Mr Speaker, I move:

Mr Speaker, I rise to comment on a number of facts that have come to light as a result of replies to questions on today’s Question Paper replies given by the hon the Minister of Defence and the hon the Minister of Internal Affairs respectively.

I found it quite interesting to hear that approximately 10 000 people automatically became South African citizens in terms of section 11(a) of the Citizenship Act. We also heard that there were only about 340 people who in fact made the declaration that they did not wish to become South African citizens, and of that number approximately 30 people have withdrawn their declaration. This means that just over 300 people must have forfeited their permanent residence rights in South Africa. Another thing that I found interesting, particularly as a result of replies to questions today, is that it appears that of the category of people over 21 years old only 10 have left the country. We also heard that in no case where people re-applied for temporary residence was the request refused. A third factor is that a large number of these people appear to be under the age of 21. Where they have been in South Africa with their parents, it certainly does not seem to have been the policy of the department to force those people to leave South Africa. I think that is a fairly reasonable way of dealing with the situation. It is not unduly harsh or ruthless to people who find themselves in that kind of situation. So I think this is the correct approach to the matter. Whether this actually reflects on the necessity for the legislation we put on the Statute Book in 1978, and the subsequent amendment of it, one cannot say with great certainty. It rather appears to me that at some stage in the future we may well have to consider adapting our citizenship legislation to the extent that people will become citizens automatically after a reasonable period of time, for example five years, across the board and that one can possibly consider removing this penalty. I have doubts about the extent to which this penalty, or the potential penalty of losing one’s right of permanent residence, really makes much difference. I want to submit this thought for the hon the Minister’s attention. This is something we should have regard to in future.

Another thing I found interesting and which also arises from the reply of the hon the Minister of Defence to a question, is that Proclamation R363, which was reasonably framed to deal with the situation of aliens whom the Department of Defence wished to call up to do military service, is still in operation, something about which the hon the Deputy Minister is not quite certain. I would have expected that that proclamation would to some extent have become unnecessary since the Citizenship Act was passed in 1978 and amended in 1980 and 1981. I would suggest that it is perhaps not a good idea to allow these two measures to operate parallel to one another and that if we have now accepted that people will become citizens of this country automatically and will therefore become liable for military service, one should consider getting rid of this proclamation because it does not appear to be serving any particular purpose. In fact, I think it could have the aggravating affect of creating some degree of uncertainty about the status of aliens vis-à-vis military service in future.

In indicating our support for the Third Reading of the Bill, I would hope that the hon the Minister will pay attention to the issues I have raised with a view to us debating these issues again at some time in the future.

Mr Speaker, at the beginning of this debate, the Third Reading debate, I want to tell the hon the Minister that the CP supports the Bill. However, I want to make a few remarks.

In order to prepare myself for participation in the debate, I looked up the Third Reading debate on the original Act of 1949. Dr Dönges began his Third Reading speech as follows:

It is interesting, by the way, that at that time the rules of this House still allowed a discussion of 70 hours. The hon the Minister sharply attacked Mr Strauss on that occasion and said that Mr Strauss had been very petty in his criticism and had used words which were not appropriate.

I want to say that one should regard a human society as an organism consisting of different cells which are arranged in a specific pattern. When a stranger enters such an organism, as an individual or within a family context, there is always a kind of tension between the existing organism and the new cell which is being introduced. When we use the term “strangers”, it also reminds one of the reference in the Bible to the strangers at one’s gates. I think that in the decades since 1948, and especially at the beginning of that period, we have been very sensitive about the quality of persons who enter our country from outside. However, I believe that we have to a large extent succeeded in selecting very carefully the people who have come to this country. We have done our best to get people from abroad who would adapt to the South African atmosphere. I think we have to a large extent succeeded in this, although tensions still exist in many respects.

In view of the military situation in which South Africa finds itself today, it is understandable that the people who live in this country, whose children were born here and who have formed part of this particular organism for a long time, will be sensitive about people who come to this country, who reap the benefits of the country and who are perhaps not always prepared to shoulder the responsibilities that go with those benefits. Therefore I think that we have adopted a very accommodating attitude towards the strangers who have come, not only to our gates, but into our country. We have also taken cognizance of the problems surrounding their presence. On the other hand, we have succeeded in bringing home to them the responsibility of a new fatherland and its particular circumstances.

There is a final matter which I want to raise. Perhaps this should rather be discussed under the hon the Minister’s Vote, and I may do so on that occasion as well. However, in a previous debate, one of the NP members was rather critical of immigrants from England in particular. I should like to ask the hon the Minister whether he could just tell us in his reply to the Third Reading debate that it remains his standpoint and the standpoint of the Government that people who come to this country from England and who have been approved by the Selection Board according to the normal criteria will still be welcome in South Africa.

Those who were born here are also welcome.

Sir, I am referring in particular to the hon member who has just made an interjection. [Interjections.] I should like the hon the Minister to reply to these matters.

Mr Speaker, as was the case with the previous stages of this Bill, we will be supporting the Third Reading as well. We anticipate that, as a result of the variety of circumstances that can arise in regard to a Bill of this nature, there may well be a considerable number of problems in the application of this legislation. However, we are convinced that there are sufficient provisions in the principal Act of 1949 to allow the Minister to exercise ministerial discretion or to apply exceptions. We are also very happy at the removal of the unfair discrimination which presently applies to young South African Whites in respect of their military service, but I should also like to point out that the fact that these youngsters who are going to get South African citizenship will have to do military service is not entirely a one-sided thing. They are also going to profit in the sense that they will have conferred on themselves South African citizenship, which is not and should not be lightly conferred.

We believe that the concept of automatic citizenship is a very distinct improvement, and as the hon member for Green Point pointed out, we also would rather like to have this concept extended a little more in order to deal with all the people who could also derive some benefit from it. I believe too that South Africa can indeed derive some benefit in this way. Therefore I conclude by stating that this Bill is, we believe, necessary and desirable. We in the NRP support it wholeheartedly.

Mr Speaker, on behalf of hon members on this side of the House I should like to express our satisfaction with the amending Bill under discussion. The scope of this legislation has already been very thoroughly thrashed out and the result is a very good measure. We on this side of the House are, therefore, very grateful for the fact that all three Opposition parties support this Bill.

Mr Speaker, you will, however, allow me to touch on one further matter in this debate. We are afraid that uncertainty may arise among people outside this House as to why we cannot continue to use the Defence Act instead of this measure. The hon member for Green Point again expressed his doubts about the fact that we are no longer using the old method. He wanted to know why this measure was actually necessary.

However, before I get to that, I just want to indicate that this amending Bill achieves two basic objectives. In the first place, this measure accommodates a dispute of many years’ standing with regard to the rendering of compulsory military service by immigrant children.

What I, consider to be important, however, is that this is being done in such a way that no one can take offence. It is also being done in such a way that no one can accuse the Government of injustice of unfairness. It is also important that no one is being forced to render compulsory military service or to accept South African citizenship. There is a clear choice being offered in this measure. Either a person accepts citizenship, with all the privileges and responsibilities associated with it, or he forfeits his right to permanent residence in South Africa. When one looks at the proclamation in terms of the Defence Act, it would not seem to be in complete agreement with the international law position.

In the second place, this measure brings about satisfaction among South African citizens because they now know that in future there will no longer be unfair competition as regards studies and careers between them and immigrant children, who enjoy an advantage in this respect. All young people, whether they be South African citizens or immigrant children, between the ages of 15 and 25 years, will in future be subject to the same obligations as regards compulsory military service.

Now I want to return briefly to the aspect in connection with the Defence Act. Today there was a question on the Question Papar to which the hon the Minister of Defence had to reply. I feel that if hon members want to pursue that matter, they could do so more fruitfully during the discussion of the Vote of the hon the Minister of Defence. The hon the Minister indicated that in terms of that proclamation, 5 288 aliens had rendered compulsory military service in 1967. The crux of the matter is that those people did so voluntarily. They were under no obligation; they did so voluntarily. The new measure, as it is now going to be applied, is far more acceptable in terms of international law. Aliens in South Africa also find it more acceptable.

Apparently no general rule in connection with military obligations by aliens exists in terms of international law. It is nevertheless argued that the most acceptable rule would amount to this that aliens should not be subject to compulsory military service in the host state in which they are resident.

I have here with me an interesting document from which I should like to quote for the purposes of the record. I am quoting a few sentences from Brownslie’s Principles of Public International Law, as follows:

He goes on to say:

This is the position in America and Australia. We in South Africa are being watched so critically and are being subjected to so many double standards that we have to deal with this matter very circumspectly. The first time America called up aliens in that country for military service, France and West Germany lodged a protest with them. When Australia did so, there were protests from Russia, Spain and Italy. When South Africa published that proclamation, Italy, Spain, Austria and Switzerland lodged protests. However, it is interesting to note that in America it is the rule that persons with a right of permanent residence are given a choice to render military service and, if they refuse and leave the country, they forfeit the right to return to that country to live there. If they refuse to render military service but they remain in the country, they are denied the acquisition of American citizenship. Quite obviously, therefore, there is uncertainty in international law as to whether people who are aliens in a state have to render military service or not.

Since the preponderance of authoritative sources indicate that compulsory military service by aliens is prohibited, this measure has many merits, as far as I am concerned. We are giving aliens a simple choice—accept citizenship or forfeit your permanent residence. That is why those of us on this side of the House are satisfied and convinced that this is the best way of dealing with the situation.

I do not want to take up any more of the House’s time. I merely want to refer to certain treaty obligations. In this connection hon member could glance at a whole series of such treaties which South Africa has accepted and which are binding on it and which were already entered into with a number of countries in the 19th century while South Africa was still a Union and under the domicilium of Britain, and we feel obliged to honour those treaties.

The last remark of the hon member for Green Point, which I think passed unnoticed, was that it would be unfair to make a 25-year-old man liable for military service. He said that that person was placed in that difficult position that he had not planned on having to render military service at some future date. All these years any immigrant or any alien has had the choice of either rendering national service through naturalization or of indicating in terms of the proclamation that he was going to accept citizenship and would then render military service. However, there are many young South African citizens who attend universities and are only subject to military service after they have completed their education at the age of 23, 24, 25 years or more. As far as I am concerned, that argument, therefore, does not hold water.

This measure is a dispute and we on this side of the House should like to express our thanks and convey our congratulations to the hon the Minister with regard to a problem which has eventually been solved to everybody’s satisfaction.

Mr Speaker, I want to begin with the hon member for Turffontein, and I want to thank him sincerely for a well-considered Third Reading speech which has greatly facilitated my task. He has obviously made a thorough study of the whole matter and he also conveyed some interesting information to hon members which demonstrates even more clearly why this is a sensible Bill and why it is fair to all those involved.

I want to make one remark concerning the resistance to which he referred at the end of his speech and to which the hon member for Green Point also referred, namely the question of the young immigrant who, because of his date of arrival, only becomes liable for national service when he is 24 or 25. I want to say that it goes without saying that such a person can only become liable for service when he has been in the country for five years. If he becomes liable for service when he is 24 years old, therefore, he must have been here since he turned 19. Since such a young person knows that he is going to become liable for national service, I am quite in favour of the idea—and I shall recommend it to my hon colleague, the Minister of Defence—that formulae and procedures should be developed which would enable such a person to anticipate his national service, so that he would not have to wait until he became liable, but could arrange to do his service before he really had to, because he wanted to do it before he went to university. I think it would be reasonable if we could arrange for such an alternative, and I am sure it will be possible to do it in this way.

Mr Speaker, may I ask the hon the Minister what his standpoint will be on the more limited category which I think the hon member for Cape Town Gardens had in mind? This does not concern people in the 18 or 19-year age group who know that they are going to obtain citizenship and are therefore able to make the choice. It concerns people who, because of the amendment of the Act, are suddenly being placed in a category in which they are going to be naturalized. I should like to have the hon the Minister’s opinion on this.

I am afraid that we cannot begin to make exceptions to alter the sphere to which the Act will be applicable. That I could not support. What I shall support in this connection is that if such a person is placed in a difficult position, the Defence Force will deal sympathetically with any reasonable request from such a person, within the framework of discretion which exists within the systems of the Defence Force. I cannot support an approach which would subject the sphere of application of the Act to a whole series of exceptions.

I convey my sincere thanks to the hon member for Turffontein and to all the speakers on this side who have made such constructive contributions throughout the debate on this Bill. The same applies to all the speakers of the other parties. We are dealing here with a Bill on which there has not been any serious disagreement among us. Therefore I also thank the hon members for Green Point, Rissik and Umbilo.

†All of them found it necessary in some way or other to address a word of praise to the department for what it is doing in regard to immigration per se and in regard to this measure in particular. I think the Department of Internal Affairs well deserves this word of praise. I should like to add my own word of appreciation to the words of the hon members for the delicate and sensible way in which the department handles these delicate and difficult questions.

The hon member for Green Point suggested that we should look at basically extending at some time in the future the terms of the Bill to immigrants per se instead of restricting it to the children of immigrants. I am afraid that at this point in time I am convinced that other problems would make it extremely difficult to follow that course, but I am open to debate in this regard. I think we can discuss this when we consider my Vote.

*The hon member for Rissik almost surprised me. For a moment I thought he was going to make a positive speech and that he was going to steer clear of political acrimony …

I was not acrimonious.

In the end, the hon member did not disappoint me and he tried to score a political point again. The hon member referred to what an hon member on this side had said about our approach to Coloureds. I have read the Hansard of the hon member Dr Vilonel, which the hon member was so kind as to send to me, and I really do not find in it what the hon member finds in it, ie that the hon member Dr Vilonel expressed any opposition to immigration or to immigrants from any country who have been selected in accordance with our procedure, or displayed any negative attitude towards them.

What the hon member Dr Vilonel was driving at was that the hon members of the CP wanted to treat Coloureds who had been living in South Africa for generations as strangers in their own country. That is the message he wanted to convey. The immigration approach of the Government—the hon member put a direct question to me about this—is that we would like to assimilate immigrants into the South African community as soon as possible and in a meaningful way, irrespective of whether they come from England, Germany, France, Portugal or any other country. Indeed, the State provides assistance to two organizations which deal with immigrants, namely the “Maatskappy vir Europese Immigrasie” and the 1820 Settlers’ Association. The latter concentrates mainly on immigrants from English-speaking countries. The department co-operates very closely with the assimilation programmes of these bodies. The hon member’s attempt to cast suspicion on these efforts of the Government struck a discordant note in this Third Reading debate. But different people get their kicks in different ways, and if the hon member wants to get a kick out of this, he is entitled to do so. However, it is not relevant to this Bill, so I shall not say any more about it.

†I also want to thank the hon member for Umbilo for his support and contribution. I am extremely pleased that we could pass this Bill through Parliament on the basis of unanimity. It is a good thing that we have reached accord outside this House with important leaders of various immigrant societies as well as within this House with regard to this important bit of legislation whereby it is intended to bring into line a certain category of immigrant children with legislation which has already been passed by this House.

Question agreed to.

Bill read a Third Time.

Mr Speaker, this Bill deals with a whole series of matters concerning aliens, their entry into and residence in the Republic. It is important that it should be made clear right at the outset that this legislation is absolutely colour-blind. It is not, as the PFP Press tries to suggest, legislation which is primarily aimed at preventing Blacks from entering the Republic. The hon member for Green Point knows, after all, that there are reciprocal agreements between the Government of the Republic and the homeland governments, and also between the Republic and countries such as Mozambique and Botswana, concerning the entry of their citizens. Orderly arrangements have been made and agreements have been entered into which allow many thousands of Blacks to live and work legally in the Republic.

What the hon member loses sight of is that this legislation is intended to prevent undesirable aliens from entering the country and not to make it difficult for those who are already in the country, whether they be Black or White, to remain here, nor to impede the free movement of people who enter the country legally. The hon member will concede to me that any country is surely justified in protecting its own territory and citizens, as well as any foreign citizen who may be legally present in the country. Especially when it comes to possible subversion of the State, the provision of employment and the provision of housing, any Government has to be extremely careful. Just think of the situation which has arisen in Germany. In Britain, too, many people of colour have tried to enter that country and the Government of that country has been forced to review the whole situation in order to prevent a massive influx of aliens. We must bear in mind the fact that this may happen in our country as well if order is not maintained. Certain parts of our country could literally be plunged into chaos, especially when one thinks of the number of unskilled Whites who are ready to flock to our country from European countries.

The hon member for Brakpan began his speech very calmly. For once he did not get very excited. But then he went and spoilt it all with that kind of aside which we often get from him, actually a rather snide remark which is so typical of him. I quote him (Hansard, 20 March 1984):

Are you not in favour of that?

If the hon member would only be quiet, I shall tell him. Why does the hon member mislead this House and the public of South Africa in this way? Why does he suggest that Indians need permits to be admitted to the Free State at all? Why suddenly link this provision to people again if it is not applicable to them at all? Why does the hon member not say that Indians have every right to enter the Free State without any permit? Why does the hon member not say that at present they only need a permit…

But does an Indian have every right to remain there?

If the hon member had allowed me to complete my argument, he would have discovered what I wanted to say.

Why does the hon member for Brakpan not say that Asians only need a permit at present if they want to settle permanently in the Free State? Why does he not say that in terms of Chapter 33 of the Free State law of 1891, Asians are in fact allowed to remain in the OFS without a permit for two months? If only he had given the matter some further thought, he would also have known that if an Asian has been staying in the Free State for two months, for which he does not need a permit, and has left the province for a weekend, he may return and stay in the Free State for another two months. I want to appeal to the hon member to stop trying to make petty politics out of a very sensitive matter. Why does he not comply with the hon the Prime Minister’s request that people should stop agitating for the admission or otherwise of Asians, since they only cause unnecessary friction by doing so? Surely that is what happens. We are bedevilling race relations in our country with this kind of remark made by the hon member for Brakpan. The hon the Prime Minister has said quite frankly that he is prepared to talk to the Indians about their movements and that he will be guided by the elected leaders of the Free State in this connection. Is the hon member for Brakpan also prepared to do so? Why does the hon member not wait until the inquiry into the Group Areas Act and other related laws has been completed before making such remarks? Why raise the matter again in this House? Does he not have enough humanity to approach sensitive problems with compassion and in the most humane manner possible when the time is ripe? If, hypothetically speaking, the great majority of the inhabitants of the Free State were prepared to grant the Indians the right of residence in the Free State, would he be prepared to accept that? For the sake of a few votes he would say “no”, of course. [Interjections.]

†The hon member for Umbilo was most responsible in his approach. He questioned certain clauses in such a calm and reserved manner that it is indeed a pleasure to enter into debate with him. He is unfortunately not in the Chamber at the moment, but I should nevertheless like to reply to a few of his queries. He had reservations about Blacks losing citizenship rights when their territories become independent in the future. Any country, when cutting the apron strings from its host and becoming independent, becomes a proud sovereign nation, it cherishes its citizenship. The hon member will recall that the people of the Ciskei voted in a referendum to become Ciskeian citizens. We did not force that on them. Other Black independent states also accepted full citizenship rights for their own people upon independence. Once a state is independent, its citizens become full citizens of that state. They do not remain citizens of another country. In any event, one can never have full freedom to live and work in other countries solely to suit oneself.

The hon member also questioned the fines which may be levied on small firms should they transgress this Bill. This is something which I will deal with a little later. He also had reservations about messengers of the court and other civil servants being appointed as immigration officers. I can assure him that they will be fully briefed before such appointments are made. We can again discuss this in detail during the Committee Stage as there are some very good and valid reasons for making use of such servants of the State.

*With this legislation we wish to give attention to the problem of persons trying to enter South Africa illegally from the European and Mediterranean countries. At the same time, we do not want to lose sight of the fact that there are many persons— Whites as well as people of colour—who are trying to enter the RSA from Africa as well. These are aliens who do not belong in our country.

However, the legislation contains two principles in particular to which I want to give attention today. In the first place, I want to refer to the so-called agents who pretend that they are able to obtain permanent residence permits for aliens, and secondly, I want to talk about employers who employ people illegally. There are people in our country who exploit aliens in a shocking way with the promise that such aliens will be able to obtain permanent residence permits. There have been so-called agents in the past who have charged up to R4 000 for their services, to try to get people out of their predicament so that they could settle here permanently. Unfortunately, they still exist today. Such agents did one of three things after having received their payment. In the first place, they told such an unfortunate person that inquiries had been made, but that unfortunately, nothing more could be done about the matter. In the second place—they still do this today when they get the opportunity—they forged documents and attached these to the application for a permanent residence permit. In this way, they tried to obtain a permit for someone by fraudulent means. The third method they used was to forge the permit itself and then to make a false entry in the person’s passport. The latter two methods are already punishable by law, but the fines are of such a nature, compared with the fees which these people charge for their services, that they certainly do not serve as a deterrent; on the contrary, they make this kind of conduct worthwhile. Now this will no longer be the case, however. The fines are now being increased drastically. In addition to a maximum fine of R10 000 or five years’ imprisonment or both for the forging of such documents, there will now be a further prohibition, namely that a person will not even be allowed to have in his possession any stamp or other instrument which may be used to produce a forgery. He may not even have in his possession the official forms and documents used for the issuing of permits, or copies of these, unless they are required for legitimate purposes.

However, one major shortcoming still remains, with regard to people who accept money from other people under false pretences, especially from aliens who come from the Mediterranean countries. Here I am thinking of Portuguese citizens, of Cypriots, Italians and others. These agents are still operating today and robbing people, and I am sure the hon member for Jeppe knows what I am talking about, because he also has Portuguese people in his constituency who have probably complained to him about this on many occasions. I should like to ask the hon the Minister, therefore, whether he would not be prepared to consider an amendment during the Committee Stage which would also make it an offence for any person to accept any form of payment or remuneration because he pretends to be able to obtain a permanent residence permit for someone else, irrespective of whether such permit is issued or not. Our country’s freedom and the right of residence in this country are precious, and are certainly not to be trafficked in.

