sector. We should have learnt that, when introducing legislation of this nature, it is essential that one works out carefully and clearly how the message is to be communicated. I welcome the announcement made by the hon the Deputy Minister in his speech that the department is making videos available, because this is a powerful form of communication. I do feel, however, that perhaps these programmes, particularly the video programmes, should have been made available earlier.
Let us be perfectly frank. It is in the interest of all the parties in this House, indeed in the interest of all South Africa, that we do not have industrial unrest in South Africa. Therefore, to avoid industrial unrest it is essential that we communicate the benefits of the new tax system. The hon the Deputy Minister has pointed out what is being done, and I welcome it, but I believe that there is also a need to continue to provide information and counsel to Black taxpayers so that they know exactly how the new system will affect them, and I do not mean that that should be done on a once-off basis. I know that the Department of Inland Revenue has actually introduced a system whereby, when it comes to the filling in of income tax forms at assessment time, one can go along and talk to the officials. I think this actually has had a positive impact on people. I should like to suggest that if it is at all possible, we should have mobile tax bureaux which should be established to provide Black taxpayers with information and counsel and if possible these bureaux should be staffed by Blacks. I believe we should take action to try to prevent industrial unrest in South Africa. It does not matter if it is going to cost us a bit of money. That will certainly be a lot cheaper than work stoppages. The problems which have arisen with the harmonization of the tax system and the pension legislation shows that there is a lack of trust amongst Blacks for White institutions. We must recognize this and do our best to overcome this lack of trust.
I have some specific queries with regard to clause 6, queries to which I would appreciate a reply from the hon the Deputy Minister. Constituents of mine have raised these matters with me. Clause 6 deals with the taxation of domestic and farm labourers who earn less than R2 400 per annum and in respect of whom it will not be necessary for employers to register for PAYE purposes. The first query is in respect of remuneration. Will the remuneration in the case of a domestic or farm labourer include benefits in kind, for example free board and lodging? I hope that no financial value will be placed on these benefits, as it will help to simplify the situation for both employers and employees. As for cost effectiveness, we are going to collect very little money from them. I do not think this is the sort of fringe benefits that we should be going after.
The second question I have been asked relates to the taxation of married domestic servants who earn less than R2 400 per annum but who when their husbands’ income is added to theirs, would fall in a category where tax would be payable by them. The question I want to ask is whether the onus is on the employers of domestic servants to collect the tax from the female domestic servants or whether the onus will only be on the employer of the husband.
The third question relates to occasional workers. How does one determine whether their income exceeds R2 400 per annum? If they work for 365 days or for 200 days a year, you are going to get a different figure. I would appreciate it if the hon the Deputy Minister will tell us what the level is from which people must start deducting the 10% tax. I would argue that we should be as generous as we can, because I think the rate we set is going to become the rate which people are going to be paid when they work. If that rate is R10 per day, you will find that employers are going to keep the payment down to R10 per day.
This Bill has far-reaching implications for South Africa. We have not even begun to think of those implications. For example, if one is going to have a system of equal taxation, which we all agree is a good thing, how can one say to an educated affluent Black who is paying the same amount of tax as his White counterpart, that whereas the State will spend R91 on the education of his child it is going to spend R1 169 on the education of another taxpayer’s child? How can one justify or explain away a system whereby two taxpayers paying identical tax and who are in the identical financial situation, will eventually receive unequal social old age pension? One of the inescapable consequences of equal taxation is that eventually people will demand equal benefits. One cannot have a system of equal obligations, but unequal benefits. The great irony that we will find as Whites, is that it will be the so-called middle class who will be the most vociferous in pointing out such inequalities. As politicians we must recognize that the belief that if you uplift Blacks economically and give them a good living and a nice home they will be content to do without some form of political rights, is a myth.
This Bill is teaching us that South Africa is in fact changing in the way we are implementing it. We as Whites will have to realize that the era in which we took decisions for Blacks without consulting them is rapidly drawing to an end.
I should like to put a final point to the hon the Deputy Minister. In a month’s time the Main Budget is going to be introduced and tax rates may change. The point I want to make is that employers have explained the new tax system to their Black employees by actually saying: “Under the old system you paid so much tax; under the new system this is the tax you will pay”. I want to say to the hon the Deputy Minister that if at the end of March we raise the tax rates on individuals, we will actually be playing with fire. We have got people used to a new basis of taxation. If, then, in two or three months time we come back and tell them that we have introduced a new system in terms of which they are going to pay more tax where they were paying less tax previously, to a large extent we are going to increase the communication gap which exists at present between Blacks and Whites.
Mr Speaker, the hon member for Edenvale is a well-balanced person who always makes a good contribution and we thank him for his and his party’s support. He referred here to education and the equalizing process. I do not think he is entirely correct. Then one may ask why a person who has no children should pay for the education of other people’s children, when others perhaps have many children. I think that parallel can be drawn.
The hon member also referred here to the joint taxation of married couples. It remains a contentious issue, and I know that the hon member for Durban North has occasionally discussed the matter. I want to indicate, on the basis of a few quotations, just how contentious it is. I want to refer, in the first place, to the comment by the hon member for Yeoville last year on what the hon member for Durban North said here in this House. I am quoting from The Citizen of 17 August 1983:
In Die Burger of 30 March 1983, I read:
If the tax on Black people is now equalized, hon members will be able to understand that many of them will also fall into this category.
Mrs Lilian Rosenberg, Cape chairman of the Women’s Bureau, says, on the other hand, that her organization wants a tax system—
Mr Costa Divaris, a well-known tax expert, says:
He then states as his solution:
Mr Speaker, I have been quoting these passages merely in order to give hon members an indication of how differences of opinion over a wide spectrum exist on this matter. Consequently this matter cannot be approached in a superficial way. It makes no difference how it is done, it holds tremendous implications for our entire economic structure.
Tax legislation relating to Blacks differs materially from the Income Tax Act in that it has a separate scale structure and makes no provision for the marital state, the family circumstances or even some of the other tax rebates.
Whites, Coloureds and Asians pay income tax according to the rate of taxation announced annually in the Budget speech of the hon the Minister of Finance; in terms of the Income Tax Act, Act No 58 of 1962, as amended.
Blacks, on the other hand, pay in accordance with the Black Taxation Act, Act No 92 of 1969, which came into operation on 1 May 1970. That is why the tax paid by Whites, Coloureds and Asians on the one hand, and by Blacks on the other, cannot simply be compared by merely referring to the tax tables, as I shall indicate later by way of a few examples. The hon member for Edenvale also referred to this in passing.
The earnings of a married working White woman are assessed together with the taxable income of her spouse, provided that R16 000 may be claimed in advance as a deduction. In addition, the members’ contributions of wives to provident funds, benefit funds and the Unemployment Insurance Fund are also deducted from their incomes. Married working Black women, on the other hand, pay tax separately on the same basis as Black men.
The tax rebates which are granted to Whites are the following: Child rebates, which include the taxpaper’s own children, stepchildren and legally adopted children; dependents; insurance premiums; members’ contributions to provident funds, benefit funds and the Unemployment Insurance Fund; compulsory current contributions to an approved pension fund; current contributions to an approved retirement annuity fund; and medical and dental expenses. Blacks, on the other hand, may only claim tax rebates in regard to contributions to an approved pension fund, an approved retirement annuity fund and the Unemployment Insurance Fund.
When the tax legislation relating to Blacks was put into operation in 1970, it made provision for three categories of direct tax. The first was an annual general tax, which was payable in accordance with prescribed deduction tables pertaining to the taxable income. The second was a general tax consisting of a fixed amount of R2,50—the old poll tax—which was payable annually and which was applicable to all adult males. The third was a local tax of R1 per dwelling up to a maximum of R4 per occupier per year. The last two of these categories were abolished on 1 March 1978 and 1 March 1981, respectively. In regard to the annual general tax on income, the applicable scales have also been amended twice since 1970. With effect from 1 May 1979 the threshold of accountability for the payment of tax was raised from R361 to R1 201, and with effect from 1 May 1980 the threshold was raised further to R1 801, while the marginal scale was at the same time reduced by 20%.
By way of a few examples I wish to indicate how the tax has differed from group to group within certain income groups during this period. I wish to refer to only a few examples. In the first place I wish to refer to the 1977 tax year as an example. In that year an unmarried White person with an income of up to R700 paid no tax, while a Black person in the same category with an income of up to R360 per annum paid nothing. With an income of between R361 and R750 per annum, the Black person therefore paid more, while the White person, on the other hand, with an income of more than R750, paid more. A married, childless White person with an income of up to R1 200 paid no tax, while a Black person in the same category, on the other hand, earning up to only R360 per annum, paid nothing. With an income of R361 up to R1 400 the Black person paid more, and with an income of more than R1 400, the White person, on the other hand, paid more. In this way I can quote examples in respect of married persons with one child, with two children, and so on.
I want to refer briefly to the 1979 tax year, because in that year the threshold changed. In that year it was raised. Here a married White person without children, with an income of up to R1 500, paid nothing, while the Black person earning up to R1 200, paid nothing; in other words, here again, on an income of R1 201 to R1 800, the Black person paid more, and if the White person’s income exceeded R1 800, he in turn paid more. A White person, married with one child, earning an income of up to R2 100, paid nothing, and the Black person, still up to R1 200, paid nothing. Between the income of R1 201 and R2 750 the Black person paid more, and between R2 751 and R6 350, the White person paid more. What is interesting is that at that stage, if the income exceeded R6 350, the Black person paid more.
I want to mention a final example, that of the 1982 tax year. In that year an unmarried White person earning up to R2 850, paid nothing while the Black person could still earn up to R1 800 and pay no tax. Between an income of R1 801 and R3 100 the Black person paid more. Between an income of R3 101 and R16 600, the White person on the other hand paid more. With an income of more than R16 600 the Black person paid more. In respect of married persons without children or with children, the Black person always paid more if his income exceeded R1 800. Up to R1 800, of course, he paid less.
It is still being alleged, from the left, that Blacks pay more than members of the other population groups, while, of course, the opposite is being alleged from the far right. Both statements are the therefore correct and at the same time incorrect. It simply depends on the intention with which the statements are being made. To want to generalize, therefore, can be misleading and dangerous.
That is why I gladly support this Bill, because it makes provision for the harmonization of income tax payable by members of all population groups in the Republic of South Africa.
Mr Speaker, this is a short piece of legislation and I want to thank the department for the explanatory memorandum with which we were provided in advance. The memorandum makes it very easy for us to follow the legislation and, supplementary to the hon the Minister’s speech, it gives us a very good synopsis of what this legislation seeks to achieve.
About four years ago a policy decision was taken to implement a new tax dispensation with effect from 1 March, and this is the system which is to come into operation with effect from 1 March of this year. This system was accepted in principle years ago.
We shall support this legislation. I do not think it is necessary for me to make a long speech on the measure and to elaborate on its details. Although it is interesting to hear the figures for the various years, as far as I am concerned this does not bring us much closer to the motivation for this Bill. The hon member for Smithfield did point out that in the past certain Blacks paid far more tax than certain Whites did. This is true of course, but we should not lose sight of the fact that then as now the Blacks receive very high subsidies. The one hand therefore washes the other.
I just want to mention one or two clauses in this Bill, namely clauses 5 and 6, to which the hon the Minister referred. He explained to us that these two clauses are intended to eliminate unnecessary administrative work for both employers as well as the department. As far as clause 5 is concerned, I am grateful and pleased that provision is now being made for the exemption with regard to the first R600 of a lump sump derived from withdrawal or resignation from any pension, provident or retirement annuity fund, to be increased. The amount was R600 and now it is R1 800. I do not think the State will lose a great deal of revenue as a result, but I still feel that this is a step in the right direction. The small amount of money which the State will lose, is going to bring a great deal of relief and is also going to eliminate administrative work.
As far as clause 6 is concerned, I believe that it is effecting a major improvement as far as administrative work is concerned. If everyone who is paying an employee R480 per year had to register as an employer, it would mean that a large number of people would have to register, but because this amount has now been fixed at R2 400, I believe that a great deal of extra work will be eliminated. I think this is a very good step which is being taken.
We support the Bill, and I have nothing further to add.
Mr Speaker, we wish to thank the hon member for Sunnyside for supporting the Bill on behalf of his side of the House. He pointed out that we were always talking about the tax that Black people had to pay, but that we should not overlook the many subsidies they receive. People are too fond of throwing around figures of that nature in support of the allegation that the Whites in fact provide all the money for large subsidies for schools for Blacks, for their health, training and so on. If one analyses the figures and takes into account the latest increases in general sales tax, one will find that there is not such a major difference between the tax paid by the Black man and the amounts by which he is subsidized. However, when it comes to a per capita calculation one finds that the Whites are subsidized to a greater extent than the Blacks; this may be ascribed to the large numbers of the Black people.
In considering the legislation before this House, we must bear in mind that a tax structure is subject to ongoing reform, because we have to deal with changing circumstances. We must also bear in mind that we are, on the one hand, a developed country, and on the other, a developing country. Looking at the reform of the tax system for Blacks over a period of time, one encounters very interesting facets of the way the tax structure has developed for them.
†Until 28 February 1970 Black taxpayers were in terms of the Natives Taxation and Development Act, 1925, liable for firstly, one basic general tax, commonly known as the poll tax. Neither Black females nor Black males under the age of 18 years were liable for this tax. Secondly, this was a graduated tax based on their income. The Black taxpayer was also subjected to tax under the Income Tax Act but when such liability arose, he then qualified for exemption from the graduated tax referred to above. I think the hon member for Edenvale also referred to that particular legislation which was in force before 1970.
The Black Taxation Act became operative on 1 March 1970 and with effect from that date Blacks were exempted from liability under the Income Tax Act.
*The present effective rate of tax paid by the Black man is approximately equal to that of a married White man with two children. As previous speakers pointed out, the legislation does not provide for direct rebates for children or for other rebates. Black employees from independent countries, excluding our independent and dependent national states, are not taxed in South Africa. This means that in many instances the Black man is not taxed at source. In terms of our present system of taxation, Whites are taxed at source. The Black Taxation Act makes provision for tribal or traditional tax in the national states. Therefore Black residents in national states are often subject to double taxation.
The hon member for Smithfield gave a very interesting exposition of many instances in which the Black man’s tax was relatively higher than that of the Whites. He also referred to several instances where the Whites’ tax was considerably higher than that of the Blacks.
The Department of Inland Revenue has for the past five years been designing a uniform system of taxation, and from 1 March 1984—that is why we have to dispose of this Bill without delay—the Income Tax Act will apply to all persons irrespective of race or colour. That is to say, we are now switching to differentiation on economic grounds. Moreover, employees are being assessed at the source of income irrespective of race or colour, excluding Malawi and Mozambique. Although the Commissioner for Inland Revenue in South Africa will be responsible for the administration of the Income Tax Act in South Africa and the national states, the latter will retain the right to levy tax on their citizens.
One interesting aspect is that where businesses are operated in national states, separate records will have to be kept, since tax deducted from all employees who are not Black must be paid to the Receiver of Revenue in South Africa, whereas such tax in respect of citizens of the national states must be paid direct to that state where the business concerned or its branch is situated in one of those states.
This is the history of developments in the collecting of Black taxation and how the structure has changed. When one analyses this development and reform, one must, however, do so on the basis of certain norms. A well known economist, Goode, set certain requirements with regard to direct taxation in undeveloped areas. In the first place, he contended that one could only proceed with income tax or direct tax where transactions were conducted on a monetary basis. Secondly, he pointed out that the taxpayer should be literate. Thirdly, he said that there had to be a sound accounting or bookkeeping system to enable the taxpayer to fill in his forms or to posess the information to fill in his forms. A fourth requirement that is very important and that has already been mentioned by the hon member for Edenvale, is that the system should be acceptable to all taxpayers.
Professors Döckel and Mirrilees of the University of South Africa referred to another interesting aspect. It is that in one’s tax structure one must also take into account the social customs and type of family unit. In South Africa we must recognize that a large percentage of our Black population are still living in a subsistence economy. However, this income tax will to a large extent be levied from our Black employees who have a reasonable income. The employees that are taxed are to a large extent already integrated into our economy and it can be said with a reasonable degree of certainty that nowadays Black people earning more than R8 000, or even those earning more than R3 500, are for the most part literate.
What is the position of the salary and wage earner with regard to the utlization of their tax capacity? For the most part we are dealing here with employees. How can their capacity now be utilized for tax purposes? An interesting study was carried out in the USA. They contrasted the income disclosed, to these people’s real or estimated income. When one considers the taxation of the salary and wage earner in this light, one notes that 95% of his capacity is utilized, whereas in the case of private businesses the figure is 87%. In the case of agriculture it was only 36%; interest, 37%; dividends, 76% and rent, 46%. It is interesting to note that the Bureau for Market Research estimated that the income tax of Blacks had increased from R8 million in 1960 to R127 million in 1980. Therefore an increasing number of Blacks are reaching the level at which they have to pay income tax. Mr Hendrik Smith of the Department of Inland Revenue has estimated that the figures for 1983-84 will be R345 million for the Blacks, as against R5,2 billion for the Whites. This represents a tremendous increase since 1960. We must not make too much of the problem of the number of Black people with an income of higher than R8 000 per annum who are going to be hit and who are going to cause all the trouble. According to the population cencus, in 1980 there were only 11 560 Black people in South Africa and the national states earning more than R8 000 per annum. In the Pretoria/Witwatersrand area only 5% of the multiple households, that is to say, man and wife together, earned more than R8 000 per annum, whereas 6,5% of single dwellings earned more than R4 000 per annum. Now, with this new legislation, it is estimated that 80% of this tax will disappear in the new system. However, one must bear in mind that the number of Black employees is increasing at a tremendous rate. In the period from January 1983 to November 1983 the number of Black employees increased from 5,07 million to 5,25 million. Even in a recessionary period such as the present we are experiencing a tremendous increase in the number of Black employees.
As far as bookkeeping and administration are concerned—this is the second point mentioned by Goode—it is important that if it had not been for the final deduction system which came into operation on 1 March 1982, we should not have introduced this legislation today. That system makes it possible for us to implement this legislation in practice.
What are the characteristics of the final deduction system? It applies to taxpayers who have a taxable income not exceeding R8 000 per annum and who are subject to PAYE deductions. Secondly, these taxpayers need not submit income tax returns. Thirdly, they are taxed at a fixed rate, namely 10%. Fourthly, the PAYE tables make provision for standard deductions. Fifthly, the first R100 of a taxpayer’s investment income is exempted. Under the old Act it was very difficult to tax the Black man who made a profit or earned interest. Now, however, since he is being brought under the same income tax legislation, it will gradually become possible to assess him in this regard as well. Sixthly, any taxpayer subject to the final deduction system still has the right to claim repayment by handing in his form.
Social customs, too, are being taken into account in the provisions of the Bill. We find that at present a married Black man can only receive a rebate in respect of his first wife. However, he can request a child rebate in respect of children from all other marriages, including marriages based on tribal customary law. Only the first wife’s salary will be added to the man’s salary for tax purposes.
To sum up, we can say that the legislation entails several benefits for the employee. As the hon member for Smithfield rightly said, the employee is now being allowed several rebates. In certain respects he is going to pay far less tax. The benefit for the employer is that he now only has one system to deal with. It is difficult to understand the propaganda that is at present being made against this legislation. It is being said—I think that the hon member for Smithfield referred to this, and the hon member for Edenvale mentioned it initially that if one is taxed in terms of the same tax structure, one must have the political right relating to the expenditure of the monies thus collected. However, one must bear in mind that there are many workers here from beyond our borders who are not South African citizens and do not have the franchise, but who also have to pay tax. It is also being said that the expenditure of that income must be exactly the same as that of the Whites. However, as I have already indicated, there is only a small percentage of Black people with an income of more than R8 000 per annum. If one looks at the overall picture that argument is totally irrelevant.
The third point of criticism levelled at this legislation is that the State must do a great deal more to acquaint the employee with the system. However, we must bear in mind that in fact it is the employer who is in contact with the employee daily on the factory floor. Therefore, the State can make all the films in the world, but if the employers do not inform their employees about the new tax system, we may expect problems to arise.
Mr Speaker, the hon member for Waterkloof delivered a very interesting dissertation and sketched a colourful milieu in which the new taxation system was to be applied and he also furnished some interesting figures. It is always a pleasure to listen to the speeches of the hon member, as it is clear that his research is thorough and that he is well versed in his subject.
†Sir, let me say immediately that the NRP will be supporting this amending legislation. We feel that it is a step in the right direction, although we are not too sure that the word “harmonizing” of income tax is quite appropriate for those citizens of South Africa who are taking their first tentative steps into an egalitarian society. However, I suppose that word will somewhat soften the blows which they experience in their first tentative steps. Like the curate’s egg, a capitalist or egalitarian society has some good parts and some bad.
Of particular interest to us were the comments made by the hon the Deputy Minister regarding the fact that although they initially anticipate a decrease in tax from this source, the efficiency of collection will ultimately make up for it. I believe the hon the Deputy Minister is correct when he says that because employers will now be responsible for the collection of tax, one will probably have something like 90% efficiently in tax collection. Hopefully he is correct when he says that they will very shortly make up that initial deficit. The hon member for Waterkloof pointed out that the total anticipated amount to be collected by this taxation system will initially be R345 million. However, that does include the very large proportion which will then be re-allocated to the national states or the self-governing homelands in South Africa. In view of the fact that of the 5,2 million workers in South Africa, so many are migrant workers, it would be interesting to hear from the hon the Deputy Minister just how much of the predetermined R345 million will in fact be reimbursed to the national states. We are pleased to hear that the hon the Deputy Minister’s department has given the national states a guarantee that their source of revenue from the new system will not be less than the revenue which had accrued to them previously under the old system, because the economies of the national states are very precariously balanced and, of course, income tax under the old Black Taxation Act was of vital importance to them.
We also believe that the hon the Deputy Minister has faced the problem of whether to perpetuate the existing system of taxing income vis á vis a system of taxing consumption. I said to the hon the Minister of Finance during the debate on the Part Appropriation, that I believe the time is right for a change in principle in taxation in South Africa, with a greater emphasis to be placed on an expansion of taxation on consumption rather than on income. If one calculates the percentage of R345 million as a total of income or revenue received from GST, one will see that a minuscule change, probably one tenth of a per cent, in GST would have yielded almost the same amount of tax to the fiscus as this very labour and administratively intensive system of income tax. However, that is something we can look at in the future when the Government may well decide to change its emphasis to taxing consumption rather than income.
We have also come across the hardy annuals, and this is the difficulty that one has when one deals with the interface between First and Third World cultures, namely the problem of who are dependents and who are wives. I think that very wisely the hon the Minister’s department had in effect allowed the individual’s first wife to be the only one who is taken into consideration for tax purposes. One wonders just what percentage of Black wage earners will in fact be paying income tax if one considers the rebate available for a wife’s income and which is applicable to Whites, Coloureds and Indians at the moment. At present R1 600 of a wife’s income if allowed as a tax-free deduction.
Then we have the purely administrative problem regarding the return of buff forms at the end of every year and which each individual has to complete. I think we can anticipate a fair amount of trouble in this respect. The hon member for Waterkloof mentioned that the prerequisite for this type of income tax system, is that the individual should already have developed a degree of literacy which will make it possible for him to complete that form without technically becoming prosecutable or a criminal. Here I certainly hope that employers will do thier part to assist their employees in the completion of their buff forms, should they become liable to pay tax. The hon member for Waterkloof did say that normally one would expect these people to be sufficiently literate to be able to complete these forms, but in our First World/Third World interface that is not always the case. I hope the hon the Minister’s department will be compassionate when it comes to identifying what are not deliberate mistakes but unintentional mistakes in the declaration of information.
A lot of us have problems filling in that form.
The PFP may well have that problem. Being just poor civil servants in this House, we do not have that problem of having to declare so much income, and so it is quite straightforward for us.
The other hardy annual is of course the joint taxation of married couples. The hon member for Smithfield said that this is a hobby-horse of ours, and I certainly hope that in order to ease the problems of the department, they will consider changing the system. It was a past State President and one time Minister of Finance who was initially berated by female organizations in South Africa to change the tax system. I remember listening on the radio to his reply to these first tentative requests from these organizations that married women’s tax should be considered separately from their husbands. He said that it was a very simple equation: What you lose on the one hand you have to find on the other. That is quite correct, but there probably are fairer means of deriving the revenue than joint taxation. That is really what is at stake here, and not the means for raising the revenue. We have to consider whether there are fairer means of raising the necessary taxation. This is something I will reserve for a later occasion. We can motivate our case for separate taxation to the hon the Minister later. I am speaking particularly of those people in the higher income groups, who are in fact the innovators and entrepreneurs. Those are the people we are really looking at, and not the lower income groups. I agree that those people who earn less than R12 000 per annum jointly are the ones who would not benefit from separate taxation. However, if one looks at the category above that, one has to look at the limited number of innovators and entrepreneurial people in South Africa who are being hard hit by this system.
Overall, Sir, we have no difficulty with this Bill and we will therefore give it our wholehearted support through all its states.
Mr Speaker, we appreciate the constructive speech which the hon member for Durban North made, as well as his and his party’s support for the measure.
When one talks about income tax, one gets different reactions from different people. Some people become very emotional about it and their attitude is one of rage and resentment, but most of us probably think of income tax with resignation. This brings me to the Commissioner for Inland Revenue, or the Tax Collector, whom many people consider to be public enemy No 1. I think I am right in saying that the piece of legislation now being considered by this House is the first legislation to have a direct effect on the activities of the new Commissioner’s department. On behalf of this side of the House, I should like to convey our congratulations to him. I hope he will forgive me for saying that I am really serious when I say that we wish him a very fruitful term of office. This reminds me of the well-known little rhyme:
The Commissioner must not take it amiss of me now when I say that “although the little doggy’s name has changed from Van der Walt to Schweppenhäuser, it is the same little doggy that enters the room”. We wish him everything of the best in his very responsible position.
I said that many people feel rather bitter about income tax, but at least they feel a little better knowing that everyone is in the same boat. The taxpayer feels far better when he has two assurances: Firstly that everyone whose circumstances are similar to his own, will pay the same income tax he has to pay; and secondly that his ability to pay, which is determined by his family circumstances—in other words, whether or not he is married and, if he is married, how many children or dependents he has—is taken into consideration by the tax collector when he is assessed. In short, every responsible citizen is prepared to pay income tax if he is satisfied that the tax system under which he is required to do so, is just and fair. This is in fact what the Bill before this House is trying to achieve, because it is aimed at bringing about greater tax parity among all taxpayers. That is why this measure is greatly to be welcomed.
It is interesting to note that the Bill is another important step in the tax reform programme announced by the hon the Minister of Finance as long ago as 1978. Perhaps it is as well to point out a few important aspects of that programme, because this Bill is merely another link in that programme. I suppose we should start by pointing out that general sales tax was introduced in 1978, with an accompanying decrease in direct taxation and a broadening of the tax base. A second link is the programme was the fact that the system of income rebates was replaced by a system of tax rebates in, I think, either 1980 or 1981. Another link in the programme was the fact that the system of separate rates for married and unmarried taxpayers was replaced by a single rate. Finally there was the measure we accepted last year in terms of which taxpayers with a taxable income not exceeding R7 000 per annum, are exempted from having to submit tax returns.
Thusfar there has still been one important shortcoming in our tax system, namely that there were different systems for Whites, Coloureds and Asians on the one hand and Blacks on the other. This was in conflict with the two basic principles which any sound and just tax system should contain, ie that in the first place—I have already referred to this in passing—all taxpayers, White, Coloured, Asian and Black, in similar circumstances, should pay the same income tax, and, in the second place, that the ability of all taxpayers to tax should be taken into account in determining the tax. Of course one’s ability is determined by family circumstances, to which various previous speakers have also referred.
I do not want to go into the history of how Black taxation worked in the past, except that I want to make a single observation on the hon member for Edenvale’s tentative statement that prior to 1970 Black people were taxed on the same basis as the other population groups. Of course this is only partially true. The hon member will remember that, in the first place, Black people paid a basic tax prior to 1970. This was the tax we used to refer to at the time as poll tax. They also paid an additional tax; cumulative tax calculated according to their income. However, only when that income brought him within the scope of the Income Tax Act did he pay income tax like the other population groups, and was he exempt from the cumulative tax. I feel it is a sound development in our income tax system for us to have total tax parity because now, as far as the Blacks are concerned as well, it complies with the two basic principles which apply to all citizens in a sound system. That is why it gives me very great pleasure to support this legislation.
Mr Speaker, I should like to convey my sincere thanks to all hon members who have taken part in this important debate. I wish to express my appreciation for the fact that we were able to discuss the highly important matter in such a calm atmosphere. I am also pleased that it was very clear that every hon member who took part in the debate was extremely well informed, had studied the legislation in depth, and also fully understood its scope.
The hon member for Smithfield made a very balanced contribution here, and I should like to thank him cordially for doing so. The hon member for Sunnyside, too, expressed his pleasure at the increase in the concessions made in terms of clauses 5 and 6. I agree with his contention that this will afford us considerable administrative relief—this will apply both to employers and to the Receiver of Revenue himself.
The hon member for Waterkloof presented an analysis of taxation and its apportionment. The hon member’s assumptions were quite correct. What he said was true. He is exceptionally knowledgeable about this subject and I am grateful that we were able to make use of his knowledge in this regard as well.
The hon member for Ermelo referred to our new Commissioner for Inland Revenue, who is present here today. He conveyed his good wishes to him. I thank the hon member for having taken notice of him in this way. The hon member also gave us a brief survey of the history of this tax. For that, too, I am grateful. It gives us a more complete picture in this regard.
†Mr Speaker, I also wish to refer to the hon member for Edenvale. He made reference here to a certain number of issues, to which I should like to reply as far as possible. He referred to a certain amount of heated discussions that are being conducted in connection with this particular legislation. Fortunately I can assure hon members that it is an absolute minority of people who are trying to stir up trouble in this connection.
There are people—that is quite correct—who will be paying more towards income tax as a result of this new legislation. On the other hand, however, those will be the people who can best afford to pay more. Furthermore we are actually trying not to leave the information element to the private sector alone. I shall be referring in a few minutes to what the department has actually done in order to make the provisions of this legislation known to as many people as possible.
I wish to refer to clause 6 to which the hon member drew my attention. The amount of R2 400 refers only to hard cash. Any fringe benefits received will not be affected. As far as married women are concerned—those working in a domestic capacity—their employers need not make any deductions at all although if the husband falls within the prescribed category, he will have to include his wife’s income with his on the form that he completes.
As far as the level of income before deductions is concerned, I referred to this matter in my speech. Those are the limits that are applicable. I have also taken note of what the hon member said in regard to any increase in tax in the main Budget. We shall certainly consider the remarks that he made.
*Mr Speaker, I think it is important that I should point out that the department has really gone out of its way to convey as much information as possible. In this regard I may say that an offer was made to all federal trade unions to make officials available to address their employees. Employers’ organizations were also approached in this regard and visits were paid to factories. At this point I think I must mention one particular Receiver of Revenue, viz the Receiver at Germiston who, over the past three weeks, has addressed no fewer than 32 meetings of employees at factories. Although this information work is being carried out throughout the country, I wanted to mention this specific instance, because this was an extremely meritorious effort.
Then, too, there is the question of video tapes that are available. I can only say to hon members that there is an exceptionally strong demand for this service offered by the department, and we are very grateful for this. I also just wish to say to the hon member for Edenvale that I think that this was precisely the right psychological moment to come forward with this. At this stage there is only one week before the first deductions will be made, and I think that this information service will have a very good impact. If we had started with it earlier, it would perhaps have lacked the impact it is going to have now.
I also wish to refer further to a series of six articles written by knowledgeable officials of the department. These articles were made available to the radio services and they, too, made use of them. The articles were also supplied to all newspapers and certain newspapers have already published some of them. I want to make an appeal today to our newspapers and other news media to assist us in this connection and give more publicity to these articles that have been supplied to them. I can give all hon members the assurance that we intend proceeding with our information service and expanding on it. A further publicity campaign has already been planned for February and March 1985.
†I also want to thank the hon member for Durban North for his contribution. He said that he hoped that the department would deal compassionately with all the new people coming on to the register. I can assure him that that is what will happen and that the department will treat those people with understanding. The hon member also agreed that with better administration we should be in a position to be even more successful as far as the collection of tax is concerned. I thank him for his contribution.
*In conclusion, Sir, I wish to express my sincere gratitude to the Commissioner and his officials for the diligent job of work they did in conveying the information to the public.
Question agreed to.
Bill read a Second Time.
Bill not committed.
Mr Speaker, I move, subject to Standing Order No 56:
Mr Speaker, since the Bill is now going to become law, I want to point out that it was far easier to pilot it through this House this afternoon than it will be to implement it in practice. We are aware that it is going to cause many problems. One of the problems was already singled out here this afternoon, namely that of informing the Black population satisfactorily. The collecting of tax may also create problems for both the employer and the department. On behalf of the CP I want to wish the hon the Minister and the department everything of the best with the implementation of the Bill.
In conclusion I should like to know whether the department is now properly staffed and equipped with the necessary machinery to be able to do all this extra work. As a result of the Bill there will of course be less work here and there, and things will be easier for the Department of Co-operation and Development when the collecting of tax has been taken from their shoulders. A great additional burden is now being placed on the Department of Inland Revenue, and because the department battled with its staff to carry out its task in the past, we should like to know whether the department has made preparations to enable it to cope with this task in future.
Mr Speaker, I want to thank the hon member for Sunnyside for the congratulations he conveyed to us. I tried to reply in detail in regard to the question of information. I can just tell him that the staff position of the Commissioner for Inland Revenue is far better and we see our way clear to coping successfully with this task. As I also pointed out in my Second Reading speech, the department is also going to train Black people in the national states and is going to continue to assist those states to collect taxes, and also with a view to preparing them to collect taxes successfully themselves.
Question agreed to.
Bill read a Third Time.
Mr Speaker, I move:
The Bill before the House, designed to amend the Labour Relations Act, 1956, inter alia aims at making provision for authorizing the appointment of an additional member to the Industrial Court for purposes of a function of a revision board referred to in section 25(4) of the Workmen’s Compensation Act, 1941, and his designation as its presiding officer; the insertion into the functions of the Industrial Court that of the issuing of certain directions; certain agreements not to be enforceable in a court; the transfer from the Industrial Court to the Minister of Manpower of the power to consider appeals against decisions of industrial councils on applications for exemption from their agreements; the extension of the existing factors on the grounds of which the Minister may exclude wage-regulating measures so as to include the interests of employers and employees as well as the public or national interest; and the placing of an obligation on unregistered federations to comply, as must registered federations, with certain basic provisions of the principal Act. Although an explanatory memorandum has been tabled explaining the provisions of the amendment Bill in more detail, I should like to furnish more information about certain of the main provisions.