An aspect which has given rise to dissatisfaction on the part of many companies is the fact that staff that have been recruited on contract overseas are so easily lured away by other companies, and I want to address a few remarks to the hon member for Umbilo in this connection. I have been in a situation myself where we have had to spend many thousands of rands to send trained recruiting teams overseas. There they recruit technicians, artisans and other highly specialized people who then come to this country on a short-term contract. Then it is not necessary to apply for a permanent residence permit for them. We also bring the wife and children of such a worker to this country and we have to provide them with housing and all kinds of other requirements. Then such a person works for one for a few months only and then simply disappears. He simply absconds from the service of the company. These people are then employed by smaller companies which have not incurred the expense of recruiting the workers overseas in the first place, and it may cost thousands of rands to do so. All they do is to entice the man away. The fact that such a worker may have a temporary residence permit in terms of which he may only work for a specific company does not worry the smaller company. It simply offers that man, who is in the country temporarily on contract, an additional R250 a month to work for it. In this connection, too, messengers of the court can play an important role when they go to houses to serve summonses, because in so doing, they can easily trace people who have disappeared in this way.

Then there are other people who enter the country legally as visitors and then begin to work here. We all know of such people who work as shop assistants, in cafés, etc. Those people do not even pay tax, although they earn money—not much, because they are exploited. Indirectly, however, the State loses money in this way, in so far as they are not registered as workers by the company and therefore do not pay taxes. In my opinion, it will definitely be possible to solve this problem with the increased fines which are now being proposed. The smaller companies may argue that they do not have staff departments or that they have people in their employ who do not know any better, but ignorance of the law has never been an excuse. They simply have to realize that in future, before employing a person, especially if he or she comes from overseas, they will have to make absolutely sure that he may be employed legally. I believe that the bigger companies owe the hon the Minister a debt of gratitude for this change.

Finally, I just want to refer to the fines which are now being increased. We have heard that the increases are perhaps too drastic, but when one considers the matter objectively, I believe that the hon the Minister and the department are to be congratulated on having had the courage of their convictions when it came to making these adjustments and adopting stringent measures to deal with the problems which exist.

For these reasons, I regard it as a great privilege to support the Second Reading.

Mr Speaker, I listened very attentively to the hon member for Stilfontein and do not have much fault to find with the latter part of his speech. As far as the first part is concerned, I shall come back to it later when I refer to the speeches of the hon members for Innesdal and Caledon.

The hon member for Caledon objected to certain statements made by the hon member for Green Point. He said that he was unable to see how the hon member for Green Point could say that the language criterion was applicable to the question of citizenship. I cannot quite see how the hon member for Caledon would go about refuting that statement. The question of citizenship of national states is provided for in the National States Citizenship Act of 1970. It is quite obvious that in this Act two criteria are applied, namely the question of being born in the national states and, on the other hand, the language of the people in the national state in question. The same applies when one looks at the Transkeian constitution, which formed the basis of the citizenship laws of the other national and independent states. Time and again the question of language is regarded as a dominant criterion.

The hon member for Caledon also objected to the statement by the hon member for Green Point to the effect that people had been deprived of their citizenship. Once again I cannot understand that. There is no point in our being blind to reality. In section 6 of each of the status law of the four independent homelands it is provided that everyone who falls into a category of persons defined in schedule 1 is a citizen of those states and ceases to be a South African citizen. That is a unilateral provision passed by this Parliament and by doing that we certainly deprived all those people of their South African citizenship. Surely there can be no doubt on that score. The hon member for Caledon knows that in all these cases it certainly cannot be said that the majority of people of the various states expressed themselves positively as regards the question of independence. However, that is not at issue now.

The hon members for Innesdal and Caledon also put forward a third standpoint when they said that it was not the intention that this legislation be used with regard to citizens of the TBVC countries. In this regard both hon members, whom I regard as thinking and reasonable people, adopted this standpoint, and I should like to explain to them why we on this side of the House harbour this fear. The hon member for Innesdal referred to the Second Reading speech of the hon the Deputy Minister and said that the hon the Deputy Minister had given an assurance in that speech. However, he did not do so. I should like to quote what he did say (Hansard, 19 March):

We did not say that it was aimed at these people, but that there was a possibility that this legislation could be used with regard to the citizens of the TBVC countries. I agree with the hon member for Stilfontein that the hon member for Innesdal and the hon member for Caledon did not quite grasp this point. The Deputy Minister went on to say:

Then the hon the Deputy Minister says:

Therefore the hon the Deputy Minister gave no guarantee that this legislation would not be used either on a small or on a large scale against and in connection with citizens of the TBVC countries. I wish to state that point very clearly to the hon member for Innesdal.

In associating myself with the amendment moved here by the hon member for Green Point, I want to say that apart from small points of detail, we should not have objected to this if there had been certainty that these amendments were primarily intended to be applicable solely to people other than the Black people of the TBVC countries. I shall explain why I say this. Our concern is that the Black citizens from those countries will not be dealt with on an individual basis under this legislation; that is to say, this will not be concerned with individuals in respect of whom the immigration laws are regularly applied, but instead they will be made applicable to them as masses of people. I shall come back to that point. Therefore, what we are in fact concerned about is that this legislation may be used in conflict with the normal intention and application of the immigration laws as we know them. That is our fear.

In the second place, we are concerned that this will be used as an instrument whereby the Government may apply influx control to those people and carry out and implement the urbanization policy, or the lack of an urbanization policy; in other words, that the Government may apply to those people, too, all the other oppressive measures of control that exist in this regard, viz influx control measures and steps to counteract the normal urbanization process among the Blacks. I shall come back to this later in order to state it more strongly. Our fear is that these measures may be used to circumvent other measures. Whereas other measures afford Black people a degree of protection in that they can, for example, appeal to the courts to have their rights protected, these measures can be used to circumvent that other legislation. Thus, in this way the protective measures embodied in other legislation may be placed beyond the reach of people from the TBVC countries. We are also concerned that in spite of any declared intentions on the part of the hon the Minister or whoever, there is no certainty and there are no guarantees that these measures cannot and will not be used in this way.

If we had had the third Bill of the hon the Minister of Co-operation and Development available at this stage and were therefore able to see what control measures the hon the Minister envisaged in the third and—in the nature of the matter—highly important legislation with regard to control of Blacks, it would perhaps have been easier for us to see this Bill, too, in a different perspective. Therefore in the light of the absence of that Bill our reservations and fears are quite understandable. Accordingly I regret the fact that that Bill is not available.

The crux of the problem lies in the citizenship of the people in question. As hon members are aware, double citizenship was granted to all the Blacks in South Africa when the National States Citizenship Bill was passed in 1970. When the four states in question became independent, those people were deprived of their citizenship in terms of section 6 of the Acts in question, as I indicated. We refuse to regard the people of those four states in the same light as total strangers in South Africa because it is our standpoint that we were doing those people an injustice by automatically depriving them of their citizenship.

We stated very clearly that if each of those people were individually given the choice to preserve their South African citizenship or become citizens of their new state, our attitude to this legislation may have been different. However, that choice was not given them and accordingly our attitude in this regard is still the same. We have never regarded those people as non-South Africans. We have never regarded them as aliens. Indeed, the fact is that apart from those who are resident in those areas, we know that there are hundreds of thousands, even millions of them—all the Blacks in our so-called urban White areas—who are citizens of the TBVC countries and who were born and established here in South Africa and will remain here permanently. Therefore it would surely be totally illogical and irrational for us to regard those people, on the basis of legislation we have passed here, as aliens in South Africa and therefore as people who have to fall under the legislation which is now to be amended here.

As regards the other Bill to which I referred earlier, I also just wish to point out that there is a great deal of confusion as regards certain aspects thereof. For example, it provides that except as far as citizenship is concerned a citizen of Transkei, Bophutha tswana, Venda and Ciskei, who is resident in the Republic when that measure comes into effect, forfeits no existing rights, privileges or benefits purely on the basis of other provisions in that legislation. It is true that our courts have not yet passed judgment on the precise implications of this specific provision. I want to ask a simple question in this regard. What, for example, is meant when reference is made to a citizen of Transkei, Bophuthatswana, Venda or Ciskei who is resident in the Republic when the legislation in question comes into effect? Do the words “in the Republic” include TBVC countries at that moment? Is, therefore, the protection afforded here applicable to all the people who were resident in those areas, too, at the stage when the states in question became independent, or not? This is very important. The provision reads that except as far as citizenship is concerned, they will not be deprived of any existing rights, privileges or benefits purely on the basis of other provisions in the legislation. Also as regards the implications of the words “apart from citizenship” I contend that it would have been logical to say that only the question of citizenship was at issue here; only, therefore, the fact that they had not become citizens of another country. Therefore all the other rights and privileges would be retained. If this had been the case then I really doubt whether this Parliament would have the right under that specific statutory provision to state unilaterally that we could apply to the term “citizenship” all manner of implications with regard to rights and privileges. I do not believe the right would exist for this Parliament to, as it were, impose all kinds of restrictions on those people under the cloak of citizenship. I very much doubt whether that would be the correct interpretation of this and therefore whether we can introduce all those things here unilaterally.

Then, too, there is the phrase “apart from their citizenship” that we shall definitely have to have greater clarity about later.

I spoke earlier of the fears and misgivings we harboured in this regard. The reason for this is the fact that this immigration legislation—I am referring now to the Act of 1972—was indeed used on a massive scale in 1981 to deport thousands of Transkeian citizens from the Cape Peninsula to Transkei. For the information of the hon member for Innesdal and the hon member for Caledon I just wish to point out that our fears are certainly not unfounded. This is what happened in the past. This is exactly what happened, and accordingly we have attempted by way of our amendment to prevent a repetition of it. That is also why the hon member for Green Point moved the amendment. In spite of all the objections advanced, it nevertheless happened that when those people arrived in Umtata, 600 of them were sent back to the Cape Peninsula because they were legally resident in the Peninsula. On the basis of other 1981 measures, thousands of Transkeian citizens were stopped at roadblocks and, under the cloak of measures in terms of this immigration legislation, sent back to Transkei. The hon the Deputy Minister and hon members of this House will therefore understand why we say that we are unable to accept this legislation unless we are given the assurance that it will not again be used in the way it was used in 1981 and 1982. Surely, in that case we shall have no alternative but to say that we are unable to agree to this legislation. Apart from the implementation of the legislation, what happened? All of a sudden, on 18 August 1981, seven officials of the Department of Co-operation and Development were appointed as passport control officers with the express aim of applying these immigration laws to Blacks from the Transkei. Therefore, when we ask what guarantees exist that this cannot happen and when we also consider all the provisions in this Bill and the possibilities, as indicated by the hon member for Green Point, for them to be applied to Blacks, then there is no national way for us to support the legislation in its present form.

I want to go a little further. My problem is that we do not only have these examples from the past of these laws being used against Blacks in those areas. When we look at the recommendations of the Riekert Commission it seems to be as if it is in fact inevitable that this legislation is going to be used in this way, in spite of the assurances of the Deputy Minister and the hon members for Innesdal and Caledon.

We must bear in mind that apart from many other recommendations, the Riekert Commission came up with three fundamental proposals and findings in this regard, viz that new measures of control had to be found in respect of the influx of Blacks to urban areas. They found that those measures of control should in particular include two criteria, namely employment and housing. We know that if no arrangements are made for housing, this will mean that those people cannot be lawfully admitted to an urban area, nor can they lawfully be permitted to work in that urban area. In this regard I should like to refer to what the Riekert Commission said on page 260 of its report. Paragraph 7.60 reads as follows:

The second fundamental recommendation of the Riekert Commission is that the employer must be penalized for the so-called unlawful employment, not the Black employee. They also recommended in the report greatly increasing the fine that could be imposed on employers. This is found on page 259. In the meantime the increase has taken place because the fine was increased to R500. However, that R500 is not comparable with the fine specified by this Bill which the hon member for Green Point indicated, namely R5 000. It may be that all the proposed amendments in this Bill can be fitted into the framework of the recommendations of the Riekert Commission.

The third fundamental recommendation of the Riekert Commission is that the Department of Co-operation and Development must be essentially deprived of most of its functions, particularly those that may be performed by other Government departments. This we find on page 247 of the report where it is very clearly stated. To me this is important because it is my contention that as far as all forms of entry from those four independent States is concerned, in terms of this recommendation the matter is now being entrusted to the Department of Internal Affairs and that in terms of he recommendations of the Riekert Commission the Department of Internal Affairs must use this immigration legislation to exercise that control. That is the problem we are faced with and I think that the hon the Deputy Minister will understand this.

On page 247 the Riekert Commission states in regard to the Department of Co-operation and Development that all specific functions must be allocated to other State departments, except those that of necessity can only be carried out by the Department of Co-operation and Development. Then the commission recommends that as far as the TBVC countries are concerned, the Department of Internal Affairs should take over the functions relating to people entering our territory from those countries. The hon the Deputy Minister will find those recommendations on, inter alia, pages 212, 234 to 235, 251, 267 and 274. This runs like a thread through the recommendations of the Riekert Report. The Department of Co-operation and Development must be deprived of that function entirely, and the Department of Internal Affairs must act under the immigration legislation in respect of all new arrivals from so-called foreign countries, including the TBVC countries, in order to regulate their entry.

In its White Paper the Government in essence accepted the majority of those recommendations. The White Paper states on page 11 that more effective border control is not being applied to the citizens of the independent Black States which formerly formed part of the Republic of South Africa due to the nature of the geographic borders. At present these people enter the country over a wide front. Therefore, there must be a form of control after entry. It is also said that it is also difficult and impracticable at the moment to distinguish between South African and non-South African Black inhabitants as far as their status and residential rights are concerned. However, the Government agreed with the recommendation of the commission that the provisions in question relating to Black citizens from independent Black states could be removed from the legislation relating to the abolition of passes and the co-ordination of documents. At the moment it is the control measures, namely the labour legislation, that were transferred in March to the Department of Manpower, and the Blacks (Abolition of Passes and Co-ordination of Documents) Act that is administered by the Department of Co-operation and Development. Therefore those control measures must be removed and provision for that had to be made in the appropriate legislation of the Department of Internal Affairs and Immigration which could then be made applicable to aliens of all races. The Government proceeded in that vein in its White Paper. Basically, therefore, the Government accepted those recommendations. On page 16 the White Paper deals specifically with the movement of citizens of Bophuthatswana and the Transkei and the Republic across common borders and once again it is said that it will for the most part be other departments that must exercise the control.

I note that the hon the Deputy Minister of Co-operation is present now. I want to say in his presence that it is quite clear to me that it will be necessary to take a fresh and critical look at the Riekert Report. At the time we accepted the Riekert Report in many respects without much criticism. However, it is quite clear that in the five years since that report appeared, things have changed radically in many respects. If we bear in mind the tremendous poverty and famine that is occurring and the concentrations of populations in the Ciskei, then in my opinion we cannot without further ado accept the recommendations of the Riekert Commission concerning inter alia the criteria of housing and employment as the only criteria whereby to control urbanization in South Africa.

I am aware that there are several agreements between South Africa and the TBVC countries. I have all the details before me but I shall not take up the time of this House in that regard. The mere fact that we passed legislation in 1978 relating to appropriate neighbouring states, compels me to ask the hon the Minister whether that legislation has been implemented yet. It will be borne in mind that the Riekert Commission recommended that it ought to be implemented with regard to Bophuthatswana. That legislation provides that legislation relating to admission to the Republic will only apply to the extent that it does not conflict with agreements between the Republic of South Africa and those countries. The fact that we passed that Act is already an indication that where agreements are in existence, the ordinary legislation will probably be applicable to those people. I am referring here to our immigration legislation.

The problem does not concern the Blacks who enter through the normal border posts. This brings me to a further problem, to which the hon member for Green Point also referred. What is being done now? A large number of border posts are being established and we are making it possible for all kinds of people to exercise control over these persons. This creates the impression—in the light of what happened in 1981 in regard to the Riekert Commission—that this legislation could be used on a large scale against people of the TBVC countries.

I also wish to refer to certain implications of the clauses to which the hon member for Green Point also referred. Clause 1 refers to the levying of a deposit and clause 2 to the details of what can be required of an alien. Clause 3 refers to the employment of persons and the enormous fine for which provision is made in clause 7. Clause 4 provides, by the insertion of section 5quat, that it may be required of an employer to provide details. Clause 6, by the insertion of the new section 8B, provides that the right of residence in the Republic lapses on deportation. Therefore, once a person has been deported by way of this legislation, any rights he had in terms of clause 6 under the independence legislation, lapse. Clause 8 provides for an increase in fines for people entering the RSA without a permit and clause 14 provides for the appointment of a large number of immigration and passport control officers.

I wish to conclude by saying that we note with appreciation the standpoint of the hon the Deputy Minister and the hon members for Innesdal, Caledon and Stilfontein that at this stage it is not intended that this legislation should be used. It does appear, in the light of what was said and what happened in 1981, when this legislation was used, and in the light of the Riekert Report and the White Paper, that the Department of Internal Affairs is to be entrusted with the whole machinery of control over the entry of those people. The only measures for doing so which are at their disposal comprise this immigration legislation, and I have no alternative but to associate myself with the amendment moved by the hon member for Green Point.

Mr Speaker, like the hon member for Green Point, the hon member Prof Olivier expressed concern about the possibility that this measure could be used to counteract an influx from the TBVC countries. He asked what guarantees there were that this legislation would not be used for that purpose. The guarantees are obviously the agreements entered into between the Government of the Republic and the other Governments.

The hon member also referred to certain events in 1981. If it is true that this measure was used, then it is also true that it was used with the consent and co-operation of the Governments of those citizens.

That is not correct.

This was obviously common knowledge at that stage. What is important in this connection is that the movement of citizens of the TBVC countries can only be regulated by way of agreement. This must be generally accepted. Why do I say this? Because this is a matter which is subject to change. One cannot deal with the citizens of another country in a certain way in this country and allow them certain privileges if that country does not do the same for this country’s citizens in that country. This is a matter which cannot be regulated by way of legislation, but which must in the first place be regulated by way of agreement between the states.

The hon the Deputy Minister has already given the assurance that this legislation is not intended to be used for influx control, and there are no provisions in this legislation to indicate that it will be used for that purpose.

Several fines are being increased in this measure to keep pace with the depreciation of money. In several clauses—clauses 11, 19 and 25—compulsory imprisonment is being changed into a choice between imprisonment and a fine of up to R5 000. I want to express myself very strongly in favour of this. We have had enough examples of the fact that when the discretion of a court with regard to punishment is removed, the result is that the legal principles applicable to a certain situation are distorted. The best example of this is our so-called dagga law. The inflexible penalty provisions originally contained in it simply led to a distortion of legal principles. This happened because society simply insisted that it should happen in order to satisfy their sense of justice and fair play. The classical example of this is the case of the young man who was living in a hostel. He saw certain seeds and suspected that they were dagga seeds. Because he was curious to see a dagga plant, he put the seeds in a small pot and added a little water. By doing this, he was guilty of dealing in dagga, because he had performed an act in connection with the growing of dagga. As a result, he should normally have been convicted and sentenced to five years’ imprisonment. However, this would have shocked the community’s sense of justice, so the judge ruled that the well-known maxim, de minimis non curat lex, should apply. However, it was subsequently found that he had been wrong in that respect. The best imposition of punishment is found where the judge is left as free as possible to use his discretion in imposing a penalty. Therefore I take pleasure in supporting this measure.

Most of these clauses deal with the control of immigrants who are already in the country, in other words, those who are here illegally. It is right and proper that these control measures should be tightened up, for it is no use having a policy and machinery with regard to immigration if one’s control measures are not stringent enough. Then one cannot implement them properly.

It is important to emphasize the other side of this matter as well, namely that these measures are becoming increasingly necessary and have to be used more and more often when the admission of immigrants is difficult and takes too long, whether because the procedure is too cumbersome or because the requirements for admission are too high. I want to say, on the one hand, that I fully support this measure and that it is necessary in order to make our immigration policy more effective, but on the other hand, I want to add that it is necessary to give effect as soon as possible to the recommendations of the Kleu report, in other words, that the process of the admission of immigrants should be streamlined.

Mr Speaker, if the premises of the hon nominated member Mr Schutte were correct we might agree with him and we would not be opposing this Bill, but he has made a number of incorrect premises which I feel must be corrected, and which will explain why we are opposing this Bill.

First of all the hon member said that the incidents of 1981 when masses of people were deported from South Africa under the Admission of Persons to the Republic Regulation Act must have taken place with the connivance of the Governments concerned. That is totally untrue. There were disputes between the Transkei Government and the Republic at that time and many temporary arrangements had to be made in order to accommodate the people who were deported. There was no agreement whatsoever between the two governments.

His other premise was that the treatment of foreigners somehow does not vary whether one is dealing with foreigners who are Black or foreigners who are White. Of course that is totally incorrect as well. Zimbabweans who come to this country and who are White have no problems about obtaining South African citizenship. No Black Zimbabwean, even if he has worked in this country for 20 years, is able to obtain any citizenship. There is therefore a completely different standard that applies to foreigners, depending on whether they are Black or White, even if they come from the same country. So that is therefore another false premise.

The hon member Prof Olivier pointed out that the hon the Deputy Minister did not in fact give any assurances when he moved the Second Reading of this Bill, as have been assumed by the hon member for Innesdal, who I am sorry is not in his seat at the moment. However, I want to tell the hon the Deputy Minister that even if he had given those assurances, that would not possibly have satisfied us on this side of the House because as we all know, ministerial assurances do not have the force of law, or might I add do the intentions of Parliament have the force of law. A court examines the contents of an Act; it does not examine the intentions that were stated during the debate when the law was passed in this House. Therefore neither assurances nor a statement of intent would have satisfied us about this Bill, although I for one am prepared to accept that it is possible that the officials who drafted this Bill did not have the intention of its being used, shall I say, as a crisis measure, or in crisis situations as a measure of influx control. However, I cannot be sure of that, and the reason has already been given by the hon member for Green Point and the hon member Prof Olivier. They have both mentioned the incidents of 1981, and I will return to that in a moment.