In the Workmen’s Compensation Act, already passed by this House, provision is made for a revision board. The presiding officer of a revision board must be a member of the industrial court designated by the president of that court. Because the court’s full-time members have a reasonably heavy workload, and to ensure that the work of a revision board is concluded as quickly as possible, it is necessary to obtain authorization for the appointment, from time to time, of a suitable person as an additional member for a specific purpose involved in carrying out a function of a revision board and for his designation as its presiding officer.
The amendment in clause 2 is aimed at not making agreements, whereby a matter involving the relationship between employers and employees is regulated, enforceable in a court, including the industrial court, unless particular requirements, as laid down in the principal Act, are complied with. The aim is to ensure that the relevant labour organization functions properly and is acting in good faith, thereby ensuring sound labour relations. It should be noted that it is not the intention to prohibit such agreements and that to make them enforceable in a court, relevant labour organizations need only comply with the basic legal requirements before such an agreement is entered into.
Because policy considerations in the socioeconomic sphere play a decisive role in appeals against decisions of industrial councils in connection with applications for exemption from their agreements, which are mainly concerned with relief in regard to the prescribed minimum wages and conditions of employment, and in the light of the Government’s White Paper on the Promotion of Industrial Development as an element of a coordinated regional development strategy for Southern Africa, the Government has decided, as in the past, that that power should rather be vested with the Minister.
The amendment of subsection (2) of the principal Act is also linked to giving substance to the aforementioned White Paper and also makes it possible for the Minister to suspend a wage-regulating measure in an area or part of an area, if he regards this to be in the interests of employers or employees or regards it as being necessary in the public interest, for the duration and subject to the conditions he may think fit. It is important to note that in practice the Minister’s discretion will only be exercised after consultation with the relevant industrial council or conciliation board or with the parties concerned, and subject to conditions that normally establish alternative minimum requirements.
The amendment in clause 4 aims at compelling unregistered federations, as in the case of registered federations, to comply with certain provisions of the principal Act which, inter alia, require a copy of the federation’s constitution, written particulars of its head office address and the names of its office-bearers to be submitted to the Industrial Registrar. Registered and unregistered trade unions already have to furnish this information.
Those, Mr Speaker, in broad outline, are the envisaged amendments, and I trust that they will meet with the approval of the House.
Mr Speaker, this Bill is the fourth in a series of Bills brought to the House by the newly appointed hon Minister of Manpower. The first three Bills were non-contentious; there was hardly a breath of controversy surrounding them. Unfortunately, however, as far as we on this side of the House are concerned, we are profoundly disappointed in the contents of this Bill. We believe the way in which the Bill has reached the House, in the first instance, is contrary to the normal practice adopted by the Department of Manpower. Perhaps I should read from the department’s annual report because they themselves make the point much better than I can. I want to quote paragraph 1.13 on page 2 of the report of the Director-General for Manpower for the year ended 31 December 1982, as follows:
I also want to quote from paragraph 1.14:
What has happened here is that no such consultation has actually taken place. I do not want for a moment to lay this at the door of the hon the Minister himself because he has only recently been appointed and obviously this piece of legislation was drawn up before, during or very soon after that and therefore he could hardly be blamed for the lack of consultation. However, he has a responsibility. I put it to him that the point I make is reasonable and correct. Before this legislation came to this House it ought to have been published in draft form. I know that a Bill was published in draft form as long ago as August, but the controversial clauses, to which I will come to in a moment, and generally regarded as controversial from many sides—both employers and unions—were not in that draft Bill. Therefore no one had a sight of these clauses before this Bill was tabled.
More important perhaps, the National Manpower Commission, a very selective, high-powered and experienced group of people, were never consulted. When I first read this Bill and was unhappy with some of its provisions I telephoned several members of the National Manpower Commission to find out from them why the Bill had been brought out, what they thought about it, etc. It was news to them. They asked me please to put the Bill in an envelope and send it to them so that they could see what it was all about. I am sure the hon the Minister agrees with me that that is to break faith with his own declared policy. One of the features of this department had been its commitment to consultation and its readiness to discuss matters beforehand so that we can move away from controversy in such a delicate situation as industrial relations in South Africa. It is for that reason that we cannot support this Bill at this stage. I will be asking that the Bill be referred to a Select Committee.
The hon the Minister knows that I have been in touch with him. May I say that I have also talked with the Director-General of the department, who was kind enough to see me. We discussed the matter and I got from him their own reasons why this Bill was seen to be necessary. However, I certainly did not come away very satisfied. I have taken advice from a number of people, also from employers, some of whom have contacted me themselves. A number of unions have also been in touch with me. I would therefore ask the hon the Minister whether he would consider referring this Bill to a select committee before the Second Reading. The reason why I am making this request is that after the Second Reading of the Bill it is impossible to change its principles. I know that the hon the Minister is prepared to consider referring the Bill to a select committee after the Second Reading, but my dilemma is—and I am sure the hon the Minister appreciates it as he knows the procedure of the House far better than I do—that if I should concur in that—and I appreciate his reasonableness—I may be in a position where that select committee will say, “Sorry, you cannot change that now as it is after the Second Reading”, I should therefore like some assurance from the hon the Minister when he replies as to what we can and cannot do in this regard and will reserve our decision until we have heard from the hon the Minister.
I have at some length stressed the lack of consultation between the department and the National Manpower Commission because that commission is very highly regarded in South Africa. Some very prominent people serve on that commission, and they have stressed the fact to me that they see the introduction of this Bill as a loss of credibility for the commission as the Press have asked their opinion of the Bill while they were not even aware of it. In my view that is bad.
I want to know from the hon the Minister why this particular Bill is necessary. In a Press interview his Director-General stated that he agreed that clause 2, for example, was not in the draft Bill in August, but that he had received certain representations. I should like to know from whom these representations were received and what the burden of the representations was. Furthermore, I should like to know why it was necessary to introduce this Bill with what I can only describe as an unseemly haste.
There are only a few clauses in the Bill, and I will not spend too much time on clause 1 at this stage. Clause 1(a) is consequential on the amendment to the Workmens’ Compensation Act which we have already dealt with. Therefore there is no problem in this regard. I have no difficulty with it. However, the deletion in paragraph (b) of subsection (11) of the words “or 51” has definite reference to clause 3, and I have some problems with that clause as well, and will therefore reserve my comment until such time as we discuss that clause.
In terms of clause 2, if this Bill becomes law, unions must furnish the Government with certain information, otherwise they are guilty of an offence, and the agreements between the employer and the union concerned will not have the force of law. That is very far-reaching. Secondly, copies of all agreements must be sent to the department within 30 days, otherwise the parties, both employers and unions, are guilty of an offence. That again is very tough.
In terms of clause 3 the powers presently vested in the industrial court will in future be vested in the Minister. This gives the Minister very wide powers indeed, and I will come back to that.
Clause 4 refers to unregistered federations, and I suppose one could call that the SAAWU clause, because that is the only one I know of that is referred to, which means they too must now conform in terms of sending the necessary information.
Getting back to clause 2, I want to state as a basic premise that if the Government wants to strengthen the institutions of State through democracy it must understand and accept that devolution of power offers a more lasting and, I submit, a more stable settlement of differences than centralization. In other words, the State should stay out of labour relations, beyond providing a minimum of rules and structures. I have used the analogy before, and I think it still stands, that in terms of labour relations—there is no play on words here—the State ought to be the midwife, while makes it possible for the marriages between management and unions to be consummated so that a real, lively and strong industrial relations baby can be born and be preserved. In particular at a time when what I can only describe as a pattern of pragmatic accommodation appears to be on the horizon, it is extremely foolhardly to risk heightening the conflict by wielding the big stick. The registration of common law contracts by the State in the area of labour is a totally unwarranted and unnecessary involvement of the State in the private affairs of its citizens. It is not only unwarranted, but also highly dangerous and is a threat to the fragile peace which is struggling to emerge in our correct labour relations. Firstly, there is the emphasis on information. The department already has the power to prosecute if the information is not forthcoming. According to its own report, the majority of unregistered unions do furnish information. According to the 1982 report of the Department of Manpower only 16 out of the 53 had not done so. Perhaps the up-to-date information is that even more have done so. If the vast majority of unions are already meeting that requirement, why not some more carrot and less stick, why not more encouragement in a new situation where there are still many problems in unions and between unions and management and between unions, management and the State?
If the department believes it is necessary to have copies of agreements—and I can see that under certain circumstances this may be desirable—why not simply ask for it? Why is it necessary to immediately say that if they do not make it available, they will be committing a criminal offence? Who is going to police this? Are prosecutions going to take place? I cannot for the life of me see why it is necessary to put into law the need for information, for a sight of the agreements between an employer and employees. The hon the Minister must know that there is deep-seated suspicion amongst unions that the department is “out to get them”, to use their own phrase. They ask whether this is the first step towards State control over agreements. Once they receive the agreements, they ask whether the State is then going to decide whether those agreements are acceptable or not. Talking to employers, they have told me that they believe that the reason for their success has been the privacy of those agreements and negotiations at factory-floor level with a representative union with a minimum of delay. Only today I received a phone-call from a large industry in one of our major cities to say that they are in the midst of trying to negotiate an agreement at factory-floor level, but that they cannot persuade the union to sign and to deliver because the union believes that the agreements is going to go to the Government and that the Government is going to say whether or not they think it is all right. I know that that is not right, I know it is not the intention, but I am saying that that is what is already happening—and there are 1 200 Black employees involved in that particular undertaking. Are we trying to throw away the carefully worked out negotiation procedures which we have arrived at over the last few years? This side of the House has again and again welcomed and encouraged the developments that have taken place and congratulated the Government on them. One must understand that for many unions there is a thin line between co-operation on the one hand and co-option on the other. There are those who are making their life very difficult by saying to them: “You are being co-opted by the State”. We are trying to get them to co-operate and I do not think that this is the best way to do it. I believe there is another way, a better way, of getting the same desired results without wielding what I can only describe as the big stick. There is no doubt that this Bill perhaps ushers in a tougher stance towards Black unions. This, together with recent developments and statements made regarding the industrial court, does in my opinion not augur well. It is vital that the legitimacy of unions should be accepted and that they should be recognized as an indispensable element in a free and democratic society.
As far as clause 3 is concerned, once again at first sight it appears to be very reasonable that the word “Minister” be substituted for “industrial court” with regard to appeals. It is section 51 of the principal Act that is being amended by clause 3. In terms of it any person who feels aggrieved by the decision of an industrial council may appeal. Until fairly recently it was then in the hands of the industrial court. One explanation for the proposed amendment is that the industrial court simply cannot cope with the work and the demands made on it. There are two ways of responding to that. One is to say: “Let us give it back to the Minister”. The other, of course, is to say: “Let us strengthen the industrial courts and give them more assistance”. On balance, I believe that, whether possible, we ought to leave it to the industrial court tether than to the Minister. I say this particularly with a view to clause 3(l)(e) which contains the words:
That is a very, very wide ministerial discretion. We all know how one can interpret “national interest”. One particular interpretation of “national interest” need not necessarily be in agreement with how everybody else interprets it. It makes so much more sense if the industrial court has that discretion rather than not this particular Minister but a Minister in general. If the wide powers contained in this particular provision are actually granted, so that a wage determination or an agreement will not be enforceable in an area or part of that area, clearly decisions made by industrial councils will be affected and free competition is interfered with. This could be interpreted, again by workers, as State-employer collusion. There are all sorts of possible interpretations of this, which is not going to help the situation. Therefore I believe it is not a healthy change.
To summarize then, Mr Speaker, I must point out that I would have hoped that a Bill of this nature would have appeared in draft form so that interested parties could read it and could make representations to the hon the Minister. When I talk about interested parties I include both employers and other representatives of the private sector as a whole. I would also have thought that the National Manpower Commission would have been approached for their expert views. If that had happened we would well have had a very, very different Bill before us here today.
Both because there has been this lack of consultation and also because I believe that this is legislation which is of an unnecessarily harsh nature, I move now as an amendment:
Mr Speaker, the hon member for Pinelands addressed and argued the measure before the House in a levelheaded fashion. He began by referring to the way in which this measure was brought before the House.
The hon member contends that the Bill, as it is at present, was not published in this form when it saw the light of day for the first time on 12 August 1983. I do not now want to try to take the wind out of the hon member’s sails, but if the hon member really wants us to publish a Bill for examination and comment, without subsequently amending it in accordance with the comments and representations we receive, surely he ought to realize that in that case the publication of the Bill in advance would have no significance whatsoever. The hon member must surely concede that in the White Paper it is expressly stated that the Bill was amended considerably owing to the representations received. Surely one must set some limits. Surely one cannot go on publishing the amended copy of the Bill. That would not get one anywhere either.
I do believe, however, that the hon member for Pinelands made a valid statement when he said that certain principles now contained in this Bill—these are now what he considers to be principles—did not appear in the Bill when it was originally published on 12 August 1983. That is actually what the hon member wanted to say.
The hon member also asked why the department should be notified of agreements, whether written or implied. The hon member made two remarks about this. In the first place he wanted to know why the department did not simply request this. Surely the hon member must concede that the department is only going to find out about this when a problem arises; when a matter of this nature is either brought before a reconciliation board, or is heard before the Industrial Court or court of law. That is the only time the department would actually become involved. It is therefore not going to eliminate the problem that the department wants to have eliminated, ie that of being prepared, knowing what is going on and having a record relating to a specific employer or organization on the one hand and a trade union or individual employees on the other. That is what the problem is actually all about.
Secondly the hon member alleges that employers say that the secret of their success specifically lies in the privacy of undertakings between employers and employees. I think the hon member will also concede that the department does not, after all, intend to blazon abroad any such agreement of which it receives a copy. Why would it want to? The department is merely going to place the agreement on record so that when it is necessary to refer to it, the department can state that if people want to make use of the machinery created by means of the legislation, it does indeed have the agreement and that the aspects, about which possible litigation is to follow, do not form part of the specific agreement or vice versa.
I shall be coming back to what the hon member said, but there is something I want to tell him now. The hon member brought colour back into the debate. He says, purely and simply, that he regards this Bill as a blow aimed at Black trade unions. Even against the background of the three previous pieces of legislation already passed by the House, and the provisions of this Bill, the hon member now professes to be the only champion of Black trade unions. I want the next speaker on that side to tell us quite frankly that there is no colour aspect in this Bill. It is specifically the aim of this Government to depoliticize labour legislation and I therefore find it unnecessary for the hon member to act as the spokesman for those people, as if the problems are unique to Black trade unions. That is not true. The hon member is not the only speaker on labour matters in this House who is consulted or informed about that.
As regards the transfer of appeal from the industrial court to the Minister, let me say that I shall be coming back to that, but I first want to make a few remarks in connection with the content of this Bill. As is to be expected, legislation relating to the relations between employers and employees will have to be adapted or amended from time to time. That is why we have already dealt with three Acts and why this Bill is now before the House. Those of us involved in labour matters know that the Industrial Conciliation Act, now the Labour Relations Act, is the backbone of labour legislation in South Africa. It is also the most sensitive barometer of what is going on between employers and employees in all our industries and undertakings, and even in our professional bodies. This legislation is specifically sensitive in an economic climate such as that of the present day, not only the economic climate in South Africa, but also the economic climate abroad. The hon member for Pinelands will concede that negotiations on wage increases and conditions of service are normally concluded so that the agreements can come into effect at the beginning or middle of the year. This is normally preceded by approximately three months of negotiations. At this very moment we find ourselves in a climate of pending negotiations. Why do I say this is sensitive? I am saying so because it is sensitive in the present economic climate in which we find ourselves. We are experiencing a severe recession, at both the national and international levels. Internationally it is hitting us hard too, because so many of our employees are dependent on our various exports. That is why we are encountering unemployment today. No one, when all is said and done, likes seeing people without jobs. It is no easy matter to negotiate when there are strikes either. We cannot, after all, argue away the fact that there are strikes, because that is a problem we are saddled with. That is why the authorities must, from time to time, institute investigations into possible amendments to this very sensitive section of our legislation.
It must not make that structure, within which one has to operate, unnecessarily prescriptive. It must always be remembered that the two primary parties are the employer on the one hand and the employee and his organizations on the other, because they are the ones who must live and work together from day to day. They are the ones who are in the market place.
The hon member for Pinelands will concede that overabundant legislation, even provisions that go into too much detail, are not always beneficial in the labour sphere, in fact can sometimes even be unproductive. The basis, the foundation, of our legislation in regard to labour matters must therefore have built-in manoeuvrability and flexibility so as to be able to meet everyone’s needs to the best possible extent. On the other hand, when it comes to negotiations between employer and employee, whatever the subject of those negotiations—for example in the sphere of service contracts—one must have built-in tolerance and reasonableness, and of course also conciliatoriness if one wants to go to the conference table in such negotiations with everyone’s integrity intact.
The basis of such negotiations must be trust. The hon member will concede as much. The hon member, however, questioned this position of trust. He said it was questioned by trade unions and also by employers. Let me present to the hon member, for his consideration, the fact that the position of trust does not only apply to the relationship between the Government and the trade unions or the Government and employer organizations, but should also manifest itself in the relationship between employer and employee and between employer organizations and the trade unions.
I now come back to another point the hon member raised, and that is that relevant parties should consult one another. I believe that trust has only two corner-stones: Consultation and communication. If we have the necessary consultation, through channels of communication, I believe that we can find one another, but to shout at one another or to use the House as a forum to get at one another, in a vacuum, is not going to get us anywhere. It is not going to get anyone anywhere.
In the past it was felt that perhaps the Government was not always sufficiently consulted. I think that over the years, and particularly in recent years, an attempt has been made to create as many channels as possible, to create machinery so that this consultation can take place. The consultation must not, however, be merely undirectional; consultation must not always come merely from the Government, or from an Opposition whose members consult certain bodies, but should also come from those two legs of commerce and labour in South Africa, ie employer organizations and employee organizations.
If something goes wrong, it is easy to point a finger at the Government. It is very easy, and I think we shall simply have to put up with that. At times, however, one should also do some soul-searching. I therefore want to say that the very fact that on 12 August 1983 an indication that new legislation was forthcoming was published, points to an effort on the part of the department to give labour, in fact any interested parties, an indication of what was in the offing. Whether there is overall agreement amongst us that everything was published, or that what was published was comprehensive enough, is a matter we can disagree about.
I want to dwell on a few other aspects. The appointment of a member of the Industrial Court as chairman of the revision board could lend a little lustre to the decisions or findings of the revision board. It could lend prestige to that body, but there is a question that is asked—I heard it asked on Monday in Johannesburg at a conference where these aspects were discussed—and that is why we are integrating the two Acts to such an extent. The Workmen’s Compensation Act and the Labour Relations Act do indeed belong to the same family, but why we are integrating them to such an extent that we make a member of the Industrial Court, which is a body falling within the ambit of the Labour Relations Act, chairman of the revision board which exists in terms of the Workmen’s Compensation Act? There is probably a good reason for that, because we believe that a knowledgeable person should be appointed chairman of the revision board. A question does, however, arise. In terms of the Workmen’s Compensation Act, the hon the Minister has created two new instruments, with the one, the objection committee, having a certain composition and a chairman. If one were to speak of a higher and a lower order, the objection committee would be of a lower order than the revision board. The hon member for Brakpan will agree with me. The chairman of the objection committee, however, is appointed by the hon the Minister. The chairman of the body which is of the higher order, however, ie the revision board, is appointed by the president of the Industrial Court. That is also another body falling under another Act.
It may perhaps be of academic interest, but when it comes to the interpretation of this legislation, one would like to see a certain substructure entrenched in the legislation. It was ex-Chief Justice Centlivres—if I remember correctly—who said:
It is true that when one studies a law, one would like to find the aspects it deals with in that law.
The hon member for Pinelands contended that it would be easier to argue clauses 2 and 3 in the Committee Stage, if we are to carry this principle through consistently. I feel that it is correct to say that clauses 2 and 3 lend themselves more to discussion in the Committee Stage. The hon member contended, however, that the principle of the legislation centred on clauses 2 and 3, that being the reason why it should be discussed now. Clause 2 can best be summed up by saying that it deals with efficiency. It is concerned with the employer-employee sphere, involving certain agreements that must be regulated to the best possible extent. Whether the method employed or the instrument created for such regulation meets with the hon member for Pinelands’s approval, is something one could debate. I think the hon member has a problem as far as the object is concerned, in other words about whether it is indeed being done. What is it that must be complied with? It is the most elementary of things that must be complied with. There are seven points that must be complied with. I do not want to mention all seven points now, because every hon member dealing with matters involving workers knows that when it comes to training spheres, and particularly those relating to unregistered organizations which find themselves in a sphere where there is normally a registered trade union or employer organizations, they have to comply with certain requirements. They must, for example, submit their constitutions for scrutiny; their head office must be situated in South Africa and they must keep up-to-date returns. There are seven such provisions, elementary provisions.
I want to concede to the hon member for Pinelands, however, that one can question whether unregistered organizations should be recognized or should not be recognized at all. Must they be compelled or not compelled at all? The discussion of that aspect will still be going on for a great length of time. Even hon members of the Opposition who were involved in the by-election in Carletonville will know that to a large extent the discussion there involved unregistered trade unions. Whether one was a member of the HNP, the CP or the NP, one heard this discussion. Some said that no unregistered trade-unions should be allowed. Others said it should be made easier for them, depending on the organization to which the trade-union belonged. It is a matter of the interest that is served. I think that the employers whom the hon member for Pinelands referred to as having problems, do indeed have problems. It is not, possible, however, to approve legislation that will satisfy everyone.
Give them a chance to make representations.
We are still coming to that. The employer says he has a problem because, firstly, he does not always know whether the organization with which he is negotiating is indeed registered and, secondly, does comply with the minimum requirements of the principal Act. The employer does not know how he should get to know this. The answer is simple. He only has to ask. The hon member wants to know why the department cannot ask, but the department is dealing with thousands employers, whilst most of the time the employer is only negotiating with one employee organization. It is therefore easier for the employer to do the asking. I do think, however, that the employer’s problem involves more than just that. Let us suppose that after six months the organization, with which the employer has negotiated, no longer complies with the requirements of the principal Act. Then he has a problem. He does not, however, know it. Then the agreement is no longer valid and can no longer be enforced. That is the problem that has to be addressed. That is why I believe that these problems should be approached with circumspection.
Let us take an example. Suppose the hon member for Pinelands had a farm and produced apricots for canning. Let us suppose the crop ripens quickly and, having to furnish his product to Jones or to Langeberg, he reaches an agreement with the canning company permitting him to deliver his product after hours. The agreement that the canning concern has with its employees provides that they only work till 5 o’clock, whilst the hon member wants to deliver his product at 7 o’clock, 8 o’clock or 9 o’clock in the evening. If the foreman of the canning factory, however, were to reach an agreement with his workers that they would indeed work overtime in exchange for shorter hours on a Saturday, that is when the problem would arise. Here we have an agreement, but the management of the canning factory do not know about the agreement because it was negotiated by the foreman. How are they going to know about it? That is the problem. That is why I lodged a plea for flexibility and manoeuvrability in the legislation, and also its implementation. Surely the hon member knows that throughout the years, particularly since 1956, labour legislation has been implemented in South Africa in a very systematic and flexible manner, with great calm, creating as it has done large-scale labour peace. We cannot get away from that. When it comes to sensitive matters such as people’s conditions of service, the Government does not advocate the rigid implementation of the letter of the law.
The power to consider appeals is now being transferred from the industrial court to the Minister. I want to give the hon member for Pinelands his due. He did not consult the Hansard’s of previous years, when we discussed this matter and specifically had appeals referred to the industrial courts, and refer to the arguments that we used then. Had he done so, the hon member would not have been as congenial in his opposition to this Bill. It was set out for us in the White Paper—the hon member also obtained a copy—that what is involved here is a very topical subject, ie policy aspects, and that it is easier for the Minister to decide, than for the court, whether an appeal should be successful or not. The hon member for Brakpan will now say right away that in the case of an appeal from one level to another we have a certain hierarchy. We are familiar with that in juridical circles. That is the very reason why we made the industrial court a court of law, an institution with the force of law behind it. I just want to warn against one aspect. We must guard against depriving the present-day industrial court of its powers. We should rather extend it. I believe that there is one thing that we on this side of the House have always advocated, and that is to give as much meaningful content to the industrial court as possible so that the industrial court, which is now being instituted, can build up for itself the same degree of recognition that the old industrial court has had since 1965. Why do I advocate that we should not deprive the industrial court of its powers? Because I have heard of representatives of employers referring to this industrial court—I am very sorry about this—as “the Robin Hood court”. I do not believe that any party in this House would like to see an institution, which we should like to see exalted to some extent, referred to as “a Robin Hood court”.
I therefore want to express the hope that the questions referred to the National Manpower Commission in regard to registration, the duties, responsibilities and powers of the industrial court, will be tabled and published as soon as possible, even if only by way of an interim report. We cannot, after all, expect the backbone of our labour legislation, ie the Labour Relations Act, to furnish the desired results if we do not give the highest instrument, geared to the interests of both the employer and the employee, the prestige that we believe it deserves.
This brings me to the hon member’s request that this Bill be referred to a Select Committee before Second Reading. Referring it to a select committee could possibly serve some positive purpose, but if this is to be done, it is for the hon the Minister to use his best judgment to decide when this should be done. I do not, however, have any doubt—I think we are all ad idem about this—that we must introduce amendments with a view to making this Act more flexible and streamlined so that it can comply with modern-day demands. I therefore support the principle that the Act should be amended.
Mr Speaker, at the beginning of his speech the hon member for Roodeplaat presented this House with a very interesting academic dissertation on the excellent relations which ought to exist between employer and employee organizations, among trade unions, and on the shop floor. However, he procrastinated for quite a long time before he actually got down to the provisions of the Bill. I think the reason for that was that to a certain extent he did not want to accept that the accusations made by the hon member for Pinelands were correct, namely that the unregistered trade unions, in other words primarily the Black trade unions, which are causing the Government and the Department of Manpower problems, should be brought under control in some way or another. That is after all the object of clause 2, and that is why it goes without saying that we support this legislation.
That is the cardinal aspect of this Bill. It is part of the whole history of this matter since the hon the Minister’s predecessor recognized Black trade unions. He told us that Black trade unions existed and that we should devise a plan for dealing with them, to be able to keep a watchful eye on them. We should allow them to register so that we could examine their membership rolls. We should also be able to examine their financial statements, in order to know where their money was coming from. We had to make certain that all these things were more or less kosher.
At the outset it was said that if these trade unions did not register, they would be prosecuted and that certain criminal proceedings would be instituted against them. When those trade unions did not register, other measures were adopted, but not criminal measures.
The problem has always been how one was going to bring these Black trade unions under control.
It was then decided that even if these trade unions did not register they would be required to comply with seven requirements to which the hon member for Roodeplaat referred, so as to be able to register stop orders with employers. That, too, did not work, however, because what these trade unions are now doing is to enter into agreements with employer organizations on these sensitive matters outside the ambit of the law.
Consequently they have once again found loopholes, and that is the problem the Government is experiencing. That is the reason for clause 2.
Clause 2 is acceptable to us because it protects the employee. We accept that there should also be a good dispensation for employers, but clause 2 in this Bill in fact protects the employee. When agreements are entered into the trade union organization has to comply with certain requirements before stop orders can be registered, and also so that the employee may be aware that the trade union to which he belongs and which is negotiating on his behalf for better conditions of service, complies with certain minimum requirements which afford him a certain measure of security. That is the purpose of clause 2, and that is why we support it.
I want to tell the hon the Minister, however, that a time will come when we will once again have to return to the dispensation which prevailed and which was in force when the present State President was the Minister of Manpower. There should at the time have been tremendous encouragement for work committees and for liaison committees.
Clause 2 does not prohibit agreements which were entered into between an employer and an employee and an agreement which was entered into within that specific organization. It only prohibits agreements between trade unions and employers’ organizations.
Yes, just read clause 2. For that reason we support the principle contained in clause 2.
As far as clause 3 is concerned, we agree with the hon member for Pinelands, and this is also conceded by the hon member for Roodeplaat, namely that the disappearance of the industrial court in this connection is not a good thing. One cannot leave the appeal against a decision of an industrial court or a conciliation board to a Minister. He is the political head of a department and is led by considerations such as those mentioned in the explanatory memorandum. Incidentally, I want to thank the hon the Minister for the fact that there are explanatory memorandums for the labour legislation we are considering at present. They contribute a great deal to helping one to understand the legislation better. On page 5 of the explanatory memorandum the following is stated:
It is unsound that a person who is a political head should replace the industrial court in an administrative capacity. I want to suggest, as the hon member for Pinelands also argued, that another industrial court could be created, or that the staff of the industrial court could be increased. We realized that these posts were advertised and that no applications were received. However, I think there are other ways and means of ensuring that the industrial court is enlarged. We know that its activities will increase under the new dispensation, but it is right that it should be an objective body which will consider an application strictly on its merits.
There is a further problem in connection with this matter, namely that there is going to be discrimination against, say, the medium-sized employer in favour of the small employer. This clause contains a method of benefiting the small businessman at the expense of the larger businessman because it is the small businessman who is going to receive relief in conflict with the provisions of industrial conciliation agreements or Conciliation Board agreements. For that reason it is not advisable in this case either that this power be granted to the Minister and not to the industrial court.
That is why we shall not support clause 3 during the Committee Stage. However, because we have, as I have already said, identified the principle as contained in clauses 1 and 2, we shall accept the principle of the Bill and we shall not vote for the amendment moved by the hon member for Pine-lands.
Mr Speaker, in a certain sense I want to thank the hon member for Brakpan for the fact that his party is prepared to support clause 2. There are, of course, different perceptions, and perhaps we are not doing it for the same reason. Of course, the aim of this clause is not primarily to tackle Black trade unions specifically. I certainly do not believe that that is the aim. It is, in the first place, as far as all agreements and labour arrangements between employers and employees are concerned …
Mr Speaker, may I ask the hon member a question?
A little later. I do not believe it is a good habit to want to ask a question before one has completed two sentences of one’s speech. The hon member still does not know what I want to speak about.
The object of the clause is rather, to mete out equal treatment to all parties who reach agreements regulating relationships between employers and employees. It has long been the aim, as far as the manpower dispensation is concerned, to eliminate discrimination from the legislation. If one does not do justice to the aim of this clause, then there will of course still be people against whom it will be possible to discriminate, irrespective of their colour. As the hon member for Brakpan knows full well, there have been Black trade unions in this country for as long as five to six decades. They existed, but they were not recognized. On the other hand, of course, there were White, Brown and a few mixed trade unions which did enjoy recognition in terms of the old Industrial Conciliation Act. These trade unions, as well as employers’ organizations, were of course subject to certain obligations, and certain restrictions, in terms of the Act. The hon member for Brakpan listed some of these obligations, eg the obligations relating to bookkeeping, membership lists, etc.
The mere fact that these obligations applied to a certain set of trade unions and not to a different set of trade unions, ultimately discriminated, surely, against the White trade unions; or, rather, against all the recognized trade unions, in favour of the Black trade unions. For example, there are also certain restrictions that the recognized trade unions were subject to before 1977. Here I have in mind, for example, the prohibition on affiliation with a specific political party, or the promotion of the candidatures of certain political parties, and so on. Because the Black trade unions did not enjoy recognition, these restrictions did not apply to them but did apply to all other trade unions. In a certain sense it was discriminatory in another sense as well. The aims of the principal Act were specifically to eliminate situations of this nature, situations which discriminated against the existing trade unions, and, on the other hand, to avoid certain unacceptable aspects. I believe that that situation made the non-recognized Black trade unions far more susceptible to unacceptable political manipulation, both at home and abroad. Accordingly, this was also a way of seeking to prevent that manipulation.
Mr Speaker, I just want to know from the hon member for Benoni whether he is aware of White or mixed trade unions that have not been registered.
Mr. Speaker, I must concede at once that I personally am not aware of any such trade unions.
Therefore this is aimed at Black trade unions that are not registered.
The hon member for Roodeplaat did also point out in the course of his speech that there was indeed a difference of opinion.
Mr Speaker, I am trying to answer the question of the hon member for Brakpan. However, the hon member is not listening to me. [Interjections.]
Mr Speaker, I just wish to point out, in reply to the hon member for Brakpan, that the hon member for Roodeplaat indicated that it was true that there was still a difference of opinion as to how far one should or should not compel trade unions to register. The question is still whether coercion is the best way of achieving the aims embodied in the principal Act. Since we are entering a new dispensation in the field of manpower, a dispensation which was only ushered in in 1977, I personally believe that in such a situation one will necessarily have growing pains; that because of new people and new trade unions appearing on the scene that display a lack of experience, it goes without saying that drastic action ought not to be taken. Therefore I believe that coercive measures as regards the registration of trade unions are probably not appropriate at this stage.
†In this context, Mr Speaker, I want to agree with the hon member for Pinelands. One has of course in this kind of situation the problem of teething troubles. That is why we have already had a series of amendments to the various Acts covering the new labour dispensation to which the hon member referred. Most of those amendments were effected in 1981. The mere fact that one has to come along again with amending legislation still shows that as a result of these teething troubles there are certain loopholes. I also have of course a different perception from that of the hon member for Pinelands in this respect, as I also differ from the hon member for Brakpan in respect of my perception in this regard.
You are closer to me in respect of this issue.
Yes, I am much closer to the hon member for Pinelands in this particular context, in the sense that I agree with him that the whole new manpower dispensation has been the result of painstaking, delicate negotiations. I agree with the hon member there, and I believe that is the right way to do it. I believe the Government has shown by its record in this particular field that it also sets far greater store by persuasion—by methods of persuasion if possible—than by bringing pressure to bear or even by coercion. Therefore, I agree that coercion is not the right way to persuade trade unions to register. However, as I mentioned in my reply to the hon member for Brakpan, we are trying to get rid of all forms of discrimination in this legislation. We have here certain parties, unions and others, who are negotiating procedural and other agreements which fall somewhat outside the scope of the principal Act. The hon member for Pinelands admitted that this was not necessarily right and that although some of the aims that we were trying to achieve by means of this amending legislation were indeed desirable, he disagreed with us in regard to our method of going about it. I think that the difficulty of achieving a correct method has been demonstrated by the hon member for Pinelands in his speech. I say this because he was critical of the pressures that are being brought to bear—I do not think it is coercion but perhaps a little more stick that is being added—and he felt that there should be more carrot. However, he failed to suggest what kind of carrot it should be. He did, of course, mention a select committee and, like the hon member for Roodeplaat, because, as I have said, it is our style, particularly in this field of endeavour in South Africa, to have a persuasive style rather than some other kind of style, I am quite sure that the hon the Minister will at least give some consideration to the request of the hon member for Pinelands for the appointment of a select committee at some or other stage. I am not saying that he will accede to the request; I say that he may consider it.