Despite the fact that the intention is perhaps not there to use this measure as a punitive weapon in a crisis situation such as occurred during the Nyanga squatter crisis of 1981, we have the precedent of another measure which also was never intended as an influx control measure being used against Nyanga squatters in the months of August and September 1981. During that period over 3 600 people were deported in mass movements by this Government, not as a result of those people having gone through pass law courts and at least having had an opportunity there to defend themselves, and some of them perhaps even being discharged. They were deported without any recourse to the courts, for this is not permitted in terms of the Admission of Persons to the Republic Regulation Act of 1972.

There is nothing in this Bill which prevents it, a recurrence of the ’81 episode. There is no saving clause which will protect people who have become aliens under the independence laws of the TBVC countries from being deported in such a way should there be another mass squatter movement which the Government is unable to control through the normal courts of law, the pass laws and influx control, because that is what happened then. The Government found itself unable to cope because defence was arranged for those people. When they appeared in the Langa Commissioner’s court, they found that there was a lawyer there who was prepared to defend each and every case. Of course the works got gummed up and the old sausage machine which operates in these Black Commissioner’s courts was unable to function and therefore the Government used the device of the Admission of Persons to the Republic Regulation Act of 1972. I want to know where there is a single saving clause in this piece of legislation which could prevent it from being used in a similar situation in the future. When that happned in 1981 and the 1972 Act was used in that way, I had a good deal to say about it. I said I thought it was disgraceful that an Act which in fact went through this Parliament without any opposition because nobody was ever told or given the slightest hint that it could be used as an additional influx control measure, should have been used in that manner against the squatters, who were not given the slightest opportunity of defending themselves. It was a disgraceful misuse of an Act, which was never intended as an additional weapon in the Government’s armoury of influx control measures.

With the taking of independence of Transkei and Ciskei, as I pointed out at the time, practically every Black person in Cape Town immediately became a foreigner, because the vast majority of those who are here, come from Ciskei and Transkei. That meant that with the stroke of two pens over 100 000 people became aliens in the land of their birth, and were therefore subject to deportation because they had become technical foreigners. The Department of Internal Affairs, despite protestations that the intention is not to use this Bill as part of influx control, must be aware that this Bill could be applied to the former citizens from the TBVC countries. Clause 24 specifically excludes this category from the requirement of entering the Republic by way of a formal point of entry. There is nothing else to exclude action in terms of this Bill being taken against them as a deportation measure. It is very interesting that the department should have had them in mind when it excluded them from the necessity of coming in at a formal point of entry. However, it does not exclude them from any of the punitive measures of this particular measure.

The hon member for Innesdal used as one of his arguments against the possibility of this measure being used in that way, the penalties clause. He said it was totally absurd to imagine that any Government would so disregard the realities of the Southern African region where there are thousands of people from the Black states and not only the TBVC countries, but people from Malawi, Botswana, Swaziland and so on, by imposing a fine of up to R5 000 on an employer employing a person from one of those regions. He said he could not imagine any government making provisions like that. The hon member has a short memory. He forgot that the Orderly Movement Bill, if I may call it that, which has now disappeared from sight, pro tem anyway, because we are waiting for its reappearance in whatever form we are going to get it, contained precisely that penalty, which could be imposed on employers who employed a Black man who was illegally in the urban area. He could be fined up to R5 000 or could be sent to prison for up to 12 months, or sentenced to both that fine and imprisonment. There is no excuse for the hon member for Innesdal deciding that this measure is totally innocent and that it cannot be used for any other purpose.

We on this side of the House have our suspicions about the measure. We hope that the intention will be adhered to. We are prepared to accept that the officials who drafted this Bill, may not have had that intention in mind. However, there is no guarantee whatsoever that another department at another time and in any crisis situation involving a large influx of squatters, is not going to use this measure against former South African citizens from the TBVC countries. For that reason I am happy to support the amendment moved by the hon member for Green Point.

Mr Speaker, in my reply to this debate I want to emphasize very strongly, right at the ouset, that the amendments being introduced by this legislation aim at exercising effective control over aliens. As rightly pointed out by the hon member for Innesdal and others, this is done in all countries of the world. I think the hon member for Innesdal made a very telling point. There must be effective control over aliens. Let me tell hon members that what is involved here is the question of people who are in the country unlawfully, and not aliens who adopt the correct procedure, go through the right channels and have the right documents. It is a matter of the effective control of aliens and, in particular, action against people who are in this country unlawfully.

The hon member for Green Point emphasized—I appreciate his doing so, because this is an important premise—that the general viability of, and order in, the country should be protected. He also emphasized that the process of employment, in other words the process of creating job opportunities for members of the population, for the people of the country, should be kept intact. That is an accurate assessment on the hon member’s part, and that is what these measures are all about. We must, after all, firstly protect the population, the people of the country, our inhabitants, all the people who are here lawfully. We cannot, after all, place our order in jeopardy. We surely cannot endanger the creation of job opportunities and the employment of our own people.

It is very clear to me that the official Opposition has found it extremely difficult to find criticism to level at this legislation. The one single reason why they do not support the amendments and have moved an amendment is that, according to them—and as stated in the amendment—“it may prejudice the position of aliens who are citizens of states which previously formed part of the Republic.” In order words, it concerns citizens of the TBVC countries, of the independent states, who were previously citizens of South Africa and are now citizens of their own states, having obtained citizenship of their own countries. It is allegedly on that score that we shall be taking unfair action against those people. I want to be very honest with hon members and say that I can add nothing more to what I said in my Second Reading speech. I cannot give any stronger assurance than just to reiterate that the proposals for amendments merely relate to the improvement of the control of aliens in the same sense in which the words have always been used. That is what it is all about. It is a matter of the control of aliens. I want to reiterate that the relevant Act is applicable to aliens from all independent states. It is therefore also applicable to aliens from the TBVC countries. I am making no apologies for that. That is what the Act is there for.

I now want to refer to the agreement that exists between the RSA and Transkei. For this purpose I want to quote from the Government Gazette of 22 October 1976. I shall quote from the agreement between the Government of the Republic of South Africa and the Government of Transkei on the movement of citizens of Transkei and the Republic of South Africa across common borders. Article 1 of this agreement reads as follows:

In English it is stated in these terms, and I quote again:

This is an agreement lawfully entered into between the relevant two countries, and in this article we are told very clearly that the relevant two countries can use the laws at their disposal to control this situation.

I want to know from the hon member for Houghton what would happen if 3 000 Whites were to enter Transkei illegally. [Interjections.] Would they be allowed to remain there? Would they allow 3 000 Whites to be there, or would they use their laws against those Whites?

Lots of Portuguese are allowed into Transkei.

In the same way that Transkei cannot at present accommodate 3 000 citizens from South Africa, we cannot, in a disordered fashion, accept 3 000 aliens here in Cape Town or wherever. [Interjections.] That is why we must have measures at our disposal that we can also implement. [Interjections.]

To allege, however, that this legislation is specifically aimed at aliens from the TBVC countries is, I believe, quite wrong, and I therefore want to deny this in the strongest possible terms. We are not dealing here with stricter influx control. That is not, after all, in any way the object of this legislation. This is surely no new measure we suddenly want to employ in order to implement stricter influx control. I think the hon member for Brakpan quite rightly pointed to clause 9, clause 10 and clause 24 of the Bill. He also said, quite rightly, that the citizens of the TBVC countries would actually benefit from this. That is, after all, the case. The hon member for Houghton, however, also referred to clause 24 and said that the fact that we no longer had merely the three points of entry, making provision for more of them, was adequate proof that this legislation did indeed relate to people from the TBVC countries. I think the hon member for Brakpan is correct. We are actually facilitating matters for the citizens of those countries.

I also want to agree with what the hon member for Caledon said. He contended that the PFP is being blinded by its obsession. That is, of course, the case. [Interjections.] Hon members of the PFP are blinded by an obsession. If only they could have interpreted this legislation in the way in which the hon member for Stilfontein interpreted it, they would have reacted quite differently to it. The hon member for Stilfontein pointed out that this legislation did not relate merely to specific people. It is not a question here of people’s colour. It is a question of protecting South Africa. It is a question of the implementation of measures for controlling aliens in this country.

†I should also like to refer the hon member for Green Point to the speech delivered by the hon member for Umbilo. The hon member for Umbilo said that this Bill was dealing with the traditional aliens, and that for political and economic reasons the Government would damage its image if this Bill was going to be used as an influx measure.

*I am, of course, in full agreement with the hon member for Umbilo. We do, after all, have an image we wish to maintain. Like any other country, South Africa surely also has an image it has to maintain in the face of the world at large. We have, after all, always manifested a sense of fairness and justice, of doing the right thing by those who have entered this country lawfully. I want hon members to bring me examples of our having taken action against people, of our having had people, who were here lawfully, removed from the country, people who had job opportunities and houses—people who had obeyed the laws of the land.

Other hon members clearly indicated that what we are dealing with is the control of aliens. I want to repeat that this measure is aimed at individuals and not at the masses. The amendments we are proposing here are aimed at individuals, and we have many of them here in South Africa. Hon members know many of them in their own constituencies. We come across them each and every day. What we are saying is that this is aimed at the control of aliens who are here unlawfully. It is not aimed at the masses.

I have said before that the hon member for Green Point’s basic objection to this Bill lies in his allegation that there can be no assurances that the legislation would not, in future, be used against citizens of the independent states. He based his objection on the fact that the Admission of Persons to the Republic Regulation Act, Act No 59 of 1972, was indeed, very recently, used against such citizens. When the legislation has been used in regard to citizens of other states in the past, this could only be done in so far as those citizens—I want to reiterate and emphasize this—were unlawfully present within the borders of the Republic and action could be taken against them in terms of the legislation. The fact that the proposed amendments make provision for stricter control measures and heavier penalties, must merely be seen as an attempt at overhauling the existing legislation. This afternoon I want to say that I think it truly lamentable—and I am addressing this to the hon member for Green Point, the hon member Prof Olivier and the hon member for Houghton—that certain categories of aliens are now being singled out, in spite of the fact that the proposed legislation is aimed at the control of aliens across the entire spectrum, with due regard to other existing measures and agreements between states.

More than that I cannot say. The hon member Prof Olivier said I would not be able to allay his fears. I just want to tell the hon member that he must at least take our word for it that this Government is not a Government that merely wants to oppress or subdue people.

I now come to the hon member for Brakpan. I want to thank the hon member very much for the support he gave this legislation on behalf of his party. The hon member touched upon several aspects of the legislation that I want to deal with briefly. Firstly the hon member asked why the term “Union” was still being used in the Bill and whether this could not be rectified. When I read the legislation, the word immediately struck me, and because it bothered me, I immediately approached the State Law Advisers. In overhauling these Acts we would very much have liked to replace this word with the word “Republic”. The hon member will understand that I am not a person versed in law—I only have theology as a background—but the State Law Advisers pointed out that for technical reasons the word “Union” could not be replaced by “Republic” because this would conflict with the short title of the Departure from the Union Regulation Act of 1955. I do, however, also want to refer the hon member to the Interpretation Act of 1957, in terms of which a reference to “Union” should be construed as a reference to the Republic. Unfortunately we therefore cannot, on this occasion, replace the word “Union” by the word “Republic”, even though I would very much like to have done so.

The hon member for Brakpan also referred to clause 3 and pointed out that it was not an offence to assist an alien when it came to accommodation, whilst it was an offence to help an alien to manage a business undertaking or carry on any profession. A further objection that the hon member raised related to clause 4. He felt that employers should not have to furnish information about aliens in his employ merely at the request of the Director-General, but that there should be a continual obligation upon them to do so.

The hon member’s objection in regard to clause 3, in terms of which it is not an offence to help an alien when it comes to obtaining accommodation, is unfortunately unfounded, because it would really be difficult to prove that someone did grant assistance. One would have to prove that that person helped obtain the accommodation. The real offender is the person who supplies the accommodation, and the offence could hardly be extended to encompass the helper as well. That is our interpretation, and for that reason it is only applicable to the person who actually provided the accommodation.

As far as clause 4 is concerned, it will unfortunately not be possible to go along with the hon member’s idea because this would place a tremendous burden on both the employers and the department that has to do the follow-up work. The department is continually negotiating with employers who have aliens in their employ or feel that they need to employ aliens. Consequently the department will know what employers should be approached. I do not think that the idea is to place all employers under a constant obligation to furnish returns.

In regard to clause 6 and other provisions of the legislation in which the word “opgehou” is used, the hon member expressed the opinion that the word “vertoef" would prove more descriptive. I actually agree with the hon member about the word “vertoef" being used instead of the word “opgehou”, but now we must go and have a look at the dictionary. The word “opgehou” also worried me, but after having allowed myself to be convinced by the Verklarende Woordeboek, it seems to me—without going into semantics—that we should not interpret the word “opgehou” as being wrong in the context of the legislation, but rather accept it.

In regard to clause 11 the hon member pointed to an inconsistency between the proposed fines and the terms of imprisonment that could be imposed. The inconsistency be tween the penalties proposed in clause 11, to which he drew our attention, compelled us to take another look at the clause. There is unfortunately—the hon member will also notice this—a further inconsistency, ie that the person granting assistance can be punished more heavily than the person, who in the first instance, commits the offence.

I have formulated an amendment that I shall hand to the hon member. If he is prepared to move it in the Committee Stage, I shall accept it. I am adopting this procedure because it was he who initially brought this inconsistency to our attention. He may have a look at the amendment we have drawn up and then possibly move it.

†The hon member for Umbilo referred to the citizens of the erstwhile parts of the Republic and said that it was essential that the Bill should not be used to preclude those citizens from being part of the economic structure of South Africa. He also referred to the somewhat harsh punishment proposed for employers who aided and abetted a non-permanent resident or illegal permit holder. The hon member asked whether it was really the function of the businessman to get involved in this legislation. I want to assure the hon member that it is not at all the intention to preclude the citizens of the independent countries from the economic structure of the RSA. For that reason we have extensive agreements with the Governments of those countries, agreements relating to the employment of citizens of those countries. The emphasis in this Bill falls on persons who sojourn illegally in this country, and whose illegal stay in this country preclude our people, and for that matter the citizens of the independent countries, from being part of the economic structure of this country.

As far as the involvement of the employers is concerned, it must be pointed out that they indeed have a role to play in our internal control measures. The Government alone cannot administer the measures properly without assistance of the employers. They are in the best position to ensure that they do not employ foreigners who are illegally in this country.

The hon member also raised objections to the proposals in clause 14, whereby messengers of the courts can also be appointed as immigration officers. He has grave doubts whether these officials will be capable of performing the duties of immigration officers as they are not trained in the intricacies of the Act. I want to assure the hon member that it is not our intention to appoint persons as immigration officers who are incapable of performing the duties of such officers. In this regard I want to point out that according to section 4(b) of Act 59 of 1972, the Minister may confer upon or assign to an immigration officer such powers and duties to carry out that Act as he may deem necessary. Consequently the hon member may rest assured that we have no intention of conferring powers or duties on people who will be incapable of performing them.

*Other hon members also took part in this debate, and I want to say thank you very much to the hon member for Innesdal for his contribution. I think he replied very effectively to the objections from Opposition members. He spoke with conviction and conveyed to the official Opposition the true intention behind what this side of the House, the Government, is doing. The hon member for Caledon said that this legislation was a feather in South Africa’s cap. I think we have fine legislation in this regard, and it is a pity that yesterday and today the official Opposition again alleged that we simply wanted to get at certain people. The hon member for Stilfontein referred to the so-called agents involved. I agree with the hon member that there are many people who lose a great deal of money because they make use of these so-called agents. I think one should say a timely word about people having recourse to the official channels when they want to come to this country. He also referred to the fines that are being increased and said that he welcomed the increase. The hon member Mr Schutte is worried about the procedures for the admission of immigrants and said that we should make the whole system more streamlined. I can assure him that we are giving this our constant attention, that we try to accommodate companies and that we do not want to make the procedures unnecessarily lengthy or complicated.

I think I have now replied to all the members on this side of the House. I now want to refer to the speech of the hon member Prof Olivier. He asked whether the Designated Neighbouring Countries Act, 1978, was being implemented yet. That Act is not yet being implemented. It makes provision for the entry into, sojourn in and departure from the Republic of citizens of the TBVC countries. Although this Act has not yet been implemented, in clauses 9, 10 and 24 of the Bill before us we are, after all, acknowledging the agreements entered into with the Governments of the TBVC countries.

I want to conclude by giving the assurance that we shall not go beyond the limits of those agreements. That is, after all, the aim and endeavour of this government—we also witnessed this last Friday—and it is the desire of each and every one of us to have peace in Southern Africa. It is surely our desire to have peace here in South Africa. Having decided to help with the establishment of these independent states, we surely want them to develop and flourish. We therefore do not want to oppress the citizens of those countries. I know they were previously citizens of South Africa, but now they are citizens of their own countries. We are, after all, looking after them economically.

With this legislation we are being very honest. Unfortunately I cannot accept the official Opposition’s amendment. Here we are really dealing with people who are here unlawfully and with the control of aliens. Anyone who is in South Africa lawfully will not clash with the law and will not have any problems.

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

Upon which the House divided:

Mr Speaker, I move:

That the Bill be now read a Second Time.

The Bill comprises two amendments to the National Key points Act, 1980. In the first place, section 11 thereof is being amended so as to authorize the Minister to make regulations relating to the employment or the hiring of the services of guards by the owners of key points, the requirements to be complied with by such guards and the nature and duration of their training. Presently regulations can only be made relating to the appointment of guards by owners. The present wording of the empowering provision gives rise to two problems. Firstly, no provision is made for owners to hire the services of security guards who are provided by commercial security contractors. Such guards do not meet the statutory requirement of having been appointed by the owner, in the sense of being appointed in his service. It is not a practical proposition either for owners from time to time to enter into separate contracts of service with individual security guards who are provided to them by security contractors. Secondly, the status and powers of a security guard provided by a security contractor to an owner are affected. Since he has not been appointed or employed by the owner, he is not an authorized security guard as provided for in the regulations. The proposed amendment to section 11 of the principal Act envisages therefore, on the one hand, to provide that a key point owner, besides employing security guards himself, may also hire the services of such guards and, on the other hand, for obvious reasons, that the Minister may, by way of regulation, exercise control over the requirements to be complied with by key point guards, their training standards, etc.

In the second place, section 13 of the principal Act is being amended to provide that the regulations made under section 11 shall also bind the State to the extent determined by the Minister or any person authorized thereto by him. The problem which will be rectified by this amendment, is simply that, because the regulations (particularly those which by virtue of section 11(a) to which I have referred earlier) presently do not bind the State, key point guards in the State sector cannot be appointed (or, as it is now being amended, employed or hired) in terms of those regulations. The status and powers of key point guards, as “authorized security guards”, are likewise being affected. The aim is not to enforce State liability to the regulations. The co-operation of the relevant departments is first class. This is merely to place the status and powers of the State key point guards beyond any question. Hence the provision that the Minister or his assignee may exempt the State from its liability to the regulations.

Mr Speaker, when the Principal Act was introduced in 1980, we on this side of the House supported the legislation in principle, and today we also intend to support these amendments to that Act.

I can understand that there are several reasons why the first amendment should be introduced. There are many examples one could mention, but in the first instance it might not be an easy task for some businesses to use their employees as key point guards. It could perhaps be a small undertaking for which only a few guards are needed. In such a small organization which is, in fact, a key point, it is possible that the few guards who have to be employed do not have many possibilities for promotion. Because of this it would be difficult for such an undertaking to keep those people in its employ for any length of time because the benefits offered by other companies would inevitably be better. I therefore imagine that such a small business undertaking would, for example, like to make use of the facilities of a security organization. In other cases it is possible that facilities for training guards may not be available. In that case I can also understand such an undertaking wanting to make use of an outside company. There are perhaps other instances in which, because of specific circumstances, it would not be to an undertaking’s advantage to have its employees walking around armed on its premises. There could be many reasons for this. In such instances, too, making use of outside organizations could embody certain benefits.

Now I come to the amendment relating to the State itself. At present the Act does not provide for Government departments or the State itself having to comply with the provisions of the Act as it stands. The hon the Minister said that this was not really a problem because it seldom happened that a Government department did not appoint the necessary guards. It is possible, however, for such guards or the State itself, under certain circumstances, to find themselves in a very difficult position if something went wrong. If someone were to be injured, for example, if a gun were to be fired accidentally, if someone perhaps acted too hastily and a member of the public were involved, the guard himself would, in such instances, have to bear the responsibility. For that reason the legislation is being extended to make provision for the State itself to be subject to the protection of the Act.

Whatever the Act may provide at present, it remains of the utmost importance that all people who become key point guards, and are armed, should be fully and properly trained. I think one should take the opportunity today of expanding on this somewhat. This House and the public simply have to be given the assurance that there will never be any reckless action taken. We have, for example, determined that as of now there are 36 centres in South Africa where key point guards can be trained, and that that training takes place, if not under the control of the key point secretariat, at least with their approval. So the training methods used there, are at least monitored to ensure that in the event of firearms being used, the people responsible are fully trained.

There is another aspect of detail that we must also discuss today. Apart from the fact that there are 36 training centres, there are at present 413 key points that have officially been approved. At each of these key points the necessary requirements must be met to ensure security. Apart from the 413 key points there are also—so I gather—800 others that one could call semi-key points or areas that could be described as semi-key point areas. So if one looks at the extent of the protection needed, one sees how important this Act is and how important it is to see to it that the Act is properly implemented. Escom alone, to take an example, has approximately 3 000 trained key point guards in South Africa.

†If we look then at the situation in South Africa in which it has been necessary to take all these precautionary measures it becomes very clear what the costs are that have been incurred by the community. I do not know how many guards there are in total in South Africa, but I should imagine that there are several thousand of them as Escom alone has to employ 3 000. With 413 key points and 800 additional semi-key points we can only imagine what the costs are of establishing the necessary facilities for protection and everything that goes with such an under-taking. The total costs must run into millions of rand.

Not only does South Africa have to pay for the guards, but the country also has to bear the capital expenditure of which a substantial percentage is tax deductible. I think that amounts to something like 46,2% that can be written off against tax in the first year when such expenses are indeed incurred. In addition to that 46,2%, I should imagine, the other capital is then written off over a period of years, as would be approved by the Department of Finance.

Another question which we also have to ask in dealing with this measure is the following. Is this situation going to continue indefinitely? Do we have to accept that during 1984 we will have to continue to guard our installations and that that will still have to be done by the year 2000? I believe that when one deals with a Bill of this nature the question that also arises is why it has been necessary to bring about this elaborate system of protection. Reading what was said by various speakers before the Bill of 1980 was introduced into this House, I realized that it was clear at that stage that we had experienced terrorism and that we expected even more terrorist attacks. The names of certain organizations, inter alia that of the ANC, were mentioned in this context. We have now reached the stage where only last week many of us had the opportunity of attending a ceremony at Nkomati on the common border between South Africa and Mozambique. An agreement was signed there between the governments of these two countries, which will hopefully have the effect of restricting the movements of at least one of those organizations, one which, we all believe, could be either partially or totally responsible for some of the deeds of terrorist destruction already perpetrated. I should therefore like to ask the hon the Minister, when he replies to the Second Reading debate, to give us some idea of whether he believes that some of the problems with which we have had to cope so far since 1980, and for which provision is made now in terms of this Bill, have indeed been solved. Does he think we are in the process of finding solutions to those problems? Does he believe that terrorism, and therefore the need for this elaborate protection, will diminish in future. I think this is the ideal opportunity of dealing with these matters more fully and also of giving this House and the rest of South Africa an indication of what his thoughts are in respect of internal peace in the times ahead of us.

Mr Speaker, I should very much like to thank the hon member for Wynberg for the support he pledged for this Bill on behalf of his party. Towards the end of his speech he asked how long we would still have to continue to protect these key points.

To start with I want to say that I think it would be naïve to believe that the Soviet Union and its communist-controlled terrorist organizations, including the ANC, were delighted about the events which have just taken place at Nkomati; on the contrary, the more success South Africa achieves on the road to peace and prosperity, the more fiercely this enemy will try to strike back and attack targets which are important to the country’s development, security and prosperity. These threatening intentions of the ANC are also reflected in its Freedom Charter which contains all the elements of terrorism and sabotage. In this connection I also want to refer to a report which appeared in The Citizen of 17th March under the caption “South Africa accused of emasculation”. This report came from Lusaka and read as follows:

The report went on to say:

In reaction to this one can only say that the ANC should take cognizance of the fact that irrespective of the events of the past few days the South African Government will not relax its vigilance for a moment and particularly not as far as important key points are concerned.

The perpetration of acts of sabotage and terrorism and attempts to perpetrate such acts were what led to the Key Points Act appearing on the Statute Book in 1980. For obvious reasons it became essential to identify certain strategic industries and undertakings which had become indispensable to the economic development and growth of our country as key points and to protect and safeguard them as such.

Section 11 of the existing Act therefore provides that the Minister may by way of regulation compel owners of key points to appoint guards with the purpose of guarding such places. In order to prevent administrative or other stumbling blocks from arising in respect of the guarding of these key points, these amendments now make it possible for the owner of the key point to hire guards or to make use of organizations or bodies which specialize on providing security services. However, the Minister retains the right to lay down certain standards, by way of regulation, particularly with regard to the qualifications and training that such guards must have. The use of security organizations, some of which—as the hon member for Wynberg has already said—already have well trained guards at their disposal, may to a large extent enable key point owners to eliminate certain problems particularly in connection with training facilities and time factors and the cost structures involved.

Another important provision of this legislation is that State departments may also, in future, be compelled in pursuance of this amendment to the Act to take similar steps. However, cognizance should be taken of the fact that these security services will only be responsible for internal security, in other words only within the boundaries of that key point. External security therefore still remains the responsibility of the State.

This amendment is an important and essential addition to the existing Act, because it not only meets a need or eliminates a deficiency which arose, but it also gives key point owners a greater degree of reassurance in the knowledge that, although under conditions laid down by the State, they will in future be able to make use of the services of thoroughly trained and well-equipped guards to perform this very important task.

I conclude by saying that although these amendments may seem to be trifling, I believe that the consequences could hold great advantages for the protection of key points which are of vital importance to South Africa and its people. I should like to convey our thanks to the hon the Minister and the staff for this amending Bill and say that we on this side gladly pledge our support for it.

Mr Speaker, firstly, as the hon the Minister impressed on this House, the National Key Point Act provides for the identification and safeguarding of such key points. The original legislation was piloted through Parliament in 1980 and came into operation on 25 July 1980. The Bill envisages two amendments, the first to section 11 and the second to section 13 of the Act. As the hon the Minister pointed out, the two amendments seek to bring about more effective operation and control with regard to the safeguarding of national key points. As previous speakers have also pointed out, this is being done by exercising control over the nature and period of training of security guards and by allowing security guards to be hired from security contractors. In terms of the amendments made to section 11, the State will be able to place the status and powers of the guards appointed beyond any doubt.

In my opinion this is absolutely essential because national key points are and remain the targets of terrorists and the underminers of the existing order in South Africa. For that reason the CP will support every measure the Government comes up with to raise the standard of the safeguarding of national key points.

We have repeatedly experienced successful acts of sabotage, particularly at fuel installations. Just think of the Warmbaths incident in October last year and the Ermelo incident a short while ago. Rightly or wrongly, one gets the impression that at this stage the measures that are being adopted are still not sufficient. I want to refer to a report which appeared in The Citizen on Monday, 12 March, after the Ermelo incident. In the report an eye-witness is reported as saying:

This may create a completely erroneous impression among members of the public that insufficient provision is being made. I should like the hon the Minister to give this House and the public the assurance that everything is being done which could possibly be done to safeguard places of this kind properly or that the measures which have existed since 1980, are going to be improved to keep the possibility of this kind of sabotage down to a minimum.

One realizes that it is probably not humanly possible to eliminate the security risk entirely. However, I should like to know from the hon the Minister if it is not possible, for example, to provide in this legislation or in other legislation that industrial complexes containing national key points such as fuel storage depots should, for example, be situated a certain minimum distance away from residential areas because in certain cases the properties and lives of people living near such places could be endangered.

In spite of the peace negotiations taking place and in spite of the agreement which was reached recently with a neighbouring state we shall find—and here I want to associate myself with the question the hon member for Wynberg put to the hon the Minister—that in future we shall still have to deal with fanatical underminers of the existing order in South Africa. We shall therefore not be able for a moment to relax our standard of preparedness in every conceivable sphere of our economy. For that reason we on this side of the House want to give this Bill our full support, to the extent to which it effects these safeguards.

Mr Speaker, it was an experience hearing the hon member for Pietersburg calmly, reasonably and rationally speaking about this important legislation. Even the hon member for Rissik was listening attentively to the hon member for Pietersburg. Hon members wil remember that this matter was debated in this House in 1980 when the National Key Points Act was placed on the Statute Book. That Act authorizes the hon the Minister and the Department to make regulations to achieve the objectives of the Act. All of us still remember the tragedy in Silverton. Some members will perhaps not remember it all that clearly because they were not as closely involved as I was, seeing that it took place in the very heart of my constituency. Some of the people who were injured and who died were voters of mine.

The hon member for Wynberg referred to the tremendous costs which would have to be incurred in safeguarding certain key points and other installations. That does not bother me as much as the loss of life and possessions that goes hand in hand with terrorism and other atrocities.

A branch of the Volkskas Bank, for example, cannot simply be declared a key point. That is true, but where must one draw the line? Now that Stander is no longer in circulation it is, of course, much safer at such branches too. There are, however, also other instances—and this has previously been referred to—of acts of terror being committed and arson having occurred. As examples, there were explosions at Sasol in Sasolburg, at Secunda and even at Natref. It was therefore essential for this Act to be placed on the Statute Book. This made us realize for the first time that we would have to introduce stricter security measures in South Africa and that we could not always merely rely on the State to look after the security of property, particularly private property. Terrorism and sabotage are not unique to South Africa, occurring virtually throughout the world. One could pick up any newspaper in the reading room, whether a daily, a weekly or a monthly, and somewhere in it one would read about sabotage, terrorism, the hijacking of aircraft or kidnapping. It would seem as if, in this modern-day world, something in human being has snapped and as if this has led to a situation in which human life has been made cheap. There are those who are so maladjusted that they no longer care about the property or lives of others. I do not think there is a single hon member in the House who does not feel a little queasy when he sees, on television, what is happening in Beirut. One asks oneself whether, in a place like Beirut, there can still be any key points that can be protected. One wonders whether one can still bring up children in Beirut. So it was necessary for us in South Africa to have learned these lessons, even from countries abroad. That is why we identified national key points. What did we use as a basis? As our point of departure we decided to protect those places which provided services or products, or even stored products, the destruction or damaging of which would do incalculable damage to the Republic of South Africa and its inhabitants.

It is true that no legislation, and particularly no new legislation—like the 1980 legislation—is perfect. I am therefore convinced that the amendments we are introducing today will enable us to introduce even better security services in South Africa. What happened after 1980? It is very clear that after 1980 sabotage and terrorism did not cease, in spite of the fact that we had identified and declared more than 400 key points, and in spite of the fact that there are numerous other places which, although not key points, are nevertheless guarded. Sabotage continued. One merely needs to think of the explosion at Vryheid and the sabotaging of railway lines, explosions in buildings at Durban, Administration Boards that have run the gauntlet and the explosion at the Carlton Hotel. Probably one of the most gruesome incidents was the car-bomb explosion in the heart of Pretoria. People who have not been through that, have not been that, cannot have any idea of exactly what happened there. We shall simply have to incur this expenditure and, in the case of our own installations, appoint and train our own guards.

What have practical situations proved to us? They have proved that entrepreneurs do not have sufficient trained guards. Some do not have the facilities. The hon member for Wynberg referred to that. Some of them have organizations that are too small to be able to train people and then have to lose them when they eventually go to larger organizations. In many cases it is cheaper to take out insurance than to appoint or train guards. I am convinced that the Ermelo incident was a case of premises not having been declared a national key point, and there are probably still thousands more.

In this legislation we are giving entrepreneurs the expertise of trained people from commercial contractors. Those are the people whose work it is, and whose own training undertakings give them the expertise to comply with all the provisions that the Department and the relative committee and board lay down. The State does, of course, still retain the right to determine both the powers and the training of these guards. What is of special importance is that the department provides here that the State also takes the responsibility of ensuring that retraining is done. We are surely all aware that it is essential that these guards be re-trained. If one has taught someone years ago to shoot with a .303 rifle, and he is suddenly now given a R4 rifle, do not expect him to be able to use it very effectively. I am therefore asking, not only for re-training but also for regular medical check-ups. Any of us who have ever been to large factory premises have had the experience of driving up to the gate where there is a guard, and whether one presses the hooter or rings a bell, one sometimes has to wait for some minutes for any reaction. Meanwhile there is nothing wrong, except for the fact that the guard is old and cannot hear all that well any more. Perhaps, in having to write down your car’s registration number, the guard often finds it difficult to see or read the number. I therefore believe that that is an aspect that deserves specific attention. When a person is medically examined, both his hearing and eyesight must be tested, because if a guard cannot see or hear well, it is no use having him in one’s employ. [Interjections.]

The entrepreneur will now be able to employ specialist guards, because the requirements of one undertaking differ, of course, from those of another. The commercial instructors and contractors will now specifically know for what purpose they are training the people, and in this connection I should like to put three questions to the hon the Minister. Firstly, how are these training requirements made known? How are those people who would like to train guards notified of the requirements? I think it is important to determine this, because judging by the people who do this type of work at present, it seems as if there is the possibility of a monopoly, something which I think we should be careful about. The more institutions offering these training facilities, the better will the eventual methods be. Secondly, I should like to know from the hon the Minister whether the regulations that have been promulgated have been implemented by now. I should also like to know how the national key points are evaluated. I think it is important to determine, from time to time, whether a specific key point still comes up to scratch as far as its objective is concerned, or whether a relevant key point list should perhaps be extended and other key points added.

If I were to ask hon members to pinpoint the reasons for the success achieved by those committing sabotage and terrorism, I would probably obtain diverse answers. In my view it lies chiefly in the element of surprise, and that is so because we, as members of the general public, are too easy-going, in fact, apathetic. We trust the police and the security forces to ensure that we and our possessions are safe. One can also ask oneself how we can most effectively combat terrorism and sabotage. How can we thwart the attempts of these saboteurs who normally work at night? I think we can only do through the joint efforts of the State, the public and businessmen, and businessmen can only do so if they are informed, prepared and determined to help the security forces in this connection. I therefore think that if we want to feel safe and secure, we must ensure that we have the very best security measures possible. I think it is essentail for members of the public, in particular our businessmen, to be made security-conscious. Then we shall have the necessary co-operation. If our entrepreneurs and businessmen could extend their involvement in security, they would be able to help protect their own undertakings and possessions, to the benefit of everyone in South Africa. If the amendments in this Bill can contribute to places other that those already declared national key points being protected by the owners, it is good legislation, and I want to congratulate the hon the Minister.

Mr Speaker, I am sure you will be glad when I say that I am not going to follow the wide-ranging debate on the principal Act but that I am going to speak about the amendments contained in the Bill. I will leave the general debate on security key points, etc., for a more appropriate occasion.

The Bill contains only two simple provisions. The first provides for the hiring of security guards from organizations and firms which supply them by contract or by other agreement to employers who do not have their own. This is something which has arisen from a need which was not envisaged when the principal Act was passed. We have looked at the reasons for the need, those that have been discussed in the House and others—there is no need to go into these—and we are satisfied that there is a need. We will therefore support the extention of the provision to hired security guards. In addition to the major need for it, there are other minor needs which have been referred to by speakers, particularly in the case of firms which for some reason or other cannot handle or do not want to handle their own security arrangements. The Bill provides that those firms can ensure that security is provided on the basis of obtaining guards from other sources. The type of guards you would get here, would probably in many cases be superior to the employed guard whom as the hon member for Roodeplaat said, was very often a retired person, whereas the normal security organizations have people who are trained, fit and able to deal with a variety of situations, There was a time when old men were used, and very effectively used, to guard bridges, railway lines and post offices, a time when other hon members may not have been so keen on their being protected. However, that is part of history, and I will leave that history there; otherwise I would not be speaking within the limits of the amendment.

The second provision deals with the extension of the regulations to bind the State. This is an improvement, and we support it. So the NRP will support the Second Reading in principle and will support the Bill in all its stages.

Mr Speaker, a spirit of whole-hearted unanimity seems to prevail as far as these amendments are concerned, and this is cause for real gratitude because we are concerned here with a very serious matter—it is in fact a thorny issue— as regards the maintenance of a strong economy in our country. The imperative need to take precautions to prevent sabotage attacks on key points in our country is being emphasized more and more by the increasing incidence of acts of terror in our cities and industrial areas. I think that the outstanding instance of this is the Sasol incident, an incident that really shook our country. However reprehensible and cowardly these deeds may be, they have become an important part of the onslaught on our country and we have no alternative but to counter them with all the force at our disposal.

The envisaged effect of the terror onslaught is a long-term grinding down process, which is eventually meant to lead to the economic destabilization of the Republic of South Africa. In this process it must have an effect on the mental condition of the people of the country and they are subjected to psychological disturbance in the hope that they will take sides with the terrorists in order to get rid of the threat. It is as simple as that. Now you must permit me, Sir, to say that in this process they have an ally in those who seek the reason for deeds of terror in the policies of whomever governs the country, those who believe that terrorists and saboteurs are freedom fighters who are only doing their duty in the interests of their so-called oppressed comrades. [Interjections.] To them liberty means threatening the liberty of innocent law-abiding people.

In order to combat these senseless deeds the Government has accepted the responsibility of protecting the area surrounding the key point, and it is expected of the owners of key points to ensure that the terrain within the area of their undertaking is protected by themselves. Whereas the limiting provision in the existing Act specifies that owners of key points must employ individuals or must make use of people in their employ to perform security tasks, the new legislation permists owners to hire the services of companies or bodies that provide security services in order to perform the security tasks for them. Not only does this broaden the scope available to the key point owners as regards obtaining such services; it also entails several other benefits. The considerable expense involved in training and equipment of security guards is to some extent neutralized. Bodies specializing in the provision of security services are once again being stimulated, as a result of which better services may be rendered etc. Since it is the desire of key point owners to utilize such services, and the bodies providing such services are eager to offer their services I regard this Bill as a meaningful and also a necessary one in these times. It will certainly contribute towards more effective combating of sabotage by those who believe that violence and terror afford a solution to the problems facing us. The question could arise whether hired security guards with no personal interest in the institution they have to guard will be dedicated enough to perform their task thoroughly. However, in view of the many advantages offered by the specialized services of well-trained security guards and their own dedication to their cause—after all, they too have a reputation to uphold in order to protect their jobs—that fear is in fact entirely eliminated.

Food for thought is provided by the question of the degree to which the considerable expense involved in providing services to prevent sabotage and acts of terror at institutions that have not been declared national key points, make it impossible for the owners of such institutions to protect their institutions effectively. Are there not perhaps many instances in which, due to the high cost that is characteristic of our time, people simply cannot afford to protect their undertakings? Here I want to associate myself with what the hon member for Wynberg had to say. He also spoke about the considerable expense involved in this regard, and made the statement that there were thousands of guards who had to be paid. He, too, eventually asked whether this situation would carry on indefinitely. He also wanted to know why it had become necessary to introduce this measure.

I believe it would be naïve to think that we have now reached the stage in which peace initiatives have given rise to greater goodwill in Southern Africa, and that it would be naïve of us to believe, in present circumstances, that the onslaught on South Africa is a thing of the past. I believe we must recognize that our successes will serve as an incentive to our enemies to increase the intensity of their attacks on us. It would also be naïve of us to believe that this struggle is carried on on a casual basis. We must recognize that to one of the great powers of the world, namely Russia, this is in fact a life-and-death struggle and those people will certainly not passively accept the fact that we are succeeding in achieving peace initiatives. Therefore, if we regard this matter in so serious a light and then ask the question which the hon member for Wynberg also asked as regards why it has become necessary, the answer is that it is in fact necessary because the enemies of this country will pursue the onslaught on us.

When we analyse the onslaught it becomes clear what I mean when I say that there are people in this country, too, who by their actions further the cause of the enemy. They do so by saying “Dear me! Shame!” about the terrorists who launch violent attacks on peace-loving people in South Africa. I do not wish to refer to political parties or personalities; I merely wish to make the appeal that we as responsible citizens of South Africa should devote our energies to pursuing the salvation of this country, not its downfall. If we wish to do that we must not merely attest to our unanimity when legislation of this nature is discussed in the House, we must also give practical evidence of our attitude in our doings outside this House. We must oppose people who adopt this attitude and when we encounter it in our own ranks we must get rid of them because it is they who will eventually help to cause the downfall of our country.

Mr Speaker, I want to thank the members on both sides of the House for their support of this amending Bill and for the constructive contributions made by all. It is very clear to me that all hon members who took part in the discussion of this amending Bill this afternoon are fully acquainted with what is going on in this regard and are also fully aware of the problems that exist in this connection. They also appreciate the reasons for the amendments being proposed. I wish to convey to them once again my sincere thanks for their support.

What struck me was that everyone realized that national key points are very important. I wish to come back to the importance of these key points but to begin with I just want to refer very briefly to a few aspects about which questions were asked.

The hon member for Wynberg referred to the need for security. He also asked for what period such security awareness or security expectancy would be essential in creating security precautions. I want to put it this way: As long as efforts are made in this country to overthrow our structure of Government by violence we shall have to employ security guards, we shall have to spend money on that security and we shall have to create security awareness on the part of the public at large. I do not know whether the hon member for Wynberg referred to this but I detected a hint of optimism in his voice when he referred to the Government’s new initiative. If I interpreted that hint of optimism correctly then I want to thank him sincerely for it. Hon members will find that I am cautiously optimistic but the degree is the same. I think that one should in fact also adopt a realistic approach to these initiatives that are developing. The hon the Prime Minister must be given all the credit for this because this is the attitude he created himself and it is on the basis of that attitude that we are moving ahead. I also wish to say that we shall not be successful overnight. I hope we shall, but I do not think that will be the position, because there are many minefields ahead. Indeed, I think that the worst is still to come, but I want to add to that we must not think that everything will fall into our laps. We shall have to put our shoulders to the wheel. I expect a great many more accusations such as those we have had recently in regard to Angola and Cuba. A great many more accusations will be levelled at the Republic of South Africa. However, with hope, faith and—also very important—hard work, we shall achieve success and we shall be able to succeed. However, we must not regard these new initiatives as the end of everything and think that peace will be with us for ever. Our security forces will have to be fully prepared and we shall also have to realize that as long as our enemies seek the violent overthrow of our structure of government it will be necessary to protect national key points, to create this attitude of security and to remain prepared.

The hon member for Pietersburg asked whether adequate steps had been taken to ensure security. He referred to certain incidents and mentioned certain examples of companies which had apparently failed to take precautions and which thought that their assurance coverage was sufficient. I think that the hon member put his finger on one problem with regard to the approach to national key points or areas of importance. I think that this is a facet that we shall have to scrutinize closely. What worries me in this regard is the fact that we must not expect, in the first instance, to be able to rectify the situation overnight, because it will take large sums of money. The second point that I regard as important in this connection is that we must not always set ourselves a maximum standard; either we do nothing or we want to do everything. I think there is a middle way. With reference to the incident to which the hon member referred I can see no reason why there could not have been a guard on duty who could have raised the alarm. All he had to do was raise the alarm. If such an approach is adopted, astronomical amounts will not be required and we shall nevertheless be able to succeed.

I discussed this aspect with the National Key Point Committee and I hope that they will come up with proposals as to how we can deal with this kind of problem. If necessary we shall introduce statutory amendments. I agree with the hon member that this is one of the problems that is experienced.