What do you think? Will you support it?
Well, personally, I do not think that it would be too bad after Second Reading but it is, of course, the prerogative of the hon the Minister to decide. In this regard, my perception also differs from that of the hon member for Pinelands.
As I have said, I do not think that there are very great deviations in principle from what the principal Act intended to achieve in the first place, particularly in regard to clause 2. I see it merely as a need to close a loophole that still remains so that every trade union whether registered or unregistered, whether it be an employers’ organization or a trade union, whether as a federation or as an individual union should have to meet the obligations of the principal Act in every way if the advantages provided by the principal Act are to be enjoyed. It really is discriminatory and unfair to the people who do abide by the rules if others are allowed to enjoy the advantages of the Act, including the procedures for litigation, when they are not prepared to meet their obligations. That is why I do not really see that this is a deviation in principle at all which would really warrant the type of description used by the hon member for Pinelands in this respect. He said it was such a harsh measure. I do not think it is a harsh measure but that is, of course, a question of perception and so in this regard I fear we shall just have to agree to differ.
I really feel that since the hon member for Pinelands has admitted that the aims of this amending Bill are in effect desirable and that some of the unions which did not wish to meet certain obligations laid down by the principal Act were not necessarily correct in their behaviour, instead of describing a rectifying measure as harsh, he should rather also use some care in the interests of all to persuade those people to ameliorate their attitude towards legislation which generally aims at sound and harmonious labour relations with the maximum degree of negotiation and persuasion possible in a rather difficult situation. This also applies to the federations. I feel that the federations are party to an agreement of this kind and they should therefore be treated in the same way as any other negotiating party in such a situation whether it be a trade union or an employers’ organization. Therefore I also found it a bit strange that the hon member for Pinelands could single out the clause applying to the extension of these provisions to federations as worthy of some criticism. I do not quite see that. If we want to remove all kinds of unfairness and discrimination, then we have to be consistent and we should have it applied to everything.
Finally I come to the question of the right of appeal being transferred back to the Minister from the Industrial Court. The hon member for Pinelands will recall that this right of appeal was originally vested in the Minister before it went to the Industrial Court. The fact that its now being brought back to the Minister has, as the very excellent explanatory memorandum points out—I want to thank the officials of the department for the explanatory memorandum—directly to do with the Government’s decentralization policy for industries which I consider very necessary and desirable. As the kind of decisions that have to be made in such appeals in this new context have to do with policy making rather than with juridical matters, it is only logical that the Minister would seem to be the best person to handle such appeals. I really do not think that one can expect of any court, whether it is an industrial court or any court of law, to be a policy making body, particularly a policy making body for socio-economic issues such as labour relations. That being the case, the courts have to act in the juridical sphere. They have to interpret and judge on existing legislation and not formulate policy or even implement policy. Therefore it would only seem logical that also in this respect the right of appeal should go back to the Minister.
*I do not agree with the hon members for Pinelands and Brakpan that this will again lead to other discriminatory measures against large or small companies. That is by no means the aim of the legislation. The issue here is purely that one cannot expect of any court to become a policy-making or policy-determining body.
I believe that it will be quite clear from what I have said that I regard all four clauses of the Bill as improvements of the principal Act, whereas the principles embodied in the principal Act have certainly not been drastically altered, and therefore I have no hesitation in supporting the Second Reading of the Bill.
Mr Speaker, the hon member for Benoni and other speakers before him have raised and discussed the very important matters which are dealt with in the Bill. I think they are matters which should be given very considerable thought indeed.
I want to start with the last point raised by the hon member for Benoni and that is the right of appeal. Whether in terms of industrial labour practices or relations the right of appeal should be vested in the judiciary or in the Executive by way of the Minister, is a question which we can debate. The parliamentary and democratic system which we have in South Africa and which has been tried and tested over many decades and centuries in other parts of the world has indicated that it is unavoidable that Ministers should have a certain amount of executive power which overlaps in the form of appeal with the judiciary. One of the reasons why this is the case has been mentioned by the hon member for Benoni and that is that there should be a distinction between a legalistic or judicial argument and a policy argument. One is therefore apparently entitled to give the Minister the power to deal with appeals if such appeals deal with a policy matter determined by the ruling party or by the Minister himself. In this case, however, we believe that where one is dealing with the rights of organized labour to exercise certain rights which are entrenched in legislation, that argument goes wide of the mark of what could be interpreted as Government policy. Once it is embodied in legislation, then of course it is no longer Government policy; it is then a legalistic right and that should be argued along the lines of jurisprudence and in the best tradition of an independent judiciary.
For that reason we will at this stage not be supporting the concept of the right of appeal to be vested in the hon the Minister. It should rather revert back to an industrial court.
We understand the basic problem which the hon the Minister and the Department have in this respect. That is that many of the unions, in particular the “unregistered unions”, have tended to frustrate industrial agreements and their implementation by declaring that it is an unfair labour practice and then bogging down the industrial court completely and not making it possible for them to give a verdict in a relatively short period of time. Therefore the delay between the generation of an industrial council agreement and its actual implementation can be quite considerable and thus not beneficial to that particular trade or sector. We understand the hon the Minister’s problem, but the problem is to be tackled by changing the attitude of the unions and getting to the bottom of their frustration and problems rather than to revert back to giving the hon the Minister the power of appeal.
The other two important aspects as far as we are concerned relate to the registration of federations of unions. If this amending legislation is passed, it would mean that an agreement entered into between employers and employee organizations, particularly a federation, would be invalid and not prosecutable in a court of law if that federation had not registered, had not registered the name of its head office and its list of members. They will not be able to contest their agreements in court if they are not properly registered. With that aspect of the Bill we have no complaint. Any company which operates in the private free enterprise system in South Africa, must register itself and its shareholders must be declared because it deals with finances of members who are sometimes shareholders of the company or pay subscriptions if they are members. We believe that any federation of trade unions, or trade unions themselves, should be properly registered—it is a minimal registration requirement—because they are dealing with public assets. Whether the public assets are subscriptions from union members or not, they wield very considerable power. Every political party in South Africa today must register, because a political party itself also wields very considerable influence and power, some to a greater and others to a lesser extent.
We therefore have no hesitation in saying that we agree with the principle that these organizations should be registered. What earthly reason could there be for these people to want to refuse to register? I cannot understand why the hon member for Pine-lands says that that is an undesirable practice.
I am saying that you need to deal with realities. There is a perception in unions regarding national …
That is correct; in other words, they were seen to be part of the system and this was the original problem which they had. They were using a platform to popularize themselves and to compete with existing unions by saying: “Do not worry, we are not part of the system”. In order to avoid being seen as part of the system, or the establishment, by the workers, they play with this idea of not registering. However, it is not rejudicial to the welfare of a union to register; it merely affords them the opportunity to play politics, to play confrontation politics in trade unionism, and I do not think it is a valid reason.
I now want to refer to the gravamen of the problem. This relates to …
Ah! That’s nice.
I see the hon member likes that word.
Do not forget the sweat equity.
The hon members are definitely listening, Mr Speaker, and that is very important indeed. They apparently hang onto every word I say.
The major problem here relates to clause 3 on page 5, the clause which deals with the transfer of power from the industrial court to the hon the Minister. It will be within his power to grant exemption from part or the whole of industrial council agreements. This is a major departure from what we believe should be sound labour practice in South Africa. The hon the Minister could well have solved this problem for us thereby avoiding the support which we may be giving the PFP on their amendment. I want to refer to page 7, line 55, of the Bill. If it was possible—I know it would be ruled out of order—to amend “after consultation” to read “in consultation” we may well have taken a different view of the ministerial powers. As it stands at the moment, if it is approved and the Minister is required after consultation with the industrial council or the conciliation board to grant an exemption, it means he can ignore the advice of these people, ride rough-shod over it and grant exemption from an industrial council agreement in part or in whole for an area. However, if “in consultation” is inserted then he has to achieve consensus first before he can grant exemption. Unfortunately from a technical point of view it is not possible for us to move that amendment. Therefore we have generated a considerable interest in the amendment of the hon member for Pinelands.
Let me say why we believe this is improper. It is because an industrial council agreement is the product of extensive negotiation, often months and years of negotiation, between employers and employees who do take a wide range of factors into consideration before they finally agree on a particular industrial council agreement. What the hon the Minister wants to do he can do right in the centre of the industry or trade or in the peripheral areas. I know the hon the Minister and his spokesmen have said that the reason why the Minister wants this power is in order to facilitate or maximize decentralization of industry. In order to give these entrepreneurs an advantage in a certain area he can grant them exemption from the minimum wage requirements and the minimum conditions of service so as to make them more competitive because their input costs such as for transportation and maintaining management etc there are higher.
The question is, of course, why an industrial council itself cannot write it into their agreement. Why is it necessary for the Minister to have that power and to ride roughshod over the industry and its representatives on the industrial council? Our standpoint is that if there is a need for decentralization I am sure the trade unions will be the very first to recognize the fact that decentralization creates job opportunities, that it widens the scope of the industry and that it makes us less dependent on imports. They themselves would be agreeable to having geographic variation. In fact, that is a well established principle in industrial agreements at the moment. For insurance the dairy industry in Durban has a different set of conditions to the dairy industry in Port Elizabeth or Johannesburg. One also finds differential wages and conditions of service which the agreements reflect. They are therefore applicable only in certain areas. We believe that it should be left to the industrial councils themselves to make provision for those variations, including decentralization which the hon the Minister wishes to achieve. For that reason we feel that there is a lot of merit in referring this Bill to a select committee before Second Reading, as has been requested by the hon member for Pine-lands in his amendment. I say this for the simple reason that we are dealing here with the root cause of discontent among some of the younger unions, the industrial councils and the existing unions—I know that the Trade Union Council of South Africa is totally against these powers which the Minister wants for himself—and the relationship between industrial councils and the Minister.
May I say in conclusion—we do, support the amendment of the hon the member for Pinelands that in fact if one wanted to examine this philosophically, the power of the Minister to grant exemption from an industrial council agreement could be interpreted as an unfair labour practice. There could be many instances where it could be prejudicial to the interests of labour and to the interests of management because the decision of the Minister may not have been as well founded as would be the case in respect of an industrial council agreement. The hon member knows that many practices revolve around the wage level. Take the mining industry as an example. The White mineworkers are quite prepared to entertain the concept of members of other groups doing the same work as themselves such as obtaining a blasting certificate, provided there is no difference in the wages, that it is equal pay for equal work. In many instances where the Minister is going to grant exemption, it will be done in order to reduce the minimum wage payable so as to give the entrepreneur an advantage. The whole concept of equal pay for equal work, which has socio-economic and political implications, could be interpreted as an unfair labour practice, and then it will be quite interesting to see what will happen vis-à-vis the hon the Minister’s standpoint, the industrial council and the industrial court.
We trust that the hon the Minister will give favourable consideration to the hon member for Pinelands’ amendment because we will fully support referring this measure to a select committee before the Second Reading.
Mr Speaker, I take pleasure in speaking after the hon member for Durban North. It was very clear that he understood the difficulties the Government has when labour problems have to be dealt with. Amongst other things, he expressed concern about the powers the Minister would have in future and he said that there would be no real consultation between the Minister and those involved. I think the hon the Minister will reply to the hon member on that score.
The hon member for Brakpan said that as regards our labour dispensation we should go back to the days when the present State President was Minister of Labour. However, the hon member is aware that a great deal has happened since then, and he would probably readily concede that the problems we have to face today and prevailing circumstances differ so radically from the set-up at that time that we will never be able to go back to the days when the State President was Minister of Labour. It is interesting, however, that from that time the hon members of the CP have come the whole way with us, but now, all of a sudden, the path is no longer the right one, and they want to retrace their steps. The hon member for Brakpan is one of the members of the CP who at least intimated on occasion that they did, in fact, agree with what we were doing at that time. He said by way of an interjection: “I supported it, but with regret.” The fact remains, however, that he and other CP members supported it.
When amendments to the Labour Relations Act are effected or proposed, it must in fact be done with a great deal of circumspection, as other hon members have already said, for whatever is decided in respect of the position of the millions of workers in this country will be studied and blazoned abroad both here and overseas. Whether it is about wage demands, disputes or pension benefits; whether it is about the question of striking or not striking or whether it is about adjustments to this Act, it will always be a news item of major importance. This is the case because we are moving in a sensitive field and because everyone knows that the potential for conflict is unquestionably built in to our labour set-up. Everyone is aware of this, even those who do not wish to admit that there is an onslaught on our country. The Labour Relations Act will therefore have to be adjusted and amended continually in the future in view of the circumstances in which we find ourselves.
However, it is not only the task of the Government to maintain order and peace in the labour situation. The partnership of State, employer en employee must function in an indissoluble and co-ordinated way in order to achieve a common goal, viz work for everyone in a peaceful environment. Let us take a brief look at what the Government has done, and is still doing, to achieve that set goal. I just want to refer in passing to the very clear set goals in the preamble to the constitution, which reaffirms the earnestness of the Government to want to achieve only the best for this country and its people. This includes the workers. We need not go very far back. Could any Government have decided more timeously to appoint a Wiehahn Commission with the following terms of reference?:
The bottle-necks were identified in the ensuing reports that were published and the Government’s action was not only confined to White Papers. Under the outstanding leadership of a certain Fanie Botha these matters were given due attention and decisions were taken which were not equally popular with everyone, but which were in the interests of this country. This will be confirmed by history in time. The Government went further, and bodies such as the Manpower Commission and others are now able to give the Government scientific information regarding our manpower position and how it can best be utilized. Has the Government not made considerable progress in training workers and giving guidance and assistance in this regard? However, the Government went even further by announcing one of the most exciting and most formidable industrial and regional development plans in the world, with only one aim, viz to create employment opportunities for the thousands of people entering the labour market. Is the Government not doing its share when the RSA is known as one of the most reliable trading partners in the world today? Our workers must be aware of this, since it creates trust and obviously it also safeguards the position of the worker. A responsible government would have to proceed in this vein in adjusting legislation from time to time as circumstances change. The Government cannot sit on the sidelines and watch the labour situation. Things do not work like that, and the hon member for Pinelands, who is insisting that the Government should not be so intimately involved and should not interefere with the labour set-up, is entirely wrong. The Government cannot remain on the sidelines, for when there is chaos and unrest, it is the Government that will be given the full blame. How can the Government sit on the sidelines when we have information which unquestionably points to actions being launched and planned to bedevil the political and labour spheres? Everyone in this House and every citizen at large can expect the Government to give its attention to these threats from both outside and inside, threats and plans about which we have to read in no uncertain terms on the front pages of newspapers and in magazines on labour relations. We can therefore expect that the Department of Manpower, as the instrument of the Government in the labour field, must be informed about the membership of trade unions. We want to know whether such an organization is operating within the framework of a constitution and we want to know what that constitution says.
It is necessary to know where trade unions get their funds. No government would keep an eye on any trade union that wants to justify the basic reason for its existence, viz the furtherance and protection of the economic interests of its members, but a responsible government would have to give attention to the organizations that are playing a political game. We must bear in mind that in the times we are living in the employer and his representative workers’ association are exposed to the most vehement and most purposeful influence from forces that have other aims. Any political party, institution or pressure group that insists in instilling a negative or radical spirit to the left or to the right in the trade union movement, is guilty of a serious misdeed towards the people whose interests really ought to be protected. These people must know that they are playing with fire. Let us not play into the hands of those who pretend that they are fighting for the interest of the worker but who, in reality, are by no means interested in the wages and salaries and the conditions of service of the workers, but who really want to organize the work force into a massive solidarity movement with political aims. Of course, we have already noticed that this kind of thing is taking place. The right of the worker to associate is justifiably regarded as a right that should be treasured. In practice, however, there are those who conveniently forget that there are various divisions of work in the labour spectrum where, for obvious reasons, the workers wish to associate in specific groups. A certain Cyril Ramaphosa of the National Union of Mineworkers is one of the people who wants to bring all Black workers together in one union regardless of the work they do, with no other aim but to form a solidarity movement seeking political power. If this can happen on the left, what is to stop it from happening on the right as well? If these people succeed, there will be no question of reform in the labour sphere, but there will be the most violent revolution imaginable in the labour sphere.
Discipline in the labour situation must be the watchword of each of our workers. It is not only the State that can play a role by way of statutory measures, amongst other things. Workers must carry this discipline into the workplace through their workers’ associations. Discipline and labour peace are twin brothers. Only if there is discipline will the demands of the trade union on behalf of its members be reasonable and can there be a chance that the demands and claims will be tempered by the realities of the day. If this is the case, it will necessarily contribute to the peace each of us yearns for. Under these circumstances the worker will not be denied a single right. On the contrary, he will in fact be able to experience and exploit it in this peaceful labour atmosphere.