I think that the hon member has cause for concern and that is why he referred to one of the places which is not a national key point but which is nevertheless an important place. There are houses surrounding that area and if the unexpected were to occur there this could affect the people in the vicinity. I think that we are faced with a problem which has developed over the years. In future we must be absolutely geared to prevent such problems from occurring. As regards that particular instance which is very close to the houses I think that we shall have to introduce some form of warning system in order to make such onslaughts less easy to carry out.

The hon member for Roodeplaat had a great deal to say about training and the standardization of training. He also discussed the medical aspect. I am very grateful to him for his speech. It is quite clear to me that he has a good grasp of it.

He asked how the training requirements were made known. He also wanted to know whether there was a monopoly in this regard. Every national key point owner across the length and breadth of South Africa is advised by the commanding officer of command headquarters about training institutions registered with the Department of Manpower. There are training institutions that register with the Department of Manpower. The owner of the national key point can use the services of such an institution for training purposes. Apart from those that are registered, there are others, too, that are prepared to provide training. Those training institutions can obtain their link-up points from the commanding officer or the National Key Point Committee.

It is the task of the National Key Point Committee to evaluate these institutions periodically to determine whether their standard of training is acceptable. A certificate will be issued to such institutions so that the national key point owner can accept the institution which has a certificate because he will realize that the training provided by that institution is correct and that the standard is sufficiently high. The National Key Point Committee will have to evaluate such institutions periodically to prevent a drop in the standard of training.

The hon member went on to ask whether the regulations were already being implemented. The regulations already make provision for the re-evaluation of guards with regard to medical fitness and skill. I can inform the hon member that the regulations are being implemented fully, but carrying them out is a gradual process. At present we are concentrating on the training. The other part of the regulations will be implemented by agreement.

In the third place the hon member wanted to know how regularly national key points were evaluated. This is quite a difficult question because all national key points have been evaluated or re-evaluated since 1980. If its evaluation justifies it, such a place is classified as a national key point. A national key point need not remain a national key point ad infinitum., it can be declassified as a national key point on the grounds that owing to the products it produces it is no longer necessary for it to be a national key point. Accordingly an evaluation process will have to take place in this regard as well. I expect that the National Key Point Committee will periodically evaluate certain national key points. Perhaps not those that are very prominent such as Sasol, but those that may fluctuate between being a national key point and being similar to the others which are known as important places or areas.

As hon members have rightly remarked it is necessary for the sake of the orderly management and economic prosperity of our country that we protect crucial Government institutions and industries against sabotage. The recent attack on the petrol depot at Ermelo serves as a warning that the normalization of our relations and the signing of non-aggression treaties with our neighbouring states constitute no guarantee that the ANC does not pose a threat to us. On the contrary, the peace initiatives with our neighbouring states could compel the South African Communist Party and its fellow-traveller, the ANC, to try to remain in favour with their masters in the Kremlin by intensifying their terror campaign. Therefore we cannot relax our vigilance for a moment as far as our national key points are concerned. The hon member Mr Vermeulen and the hon member for Swellendam also quite rightly referred to this. I also wish to thank the hon member for Durban Point for his positive contribution.

Because ensuring the security of national key points is expensive in terms of money and manpower it must be the constant goal of the State to alleviate the burden of key point owners as far as possible without forfeiting efficiency. This is what the amendments seek to achieve and I am convinced that they will contribute towards the more efficient exercise and control of protective measures for key industries and State institutions.

Once again I wish to convey my sincere thanks for the positive spirit in which this measure was received and discussed.

Question agreed to.

Bill read a Second Time.

Bill not committed.

Bill read a Third Time.

Mr Speaker, I move:

The Bill is based on the recommendations of the Franzsen Committee which instituted an investigation into the investment activities of the Public Debt Commissioners. These recommendations were accepted by the Government.

The prospect of a new dispensation in regard to the future investment activities of the Public Debt Commissioners was held out in the Budget Speech of March 1983. This new dispensation seeks to transfer the short-term funds of the Commissioners to a new institution, the Corporation for Public Deposits, and to bring the remainder of the Commissioners’ activities under the scope of the proposed Public Investment Commissioners Act. The Bill provides that the Commissioners, under their new name of Public Investment Commissioners, will in future concentrate on their traditional function as investment trustees for the major pension and other funds of the public sector, funds entrusted to them for long-term investment.

The investment of such funds still occurs on behalf of and on account of each depositor. They are invested in Government and Government-guaranteed stock, and to a greater extent than previously in so-called semi-prime stock, ie that of statutory bodies. The debentures of the national states also qualify for this purpose. The funds which do remain under PIC control are characterized by a far more stable inflow than the short-term portion which is being relinquished. This has the important advantage for the Exchequer that it may rely on a more calculable and reliable annual contribution from this source.

The capacity of the three Commissioners remains unchanged. An important new aspect, however, is that an executive committee under the chairmanship of a senior official of the Department of Finance is being established to deal with the daily administration of the portfolio. The autonomy of investment decisions will be retained as in the past so that investments may repeatedly be made to the benefit of the funds administered by the PIC. This will also be conducive to a greater measure of co-ordination, however, particularly in the sphere of fiscal and monetary policy.

As in the past, and also because it so behoves a Government body, investments will be restricted to loans raised by public sector lenders—the so-called prescribed investments. To make a greater cash flow available to new lenders who have not yet acquired any special status in the capital market, however, it has been provided that 25% of the funds may be thus invested, as against the earlier 20%.

Although the activities of the Commissioners will primarily be concentrated on the long term, provision is also being made, for practical reasons, for temporary short-term investments in Treasury Bills, or with the Corporation for Public Deposits.

†As recommended by the Franzsen Committee, the Bill also provides for the dissolution of the General Sinking Fund and the Reserve Fund. The General Sinking Fund was created in 1927 with the objective of eventually redeeming “unproductive” public debt out of fixed amounts voted annually and then invested at a fixed rate of interest.

No part of the public debt as it exists today can be identified as “unproductive”. Public debt management has become such an important instrument of monetary and fiscal policy, that a General Sinking Fund amounting to less than 1% of public debt, has no role to play in the present environment and it is therefore proposed that the Sinking Fund be dissolved.

The Commissioners will in future only act on behalf of its depositors and for their own account and the Reserve Fund should similarly be abolished. The total value of the two funds amounted to less than R300 million on 31 March 1983.

The assets of both funds will be used to cover valuation losses arising from the transfer to the Corporation for Public Deposits at current market prices of the stock held in the portfolios of the funds. Any remaining amounts on the two funds will be paid into the State Revenue Fund.

Mr Speaker, the official Opposition will be supporting the Bill before the House. The necessity for changing the financial structure in order to improve control and management of the monetary policy was highlighted at the end of 1981 when investments of the Public Debt Commissioners amounted to some R1,1 billion instead of the amount that had been estimated, which at that time was R1,8 billion. At that time the lack of liaison between major Government components was the cause of severe financial embarrassment to the Government. The SATS had effected large net withdrawals forcing the Exchequer to raise money for essential purposes by unscheduled recourse to the banking system. The resultant increase in the rate of growth of the money supply gave our inflationary spiral a grave extra twist at that time.

In June 1982 the hon the Minister appointed a committee of inquiry into the investments by the Public Debt Commissioners. It proposed, firstly, that the banking type functions of the PDC should be taken over by the National Finance Corporation and that its short-term deposits should also be taken over by the same corporation. Secondly, it was proposed that the National Finance Corporation should become a wholly-owned subsidiary of the Reserve Bank and deal only with public funds. The Public Investment Commissioners Bill, the Corporation of Public Deposits Bill and the Reserve Bank Amendment Bill, taken as a package, will have the effect of putting into effect the recommendations of the committee of inquiry.

The official Opposition must support measures which give the Treasury and the Reserve Bank improved machinery with which to manage and control our money supplies. This is despite the fact that the Government’s abysmal failure to control the money supply, to arrest consumer demand and prepare the ground for future economic advance, has not been because of the lack of the necessary tools but because of the lack of resolution in the face of political pressures.

The growth in the Ml increased by nearly 27% on the 1983 calendar year. There was a negative growth rate of over 3% in the GDP, plus an inflation rate of over 10% during the same period. These facts cannot make one as sanguine as the hon the Deputy Minister about the improvement that took place in the rate of growth of Ml at the very end of last year, plus of course the fact that the velocity of money in circulation also dropped in that period. There is no question that the handling of the economy has been unsatisfactory and irresponsible. The hon the Deputy Minister points helplessly to the price of gold. However, if we are going to rely on the price of gold to get us out of our difficulties, then we are helplessly at sea without rudder, without sails or navigator and at the mercy of financial whims over which we have no control whatsoever.

We must therefore hope that this new legislation will put the hon the Minister in a better position to exercise monetary policy and to reduce inflation. Within two weeks we will know whether the Government has the type of resolution required to augment a restrictive monetary policy with the necessary tough fiscal measures, without which our monetary policy cannot be successful, as has been proved amply over the last year.

Inflation is not only a danger we face; it is a debilitating disease sapping our competitive strength. I will never forget the remark made by the hon the Minister of Finance—I think it was last year—when he said: “Is 14% such a high rate of inflation in a developing country?” The answer is of course that it is an impossible rate when the inflation rate of our trading partners is 2% to 5%. It is of course not so serious if their rate of inflation is the same as yours or more.

The official Opposition regards the Bill before the House as an improvement in the structure of the State’s financial institutions. The Public Investment Commissioners will not handle pool funds or demand funds. They will receive long-term deposits which will not lose their identity but will be invested on behalf of the investors. This will tend to make this a highly predictable fund, which will conduct its investment activities in such a way as to meet the objectives of fiscal and monetary policy.

There are aspects of details in the Bill which concern us. Clause l(vi)(a)(ii) speaks of “any body, council, fund or account established by or under any law which may, or is required to, pay, in terms of a provision of that law … money to the commissioners for investment in terms of this Act”. This is amplified and re-inforced in clause 14(2). We are well aware that there are Government bodies that have been investing large sums with little expertise and sometimes very unwisely. It is characteristic even in the private sector that subsidiaries, branches and regional offices like to dispose of resources which they may have accumulated themselves. This is unfortunately not possible without a fragmentation of the overall group’s strategic financial strength and effective financial control and mobilization. I am sure that the principle must also hold good in respect of public finance. I think it would be better to insist that all Government departments, including the Post Office and the SATS, use the Public Investment Commissioners and the Corporation for Public Deposits to handle all their short and long-term investments.

Clause 2(1) provides that there shall be three Public Investment Commissioners. We had thought that it was a suitable opportunity to suggest to get people from the private sector and to have perhaps two Commissioners appointed from the private sector, but the officials have pointed out to us that this is a highly confidential position and that this would not be wise. We accept that. It would seem to us that the Commissioners are being given too wide a choice of investments. Clause 6(1)(e)(i) allows them to invest in securities issued by any industrial undertaking established and conducted by the Industrial Development Corporation. I seem to remember that the IDC had a major stake in Felt and Textile (SA) Ltd, whose subsidiary, Oak Tree Investments, went insolvent and was liquidated a few years ago. The fact that the IDC had a shareholding, was no consolation when this firm was liquidated at considerable cost to its creditors. It must be remembered that the IDC does not always have a majority holding.

The provisions of clause 6(1)(f) also appears to be too wide, because it provides that the Commissioners may invest in “securities issued by any body approved … for such purpose by the Minister”. Perhaps the hon the Deputy Minister could tell us what he has in mind by “any body approved” in those particular circumstances. We would imagine that all Public Investment Commissioners’ investments would either be in gilts or in semi-gilts. From inquiries we have made, we gather that that is in fact the case. We are wondering why this provision is being introduced to give that latitude in the type of investment which the Commissioners may make, when apparently it is not used at this stage. Perhaps this provision should not be there.

Will the hon the Deputy Minister inform us what type of circumstance clause 7 is intended to cover? Why would any body or any person receiving or holding within or outside the Republic amounts of money be authorized to pay those amounts of money to the Commissioners for investment? The reference in clause 13(3) does not actually clarify that point.

Clause 15 provides for the transfer of demand deposits at 31 March 1984 to the Corporation. These are pooled funds which are invested in assets which have a market value different from the value when purchased. The movement of interest rates has been such that there is an apparent book loss in this transaction. I wonder whether the hon the Deputy Minister could give us an indication of what the estimate is of that book loss at this juncture, so close to the full term.

As I have already said, we will be supporting this Bill. It is a carefully considered and constructive proposal to improve the authorities’ management and control of our whole monetary system and of our monetary policy in particular. We would, however, be very grateful if the hon the Deputy Minister could respond to some of the points raised.

Mr Speaker, I want to thank the hon member for his and his party’s support. It is a pity, though, that the hon member began by criticizing the hon the Minister of Finance. He referred to the price of gold, to fiscal and monetary measures and also to inflation. In all the years I have been here it has always been typical of the official Opposition to criticize, but never really to put forward any proposals on how to solve problems. I want to tell them that as from next week we shall have the opportunity to debate these matters again. Then I want to repeat that I really hope that this time they will make concrete proposals on how the economy should in fact be dealt with.

For example, the hon member referred to our inflation rate and compared it to the inflation rates of some of our trading partners. It is not a problem to bring down inflation provided one is prepared to accept unemployment. This is what happened to our trading partners. The hon member is aware of the fact that they have succeeded in bringing down the inflation rate, but with the result that tremendous unemployment is being experienced in those countries. Our population is less homogeneous than the populations of those countries and for that reason we must always bear this in mind when we talk about inflation and how to combat it. The hon member went on to put certain questions to the hon the Deputy Minister and I am sure that the hon the Deputy Minister will reply to them.

In the main the Bill is a result of the recommendations of the committee of inquiry into the investments of the Public Debt Commissioners. In principle the Bill is based on existing legislation and specifically on the Public Debt Commissioners Act, Act No 2 of 1969. However, it is now being restructured here in order to adapt to changing circumstances. The name is also being changed to conform more aptly to its functions.

Apart from handling statutory funds such as the General Sinking Fund and the Local Loans Fund, the investment activities of the Public Debt Commissioners may be divided into two categories. Firstly, allocated funds which consist almost exclusively of long-term funds, are invested by the PDC on behalf of depositors. The depositors themselves bear the costs involved in such investments and also retain the profits made by the PDC as a result of transactions with those investments. Secondly, the PDC also deals with so-called pooled funds which are available for short-term investment and to a large extent represent day money. These funds are pooled and invested collectively so that if withdrawals are made, investments can be converted into cash readily and without loss.

It was necessary to rationalize the organizational set-up of the PDC and by means of the Bill certain amendments are consequently being made to the way in which it functions at present. The most important of these is the establishment of an executive committee which will exercise continuous administrative control over the portfolio.

Clause 6 indicates the investment channels open to the Public Investment Commissioners. In this connection minor amendments have been made compared to the existing powers of the PDC. The most important of these is the inclusion of securities from new public sector loans in the market and securities from foreign governments in the increased maximum limit of 25% pertaining to certain investments. The latter amendment will pave the way for investments by the PIC in the stocks of independent states. In addition provision is also being made for investment channels to be available to the PIC if, for practical reasons or on the grounds of policy, it cannot invest funds in the approved credit instruments. Such deposits may then be invested on behalf of depositors either in Treasury Bills or temporarily with the Corporation for Public Deposits.

I take pleasure in supporting the Bill.

Business suspended at 18h30 and resumed at 20h00.

Evening Sitting

Mr Speaker … [Interjections.]

Lonely old Jan. Where are all the other members of your party?

Mr Speaker, hon members seem to be wondering where all the other hon members of the CP are. It does not really matter. I consider myself to be man enough to take on the rest of this House on my own. [Interjections.]

Before I say a few words about the Bill under discussion, I just want to point out that we have dealt with three similar Bills in a row. At the outset I want to thank the hon the Deputy Minister most sincerely on behalf of the CP for the friendly way in which he made this legislation available to us. In addition it was also accompanied by an explanatory memorandum, in which the Bill and its contents were thoroughly explained. We also thank the hon the Deputy Minister for the officials from both his department and the Reserve Bank whom he made available to assist us.

The Bill under discussion is actually of a very technical nature, and for that reason quite a number of questions have arisen in this regard, which we cannot put here in the House. These are questions which concern aspects which could more fruitfully be cleared up in discussions around a table. We want to thank the hon the Deputy Minister most sincerely for making it possible for us to do so. I hope that in future we can count on similar co-operation from him.

This brings me to the Bill itself. I see that the abbreviation being used for “Openbare Beleggingskorporasie” is OBK. Because “beleggingskorporasie” is one word, I was afraid that the abbreviation would eventually end up by being OB.

In addition I feel we should also pay tribute this evening to a man who has done a great deal for finances in South Africa in the past. He is Prof Franzsen. This Bill is also one of the results of all the work he did. As we know, he was engaged for many years in investigations into certain facets of our country’s finances. These were matters he had to investigate, not only to benefit the South African economy, but also to benefit the international economy. Sometimes such things simply pass unnoticed. That is why I want to focus attention on Prof Franzsen this evening. In addition to him there are of course many other persons who deserve to be mentioned. However, this evening I shall confine myself to mentioning Prof Franzsen’s name, precisely because he has done such good work in so many spheres.

It is a fact that when the legislation under discussion is passed, the Public Debt Commissioners will disappear from the scene. As the hon the Deputy Minister and other hon members have already indicated, the relevant funds will now be divided into short-term and long-term funds. I think this is a very good step in the right direction. This is really a well-considered step which is being taken. Of course it is also true that for years now the hon the Minister of Finance has stated that he wants to apply proper financial discipline. Of course it is not possible to apply proper fiscal and monetary discipline, particularly in the public money sector, while long-term and short-term funds are still combined in one package. Since we are now going to separate these two facets, I believe it will also be far easier for the Department of Finance, as has already been stated, to plan budgets properly in future, precisely because it will be possible to determine how much money will be available from these public investment corporations so that, when the hon the Minister of Finance has to draw up his budget, he will be able to ascertain what amount is at his disposal. He will therefore be able to determine in advance if and where he will have to borrow extra money to supplement possible shortages.

There is one further aspect I should like to express my thanks for, namely the Public Debt Commissioners themselves. As hon members know, the system of Public Debt Commissioners was established many years ago in order to develop and to stabilize the money market in South Africa. This was a function which was originally exported from London, which was of course a bad thing.

When I express my thanks in this connection, I am of course also including the hon the Minister, as well as the two commissioners who served with him. I believe that the task they performed over the years deserves the thanks of all hon members of this House, particularly since this is now as it were the funeral of the Public Debt Commissioners. I believe I am speaking on behalf of all the parties in this House when I say that we are very grateful for the work those people did. I believe they did good work, and since the Public Debt Commissioners are going to disappear from the scene we would almost say that this is a case of a father passing away and leaving two children. In this entire matter I see one very good aspect, namely that in addition to the three commissioners— something which is going to remain unchanged—an executive committee is also being established.

As far as the commissioners are concerned, one can make use of the services of experts but they cannot always go into every details and they cannot always keep abreast of things in the way a full-time executive committee is able to do. I think this new aspect is commendable and since it is also under the chairmanship of a senior official of the Department of Finance, there will of course be the necessary liaison. I am convinced that this executive committee will be able to do very fruitful work for us in South Africa in this regard. I do not want to elaborate on this matter except to say that as far as this matter in concerned one could probably discuss every clause for hours during the Committee Stage.

I shall confine myself to saying that the CP supports this legislation and that we think it is a very good Bill.

Mr Speaker, it really is amazing that when we have to deal with three pieces of technical legislation on a Wednesday evening, the hon member for Walmer, although he supports this measure, cannot refrain from scoring a few political points which it would have been more appropriate to discuss in next week’s Budget debate or the subsequent week. [Interjections.] It is astonishing to hear this kind of language from that party, eg the reference of the hon member for Walmer to “the Government’s abysmal failure to control the money supply” and “the Government’s handling of the economy was highly irresponsible”, because in the same breath the hon member supports the legislation and says that it is in the interest of our State finance and domestic economy. I want to ask the hon member to keep that kind of remark for the Main Budget debate. In that debate he can come and talk politics, but not in this calm atmosphere in which we have to deal with important legislation in the interests of our domestic economy this evening.

I want to convey my thanks to the hon member for Sunnyside for his support of this measure and for his friendly words concerning Prof Franzsen and the appreciation he expressed concerning the whole series of Public Debt Commissioners that this country has produced in the past since 1969. It is fitting that we should all place on record this House’s appreciation of these gentlemen.

This side of the House, too, supports the Bill before us. I want to say that this legislation is a feather in the cap not only of those persons to whom the hon member for Sunnyside referred but also of the hon the Minister of Finance, the hon the Deputy Minister who is dealing with the Bill this evening, the Department of Finance and all its able officials. It is further evident that this Government administers this country well, that it is constantly introducing innovations and that it is able to adjust to altered circumstances as far as these matters, too, are concerned.

The Bill before the House this evening affords us the opportunity to draw attention to the extremely important role played in the past by the Public Debt Commissioners as regards State finances and the State economy in the past and the role they will continue to play in the future under the new title. The main function of these commissioners is to receive and administer all trust and deposit funds of the Government, the SATS and the provincial administrations, and in addition, supplementary to this, to receive deposits from public bodies such as the Agricultural Marketing Boards which often have surplus funds, the Economic Development Corporation and many other public and statutory bodies. Therefore, the commissioners are collectors of surplus funds in the public sector. However, receiving these funds is not all they do. Their other main function is to make this money work in the interests of South Africa to ensure that it is at all times used in the public interest. They are now obliged to invest the funds they receive in this way in Government stock, Land Bank stock, and so on.

When one considers the scope of this important function, the latest statistics at my disposal—unfortunately they are the 1980 figures—show very clearly the importance of this body and its functionaries. In 1980—if I may just furnish a few interesting figures— the funds administered comprised R1 328 million of the SATS, R319 million of the Post Office, R146 million of the provincial administrations, R4 709 million—that is a very important amount—of the pension funds of the State and the SATS and R949 million from other sources. This gives a total of R6 789,8 million invested by the Public Debt Commissioners in long-term securities. Further calculations indicate that in that year the Public Debt Commissioners held about 50% of the Central Government’s in internal stock debt.

In the 1983 Budget speech of the hon the Minister of Finance he pointed out that because the Public Debt Commissioners had become such an extensive banking body over the past number of years, he was appointing a committee of investigation under the chairmanship of Prof Franzsen to investigate the functions of the commission in the constantly changing circumstances on the capital and money market. The Franzsen committee of investigation made certain recommendations which were accepted by the hon the Minister of Finance, as the hon the Deputy Minister indicated in his introductory speech. The most important recommendation of the Franzsen Committee was made after they had, firstly, referred to the problems experienced by the Public Debt Commissioners in the past, viz firstly, the fluctuations in its contribution to the financing of the Treasury and, secondly, liquidity problems particularly in 1982, due to sharp changes in interest rates.

The committee of inquiry ascribed these problems to the duality of the activities of the Public Debt Commissioners, a matter to which the hon member for Sunnyside also referred, viz the fact that they have to accept both long-term deposits and short-term moneys. The short-term activities of the Public Debt Commissioners constituted a bank-type function such as those performed by the commercial banks in the capital and money market, but that was not the original aim and purpose for which the commission was established, because, as the hon member for Smithfield indicated, its real task is to administer and invest long-term funds. Accordingly, the Franzsen Committee recommended that the money market activities of the PDC be transferred to the National Finance Corporation which already has all the know-how in the money market situation, and that the PDC concentrate on its traditional function of administering long-term deposits.

This Bill and the two that follow it—the Corporation for Public Deposits Bill and the South African Reserve Bank Amendment Bill—in fact make provision for the implementation of these recommendations. It also gives the commission a new name which is better suited to its functions.

I should like to draw attention to some of the provisions of the Bill before us. Clause 1 defines “deposits”; that is to say, the kind of money that the PIC may receive, namely those funds which are not immediately required, and they include pension funds of the State, the pension funds of the SATS, pension funds of the Post Office and of the provinces, surplus funds of statutory and other public bodies such as the marketing boards to which I have already referred, the National Road Fund, the Economic Development Corporation and many others. Clause 3 contains a provision which does not appear in the existing Act, viz the creation of an executive committee which is obliged to meet at least once a month to deal with the day-to-day handling and administration of the funds. This is a very welcome improvement that will contribute towards greater efficiency. Clause 3(9) provides that the Commissioners may at any time withdraw or amend any decision of this executive committee so that the ultimate final say will not be taken out of the hands of the Commissioners, although the business of the day-to-day handling and administration of funds will be in the hands of the executive committee.

Clause 6 relates to the investment function of the Commissioners. This is the second main aspect. They are not only entitled, but also obliged, to invest the funds of a depositor, in prescribed securities whether the depositor be a Government department, a provincial administration or some other Government body. It is very interesting to note where the Commissioners have to invest these funds. They have to invest them in Government stock, Post Office debentures, stock of the Industrial Development Corporation, Land Bank debentures, stock of the Rand Water Board, Escom, the National Housing Commission and the South African Transport Services. One very important addition to this is securities issued by foreign countries or territories. This illustrates the vast terrain in which these funds may be utilized by the Public Debt Commissioners in the State economy. Development is taking place in the field of telecommunications and of industry, agriculture, water supply, electricity supply, housing and transport. I wholeheartedly welcome the fact that funds may now also be invested in securities of the Governments of the TBVC countries. This will result in substantial additional development aid funds being available to those countries.

Clause 15 provides that all the short-term funds which were previously inder the control of the Public Debt Commissioners—in other words, all repayable on demand deposits invested on 30 March this year by the Public Debt Commissioners that were not invested in specific assets on behalf of the depositors—were transferred to the Corporation for Public Deposits. We shall deal with this matter in the next Bill. As a result of this, the PIC is being left with long-term funds only and no longer has any short-term funds.

I think that this is a most essential and timely amendment to enable the hon the Minister of Finance, the department, the Treasury and all the other bodies involved to regulate our Government economy and finances even more effectively in future.

Mr Speaker, we have before us a trilogy of finance Bills which are interrelated. At the outset I would like to say that the NRP will be supporting all three these Bills. We do so because these Bills are the result—I say this as tail-end Charlie in this debate as much of the eyes have been picked out of it already—of the investigation and recommendations of the Franzsen Commission which was appointed by the hon the Minister of Finance two or three years ago to investigate all the State’s financial institutions with the view to improving their operation so as to overcome certain problems. As a result of this we now have a restructuring of these institutions for the benefit of the State as a whole and, as such, they deserve to be supported. Having said that, the hon member for Ermelo had a go at the hon member for Sunnyside … [Interjections.]

I congratulated him.

I beg your pardon. He had a go at the hon member for Walmer. [Interjections.] I have my constituencies mixed up. He had a go at the hon member for Walmer for criticizing the hon the Minister. He mentioned that the hon member for Walmer had said that he hon the Minister had acted a little too late, that there had been this tremendous increase in inflation, that there was a lack of control of the money supply, etc. May I say to the hon member for Ermelo that I believe that the hon member for Walmer has a point. [Interjections.] To come with these Bills is like closing the stable door after the horse had bolted. We know from the hon the Minister of Finance’s own words a year or two ago when he presented his Budget that one of the problems he had in trying to finance the deficit before borrowing was that he did not have access to the funds that he had hoped to have in the Public Debt Commissioners’ account. He did not have it because the SATS upon which he was relying to invest its money in the Public Debt Commissioners’ account had decided that it was better to invest its money elsewhere where it could get a better return on its capital. As a result of that the hon the Minister of Finance admitted that he had to go to the Reserve Bank for finance, which we all know results in inflation because it is a case of pumping more paper money into the market. The hon member for Walmer has a point. Last year the hon the Minister of Finance said that the average increase in the money supply was of the order of 27%, if I remember correctly. We know that the target as far as the economic development programme is concerned is a maximum of about 18%.

Mr Speaker, does the hon member agree with the hon member for Walmer that the hon the Minister of Finance is handling the economy of the country in a disgraceful way?

I would not go so far as to say that he is handling it in a disgraceful manner. [Interjections.] What I do say is that he is closing the stable door after the horse has bolted. These Bills are the result of the hon the Minister’s realizing that he had a problem. It was one of his own colleagues in the Cabinet who caused these problems, namely the hon the Minister of Transport Affairs, who did not invert his short-term funds into the Public Debt Commissioners’ account thereby making them available to the hon the Minister of Finance to finance his debt before borrowing. The Ministers themselves were not co-operating with one another. The one hand did not know what the other one was doing and as a result South Africa had a far greater inflation rate than would otherwise have been the case. It is all very easy to be wise after the event but one would have thought that the hon the Minister of Finance who has had so much experience, along with his colleague the hon the Minister of Transport Affairs, who is one of the longest serving members in this House, would have realized that there needed to be a little more co-ordination on these matters, rather than the hon the Minister of Finance suddenly finding that he did not have money in the Public Debt Commissioners’ account.

Having said that, these three Bills which are coming before the House now will hopefully correct that. I do not intend going into the details of how it is going to be restructured because that has already been done. We on these benches think that this is a very good thing that will certainly enable the short-term finance that has been invested in the past with the Public Debt Commissioners to be far better invested and handled by the new corporation which is going to be set up, namely the CPD, the Corporation for Public Deposits. This will be a wholly owned subsidiary of the Reserve Bank. We believe that the Reserve Bank with all its knowhow and expertise is in a far better position to handle the short-term funds which are made available to it than the old PDC were in the past, and we think therefore that this is a great improvement.

One good thing out of this whole exercise is that the SATS a year or two ago became more market-orientated, something which this party has fought so hard for, and realized that it had vast assets which would be better invested elsewhere than with the old Public Debt Commissioners. That resulted in a problem for the hon the Minister of Finance and now he is endeavouring to correct it. However, we sincerely hope that as a result of this restructuring, these vast sums of money—the hon member for Ermelo mentioned that these sums run into thousands of millions—will now be better invested by the new corporation being set up, and that these funds will be made available for various investments in South Africas’ infrastructure. One thing that does bother us is the rate of return which the vast sums of pension money that will be going into the new Public Investment Commissioners’ investments will earn. We sincerely hope that in these times of inflation and high interest rates this money will not be invested at a rate which is not market-orientated because hundreds of thousands of public servants and others are investing their pension contribution in funds which they hope will secure a decent standard of living for them in later years. It is therefore very important that these pension funds should earn a market-related rate of interest at this time when we are having these high inflation and interest rates. We sincerely hope that the interest will be ploughed back into the pension funds in order to secure the future of these pensioners.

I do believe that we are once again indebted to the hon member for Ermelo for describing some of the investments to which these funds are put. He mentioned that the funds would be invested with the Land Bank, with water boards and many other State corporations such as Escom; in other words, these funds that are being saved by the pension funds and other State or para-State organizations are being used to develop the infrastructure of South Africa, something which is very important.

I am very pleased that the hon member mentioned the fact that some of these funds can be channelled into the development of the independent national states, the so-called TBVC states. We think this is commendable because these independent national states need to be developed if they are to become viable and self-respecting states. I also sincerely hope that this fact will be made known to the people in those states, namely that there are vast sums of money being saved by employees of the State in South Africa that are now possibly being invested in development programmes in these independent national states. South Africa needs tremendous sums of money for development capital; in fact, one of the greatest needs in South Africa is more savings. South Africa is spending far too much on consumables today and there should be as greater emphasis on saving because we need capital to develop these states.

Much has been said about the Bill and the contents thereof and I do not intend to elaborate on that any further except to say one again that we have pleasure in supporting this legislation.

Mr Speaker, I listened with interest to the hon member for Walmer, as well as the hon member for Amanzimtoti. I want to ask them, however, whether they are in favour of the Reserve Bank adopting a more market-orientated course, or do they still agree with the old policy of intervention? Do they agree with the policy which the Reserve Bank is following at present, or are they opposed to it?

†Do you support the Reserve Bank’s policy of being more market-oriented or do you want to go back to the old policy of direct intervention? [Interjections.] The hon member indicates that he supports it. Why does he then criticize the hon the Minister of Finance by referring to inflation etc? What we have here is the result of a market-oriented policy by the Reserve Bank.

Do you believe that the monetary policy has been adequately reinforced by a tough fiscal policy?

We are talking about the Bill before us and the result of the Reserve Bank’s policies.

*Since 1980 the Reserve Bank has begun to adopt the policy of becoming more market-orientated. This is a new strategy. What we now have before us is a change in the structure to adapt to the new strategy. That is all. Hon members are agreed on this strategy, and therefore I cannot see why they now wish to attribute other meanings to this structure. We must take a good look at this strategy. In this connection there are several examples. For example, there is the interest paid on bank deposits and the removal of the ceiling on bank credit. In addition, interest rates are being allowed to move upwards according to supply and demand, in other words, market-orientated forces. This is precisely the problem which the Public Debt Commissioners were faced with. We are not dealing with inflation now or with the Minister having to be reproached with certain things. The Reserve Bank is also adopting the policy of open-market transactions now. It is also adopting a policy of cash control through cash reserves. If we examine this strategy of a more market-orientated direction, we encounter the problem which we wish to eliminate by means of this legislation.

One is dealing here with three aspects, namely the monetary policy, the fiscal policy and then the administration of public debt. I should like to point out to the hon member for Walmer that the administration of public debt is a separate item. It can be viewed in isolation from the monetary and fiscal policy, although influenced by it. The administration of public debt can produce many problems and we must congratulate the Public Debt Commissioners on the success they have achieved over the years. We cannot point a finger at them. We must begin to give more attention to the administration of our public debt, and in this connection a more market-oriented policy on the part of the Reserve Bank is important. Various objectives can be pursued in regard to public debt. One can try to administer it according to the business cycle or according to the cheapest interest rate, or try to prevent its monetization. With the Reserve Bank’s policy of becoming more market-oriented, the administration of our public debt unfortunately became contracyclical, that is to say, while the Reserve Bank tried to move in one direction, the administration of our public debt began to move in another direction. I want to refer to what a well-know expert said in this regard. Dr Fred du Plessis of Sanlam said the following in a speech in Potchefstroom:

That is what we are dealing with. The other problem is that as a result of the structure which we have, it was very difficult for the Minister of Finance to tell us correctly how he was going to fund his deficit on his budget. Now the hon member is criticizing the hon the Minister of Finance for this. Criticism in regard to the tremendous deficits which occur is regularly levelled at us. Inter alia, it is said that the hon the Minister of Finance’s bookkeeping is not correct. However, what we have to contend with, is a structural problem. As quite a number of hon members pointed out, the problem we are experiencing in the administration of public debt is related to the fact that there are allocated funds as well as pooled funds. The allocated funds are actually for long-term investments, and the pooled funds for short-term investments, but the two fall under the same administration. Unfortunately a portion of the allocated funds are also invested on short term. When the interest rates began to rise rapidly, a large portion of these funds were invested in Government stock on long term. Then the Public Debt Commissioners, like many of our financial institutions—here I am thinking in particular of hire purchase credit bodies, because this is not only a problem which the State has to contend with but it relates to our entire financial system—experienced the problem of insufficient liquidity as a result of the withdrawal of short-term deposits.

I want to point out that the pooled funds also consist of funds from SATS and the Post Office, funds which in their turn not only consisted of the pension and provident portions, but also of the short-term cash surpluses of those institutions. As soon as the interest rates began to rise, they withdrew those funds. In the meantime the Public Debt Commissioners had invested the funds in Government stock, as well as in certain Treasury bills—fortunately the latter were on short call. Consequently a major problem arose. The institutions in question had to withdraw money. This created a problem for the hon the Minister of Finance, because what he planned to get from the Public Debt Commissioners was not available then. That was why Dr Fred du Plessis said that it was contracyclical, because at the time the State had to receive money from the private sector, and particularly from the non-banking sector. This is where the concept of “crowding out” enters the picture. The State had to borrow money from the private sector. This problem had to be solved. A structural change took place. That is why the banking sector has been taken away from the Public Debt Commissioners. The Public Investment Commissioners, who are now being established, receive a different kind of structure. As it happens, they will still have to deal with R10 billion, but revenue and expenditure will now have to be more on a par, which will make it easier for the Minister of Finance to get basically what he estimated. Consequently there shall no longer be the element of short-term money which may be suddenly withdrawn, because it is transferred to another corporation which we shall deal with later. I must also accept, of course, that fewer funds will now be available to the hon the Minister of Finance, because the element which I referred to is being taken away from the Public Debt Commissioners. As I have said, there will now be more stability.

With the structural change which we are undergoing here, it is of course necessary to make certain further adjustments. We find, for example, that the Sinking Fund is no longer necessary. Many years ago the Sinking Fund was established to pay off public debt. This was in accordance with the old idea of the less debt one has, the better it is for one. Many of us have that idea today. Public debt, however, is no longer merely an item with which the State can be financed. I think that 36% of all Government stock and Treasury bills are in the hands of Public Debt Commissioners today. This gives an indication of the tremendous control they have over funds. However, it is realized, today, and Dr Du Plessis also says so, that public debt administration should not be contracyclical. It is therefore being proposed that we should adopt a loan financing programme, planned over a long term. If one uses this—I do not think one can use it immediately—the Treasury, together with the Reserve Bank, which is already moving in this direction, will, I think, be able to apply such a policy more rapidly. Then we shall no longer need a Sinking Fund because we will no longer be paying off in instalments. Then we need no longer be burdened by that, let me say it, nasty feeling of debt. This is not being done merely to finance the State but is also intended to support the State in its monetary policy.

Then there is also the Reserve Fund to reimburse losses. Previously we had the situation in which we also had short-term funds at our disposal. These, of course, also disappear and the possible losses suffered are consequently being eliminated. The possibility of losses, therefore, does not exist any more. The Reserve Fund is disappearing now in terms of this legislation.

I believe that we should see this Bill before us as the means by which a new structure will be established. As other hon members also rightly said, we are now beginning to adopt the course of management by way of a managerial committee which meets every month. I think that we can therefore say, with certainty, that this is only an initial step, particularly as far as we in South Africa are concerned. It is a continuation of the direction which the Reserve Bank and the Treasury, as well as the hon the Minister of Finance and Dr Gerhard de Kock, have indicated in recent years. In this way a system is being developed in which the best monetary and fiscal administration possible can be acquired. We consider this Bill to be merely a further step in that direction, and therefore we cannot but support it.

Mr Speaker, I should like to convey my sincere thanks to all the hon members of all the political parties in this House for their constructive participation in the discussion of this exceptional piece of legislation. We are all agreed on one thing and that is that this is an exceptionally important piece of legislation.

†Mr Speaker, the hon member for Walmer referred to certain matters, inter alia certain clauses of the Bill. I shall deal with that later. He also criticized the department and the hon the Minister of Finance, which is of course his lawful right to do. The hon member also referred to the importance of the control of the money supply. I am sure we all agree with him on that particular point. Furthermore the hon member spoke of a lack of resolve on the part of the hon the Minister of Finance to control inflation. It is of course easy to criticize, Mr Speaker. I should, however, refer the hon member to the fact that South Africa is, all its merits aside, still a developing country. The hon member should take note of that. He should always bear that in mind. The hon member should also take into account what will happen should we act too drastically against inflation, particularly in the field of unemployment. In order to illustrate my argument I can only refer the hon member to what has already happened in this field in the developed countries. Bearing that in mind one can just imagine what will happen in South Africa under similar circumstances.

The hon member for Walmer further intimated that he was looking forward to tough fiscal measures in the next Budget. I am delighted indeed to hear that from the hon member for Walmer. [Interjections.] Without giving away any secret I can only assure the hon member that we will indeed try not to let him down! [Interjections.]

Not long ago, Mr Speaker, I had the opportunity of discussing financial and economic matters with world famous economists. One of them openly admitted that the economy of South Africa was being exceptionally well managed.

The hon member for Walmer also referred to clause l(vii) of the Bill, which contains the definition of “public deposit”. As I understood the hon member, he wanted it to be compulsory for all public bodies to invest in these institutions. I would say that that is quite a reasonable request but the fact of the matter is that these public bodies all have various other laws enabling them also to invest in the open market. They have also built up a certain amount of expertise in this regard and all that this legislation provides is that they are not being precluded from investing. We do not think it wise to deprive them of that right.

The hon member also referred to clause 2(1) dealing with the appointment of the commissioners and suggested the possibility of appointing somebody from the private sector. He also gave us a reason as to why this could not be done. However, I want to refer him to clause 2(2)(b)(ii) from which he will see that the other commissioner shall be appointed on account of his special knowledge of public finance. Therefore, the appointment of a person from the private sector is not by any means precluded. As a matter of fact, in terms of the present legislation, that particular person is a member of the private sector, namely prof Danie Franzsen to whom hon members have already referred.

The hon member also referred to clause 6(1)(e) and in this regard expressed the fear that there may be investment in certain high-risk categories. That may be so, Sir, but I want to remind the hon member that these commissioners are experts in their field and they will of course invest with due care and ensure that no unnecessary risks are taken. This body has been brought into being for and is geared towards the safe investment of public funds.

Section 6(1)(f) refers to any other stock, debentures or securities issued by any body, and the hon member asked me to mention any particular examples that could be applicable in this particular case. I may be able to give the hon member one or two examples in this regard. I refer here to the World Bank which is not referred to in any of these provisions, and the Development Bank of Southern Africa which could also be used as an example. In fact, it may even be possible in the future to have a tourist corporation involved with Mozambique and South Africa in which investment in terms of this particular provision could be possible.

The hon member also referred to clause 7 in terms of which the Minister may, if he deems it desirable in the public interest, authorize generally or in respect of a particular case any person or body receiving or holding within or outside the Republic amounts of money other than deposits to pay those amounts of money or portions thereof to the commissioners for investment. This is very much in line with the existing section but here again I want to say that this could also include the private sector if the private sector wishes to invest in this particular type of fund. Indeed, as the hon member for Amanzimtoti suggested, this could also include the TBVC countries. Friendly societies, for example, may also want to invest in safety in this particular type of fund.

The hon member also referred to clause 15. He wanted an estimate of the book losses in this procedural transfer. It all depends upon the rate of interest at which transactions are taking place, but at the present rates of interest it could be as much as R100 million.

*I think that for a Namaqualander I have spoken enough English for now; I shall carry on in Afrikaans. The hon member for Smith-field also referred to the question of inflation and unemployment. He referred to a better dispensation that could ensue in the administration of these short and long-term funds for investment and the control exercised in this regard. I thank him for the balanced way in which he participated in the discussion.

The hon member for Sunnyside also referred to the share of the officials in drawing up the Bill. He congratulated them, too, in that regard. I want to extend my cordial thanks to him for doing so. He also referred to the way in which we dealt with these matters and negotiated in this regard to achieve consensus. He referred, too, to the success we achieved. I thank him for doing so. I agree wholeheartedly with him and he had better tell his colleagues over there, too, that it is clear that consensus politics are not quite so difficult to achieve. He need not be so afraid of it.

The hon member for Ermelo also expressed his gratitude to the commissioners and the officials. He referred to the important function performed by the commissioners in regard to the receipt and investment of this money. He referred to the large amounts of money involved. Indeed, the total could be as much as R11 billion if he were to add all the amounts together.

I think the hon member did this House a service by going into the details of the Bill to some extent. I heard one of the hon members say that he, too, understood the Bill after the hon member had provided him with that information, and I thank him for that.

†The hon member for Amanzimtoti referred to the restructuring of the institution handling these moneys. I must point out to him, however, that it is still not compulsory for institutions to invest in these bodies. An institution like the SATS will still have the option to invest somewhere else.

But it will be more attractive.

That is correct.

He referred to large sums of money being available, and I have already referred to the fact that they will be in a position to invest in the underdeveloped neighbouring countries in Southern Africa. I must also point out to him that the rates of interest will in fact be market related.

*In conclusion I wish to convey my thanks to the hon member for Waterkloof who referred to the monetary and fiscal considerations and the management of public debt on the basis of business cycle and interest rate trends. He placed special emphasis on that. The legislation facilitates all these processes. He is quite correct. Over the long term they do not necessarily have more money, but they have a more stable money supply in the long term and certainly have better control over a large sum of money, too, in the short term. In that regard the hon member has indeed hit the nail on the head.