It is easy to blame labour legislation when there is unrest in the labour field. There are those who say we are doing too little too late. Through his trade union, the worker can just as easily be branded as the scapegoat. We can go on seeking reasons in this way. However, I want to say that the employer’s role in creating the right circumstances in which the State and the workers can play their role in the labour dispensation, must not be underestimated. Last year the department of industrial relations of the University of Stellenbosch carried out an investigation and shed some interesting light on this problem. It was found that 62,9% of last year’s strikes could be ascribed to unjust action by employers and management. Furthermore, it is also a fact that not all strikes arise purely from wage disputes; there are other reasons as well.
What do I really want to tell the employer by emphasising his role so strongly? Firstly, I want to say that the employer who looks after the interest of his workers well, will have little trouble in negotiating and coming to a satisfactory conclusion regarding the problems that may arise. Secondly, in the case of disputes, it is not the task of the management simply to telephone the police to come and maintain order. Thirdly, when they enter into agreements, the workers must make sure that the workers’ organizations comply with fixed legal provisions.
Business suspended at 18h30 and resumed at 20h00.
Mr Speaker, before business was suspended earlier this evening, I was briefly emphasizing the very important role of the employer as a partner of the State and the employee in the labour dispensation. Fortunately it is true that there are very clear signs that the employer understands his role in preventing the problem, and that he acts accordingly in the process of negotiation.
Having said all this, it is clear that discipline in the labour situation, and the labour peace that results from this is not something we simply receive on a platter. It requires dedication, hard work and an honest setting of goals by everyone concerned. The principal Act is known as the Labour Relations Act. This name says a great deal. The labour force of South Africa, their representative associations and employer organizations, as well as political parties inside and outside this House, and everyone else concerned with labour affairs, must realize that creating sound relations is the key to peace, in the labour field as well. If we are fortunate enough to read a success story in the history books of the future in which the actions of this country are pertinently mentioned, it will be because we in this country showed tolerance towards one another. Wiehahn, Riekert, trade unions, and so on, are words that have become swear words in the mouths of certain people.
Let us be grateful that a certain Prof Wiehahn focused our attention on the factual situation with regard to our labour set-up, a set-up we have to deal with and which we cannot evade. Let us accept the trade union as an instrument that negotiates on behalf of its members. Let us accept that the interests of millions of workers in this country have to be taken care of; workers who coincidentally are not all White. Let us seize the opportunity whilst we still have time to work out a workable formula and before an exciting opportunity and challenge perhaps becomes an embarrassment to us.
The very object of the statutory amendment before us is to incorporate further discipline into the existing legislation. Whether the amendment will comply with what we wish to achieve, viz the further protection of the worker, is something we shall have to evaluate from time to time, whilst we shall also have to act accordingly. If that is our aim, the legislator will be free to be able to say that he acted responsibly towards those whose interests are really at stake.
I support the present legislation.
Mr Speaker, it goes without saying that I agree with quite a few of the things the hon member for Rustenburg said. The importance of the appointment of the Wiehahn Commission, the fact that things did change and that today we can no longer assess the situation in terms of what it was five or ten years ago, amongst other things, all confirm what the hon member said. The hon member for Rustenburg will not, however, take it amiss of me if I remark that the major portion of his speech did not actually deal with the Bill. It actually covered a much wider field, embracing things such as trade unionism and the problems and dangers involved in it. It did not cover the Bill itself.
Mr Speaker, I actually just want to support the amendment moved by the hon member for Pinelands, an amendment in which he requests that the Bill be referred to a select committee prior to Second Reading. We know the hon the Minister and this department as being reasonable, thinking and rational individuals. That is the very reason why I feel myself at liberty to support the hon member for Pinelands’ motion.
Noting the course taken in regard to the relevant legislation—that was also what I found interesting in this evening’s discussion—I must say that the request actually came from all three the Opposition parties in this House. That is important in the light of the way in which our labour legislation has been dealt with in this House in the past few years. This has been done in a spirit of responsibility, co-operation and goodwill. In other words, there was no attempt at seeking divisiveness where none existed; nor an attempt to initiate confrontation; on the contrary, we realized and acknowledged that great strides had been made in this field. We acknowledge that there are big problems we are faced with, and we must all investigate how we are going to deal with those problems. That is the spirit in which the labour legislation has been dealt with in this House in previous years. It was also the reaction of the former Minister and the department to see whether they could not obtain the maximum degree of consensus in connection with this matter, because it is an extremely important field. The issues and the problems are too overwhelming, as a result of so many things in our country, and we cannot—if it can be avoided—afford to create or seek confrontation on labour legislation in this House. It is in that spirit that the hon member for Pinelands moved his amendment, and it is in that spirit that I want to support that amendment. I do also want to link up with the hon members for Pinelands, the hon member for Barberton and the hon member for Durban North in making a serious appeal to the hon the Minister to pay heed to our argument. I shall also indicate my reasons for saying why it seems to us to be important for this matter to be referred to a select committee.
The hon member for Pinelands and other hon members said that we greatly appreciated the work done by the Department of Manpower. We are aware of their dedication and of their deep-rooted knowledge—much more than I or any other hon member in this House can have—about the actual problems we are confronted with in this country of ours when it comes to trade unionism and so on. We greatly appreciate the work they are doing and the work done by the Manpower Commission. I say without qualification that what we desire is to co-operate in this tremendously important aspect of the life of our people. It is specifically because of our concern about these matters that we want to make that urgent appeal to the hon the Minister to consider referring this amendment Bill to a select committee.
The hon member for Pinelands made two important points which were not refuted by either the hon member for Roodeplaat or the hon member for Benoni. The first point he made was that when the draft Bill was published it did not contain these important provisions to which we are objecting. Consequently there was no opportunity to test people’s reactions to these provisions. If they had indeed been included, and representations had been made in that connection, the department having drawn up the provisions in the light of those representations, it would have been a different matter. We are under the impression, however, that there was actually no opportunity for people to make representations about these fundamental points and consequently infuse the department’s thinking in this connection.
The second point the hon member for Pinelands made was that serious, unsolicited representations were made to him by all manner of bodies—members of the Manpower Commission, trade unions and whatever—in which it was said: We are unhappy about the new provisions. Whether we agree with them or not, is not the point. The point is that in terms of the role that we have to play in this House it is our duty, when such representations are made to us, to tell the hon the Minister and his department, since these particular provisions were not embodied in the original draft Bill: Wait a minute, there is no urgency—and I shall be coming back to that—for this matter to be forced through now. Let us rather reflect on the matter for a moment.
Even if one were to be very much in sympathy with what this Bill hoped to achieve, the fact remains that neither the hon the Minister nor any of the other hon members have told us, in connection with clauses 2 and 3, what the urgency is. If the hon the Minister had said that problems had arisen and that they had been confronted with practical situations calling for action, and we had been furnished with particulars, we would have been better able to evaluate this aspect, but the immediate need or vital urgency for changes as drastic as this—as I shall indicate presently—has not been put to us. I think the hon the Minister will concede as much.
Perhaps it is only my ignorance, but I do not know of any such problems. I do not doubt that there are problems and that the department is aware of them, but in the motivation furnished, both in the explanatory memorandum and in the hon the Minsiter’s speech, I have simply not been able to gain any sense of urgency about this matter. That is all the more reason why we should reflect calmly and see how we can go further.
One of the fundamental problems—the hon members for Brakpan, Durban North and Benoni touched on this—is whether we should use coercive measures to compel unregistered Black trade unions to register. That is a very great problem, and the department and the hon the Minister will concede as much. Because we should, as far as those important problems are concerned, have an opportunity to reflect calmly, it seems to me it would be wrong to come along with legislation now and say we want to force the issue.
It is very clear that for many long years to come we shall be faced with a situation of uncertainty. One only has to look at the history of the trade union movement in general, and more specifically at the history of Black trade unionism. Throughout the years there was a refusal to recognize Black trade unions and to slot them into our industrial negotiating machinery. Keeping this background in mind, seeing the problem in the light of all the factors affecting the Black community, we cannot expect our Black workers, at this stage, to display the same sophistication as our White workers. That would be too much to ask in the light of the overall pattern of history.
What I therefore want to say is that it is very clear that with the best will in the world we shall, during the next few years, constantly be faced with the problem of how to handle this situation. I can only say that I believe that as in the past few years, with the goodwill of all the parties in the House, and with the responsible view taken by the hon the Minister and the department, it will be possible for everyone in the House to make a contribution when it comes to dealing with this truly difficult problem. The hon the Minister will concede that the last word has not yet been spoken. We are still increasingly going to be confronted with problems. That is, after all, quite clear.
I do not want to elaborate on clause 3. I think it has generally been pointed out by the hon members for Brakpan, Durban North and Benoni that there are all kinds of problems involved in transferring the functions of the Industrial Court to the Minister and that we have perhaps not yet realized the full implications of this. I therefore do not want to express an opinion about clause 3, except to associate myself with the general standpoint that I am not sure that eliminating the Industrial Court and transferring the responsibilities and powers to the Minister is a desirable change.
Allow me to make a few remarks about clause 2. That is another clause we object to. Clause 2 contains four important provisions. I am mentioning this because in all honesty to myself I wanted to try to understand what the implications and effect of this legal amendment would be. I was not, however, able to obtain clarity on any of these points. What does this clause provide? It states, firstly, that if there is an agreement, negotiated between an employer or group of employers and a group of employees, which does not comply with the requirement of a registered trade union, that agreement is not enforceable. It has been intimated that this relates chiefly to Black trade unions. It is equally possible for such agreement to contain provisions protecting the employes’ interests and not only those of the employees. If such an undertaking is not enforceable in a court of law, this surely means that we are also depriving the employer of the fundamental right to keep his employee to a contract that has been concluded, quite apart from the fact that this is primarily a case of a possible civil action in a court of law and not a criminal action. This point is of particular importance in the light of subsection (4) where it is provided that any prior agreement would also be subject to this. So that will not be enforceable either.
Earlier on I referred to the history of Black trade unions. The hon the Minister and the Director-General will know that before this legislation was introduced the only way legal agreements could be concluded was in terms of the old Black Labour Act. That Act made provision for agreements between works committees and employers. The hon the Minister may know, but I certainly do not know whether numerous such agreements have been concluded between smaller employers and their Black employees on the factory floor. It is therefore possible that there are employers and employees who are not linked up with the broader employer organizations or trade unions. What is now being provided, is that all such agreements which were concluded will, a month after the commencement of this Act, fall under the provision of the Act. This means that those agreements, concluded between those emlpoyers and the employees, cannot be enforced in a court of law.
I want to refer to further implications of the implementation of this clause. Those poor employers and employees are now being compelled, within this specific period, to give notice to an inspector. How are we going to find out whether there are such employers and employees who could possibly be affected by the retrospective nature of the provisions of clause 2(4)? In light of all that, it seems to me as if we are in danger of committing an injustice, because those people entered into negotiations with one another in all good faith before this legislation was introduced.
I agree with the hon member for Roodeplaat that a requirement for smooth-running employer/employee relations in good faith. What, however, are we doing here? In regard to such agreements we are saying, firstly, that they cannot be enforced in a court of law; secondly, that within 30 days a report should be furnished in connection with an agreement which was perhaps concluded two or three years ago and, thirdly, that if this is not done, a criminal offence will have been committed. I support the hon member for Pinelands’ amendment because with the best will in the world I cannot foresee all the implications of the proposed amendments.
A second aspect of subsection (2) of the proposed new section 31A, as contained in clause 2 of the Bill, is that the parties must give notice. I do not know which parties are being referred to. Does this obligation apply to both parties, employers and employees? If it is not an organized group of workers, the agreement having been concluded on the factory floor, is the employer expected to furnish a report in terms of subsection (2)? I do not know whether this is practicable. As far as this matter is concerned, some doubts exist. This means that if the agreement entered into was not a written agreement, full particulars must be furnished in writing. According to the Bill, this must be done by the “parties”, not one of the parties, but the “parties”. It seems to me as if the implication is, of necessity, that both parties are expected to furnish a written report about the agreement to the inspector.
Another aspect that creates a big problem as far as we are concerned is that relating to subsection (3). In terms of that subsection, anyone who fails to comply with any provision of subsection (2)—in other words, the obligations to submit notification of an agreement within 30 days—is guilty of an offence. I do not want to imply that it may not be essential, at some or other stage, to introduce penal provisions, but I think that at this sensitive stage of the problem involving Black workers and Black trade unions, it would be unwise to introduce penal provisions of this nature.
I want to associate myself with the hon member for Pinelands and seriously request the hon the Minister to refer the Bill to a select committee. He could not lose anything by doing so. This does not appear to me to be a matter of the utmost urgency that must be finalized today or tomorrow. In accepting the amendment of the hon member for Pinelands and referring the Bill to a select committee before Second Reading, the hon the Minister can only win.
Mr Speaker, I do not intend disturbing the peaceful atmosphere prevailing in this House in any way, nor am I going to repeat the arguments advanced with so much conviction by various hon members on both sides of the House. I want to summarize by saying that the most serious question we are being confronted with does not concern the contents of the measure under discussion, but the procedure followed in bringing this measure before this House and, secondly, what procedure is going to be followed in dealing with it further. I do not intend entering into a debate with the hon member for Pinelands and speculating about this. Like the hon member, I shall also await the hon the Minister’s decision on the matter. I do just want to state that it is very clear that the labour dispensation and the labour legislation in operation in the Republic of South Africa at present is very sound and forms a base for meaningful further evolutionary development. With the exception of the hon member for Brakpan, not one hon member suggested that an in-depth look be taken at existing legislation or that it should be drastically amended. [Interjections.] However, I do not think that the clamping down approach of the hon member for Brakpan—this is how he interprets clause 2—provides an answer to the problems we have to deal with. Apart from that, the hon member for Pinelands is not aware of the full truth if he feels that negotiation simply means concession. The attitude reflected by hon members on this side of the House indicates that we must create evolutionary domestic government in the labour field in which the State, the employer and the employee can organize themselves in such a way that problems can be solved in an evolutionary way through negotiation.
Another matter of the utmost importance and which is deeply philosophical, is the question whether the right of appeal should be vested in the Minister, or whether it should fall under the industrial court. I think that the good faith on this side of the House was demonstrated very effectively by the hon member for Roodeplaat when he pointed this out and asked us not to allow the status of the industrial court to be diminished in any way. What is happening here is that an element of the industrial court is now being channelled to the Minister in order to prevent that court from becoming politicized. As set out in the explanatory memorandum, the Minister is better equipped to deal with these aspects of policy implementation.
I believe that we have reached the point when we should hear what the hon the Minister’s reply is.
Mr Speaker, in the first place I want to thank hon members who participated in the debate for their contributions, particularly the hon members who made very positive contributions and who debated the legislation in an objective way.
Since we are dealing with labour legislation in South Africa, and since the entire question of labour and labour legislation is a very sensitive matter which covers the broad spectrum of the national economy and is of great importance to South Africa, it is my considered opinion that we must have maximum consensus and unanimity, but also enlightenment, on legislation of this nature. I am consequently prepared to refer this legislation to a select committee prior to Second Reading. [Interjections.]
You have now thrown in the towel.
I do not appreciate that remark. I am going to treat the hon member for Brakpan decently in all the debates. Without trying to score political points, I want to tell the hon member that we should elevate labour matters so that they are not exploited by any side of this House to the detriment of South Africa.
Why did you not do that in the first instance?
The hon member wanted me to take a decision before I was addressed on the matter. In other words, the hon member wants to negate Parliament. He is now saying that I should not have come to Parliament with this legislation, and that before something is discussed in Parliament I must indicate that I have taken a decision one way or the other, regardless of what Parliament says. I want to tell the hon member that I am not prepared to hold members of Parliament in contempt.
May I ask you a question?
The hon member must first resume his seat for a while. I shall give him a chance to put a question in a moment. I shall give the hon member a little attention, because I know he needs it.
Sir, I am not prepared to use Parliament as a rubber stamp. I am not prepared to come to Parliament, and then plug my ears with cotton-wool and refuse to listen to what Parliament is saying. What is important in this respect is that the members who are sitting here were elected by the people. For the opinions which they express here they are held accountable to the voters of the country. I therefore refuse to use them as rubber stamps and to pretend not to hear them or to come to this place with preconceived ideas. If that is the attitude of the hon member for Brakpan, I feel sorry for him. However, I appeal to the hon member to agree that we send this legislation to a select committee that can consider it from all angles. The select committee can then come forward with positive suggestions. I am not going to yield to the temptation to try to turn sensitive labour relations in this country into a political issue. If the hon member wants to be angry with me about that, I welcome his wrath. We, however, must act in a responsible and reasonable way. If there is one danger in this country which could give rise to problems, it is when ignorance and misunderstanding exist over the intentions of the Government with its labour legislation. When I agree that we should refer this Bill to a select committee I am not implying by that that I do not stand by what is contained in this legislation or that I question the motives of this legislation. Not at all, I see my way clear to defending and motivating every clause of this legislation in Parliament. However, I am also aware that this legislation is misunderstood and misinterpreted by many people and organizations. I also know that erroneous propaganda about the contents, the points of departure and the motives of this legislation is being blazoned abroad. I should like to give everyone the opportunity for further consideration of the matter, so that everyone can feel that we are dealing here with fair legislation. That is why I am prepared to refer this Bill to a select committee, and for no other reason.
Hon members must pardon me if I do not refer to individual speeches. I do not think it is relevant at this stage to reply to every argument raised here, because these matters will, after all, be discussed again on the select committee. I just wish to make a few general observations now.
I want to tell the hon member for Brakpan that I do not appreciate his remark about capitulation.