Accordingly I wish to convey my cordial thanks to all the hon members who participated.

Question agreed to.

Bill read a Second Time.

Bill not committed.

Bill read a Third Time.

Mr Speaker, I move:

In the Budget Speech of March 1983 the hon the Minister of Finance signified his approval of the main recommendations of the Franzsen Committee which had investigated the investments of the Public Debt Commissioners (PDC). This committee found, inter alia, that the short-term investment activities of the PDC were, to a large extent, a banktype function, which, in the present circumstances, required a specific expertise which was not in line with the original purpose for which the PDC had been established, which was to invest moneys of the public sector chiefly in long-term stock. Consequently it was recommended that the short-term deposits administered and jointly invested by the PDC be transferred to the National Finance Corporation of South Africa (NFC), since that institution was better qualified to deal with such money market activities.

The Franzsen Committee also liaised with the Commission of Inquiry into Fiscal and Monetary Policy—the De Kock Commission—and learned that this commission envisaged certain recommendations which would mean that the NFC disappear from the scene.

A decision was taken, all these recommendations having been considered, to make provision at this stage already for the dissolution of the NFC and for the establishment of a Corporation for Public Deposits (CPD). The intention is to transfer the short-term deposits from the PDC to the new Corporation for Public Deposits.

†The future Corporation for Public Deposits (CPD) is to be a wholly-owned subsidiary of the Reserve Bank, directed by a small board of senior Reserve Bank and Treasury officials, under the chairmanship of the Governor or one of the Deputy Governors of the Reserve Bank. It will receive deposits at call from over 100 entities in the public sector. These moneys, estimated to amount to R1 000 million on average, will be invested in liquid assets of both public and private sector origin. I expect the judicious application of the Corporation’s funds to contribute significantly to the efficacy of the Reserve Bank’s monetary management.

The Corporation’s profits, after the payment of dividends to the Reserve Bank and appropriation to reserves, are for the credit of the State Revenue Fund.

The dissolution of the National Finance Corporation will mark the end of an era in the development of the South African money market. The NFC was established in September 1949, under the management of the South African Reserve Bank, in order to mobilize for local investment much of the liquid funds previously held in the London money market by large South African financial enterprises, including the mining houses. Its establishment was a deliberate step to develop and promote a South African money market. This purpose was amply achieved in the years that followed. Indeed, the NFC must be judged to have succeeded eminently in achieving all its main objectives. Its dissolution is being proposed not because it has failed but because it has successfully completed its allocated task.

In the 35 years of its existence, the NFC has been guided by a board of directors of exceptional calibre. Some of the leading personalities of our financial, industrial and mining enterprises, as well as the Reserve Bank and the Department of Finance, have served as directors, with the Governor of the Reserve Bank as chairman. Their deliberations have been of inestimable value to the bank and the department in conducting the nation’s financial affairs, and I take this opportunity to express my gratitude to the distinguished representatives of the business world who have all those years given of their time and wisdom.

Mr Speaker, it seems to me that the hon the Deputy Minister of Finance has actually been caught up in this mood of change. We have lived through a period of constitutional change and now we seem to be living through a period of financial change. The good news that I can give the hon the Deputy Minister is that we will be supporting this change.

The hon the Deputy Minister pointed out quite correctly that with the disappearance of the NFC we really come to the end of an era in the development of the monetary system in South Africa. He also pointed out « that the NFC was established in 1949. At that stage we had no sophisticated receptacle for short-term funds in South Africa. That money was in fact going overseas to the London market. If the Reserve Bank was the lender of last resort then the NFC became the depositor of last resort.

Let me say in passing that I am sorry that the NFC is disappearing. I find it much easier to use the term “NFC” than “CPD”. No doubt that will come with time. If one looks at the development of the NFC one sees that it in fact played a very prominent role in getting the money market going in South Africa. Six years afterwards it was followed by the establishment of the first merchant bank in South Africa, established by one of the mining houses, and soon that was followed by the first of the discount houses. We now have three discount houses and numerous merchant banks. As the money market developed it became obvious that the function that the NFC had originally performed was becoming less and less relevant. As the money market became more sophisticated the role that was played by the NFC was not as essential as it had been in the past.

Another point is that the South African money market is sophisticated. The money market of, for example, Ireland is not nearly as sophisticated as that of South Africa. Given the size of our economy we actually have a very sophisticated money market. The one thing that this actually achieved was that the emphasis on monetary policy had to change from controlling the stock of money to actually controlling the velocity with which money circulated. One of the problems that we have in the control of monetary policy is that one can look at the basic stock of money, but if it begins to circulate faster in the economy it becomes more difficult to control. This is basically part of the problem to which the hon member for Amanzimtoti referred in his previous speech in regard to the SATS, where one had the position that short-term funds were locked in with long-term funds. Short-term funds, of course, are subject to much greater fluctuations than capital market funds. Therefore this requires a highly specialized form of expertise. While a capital market trader takes more of a long-term view, a money market operator trades literally on a day-to-day basis. He can in fact be trading almost on an hour-to-hour basis. Consequently the expertise that is required in the short-term end of the money market is completely different to the expertise that is required when one is dealing in the capital market. Therefore one welcomes the fact that these two functions have now been split. I think the type of person or the type of expertise required to deal in the short-term end of the money market is completely different from that required in the long-term end. The hon member for Walmer actually raised the point—the hon the Deputy Minister also referred to it—that one is a little concerned, particularly when one is looking at money market operations, that public bodies may in fact be allowed to invest their funds outside the ambit of the CPD because it is such a specialized field.

I should like to make some specific comments to the hon the Deputy Minister in regard to the Bill because I think it is actually important when we get legislation like this that we go back to first principles. However, before doing that I should like to react to the comment made about inflation and the creation of unemployment. I think this point was made both by the hon the Deputy Minister and the hon member for Smithfield. The contention was that we could control inflation but that it would lead to unemployment. I accept that that contention is correct in the short term but I suggest that in the long term continued inflation actually destroys employment opportunities. When one looks at two countries in the Western economy that have been relatively successful, it is interesting to note that Japan and West Germany have at the present moment, compared with some of the other countries, relatively low inflation and also less unemployment.

Mr Speaker, may I ask the hon member whether I am correct in assuming from what he has said, that he believes in “Reagonomics”?

The hon member has referred to “Reagonomics”; in other words, he is asking whether I am a supply economist. No, that is not so. What tends to happen is that one gets fashions in economics, and I think the fashion of five, six years ago, perhaps even earlier than that, was the monetarist school under people like Friedman and others who believed that if one controlled the money supply then one would control inflation. I do not believe entirely in “Reagonomics” but think that one should actually get a balance between the two.

The point that I want to make is that if one has rapid inflation—and the first area in which one sees it is in wages; it is wages that actually are increasing—what will the industrialist and the businessman do? He begins to replace labour with machinery because the cost of that machinery once he has bought it, is not going to continue to escalate. To that extent, I believe, sustained inflation actually destroys employment opportunities. I should like to make a couple of specific comments relating to this Bill. Clause 3(1)(a)(vii) states:

One is perfectly happy that they are going to invest in bankers’ acceptances but one questions the wisdom of investing in private sector paper which is unsecured. When I look at the investments of the PDC, I get the impression that this has not been an avenue that it has gone into historically, and that it has normally gone into highly secured investments. One wonders why there is this specific clause here. The other point I would like to raise, is in connection with clause 4. Clause 4(1) entitles the Minister to authorize any person holding money other than public deposits to invest with the corporation. In his reply to a previous debate I think the hon the Deputy Minister actually indicated that maybe this body will in fact be allowed to accept funds from the private sector. Did I understand him correctly?

Yes.

That is fine, as long as one is aware of it. It seems to me that the objective of the PDC was in fact to accept money essentially from public organizations. However, I assume that it will not go into competition with the private sector. If it starts accepting investments from the private sector on a large scale it is obviously going to be come a competitor.

We looked very carefully at clause 5 which provides for the composition of the board of directors of the corporation. The Reserve Bank has 12 directors, six of whom come from the private sector. We asked ourselves if there was not some value in introducing directors from the private sector onto the board of the corporation. We discussed this and came to the conclusion that while it would be useful, both of this organization and to the private sector to get some insight into government thinking, it would actually be wrong because obviously whomever one puts on the board from the private sector is going to be someone from the banking sector who would then have a tremendous advantage over his competitors. Therefore while one tends to think that it is a good idea to involve the private sector wherever possible, I think that in his particular case the decision is the correct one. One should keep it to two directors from the Reserve Bank and two directors from the Treasury.

Clause 11 relates to the liability of the CPD and states that the liability of the Reserve Bank as a holder of shares in the corporation shall be limited to the amount unpaid in respect of the shares held by it. I would like the hon the Deputy Minister to clarify this aspect. I can understand that the liability of the Reserve Bank can be limited because it does not operate purely as a normal state body. I cannot conceive of a situation in South Africa where if the Reserve Bank or an organization like the CPD could not meet its liabilities, the government of the time would actually allow it to default. I think it is important that we realize that if there were losses, they would eventually be met out of the State Revenue Fund, particularly since the profits of the CPD, after dividends and transfer to reserves, are paid into the State Revenue Fund.

Just as a matter of interest, I notice from clause 21 that the auditors will appoint the liquidators of the National Finance Corporation. This is a fairly unusual step because normally the liquidators are in fact appointed by the shareholders. I am interested to know why, in this particular case, the liquidators are actually appointed by the auditors.

The final point I want to make, is that if one looks at the interest rate pattern and what has been happening to interest rates, there will be a capital loss when these funds are transferred from the NFC to the CPD. I wonder if the hon the Deputy Minister could give us some idea of the extent of that loss. He mentioned an amount of R100 000 000 in the case of the PDC, but I do not know whether that includes any loss on the short end of the market. The obvious point is whether it will come out of the General Sinking Fund and whether there will be sufficient funds available to cover it.

Mr Speaker, in the first place I want to thank the hon member for Edenvale for his and his party’s support. It is pleasant to listen to an authority in the field of banking, in contrast to what we have had to listen to from the hon member for Walmer. In contrast to the hon member for Walmer, the hon member for Edenvale complimented the department and the hon the Minister on the monetary policy followed by this Government over the years.

In the field of inflation the hon member’s contribution was possibly less fortunate. He quoted the examples of Japan and West Germany, but in my opinion those are not good examples since those two countries are highly developed countries, whereas South Africa really is a developing country which, in fact, consists of a First and a Third World. I do not think they are quite comparable. Over past years we have actually been trying to keep inflation as low as possible and to maintain a balance by, on the one hand, not allowing the rate of inflation to increase too much and, on the other, not allowing the unemployment figure to increase too much. Over the past years this Government has in my opinion actually succeeded in doing so. The hon member proceeded to put a few questions to the hon the Deputy Minister to which the hon the Deputy Minister will undoubtedly reply.

The two most important recommendations of the committee of inquiry into the investments of the Public Debt Commissioners were, firstly, that the banking type of functions of the PDC be administered by the National Finance Corporation of South Africa, the NFC, and consequently that the existing short-term deposits with the PDC be taken over by the NFC; and, secondly, that the NFC become a wholly-owned subsidiary of the SA Reserve Bank which will handle only public funds. In principle the Bill has been modelled on the existing legislation. However, it has been restructured to accommodate the changed circumstances. At the same time the name has been changed to be more appropriate to the changed functions.

Consequently the Bill provides for the transfer of the PDC’s joint funds to the Corporation for Public Deposits or CPD. The CPD will be controlled by a board of four directors who will be appointed by the Minister, comprising two representatives from the Reserve Bank and two officers of the Department of Finance. In addition, provision is being made for the appointment of alternate directors and for the conditions subject to which they will fulfil their functions. For example, decisions may be taken only if at least one representative of both the Department of Finance and the Reserve Bank is present at a meeting. Because only public-funds will be handled and the surplus of the CPD, after provision has been made for a reserve and for the payment of a dividend, will accrue to the State Revenue Fund, the CPD will not be subject to income tax or stamp duties. In turn the CPD will not be able to compete for deposits with other deposit-receiving institutions, as public deposits cannot be deposited with other institutions. The Reserve Bank, as the holding company, will be entitled to receive a dividend, but may not pay its shareholders a dividend exceeding 10%. For the rest surplus profits are to be paid into the State Revenue Fund.

Lastly this Bill makes provision for the measures which are required to effect the dissolution of the NFC on 31 March 1984. These can be summed up as follows. A liquidator is to be appointed to deal with the dissolution and on 31 March 1984 he will take over all the assets and liabilities of the NFC. The liquidator will, in so far as it is practicable, sell the negotiable assets in the NFC’s portfolio. The assets which have not been sold or transferred at the time of the dissolution of the NFC will be sold to the CPD at a value mutually determined by the liquidator and the Reserve Bank. The money obtained from the sale of the assets will be utilized by the liquidator to repay the depositors money and to meet all other obligations of the liquidator. The remaining amount will then be divided amongst the shareholders of the NFC in proportion to their shareholding.

Mr Speaker, it is with pleasure that I support this Bill.

Mr Speaker, as I have indicated, I just want to support the Bill under discussion on behalf of the CP.

I just want to refer to the remark the hon the Deputy Minister made a moment ago when he said, “See what we can achieve by means of consensus”. He is perfectly correct, of course. I just want to point out to the hon the Deputy Minister that he should persuade his people to reach consensus with the CP instead of trying to move in a contrary direction. The CP will show them the right road. [Interjections.] I must say, of course, that they seem to be coming right. When the hon member for Amanzimtoti launched an attack on me here earlier on, hon members of the NP took him to task immediately. It seems to me that things are really working well.

I believe, as far as the Bill under discussion is concerned, that the Government is taking a step in the right direction. I do not intend elaborating on this to any great extent. The hon member for Edenvale put a few questions to the hon the Deputy Minister. I myself had one or two of those questions in mind. I do not believe, however, that it is necessary for me to repeat them.

To proceed, it is true, of course that the NFC is going to disappear. This body has been in existence since 1949. I believe it is an organization which has served a very admirable purpose. Since it is going to be dissolved, I believe we should also convey our sincere gratitude to everyone who has been involved with this organization over the years for what they have done. I consequently associate myself in this regard with the tributes which the hon the Deputy Minister paid to these people. On behalf of the CP I join the hon the Deputy Minister in thanking them.

Moreover, it is of course a perfectly correct step to make this body a wholly-owned subsidiary of the Reserve Bank. As I said with regard to the previous Bill, this will make matters much easier and more pleasant than before for the Department of Finance, the Reserve Bank and, in fact, the entire financial system in the country. Some hon members also dealt with other matters: inter alia, inflation. Since I am of the opinion that this is not really relevant to the discussion of this Bill, I prefer to leave it at that and to deal with it during the budget debate.

We support the Bill under discussion.

Mr Speaker, the hon member for Edenvale expressed some fears in connection with the provisions of clause 4 of the Bill. He was inter alia afraid of the possibility of competition for funds between the proposed new corporation and the private sector. In my view that will not occur because, as the hon member for Smithfield pointed out, public deposits may not be invested in other institutions. If, however, the hon member wants to satisfy himself completely he should look at clause 1 of the Bill, where a definition is given of “public deposit”. In addition to that the hon member should also read clause 14(2)(b) of the previous Bill, the Public Investment Commissioners Bill. I am sure that by doing that the hon member will be able to allay all his fears in this respect.

*Mr Speaker, I should just like to draw the attention of this House to one further aspect of the legislation under discussion, viz, clause 17, in terms of which the Minister is being obliged to have Parliament itself retain its control over this corporation which is to be established. In terms of clause 17 the Minister is obliged to table in this House the annual report of the corporation as well as its financial statements. This will mean that Parliament will still retain the ultimate authority over this corporation.

I, too, gladly support this measure, because I believe that it will contribute a great deal towards placing our State finances on a firmer, also a more effective and modern footing. In order to avoid putting the hon member for Amanzimtoti in the embarrassing position he was in a while ago, I shall now resume my seat and then he shall be able to deliver a long speech.

Mr Speaker, I do not intend to make a long speech because we agree with the hon the Deputy Minister and his colleagues and the representatives of the other parties who have spoken. We shall support this Bill because, as I said earlier this evening, this is one of the Bills that we are involved with this evening dealing with the restructuring of State financial institutions of which this is the second such Bill.

I do not wish to elaborate in this regard except to say that a great deal has been said here this evening about inflation and I have detected, especially among hon members opposite, an attempt to justify the fact that we are experiencing inflation in South Africa by saying that it is because South Africa is a developing nation. The hon members for Walmer and Edenvale criticized the Government because of our inflation. I think the hon member for Edenvale mentioned the examples of the low inflation rates in West Germany and Japan to which the hon member for Smithfield replied that these were well-developed nations.

So they are.

Well, Sir, if the hon member implies that well developed nations can conquer inflation and developing nations by virtue of the fact that they are developing must have inflation, I want to ask the hon member why Great Britain up to two or three years ago had an inflation rate of 20% per annum. This was far in excess of the inflation rate experienced by South Africa and so I want to ask the hon member whether Great Britain is a developing nation.

What happened to their unemployment figure?

The hon member asks what happened to their unemployment figure, but this is the crux of the whole matter. Nations experience inflation because the governments of those countries allow them to spend more money that the economy is generating. It is as simple as that. Britain had high inflation because, as a socialist state with a tremendous welfare programme, it employed thousands of people doing nothing at all except spend money. They were not contributing to the growth of wealth in the country at all. Before that position could be corrected, those people had to become unemployed before they could be re-employed in productive sectors of the economy. Certainly developing countries have inflation because social democrats like the PFP are always pushing for more, more, more. They want more and more money to be spent by the State to subsidize people and to build more houses. They want to give money away. [Interjections.] That is why we have inflation. On the other hand, the Government spends millions on ideological matters such as shifting people here, there and everywhere, and so they are wasting the State’s money as well. Therefore, they start spending more money than we are earning and before this sort of thing can be corrected, whether it be in South Africa, the United States, Great Britain or anywhere else in the world, some people have unfortunately to become unemployed. We have had this regularly this session from hon members opposite. They try to justify the fact that we have inflation by saying that South Africa is a developing country. South Africa has been a developing country since our forefathers settled here but, up to a few years ago, did we have inflation? No, we did not. The only reason there is inflation is because governments allow a nation or a people to spend money it has not earned. Therefore, they print that extra paper money and that devalues the purchasing power of the currency. It is as simple as that. Let us get back to that basic fact. That is what causes inflation and not, as the hon member for Smithfield said, because we are a developing country.

Having said my little piece about inflation. I want to say that I believe in the work ethic. There is a saying to the effect that if one wants to live like a king one has to work like a slave, and I think it is a very good saying If we want all the good things in life—motor cars and houses and high standards of living—then we have to work for them. Having said that, I want to say too that we will support this Bill because we believe it is in the financial interests of South Africa.

Mr Speaker, I have just heard such an interesting lecture on inflation that I virtually do not know whether I should continue or not. I wish it were as simple as that, because then we should probably be able to solve the problem. I do not quite know which items of expenditure we should cut. One so often hears it said that the State is spending too much. Should one cut defence expenditure? The hon member for Amanzimtoti would say we should not do so. Should we cut assistance to farmers? The hon member would say that we should not do so, particularly not with regard to the sugar cane farmer. What an enormous loan we made available to the sugar cane farmers only the other day!

Do not criticize us. We are biting the bullet hard enough as it is.

What about the wage gap?

Oh, the wage gap. Well, at the moment the wages of Blacks are only a tenth of those of the Whites. I say this on the basis of the findings of the Bureau for Market Research. Does the hon member suggest that this should be narrowed?

It all depends on the productivity.

So the hon member does not mind?

Yes.

That is fine.

I want to return to the Bill. What we have here is clearly, as has already been said, part of the structural change, viz the transferring of short-term activities from the Public Debt Commissioners to the old National Finance Corporation under its new name, the Corporation for Public Deposits. What is important in this connection is that one cannot keep these deposits in a private or semi-private body or in a body with private people as members of its board of directors, as too large an amount of State funds are involved here.

A very important aspect is raised by this Bill, viz the involvement of the Reserve Bank. I think the hon member for Edenvale put a question concerning the fact that the corporation could also accept funds from the private sector.

That is what the hon the Deputy Minister said.

The question is whether it can even invest funds in the private sector. I want to elaborate on this point. According to the view of the De Kock Commission there is the argument that the National Finance Corporation has served its purpose since 1949. Those are the days when the Government of Dr Malan came into power and we experienced tremendous problems with the outflow of money. We know that history. The National Finance Corporation at that time served as a stimulus for the development of the money market.

But you no longer stand by Malan.

Was the hon member still a supporter of the United Party in 1949?

I was a supporter of the National Party, but where were you?

I was a supporter of the National Party and with Malan long before that hon member was there. [Interjections.] Sir, if the hon members have disposed of the question of National Party or United Party, I trust that I may continue.

Order! Must there really be a few hon members who disturb the calm before the storm?

The National Finance Corporation has served its purpose and the De Kock Commission has found that these activities can be taken over by the private sector and through the agency of the discount houses. It is interesting that expectations were harboured as long ago as 1980 that the De Kock Commission would come forward with a proposal of this kind. If that proposal had been made in 1980 and the National Finance Corporation had been abolished at that time, the discount houses would not have been able to take the private funds that are at present invested with or were recently invested with the National Finance Corporation. This is so as a result of the capital/deposit ratios which existed at the time and the obligations connected therewith. As it happened, such a shortage of funds has developed since that time that today it will assist the discount houses if the National Finance Corporation does not actually operate in the field of the private sector.