But we supported you.
I thank him very much for his support.
Appreciate it then.
I thank him for his support; I appreciate it. However, I cannot get this legislation passed with the support of such a small minority. I must also say that when the hon member for Brakpan begins to support me, I begin to worry about this legislation and about my friends.
But your caucus supported you.
Yes, of course. You see, Sir, that hon member could not adhere to the decisions of his caucus when he was still in the National Party. I therefore understand his sensitiveness.
In general I want to say that we have been receiving representations for a long time …
Do you still want to give Stellenbosch away as a homeland?
Sir, the hon member is talking about a homeland now. I just want to tell him that his political associate, Dr Connie Mulder, convinced me that such a homeland could not work. [Interjections.] He was absolutely convincing, and I hope that the hon member for Kuruman will also allow himself to be convinced by his political associate that that homeland of his cannot work.
As I have said, for a long time now we have been receiving representations from various quarters, from trade unions, employers and numerous organizations, about action against trade unions in connection with non-compliance with basic obligations as laid down by the Act. Representations have also been received from various quarters, from politicians as well, in connection with appeals against industrial council decisions. A great deal has been said here tonight about the so-called draconian powers which the Minister will now acquire in that he will hear appeals against the decisions of industrial councils and decide about them, and is thus depriving the industrial court of that function.
Who are the people who are affected by the decisions of industrial councils? In the first place they are the parties to the industrial council who are affected by those decisions. The cardinal point, however, is that the industrial council comes to the Minister with that agreement and asks him to publish the agreement and make it binding on those who are not party to the industrial council, who are not part and parcel of that industrial council. They ask the Minister to make the agreement binding on small employers, on people who played no part whatsoever in the industrial council agreement. The power of the Minister is therefore being used to make those agreements binding on everyone, even though they were not party to that agreement.
For example if a small employer on whom the agreement is made binding is not satisfied with that agreement, he does not have the right to go to the person who made that agreement binding on him, but has to go to the industrial court. Surely it is the Minister who decided that the industrial council agreement should also be binding on that particular employer. Now, however, that employer must go to a court and say that the Minister’s decision was not fair to hum. Surely that court is not informed, and I would say that it is really not in a position to decide a matter which is not purely a legal matter. Surely this is not a judicial matter. Surely it is a socio-economic matter in regard to which a court is being asked to give a verdict; a verdict in regard to a decision given by the Minister. That is why I say this: Surely it is correct to come back to the man who made the agreement binding on the parties, and to ask him to release you from that agreement which he made binding on you. Why should one go to the industrial court to ask for that agreement to be rescinded?
Mr Speaker, earlier on the hon member for Brakpan wanted to put a question to me. I now give him a chance to do so.
Mr Speaker, the hon the Minister said that Parliament was not a rubber stamp and that he listened to Parliament before taking a final decision. Why did he not adopt that attitude at the time when the new constitution was being discussed in this House? [Interjections.]
Mr Speaker, the “he” to whom the hon member is referring did in fact listen to Parliament as far as the new constitution was concerned. If the “they” had not wasted the time of this House to such an extent, and had not been ruled out of order on so many occasions, it would have been possible to discuss the whole of the Constitution Bill in this House. [Interjections.] Who was ruled out of order so frequently, Mr Speaker? Who constantly made irrelevant statements and wasted the time of this House? [Interjections.] Mr. Speaker, I realize, however, that the question of the hon member for Brakpan is out of order. Consequently my reply will also be out of order. I shall consequently leave the entire matter at that now. [Interjections.] I hope the hon member for Brakpan will do the same. [Interjections.]
I now want to come to the motive behind, the grounds for, this legislation. All kinds of ulterior motives are now being ascribed to this Government, and it is even being said that this legislation is aimed precisely at putting the Black trade unions in their place. Where is it stated in this Bill that the measure under discussion is in fact aimed at Black trade unions? Cannot we in all honesty, in this Parliament at least, in this highest assembly of the people, simply adhere to the basic facts?
Where is it stated in this Bill that this measure is aimed at Black trade unions? In the first place it testifies to ignorance to make a statement like that. In the second place, it testifies to a lack of responsibility. In the third place …
First tell us what people you are actually talking about now?
About old people like you. [Interjections.] In the third place, it is entirely irresponsible to make such a statement.
Surely this Bill has no colour connotation. Why should the question of colour forever be dragged into our debates in this House? [Interjections.] Is it not perhaps done by people who, for lack of anything to say, for lack of other proper arguments, have to fall back on colour prejudices? [Interjections.] Is it not perhaps people who lack a good cause and good arguments, who have to fall back on the colour prejudices of others? [Interjections.]
I think that behaviour of this kind is no longer appropriate in South Africa. I think it testifies on the one hand to political insolvency and on the other to political opportunism. In fact I do not think that one can argue responsibly in such a way.
I shall now refer to clause 2. In it minimum requirements are being laid down with which trade unions must comply before their agreements with employers are legally enforceable. When one wishes to make use of legislation one must, in the first place, at least comply with the requirements of that legislation. A person who wants to open a shop, a person who wants to start a factory, must at least comply with the basic licensing requirements, not so? Surely there are basic rules in every community, certain fundamental obligations which one has to comply with. What is wrong with it when a person declares himself to be a trade union … [Interjections.] Of course this does not apply only to trade unions. Arguments have been advanced here implying that this legislation applies only to trade unions. It is indeed the case that if only we read the rest of the legislation we will observe that it also applies to employer’s organizations. It applies to employers as well as employees. It applies to both sides of the coin. It does not apply to one side only.
What is wrong with it, when viewed from all angles, if a person from an organization who presents himself as the negotiator on behalf of a group of employees is expected to submit his constitution to the Industrial Registrar? Surely one is not ashamed of one’s constitution. It provides that one must maintain a membership roll so that people can see whom one represents. It provides that one must keep proper books of account and that one must have those books audited every year.
What is even more important, it provides that one should have those funds which one has collected from one’s members—surely this is the nature of public funds—audited and submitted annually to one’s members. After all, one’s members are entitled, as in any orderly organization, to see what is being done with the money which has been collected from them. They want to know what it is being used for. They want to know whether it is being used for the purpose for which it was collected and they want to know whether it is not perhaps being collected for other purposes which could even militate against the interests of the workers. Surely it is not unfair to ask a trade union to comply with those basic requirements; on the contrary, I think that any trade union which is ashamed to submit these particulars has something to hide. That is why I say that the motivation for this is not to restrict trade unions. That is not the case at all. Where are restrictions being imposed?
In connection with the requirement which is laid down that copies of the agreements entered into should be submitted to the department, I want to say that when an industrial council agreement is entered into, that agreement shall be submitted to the department and we shall publish it under the Minister’s name as a binding agreement. Why then cannot we at least be able to inspect such an agreement so that we will know what the nature and scope and contents of such an agreement between a trade union and a group of employers are? Surely this is not secret information, and it ought not to be secret information either. Of course the department should have that information.
I have already dealt with the question of appeals in terms of clause 3, and I want to conclude by saying once again that I thank all hon members who participated in this debate, particularly those hon members who made a positive contribution. I also wish to express the hope that the select committee will report to Parliament as soon as possible, and therefore I am prepared to accept the amendment moved by the hon member for Pinelands.
Substitution of the words proposed by Dr A L Boraine put,
Upon which the House divided:
As fewer than fifteen members (viz Dr F Hartzenberg, Messrs J H Hoon, F J le Roux, Mrs E M Scholtz, Dr W J Snyman, Mr L M Theunissen, Dr A P Treurnicht, Messrs C Uys, H D K van der Merwe, W L van der Merwe, R F Van Heerden, Dr F A H van Staden, Messrs J J B van Zyl and J H Visagie) appeared on one side,
Substitution of the words declared agreed to.
Question, as amended, accordingly agreed to, viz: That the order for the Second Reading of the Labour Relations Amendment Bill be discharged and the subject of the Bill be referred to a Select Committee for enquiry and report, the Committee to have power to take evidence and call for papers and to have leave to bring up an amended Bill.
Mr Speaker, I move:
In Southern Africa, animal production makes a vital contribution to food production, the spending of farming revenue and the economic utilization of the greater part of the country’s surface which does not have the potential to be cultivated. South African can rightly be called a stock-raising country, and to the stock-farmers of South Africa it is very important that they should be supported by the State in their endeavour to increase their production and to make it more efficient, ie to achieve economically more profitable production. In this connection, the importance of purposeful and sustained research and extension services, which are the responsibility of the Department of Agriculture, cannot be overemphasized. However, there must also be statutory directives for the proper regulation of the industry, and one of these is the Livestock Improvement Act, 1977, in respect of which an amendment has now been submitted to this House for its consideration.
The legislation is aimed at providing for the improvement of the genetic production capacity of the livestock of the Republic by promoting the development of all the various branches of the livestock industry in an orderly and co-ordinated manner. For this reason, provision is being made for animals with outstanding characteristics to be identified by scientific evaluation. The use of such animals for breeding purposes is actively promoted by the legislation.
†Restrictive provisions in the Act should therefore not be regarded as the arbitrary curtailment of the individual’s right. Each restriction imposed by the Act should in the first instance be considered in the interests of the Livestock Industry and to the benefit of the Republic as a whole.
The Act contains the necessary provisions to enable a particular breeder to use any animal which could enhance the production potential of his herd or flock. However, the identification and selection of superior breeding animals should not be based on external appearance only, but the decisive factors should rather be the tested or proven production and transmitting potential of the individual animal. When the Livestock Improvement Act was placed on the Statute Book in 1977, the techniques of embryo transplant, that is the collection, of ova and embryos and the transfer thereof to foster females, were still in the early development stages. These techniques have now been developed to the practical stage and it has become imperative to regulate their application in the interests of the livestock industry of this country. Since the principles involved in the collection of ova and embryos and the inoculation of animals are to a large extent comparable with those relating to the collection of semen and artificial insemination of animals, provision is made in the amending Bill now under consideration to include ova, embryos and inovulation in those provisions of Act No 25 of 1977 which relate to semen and insemination.
*Animal scientists, who are highly specialized professionals, are already making an undisputed contribution to the improvement of the production capacity of the livestock industry. Genetic properties and feeding aspects of animals are the main fields in which the animal scientists, together with veterinarians who concentrate on promoting animal health, have a role to play. By the harmonious use of the services of animal scientists and veterinarians in the livestock industry, animal production can be considerably increased. In this respect, the amending Bill provides an example of the co-operation that can be brought about between these two professional groups.
As a result of problems in connection with implementation, it has not yet been possible to give effect to the provisions of the Life-stock Improvement Act, 1977, relating to livestock breeders’ societies and the Stud Book Association. Owing to the diversity of the objectives and functions of the various categories of livestock breeders’ societies, it has not been possible to achieve the ideal of a standard constitution for all which was envisaged in the Act. After consideration of several proposals submitted by the Department of Agriculture as well as the Stud Book Association, the conclusion was reached that the guidelines already laid down in the Act with regard to constitutions and annual reports are sufficient to regulate the objectives and functions of livestock breeders’ societies for the purposes of livestock improvement. The general control exercised over livestock breeders’ societies by the Registrar of Livestock Improvement and the Stud Book Association will ensure that those objectives and functions are properly pursued and exercised.
†Various other shortcomings in Act No 25 of 1977 which become apparent in the application of its provisions are now also being brought into line with the requirements for the proper administration thereof. One such problem is the control of the export of ostriches and ostrich eggs which is now specifically provided for in the amending Bill. This control was previously exercised under the Prohibition of Export of Ostriches Act, 1963, which was repealed by the Livestock Improvement Act, 1977. Although provision for such control was provided for in the regulations under the lastmentioned Act, it was, for practical reasons, deemed necessary specifically to provide for that control in the Act in order to protect the ostrich industry at a higher level. The proposals contained in the Bill now before this House were prepared in consultation over two years with the Advisory Board for Animal Production on which the Stud Book Association, the South African Agricultural Union, persons and bodies involved with embryo transplants and other interested bodies are represented, all of whom support the principles provided for therein.
Mr Speaker, the official Opposition will be giving its support to this Bill. The intentions of the Bill are quite clear. They are to improve and to regularise certain important practices associated with the livestock industry. Much of the Bill is concerned with provision relating to artificial insemination and ova transplants. While agricultural research has advanced at a steady pace over the past decade or so, the advances in the field of genetic engineering and artificial insemination in particular, have proceeded at a tremendous rate. This is the new frontier in agricultural research. The situation has now arisen where, if stringent precautions are not taken, abuses might occur which would not be to the benefit of the livestock industry. Individual farmers also need to be protected against malpractices which might arise.
In the field of artificial insemination, for example, the farmer is very much at the mercy of the supplier, particularly when semen is imported from overseas. I know of a recent case where semen imported from the United States of America was described by the AI station in East London as to all intents and purposes worthless as it had been badly collected and badly prepared. The chances of impregnating a cow with this semen were evidently very slim indeed. The farmer involved had paid something like R80 for each straw and he had imported 75 straws. The result therefore was that through no fault of his own he was down the drain by something like R6 000.
The kind of legislation which we have before us this evening makes it very difficult indeed for unscrupulous operators in this country to get away with this kind of dishonesty. This is why we welcome any provision which tightens up the control of this important branch of the livestock industry.
Just in passing, we find that provision is being made for an embargo on the sale of ostriches through the sale of ostrich eggs. I wonder if the hon the Minister thinks that this is a good thing for the ostrich industry? We have historical examples of embargoes being placed on, for example, silkworms by the Chinese, angoras by the Turks, merino rams by the Australians and pigs by the Danes. None of these really benefited the silk, mohair, wool or pork industries in the long run. In the modem world, such an embargo is, to say the least, quaint. Anyway, if the ostrich farmers want to keep their birds for themselves, I suppose it is their privilege and their own business. [Interjections.]
Having said that, we in the official Opposition have no quarrel with this Bill. It is aimed at improving very necessary legislation and we in these benches will support it through all its stages.
Mr Speaker, we thank the hon member and his party for their support of this legislation.
The increasing importance of animal production and animal products has become an important phenomenon and can only be met by the increasing application of modern science and technology. For this reason, the introduction of schemes for the evaluation and certification of the performance of various kinds and breeds of animals in order to improve the genetic production capacity of such kinds and breeds is of the utmost importance, not only to the livestock industry, but to the country as a whole.
Since 1921, when the South African Stud Book Association was incorporated, this association and its affiliated livestock breeders’ societies have endeavoured to improve the quality of farming stock. As long ago as 1971, when it celebrated its jubilee, the SA Stud Book Association deemed it necessary, because of rapidly changing conditions and requirements, to undertake an intensive investigation at a high level in order to find out how the stud book livestock industry could make a greater and even more constructive contribution to livestock improvement in this country. The need for new legislation which would incorporate all the facets of livestock improvement was very clear to the Stud Book Association, and that is why they took the initiative at the time and played a leading role in bringing about the Livestock Improvement Act (Act No 25 of 1977).
When this Act was placed on the Statute Book, the inovulation process was still being developed, and it was not possible to make adequate provision in the Act for the control of this process, for example in the case of artificial insemination. The principles in respect of the collection of ova and embryos and the inovulation of animals, which are controlled by the Act, have now crystallized, and therefore this amending Bill is basically intended to provide for the necessary control of ova, embryos and ovulation. Since the commencement of the Act, a few problems have been experienced with the implementation of certain provisions. The hon the Minister referred to this. However, they are now being rectified.
It is of great importance to the livestock industry that every person, with the exception of veterinarians, who collects embryos and undertakes ovulation on behalf of someone else should be registered in order to ensure that the service is provided by skilled and knowledgeable people. The proposed new section 7(l)(a), as contained in clause 5, provides for this, and in terms of the proposed new section 9(l)(a), as contained in clause 7, the inseminator must successfully complete a specific course of instruction in order to be registered as such.
The proposed new section 7(3)(b), as contained in clause 5, ensures that female animals from which ova and embryos are collected will also have to be submitted to stringent selection, just as in the case of male animals. It is also a good thing that in the proposed new section 10, which is being introduced by clause 8, the inovulation of animals in the same herd will also be exempted, just as the use of semen within the same herd is exempted, from the provisions of the Act relating to the approval of the animals from which such ova or embryos have been collected.
Another important provision occurs in clause 6, namely that rams can be taken to farms and the ewes can be inseminated with semen collected on the spot. Sheep and goat semen cannot yet be successfully processed and stored according to the techniques for cattle semen.
What is going to become of your merinos, Charlie?
I have been applying AI for years and the hon member may be interested to know that I inseminate up to 600 ewes with one ram’s semen in one season. What is more, the hon member can still order the best rams from me. [Interjections.]
The intention with this provision, therefore, is to promote the use of healthy rams with good genetic qualities in the case of sheep and goats as well.
Misgivings are sometimes expressed about the computer used by the SA Stud Book Association. Because the computer is one of the most important aids in promoting the aims of the Livestock Improvement Act, I want to make a few remarks in this connection. In 1979, the SA Stud Book Association, in co-operation with the Department of Agriculture, embarked upon a project involving a change-over to a comprehensive computer system. It was an expensive and laborious process and a task which had to be carried out with great care and circumspection. Naturally, there have been and still are quite a number of problems that have to be resolved. During 1982, a committee was in fact appointed to investigate the development and financing of the project. The Department of Agriculture, the Wool Board, the Mohair Board, the Meat Board, the Dairy Board and the SA Stud Book Association were represented on this committee. The report and recommendations of the committee were discussed and accepted in full at the 1983 annual meeting of the Stud Book Association. It was decided to go ahead with the project. I may mention that the system for cattle breeds has been in operation for two years, and in this connection I should like to give the House the following statistics: During 1982 the number of birth notices—this is in respect of cattle breeds only—was 39 258. The number of registrations was 61 415, the number of transfers was 25 659 and the classifications of dairy cattle amounted to 12 929. The figures for 1983 are as follows: Birth notices—86 499; registrations 83 855; transfers—33 946; and the classification of dairy cattle—40 667. This is a record in all respects. The dairy cattle performance scheme is being introduced on 1 April 1984 and an integrated beef cattle performance scheme has already been programmed and will also be introduced soon. Up to the end of March 1983, R2,9 million had been spent on the development of this computerization programme, of which the Stud Book Association contributed R656 000, not including the computer time devoted to the scheme.
When this programme is completed, not only the pedigree, but also the performance and progeny tests of animals will be immediately available with the help of the system. Surely this is the whole purpose of the Livestock Improvement Act. The main purpose of this amending Bill is to provide for the necessary control over ova, embryos and ovulation, and therefore I take pleasure in supporting it.
Mr Speaker, I have been one of the hon member’s clients, but since his politics went wrong, his rams have been wrong too. I believe that the hon member for Smithfield has given a very fair survey of the whole subject of livestock improvement and the specific matter which is dealt with in the Bill.
As the hon member pointed out, the chief objectives of the Bill are to improve control over artificial insemination and to bring it up to date, and, what is also important, to bring the implantation of ova and embryos within the ambit of the Act. What is particularly important, I believe, is the fact that this measure is being placed on the Statute Book. It testifies to the high scientific level which the livestock industry has attained in this country through the efforts of the scientists and the farmers of South Africa. We read the other day that the average rainfall in South Africa was less than 500 mm a year and that in comparable countries, the average rainfall was more than 800 mm a year. Conditions in South Africa are actually unfavourable to agricultural production, therefore. In spite of that, South Africa and its farmers have always succeeded in making food production increase more rapidly than the population.
In future, however, it is going to be much more difficult to maintain that trend, ie to get the food production to increase more rapidly than the population, because of the high level that has already been attained. It is developments such as these, therefore, that will make it possible to maintain those production levels.
With this Bill, control is being exercised over a powerful scientific instrument. If the instrument of artificial insemination and inovulation is handled correctly, it enables the stock-breeder to achieve an extremely rapid transmission of the very best genetic material. The hon member for Smithfield told us how hard one of his rams has to work to produce 600 lambs in one year. According to the old method, however, it was absolutely impossible to produce more than one calf a year from a cow of high genetic quality. Today, with the transplantation of ova and embryos, it is possible, if all goes well, to produce up to 24 calves a year from one cow, and in future the number will probably be even larger. The extent and impact of this scientific development illustrate the effect it may have on the improvement of genetic material in South Africa. That is why we take pleasure in supporting this Bill and expressing the hope that it may help to raise meat production in South Africa to an even higher level in future.
Mr Speaker, I should like to say a few words about this Bill. It is an improvement on the 1977 Act, which was a fairly controversial one, not so much in Parliament as in the farming community. It was the first phase of a transition from ordinary farming principles to a more orderly and scientific system. Initially it gave rise to considerable disagreement among the various breeders’ societies. However, this has been sorted out. The 1977 Act basically covered all these problems.
However, it is a fact that not all the problems have been solved. As advances were made in development and research, it gave rise to inadequacies in the Act. In order to illustrate this most clearly, I should perhaps tell a story about how the research has developed and about interesting things that have happened in the process. This research has been done all over the world. Our own researchers have made a special contribution to it. In the 1960’s, one of our own researchers from South Africa was studying in England. He wanted to export sheep material to South Africa. He went about this in a very interesting way. He mated a good ram and a good ewe and then removed the fertilized ova or embryos—there were three of them—and transplanted them into the uterus of a rabbit. With this rabbit he flew back to South Africa, where he removed the embryos from the rabbit and transplanted them into ewe recipients. Five months later the ewe recipients lambed. As I have said, the parents were in England. That was during the early stage of that practice. Perhaps I should relate what happened afterwards, because it is interesting. The shepherd who was tending the sheep heard a lot about where embryos came from, how the parents were in England and how the rabbit had brought the embryos which had now been transplanted into these ewes. The sheep-breed which had been brought here was one of the English South Downs breeds. These sheep have a black head, black ears and a small black nose. The day these lambs were born, the shepherd took one look at the little black faces and erect ears and said: “Hau, that is the rabbit.”
This development of embryo transplantation, the synchronizing of animals, the transplantation of embryos into a large number of female animals, has had an enormous effect on human reproduction. One reads stories today about solutions to human fertility problems and about problems with multiple births, and one forgets that all the basic research in this connection was done on animals. These techniques were perfected on animals, and have had a major effect in practice. They have paved the way for major advances in the field of animal production. They also present us with exciting possibilities for the future. Where in the past, a ewe would have produced only one lamb—as the hon member for Lichtenburg also indicated—one single ewe can now produce 24, and where one lamb or one bull was able to sire 50 to 60, or perhaps even 100, lambs or calves in the past, that number has now increased to between 1 000 and 5 000. Now, it is clear that if we do not make use of the best animal material, and if any inferior material is introduced, this could be transmitted throughout all the livestock in South Africa; something which could create major problems. It is logical that all our country’s livestock could be greatly harmed in this way.
The figures relating to performance testing overseas, compared with our own, are very interesting. The AI centres keep records of the progeny of the animals they breed. When we compare the relevant South African figures from before 1977 with those of overseas countries—figures relating to AI bulls and their progeny—it appears that the progeny of our AI bulls in South Africa have performed very poorly. The most important reason for this was that those bulls had been selected on the basis of their pedigrees and not on the basis of their genetic properties. Subsequently it has been possible, with the aid of the computer, to start evaluating all the relevant information, and greater emphasis has been laid, in a systematic way, on the performance of individual animals. This performance has been linked to the genetic background of the animals. In this way people have been able to make selections of animals which produce better results with regard to animals and animal production. Hon members may understand, therefore, that this new development has brought about considerable problems for farmers as well. Farmers, too, will benefit from this legislation in a certain respect, because only the best genetic material must now be used. In this way, the farmer is being protected by law against abuses, as the hon member for Albany also indicated. After all, there are people who use inferior material and then ask high prices for their animals.
I just want to point out, too, that it is gratifying that a variety of disciplines are beginning to co-operate in terms of this legislation, and in a way which I actually find exciting. When one considers the attitudes which the various branches of agriculture often adopt towards one another, and their reluctance to co-operate, this is even more interesting. I am thinking, for example, of the fact that in terms of this measure, veterinarians are also being involved in order to make sure that disease conditions will not spread, and that the transmission of diseases will be restricted to an absolute minimum. We have a very impressive series of achievements to our credit in this field.
Furthermore, the animal scientist is also being involved. He has to make sure that the semen and the embryos that are transplanted are of the best genetic quality. The Stud Book Association itself is being involved in the sense that steps are being taken to an-sure that this genetic material is pure and to prevent mongrelization of individual breeds. Care is now being taken, therefore, to ensure that only the best genetic material is transmitted in a specific breed.
The Department is also being involved. On the basis of performance testing and the facilities made available by the Department, it is now being made possible to carry out these tests and to provide the farmer with the necessary co-ordination, beginning with the centres for performance testing and extending through the stud book right up to the process of providing extension services. In the case of the latter, of course, it is the farmers who co-operate to get this whole system off the ground.
Exciting new things are happening here, therefore, things which give me a great deal of hope for the future. However, I must warn that there are many dangers in this process and certain aspects have to be very carefully watched. There must also be very effective control, for if this is lacking, we can expect problems, since the system has a very great potential for abuse.
Another aspect is that when we have to select genetically superior material, the help of computer facilities is extremely important. When one looks at the history of the Stud Book Association and at the history of all the breeders’ organizations in South Africa, one sees that their biggest problem in the past has been how to process the results so that they would eventually have a single figure to say that this is my best animal and that is my second-best animal. The problem has been to obtain facilities where they could quickly feed in all their data and get back the result quickly too, and in that respect, we are faced with a department—I know this is as a result of financial problems—which has been saying since the early seventies that we will get a computer. Today, in 1984, that computer is still not quite ready and available to the industry. Perhaps the hon the Minister should give some attention to this.
There is another interesting facet in the legislation. When the price of an agricultural product is suddenly increased, a lot of criticism is often voiced in the newspapers. The Housewives’ League, the Consumer League, the Press, the city-dweller, everyone keeps a close watch on the price of butter, of milk, of meat. Now I wonder whether they also notice what it says in the legislation, because in a certain way, the legislation also has a bearing on this, since the legislation makes it possible to achieve maximum efficiency in agricultural production. Only the best is used.
Since we are moving into the future and our population is going to increase, since our natural resources are fairly limited and we cannot expand vertically and have to expand horizontally, I should like all these people to take cognizance of the fact that the Government is already planning for the future and that it has already embodied the necessary mechanism in legislation to achieve maximum efficiency in future, so that there will be food and it will be possible to produce the food as efficiently as possible, with the result that it can be marketed at the lowest possible price. This is an aspect which people very often fail to see. To me, this aspect is important, because we are faced with major problems in agriculture with regard to the supply of food to the people in this country.
There is a final idea that I wish to express in this connection, and that is that since we shall concentrate increasingly on performance testing in future, the various breeders’ societies affiliated with the Stud Book Association should make greater use of performance testing. I find it tragic in a way that when people look at something and evaluate it visually, their ability to evaluate and identify its superior qualities, without measuring these, is around 30% or 40% of the progress that could have been made if these qualities had been measured. In such cases, very little progress is made at the genetic level. When one says that in the course of the year, one can at best make 2% or 3% progress at the genetic level and one evaluates this visually, but one is only 20% efficient in the evaluation of those differences, then we are really turning that potential progress of 2% or 3% into a farce; then no progress is being made. That is why it is so important to make use of performance testing in order to maximise the limited genetic progress which it is in fact possible to make.
I should like to congratulate the people who drafted this legislation. I think they had a difficult task in combining the ideas of basically five disciplines—in basically resolving the problems of five disciplines and combining them in legislation which I think has the potential to succeed and to produce exciting results in future in this connection.
Mr Speaker we on these benches will be supporting this Bill. We feel that it is timeous in its introduction bearing in mind the great strides that have taken place in breeding techniques over recent years.
Some years ago we realized that AI was due to plan a very important role in the building up of our breeding stock in this country and we are here being faced with the second stage in this regard in the form of embryo transplant. It is vitally important in a case like this that legislations that is presented to this House from time to time keep pace with modern developments. When one studies the effects of AI over the past 25 to 30 years, for example, one realizes that it has brought about a completely new concept in regard to breeding. It has also resulted in a great increase in productivity as far as animal breeding in this country is concerned. It has increased the productivity potential of a number of breeds.
The old style of line breeding was too slow and we are now witnessing exciting developments as a result of embryo transplants that are now being performed in ever-increasing numbers.
We welcome the regulations contained in this Bill in regard to misuse and abuse as provided for in clause 5. This will inevitably lead to an improvement in the genetic production potential of livestock breeding in this country. Better breeding lines will come into prominence and will become available more easily and more quickly. Over recent years stud breeders have been compelled to pull up their socks. More prominent breeders have survived but many second rate breeders have fallen by the way. Commercial breeders are scoring tremendously from the effects of the latest developments in breeding techniques. They have been provided with improved genetic material which is inevitably costing more but yielding in the long term higher returns. This is also of considerable and greater benefit to the agro-economic scene of agriculture. Genetic progress must be speeded up. Gone are the days when livestock farmers had to wait years for the improvement of their herds. This can be done virtually overnight.
The introduction of performance testing, group-breeding schemes and so forth have also played a very positive role in animal production in this country. However, I must sound a warning. It is essential with these modern techniques that are now being used that breed identity be maintained. This can only be achieved effectively by efficient breed societies that must be allowed to run their own affairs without undue Government interference.
There are a few other points which I would like to raise. I would like to refer to page 15 of the Bill where I feel a grammatical correction is necessary. Lines 22 to line 24 read:
“At which” is completely non-U and non-agricultural. I would suggest that the wording be changed and that “at which” be amended to read “in respect of which”. The Afrikaans text should similarly be changed.
I would like the hon the Minister to give us a little more information with regard to the Department of Agriculture importing animal semen or ova, or whatever the case may be, from other countries. Am I correct in assuming that any importation will be done purely for experimental purposes?
I would also like to refer to the proposed new subsection (1A) inserted by clause 13(b) which reads:
I want to suggest that after “Association” be inserted the words: “and the relevant breed society”, as is the case at the present time.
With these few observations it gives us great pleasure to support this Bill.
Mr Speaker, I also take great pleasure in participating in the discussion of this Bill, since I have personal practical experience of the substantial contribution the livestock improvement scheme has made to improving the genetic production capacity of the livestock of the RSA.
On behalf of the farmers of South Africa I wish to express our warmest gratitude and appreciation to the department and its animal husbandry officers for their tremendous contribution to the success of the livestock improvement scheme up until this stage. However, it is not sufficient simply to put a comprehensive livestock improvement programme into operation without it being ordered and regulated by relevant legislation. The modern techniques used to fulfil the high ideals in the genetic world can have just as many disadvantages as advantages if it is left to the wrong people. In other words, the incorrect use of this can do more harm than good. It is therefore essential that the provisions of the Act should be such that we can limit the dangers to the minimum.
In studying this Bill it is clear that it does in fact aim at eliminating the dangers, disadvantages and malpractices as far as possible. However, I also want to issue a serious warning. No matter how perfectly the Bill is drawn up, we cannot use it to prevent certain factors detrimentally influencing that which we really wish to achieve. The very ideals the hon member for Prieska and other hon members envisaged can only be achieved if no obstacles are placed in the way of the AI centres and other centres; in other words, only the best—and I want to emphasize this—breeding material must be made available to them. What I mean is that factors such as a lack of funds or a lack of genetic material, injudicious import control, therefore, should not stand in their way when it comes to the best breeding material.
The hon the Minister has already mentioned that since the Livestock Improvement Act of 1977 was placed on the Statute Book, the techniques of embryo transplantation and inovulation have become such an integral part of practice that the time has come to amend the Act in such a way that it makes provision for these new techniques.
In addition, the Bill also makes provision for measures for categories of animals which cannot be accommodated under the conventional methods, such as, for example, in the case of sheep and goats, an aspect the hon member for Smithfield has already pointed to. The hon the Minister also said that the Bill was providing for any breeder to use the reproduction material of any animal that could possibly improve the production potential of his herd. To come back to my earlier warning, the legislation does, in fact, make provision for identifying such an animal. If, however, there are not sufficient funds to purchase the animal, or if there is a lack of co-operation between the AI centre and the breeders’ society concerned, its semen would not become generally available to the breed as a whole, despite this legislation.
Perhaps the dairy industry benefits most from this scheme. Under this Act, 40 to 50 young male animals representing our four main dairy breeds are tested annually with the aim of determining their relative breeding value before their semen is made freely available for general use. Performance testing is one of the fundamental principles or foundations of the whole scheme. This, too, has already been pointed out by previous hon speakers. The crux of the whole scheme therefore lies in the identification of the breeding animal that can bring about the greatest possible improvement in his or her particular breed. It is interesting that under this scheme one such bull was identified which displayed a relative breeding value of 130% in his testing programme. Sir, you can therefore imagine what a tremendously positive influence such a male animal could have on the progeny of his particular breed.
What is the effect of this on the dairy industry? Out of an active female dairy population of approximately 650 000 we find an AI penetration of approximately 43% at present. In other words, approximately 300 000 female animals are benefiting from this upgrading scheme. Some of the cows participating in the milk recording scheme showed an improved milk production of approximately 10% from 1977 to 1982. This is an improvement, but in my opinion it is not good enough. The production of graded cows was increased from 4 175 kilogrammes per lactation to 4 546 kilogrammes per lactation, whilst that of stud cows increased from 4 638 kilogrammes to 5 105 kilogrammes.
Did the hon member perhaps want to ask a question in this regard? I must say that when we speak about outstanding breeding animals in this legislation, we by no means look to our right. [Interjections.] What is disappointing, however, is the general apathy of farmers to join in with the various sections of the livestock improvement scheme. After all, it is not good enough that only 43% of our dairy animals are linked to the AI scheme, and even a smaller percentage to the milk recording scheme. I could go on giving examples in other branches of our livestock industry, but I shall let that suffice, and I hope that the department and the various livestock breeders’ societies will once again give attention to actively propagating the livestock improvement scheme amongst our farmers.
I take pleasure in supporting this amending Bill.
Mr Speaker, it is not often that we discuss a measure on agriculture in this House that can have as tremendous and positive an influence on the vertical growth of our agricultural production in South Africa as the measure we are dealing with now. Through scientific research and development, and by incorporating the results of this research into the existing Act, and by succeeding in implementing it in practice on the land, we can achieve great heights in respect of all our livestock in South Africa. If hon members look at our livestock in general, they would agree with me that major improvements should be affected, particularly as regards the scarce resources in our country. Apart from research, we shall also have to strive for stronger and more purposeful guidance in respect of this scientific development.
I should like to continue on this positive note, but at this stage I move:
Mr Speaker, I move:
The House adjourned at