In the meantime, the entire banking sector is virtually engaged in a revolution, and I believe the hon member will agree with me. The tremendous compartmentalization which we have had is disappearing. To say that the funds would necessarily have gone to the discount houses is perhaps not necessarily correct, because our discount houses are in any event moving away from the old British discount houses which were geared solely for the short term, and are following a trend similar to that of the American system, and they are going to bring pressure to bear on the Government and the Reserve Bank to enable them to deal in all types of securities. That is to say that funds are invested not only in Treasury bills, but also in other securities. This change can bring further pressure to bear on the Reserve Bank and give rise to inter-bank movements. These funds will not necessarily go to the discount houses. They can flow between banks too and I think the Reserve Bank will shortly receive a request from the banking sector that the liquidity requirements applicable at the moment be adjusted for surplus moneys flowing from one bank to another. This means that this change can set in motion an interesting new departure, one which can fit into the Reserve Bank’s policy of having a more flexible and competitive banking system.

Questions were also asked about the funds which the Corporation would receive and how these would be spent. The Public Debt Commissioners were not the only ones who experienced problems with their finances. The discount houses, too, have experienced problems in recent times because of the changing rates of interest. At the moment the State is assisting the discount houses, and I think the hon member for Edenvale knows this. This provision is being inserted to fit in with the Reserve Bank’s monetary policy. It means that at certain times when everything cannot be taken in Treasury bills, it may be taken in deposits. If the banking sector runs into problems at the same time and the Reserve Bank is not able to render direct assistance as at present, it will be the work of this Corporation to render assistance to those financial institutions experiencing problems.

I gladly support this Bill because it has interesting possibilities and I think there will be quite a reaction from the banking sector to the development which will result from this Bill.

Mr Speaker, once again I want to convey my sincere gratitude to all the hon members who have participated in this debate.

This Bill, together with the previous one and the one which will follow this Bill directly, actually form a trilogy which should be seen as a whole. Consequently a great deal of what I said in the Second Reading debate on the previous Bill applies here as well.

†The hon member for Edenvale referred with a certain amount of regret to the dissolution of the National Finance Corporation. I share that with him, but as he also very ably pointed out, the nature of the operations of the future Corporation for Public Deposits will be entirely different in that it will only deal with public money. The shareholding of the CPD will also be entirely different from that of the NFC. For the record I want to refer to the shareholding of the NFC. The Reserve Bank had holdings of 10%; commercial banks, 18%; mining houses, 37%; insurance 19%; building societies, 10% and other financial institutions, 6%.

I do not want to be lured into a debate on inflation at this moment. The hon member said that he preferred short-term unemployment to long-term inflation. That is a valid statement to make. I grant the hon member that. “Short-term” is however, a very relative term. In Britian and the United States of America, short-term unemployment has so far meant two or three years of high unemployment. If one adds to that the social security schemes that operate in those countries to sustain the unemployed, schemes which we do not have in this country, then only does one realise the real problem that we are facing in this regard.

I want to refer to two or three specific questions. The reply to the question which the hon member asked in connection with clause 1(vii) is that the CPD has to deal in market instruments as well. They do not only invest in semi-qilts, but they also invest in market instruments. Market paper must therefore also come within its ambit.

Clause 11 merely deals with the liability of the bank as shareholder. Because the CPD is a wholly-owned subsidiary of the bank, the bank will of course keep a very close watch on the functions of this body. I agree with the hon member that the bank can never allow this body to go bankrupt.

As far as clause 21 is concerned, the hon member asked for an estimate of the book loss that could be incurred. It is estimated that it could be as high as R13 million, but there are sufficient reserves to cope with this.

*In conclusion I should like to thank the hon member for Smithfield. He gave an exposition of the details relating to the constitution of this body. I also take pleasure in thanking the hon member for Sunnyside for his remarks. The hon member for Ermelo highlighted a new aspect, viz the powers of inspection which Parliament will have; this is an aspect of particular importance. The hon member for Amanzimtoti dealt with inflation. This reminded me of a very interesting debate on inflation which we conducted here last year. In conclusion I should also like to convey my thanks to the hon member for Waterkloof for his contribution.

Question agreed to.

Bill read a Second Time.

Bill not committed.

Bill read a Third Time.

Mr Speaker, I move:

That the Bill be now read a Second Time.

With the dissolution of the National Finance Corporation of South Africa, a new body, viz the Corporation for Public Deposits, is to be established on 31 March 1984. The latter institution will take over the existing short-term deposits, which, are dealt with by the Public Debt Commissioners, on the above-mentioned date. The CPD is only authorised to accept deposits from institutions in the public sector and will be a full-fledged subsidiary of the South African Reserve Bank.

In the past, banking institutions were sometimes permitted to deposit a portion of their compulsory supplementary cash reserve requirements that have to be maintained against their obligations to the public, with the NFC. To them this was an important concession because they earned interest with the NFC, which was not the case in respect of their deposits with the Reserve Bank. Section 9(d) of the South African Reserve Bank Act, 1944, prohibits the payment of interest on any balances kept at that bank.

Since the new Corporation for Public Deposits will not accept deposits from the banks, all cash reserve balances of banks will have to be held at the Reserve Bank in future. Although the Reserve Bank does not intend paying interest on such balances at present, it may, in fact, be desirable at a later stage. For this reason the Reserve Bank is being empowered by this Bill to pay interest on deposits if it deems it advisable to do so.

Mr Speaker, as the hon the Deputy Minister said, this Bill, which is very short, flows from the two previous Bills that we discussed this evening. In the past the NFC could accept deposits from the commercial banks, while the CPD will accept money only from the public sector. We therefore had to find a new home for the funds which the commercial banks kept with the NFC and the logical place for those funds is the Reserve Bank. I think the key question, one which is actually very interesting, is when the Reserve Bank is going to start paying interest on those deposits and what that interest will be. The hon the Deputy Minister might suddenly find himself very popular at dinner tables because I think there are a large number of share investors on the Johannesburg Stock Exchange who would like to know the answer to that question.

Mr Speaker, we will be supporting this Bill.

Mr Speaker, here we have a short text, but one with very interesting possibilities. The hon member for Edenvale also referred to this. In the past the banks invested a portion of the 2% supplementary cash reserve requirements on short-term deposits with the National Finance Corporation at interest, whilst they invested the 8% cash reserve requirements with the Reserve Bank and they did not earn interest on it. The supplementary 2% investment with the NFC is falling away now, but I think this was discussed yesterday or the day before, and it is therefore almost irrelevant now. What is interesting about this Bill, however, is that the Reserve Bank can now pay interest. If one were to analyse the policy of the Reserve Bank over the past few years, one would find that it has placed increasing emphasis on open-market transactions and that, in turn, this is linked to cash reserve requirements. Until now the Reserve Bank has tried to control the money in circulation by laying down liquid asset requirements. However, it is clear that it now intends making more use of cash reserve requirements in conjunction with open-market transactions. If the direction the Reserve Bank is apparently going to pursue should succeed, one could ask whether it is not possible for the Reserve Bank to make 16%, instead of 8%, a cash requirement. If the Reserve Bank moves in that direction this Bill will make it possible for the Reserve Bank to pay interest on that additional cash reserve. I therefore believe that the structural changes in the three Bills we have discussed this evening contain possibilities for the future monetary policy of the Reserve Bank.

Mr Speaker, this is the shortest of the three Bills we have dealt with. It contains only two clauses. However. I wonder whether we realize that it is really the most important Bill of the three. People in South Africa do not realize what an important role the SA Reserve Bank plays in our economy. Everyone in South Africa, myself included, knows too little about the Reserve Bank. We do not know precisely what the Reserve Bank does. If one considers this carefully one realizes that this central bank, like all other central banks throughout the world, controls our finances, and in fact, the entire economy of the country. I think it would be a good thing if all of us saw to it that we were better informed about the role the Reserve Bank plays in our economy, not only locally, but internationally as well. We often read that the Reserve Bank has saved the rand, and one realizes then that this bank is just as important to our economy as a doctor is to a family. One only sees the doctor now and then when one is ill, but one has the assurance and the guarantee that if something should happen to one’s health the doctor will make one well again. The Reserve Bank plays precisely the same role in the economy and in respect of the finances of the country. I hope that the hon the Deputy Minister will be able to do something to make us more aware of what the Reserve Bank does. Practically every week figures with regard to the various banks and the financial world in general appear in the Gazette. Our people do not read this, and even if they did they would not understand it. Perhaps consideration could be given to conveying more information on this subject to the public at large.

Sir, the CP supports this Bill.

Mr Speaker, as has already been said, this measure gives the Reserve Bank the discretion to pay interest on certain deposits. This is a consequence of this hon House having passed the two previous Bills. It must therefore also follow that we in these benches support the measure.

I would like to take this opportunity of wishing the hon the Deputy Minister and his department, as well as the Reserve Bank, everything of the best for the future in administering the restructuring of the financial institutions as a result of the Bills that have been passed by the House today. The NRP will support the legislation.

Mr Speaker. I should like to thank hon members most sincerely for their participation in the discussion of the three Bills we have just dealt with as a group. In addition. I want to express my sincere gratitude to the Whips of the various parties who made it possible for us to discuss this with members of the various groups in the parties. I also wish to thank the officials who played a part in this most sincerely, and address a special word of thanks to the legal draftsmen who in my opinion, drew up the Bill in very cleat language. I should also like to thank the hon members for Edenvale, Waterkloof. Sunny-side and Amanzimtoti for their participation in this debate.

Question agreed to.

Bill read a Second Time.

Bill not committed.

Bill read a Third Time.

Mr Speaker. I move:

That the Bill be now read a Second Time.

The Bill contains amendments to the Public Accountants and Auditors’ Act, 1951, as requested by the Public Accountants and Auditors Board—hereinafter called “the board”.

Firstly the amendments are necessary in order to revise the requirements imposed by the Act and the board in respect of the educational qualification and standard in certain subjects which a person has to achieve before he can enrol as an articled clerk in the profession of accountant and auditor. At present the Act requires that a person shall at least have passed the matriculation examination of the Joint Matriculation Board of have been granted exemption from that examination and has achieved in mathematics or a related subject a standard which the board considers to be adequate before he may begin his period of service under articles of clerkship. This period of service is five years, which may be reduced in certain circumstances.

The board is of the opinion that persons who have passed the necessary examination but who have not achieved the required standard in mathematics or a related subject are discouraged from taking up the profession since such a person still requires a year after matriculation to achieve that standard before he can begin his articles. The board feels that such a person should be allowed to complete his first year of articles during that year.

The proposed amendment contained in clause 2, will allow such a person who is in the full-time service of an accountant and auditor and is performing the same duties as enrolled clerks and who then achieves the required standard may receive recognition for that service up to a maximum of one year for the purpose of his articles of clerkship in that the board is authorized to back-date the registration of articles of clerkship on the basis of such service to as much as one year.

†The second amendment, contained in clause 3, will merely clarify that accountants and auditors are obliged to furnish the relevant information to the mentioned persons but are not prohibited from furnishing the information to anyone else.

Finally, the amendments set out in clause 4 relate to costs incurred by the board in connection with an inquiry made by it into alleged improper conduct by a registered member of the profession.

In terms of the present provisions of the Act, the board can only recover its costs from such member if the inquiry leads to an official hearing. The board often incurs substantial legal costs in cases of alleged improper conduct prior to advising the member concerned of the improper conduct imputed to him. If at that stage the said member admits that he has been guilty of such conduct, no official hearing of the case is conducted and the board cannot recover the costs of the inquiry. The proposed amendment will enable the board to recover its costs also in such cases.

I request the support of the House for the Bill.

Mr Speaker, this is a very simple little Bill and the official Opposition will be supporting it. The amendment to section 21 of the principal Act by the substitution for paragraph (g) of subsection (1) of a new paragraph (g) introduces an improved expression of the intention of the Act. It describes succinctly the powers of the Public Accountants’ and Auditors’ Board. In particular it places beyond doubt the board’s ability to prescribe how an allegation of improper conduct by an accountant or auditor shall be heard.

The amendment to section 24 of the principal Act by the addition to paragraph (c) of the new subparagraph (iv) has a logical purpose. It ensures that articles may be registered in respect of an articled clerk who has failed to pass his mathematics in his JMB examination or equivalent matriculation examination but who has subsequently gained that particular qualification. With the shortage of chartered accountants we have in this country, I think it is very necessary that we do not put unnecessary obstacles in the way of young people who are anxious to pass.

The amendment to section 24 by the addition to subsection (3) of the new paragraph (e) provides that a student who was in the service of a registered accountant or auditor before achieving the required standard in mathematics to be allowed to enter into his articleship will get credit for the period in which he gained the required experience.

The amendment of section 27 of the principal Act by the insertion of the new paragraph preceding the provisos, and also the substitution of subsection (1)bis, more clearly defines the board’s rights and powers to investigate alleged allegations of improper conduct of persons registered in terms of the Act, and also to impose any prescribed punishment and to order persons found guilty to reimburse the board for any losses it may have suffered.

We will be supporting the measure now before the House.

Mr Speaker, the hon member for Walmer expressed support of this Bill on behalf of his party. Of course, I think this was a very good and wise decision on their part. As far as this side of the House is concerned. I want to avail myself of this opportunity right at the outset …

Are you going to support the Bill?

Of course I am going to give the present Bill my unqualified support on behalf of the NP, Mr Speaker. However, there are a few remarks I should like to make with regard to this measure.

The principal Act, Act No 51 of 1951, was approved in this House on 18 June 1951, and promulgated on 1 November 1951. Since then it has been amended ten times. The first was in 1956. The present amendment is therefore the eleventh since 1956. This goes to show that regardless of how well legislation is drawn up, practice requires it to be adjusted from time to time. Of course, this is necessitated by constantly changing circumstances in the economic and financial world. Therefore, in the present case, too, occasional amendments were necessary.

I find the present statutory amendment interesting in two respects. Firstly, we see that just as in the case of the new translation of the Bible, Afrikaans has also undergone changes in the field of legal terminology and the drawing up of statutes. Terms which we previously came across in legislation, for example, “in dier voege”, “nademaal”, and many other terms, which no one really understood, and which even gave rise to court cases due to uncertainty about their interpretation, are now being replaced by easily understandable and much more flexible Afrikaans terms which everyone can understand. Of course, this has many favourable consequences, as we have already seen here in this House. Even in the present Parliamentary session hon members who are farmers have already intimated that they are able to understand legislation more easily now; some of them can even do so just as well as any trained lawyer. Of course, this is a satisfactory state of affairs, because it makes the language more understandable to us all.

These is another principle which I believe comes to the fore in the present measure in particular. That is that as far as auditors are concerned, we find that the original legislation eventually made provision, by way of amendments, for these people to deal increasingly with their own affairs. For example, they need no longer obtain ministerial approval for every little deviation from their statutorily prescribed procedure. Of course, this is quite right. We should get away from this. Earlier this year we discussed other legislation in this House with regard to another specific profession in which those involved can also arrange their own affairs in future, and in which they are only obliged to present an annual report of their activities to the Minister. No further restrictions are being placed on them. I therefore think this is a sound principle being introduced here.

I believe that the present statutory amendments make good sense. Clause 1 of the Bill amends section 21 of the principal Act, and deals with certain authorization. I think it is appropriate that certain improper conduct is being halted in this way. I think the new provision is an improvement on the existing one in the principal Act. In my opinion, clause 2 and clause 3 also contain sound improvements on the existing legislation. It appears from legislation we have had in this regard during the past year that the auditing profession is one of the professions which, probably more than any other profession, is subject to statutory obligations, and which is also in charge of legionary tasks. I am not aware of any other profession of which the same can be said. It is this very fact that has caused the present general shortage of articled clerks and professional people in this field. That is why it is fitting that this amendment is being effected to place this profession on an equal footing with the legal profession. Whereas Latin is a requirement in the legal profession, in this case the period of articles of clerkship can only begin after the required qualification of Latin has been obtained, although he can register. A person can register as soon as he has obtained matric, but the primary requirement in this case is precisely the same. The period of articles of clerkship will only change once a person has obtained those qualifications. I therefore think that this is a very good thing, particularly in view of the fact that there is such a scarcity of human material in this profession.

Please may I put a question? Mr Speaker, I just want to know from the hon member whether he does not think that it is necessary for accountants and auditors to have even higher qualifications with regard to mathematics, for example, in order to be admitted as auditors.

That really does not have anything to do with the matter. The hon member has not been listening carefully. The argument I used has nothing to do with the standard of mathematics or any professional qualification. I was merely referring to the question of the beginning of articles of clerkship. The hon member is aware—and I think he agrees with me—that it is essential and practical that this amendment be effected. In order to make a start on the procedure to do this essential work, it is not necessary to lay down the qualification at the beginning. That comes at the end.

That depends on which university one obtained the qualification from.

Of course, but there has never been a dispute in this regard at Stellenbosch. [Interjections.]

I have somewhat of a problem as regards clause 4, which I should like to put the hon the Deputy Minister. The proposed new section 27(1) reads as follows, inter alia:

The proposed new section 21(1)(g) reads as follows:

I want to ask the hon the Deputy Minister whether he would not consider inserting the word “such” after the word “any” in line 35 on page 5. This would mean that one would not have a vague charge in respect of the provisions of clause 4, but a specific punishment defined in terms of clause 1. It may be a vague charge, but it could be substantiated in any case. Perhaps we could also replace the word “prescribed” with the word “appropriate”.

As far as the provisions of clause 4(b) are concerned, I want to ask whether, when reference is made to reasonable costs, it is referring only to expenditure, or to expenditure and fees for the services of professional people performing a duty there, etc.

The second question is whether or not it is a matter of partial costs being claimed, or is it the total amount that has to be charged? I am asking this because in other legislation in which the term “reasonable costs” was previously used, it has been found necessary to use other terminology, for example, the question of attorney-client costs in legislation we will possibly have before us at a later stage. I do not want to deal with the question of attorney-client costs as such, but I am merely referring to it to focus attention on the fact that in this respect one has a third impartial person who can evaluate or determine the costs. When a dispute arises over costs in this case, there is an impartial party who can make such an evaluation.

I should like to make an appeal to the auditing profession. At the commencement of my speech I said that it is the one profession that finds that it is obliged to do a considerable amount of work by virtue to legislation and the establishment of professional associations. This has particularly been the case over the past 10 years or so. I therefore think that in their case it is essential that they keep the annual increase in their fees lower than the inflation rate.

Mr Speaker, we have before us a short piece of legislation, viz the Public Accountants’ and Auditors Amendment Bill. I think the public accountants and auditors belong to the profession that gets the least credit in South Africa. There is no sector in life in which the auditors are not involved. They remind me very much of the horse that pulls the cart and then still gets hit. Every company in the country has to have an auditor. Nothing can happen on the stock market if the auditors certificates are not there. It does not matter whether it is a large public company or a private individual—everybody is dependent on the auditing profession.

If it were not for the fact that the auditors get stuck in, the Receiver of Revenue, and consequently the State as well, would not be able to collect any money. This aspect is so important that we find that the articled clerks at auditing firms are called up for military service and are then seconded to the Receiver of Revenue to assist there. I have objections to that, and I am simply referring to it to emphasize the importance of auditors. Auditors are people who are knowledgeable about finance and accounting. They are trained in this and, after all, assistance to the Receiver of Revenue is a function they can perform.

One thinks of the auditors who work from early in the morning till late at night. When stock taking is done, they are the people who have to see to it. When the various departments and other bodies appear before the Select Committee on Public Accounts, the auditors always keep us informed about what is going on. There are internal, as well as external auditors. As I said with regard to the Reserve Bank as well, it will also be a good thing if South Africa would take greater cognizance of the functions, role and importance of the auditing profession.

As a matter of fact, the Bill contains only two points. Clauses 1 and 4 can really be read as one, whilst clause 3 concerns the substitution of a word.

Regarding mathematics for matric, one often finds that a child has only taken mathematics up to Std 8 and that he took other subjects for his matric. However, when he gets to Std 10 he finds that auditing is really his field of interest. I know of one clerk who did not have mathematics as a subject in matric. He took mathematics at a later stage, but it cost him an additional year. I think he is one of the most brilliant auditors I have ever known. I am therefore very grateful that this concession is being brought back so that such a person need not serve six years, but only five years of articles of clerkship. I think normal apprenticeship has been shortened to three years, or something like that. Concessions have therefore been made in that regard, but the same does not apply to this profession. Articles of clerkship should not be shortened in this case, since people should be trained thoroughly in this field. Auditing clerks have to work a full day and attend classes at night, either at a university nearby or through correspondence courses. Many of them are unable to attend extramural classes at a university in the large cities and therefore have to turn to correspondence courses. This is not easy. Hon members know how difficult it is to sweat over a subject when there is no lecturer or professor at hand. If any hon member wishes to deny that an accounting course is very difficult, I want to invite him to serve his articles of clerkship and do the course.

An aspect about which I am very pleased, is that an accountant can be charged or subjected to an investigation if he commits an offence. It is important that people in the auditing profession be clamped down on.since when one person in this profession is dishonest or careless, the whole profession is affected and the confidence of the entire country in the finances of the country are shaken, whether it is a private company or a government institution, it does not matter. That confidence must not be shaken. When an auditor is charged with negligence, a letter is sent to him in the first instance, so as to obtain more information. That auditor, as well as the Public Accountants’ and Auditors’ Board both appoint attorneys and this could lead to enormous costs. Until now an auditor could do this, since the Board would pay. However, he now knows that he will have to bear such costs himself and he will therefore admit guilt timeously if he is guilty. I think this is a step in the right direction. I have spoken to the Public Accountants’ and Auditors’ Board about this and they are very grateful for this.

I therefore want to thank the hon the Minister for this Bill and say that the CP will support it.

Mr Speaker, I also take pleasure in supporting this legislation. The House of Assembly takes pleasure in complying with requests for legislation on the part of professional bodies, in this case the Public Accountants’ and Auditors Board.

I wish to confine myself to clause 2 of the Bill. I disagree with the interpretation of this provision of the Bill by the hon members for Walmer, Vasco and Sunnyside. As I understand it, this Bill makes provision for a young man who would like to enter into articles of clerkship, but who does not have the necessary mathematical qualification, is being permitted by way of this Bill to begin working at an auditor—an auditor who is in public practice full time—and to give him a year in which to obtain his mathematical qualification. He is not permitted to enter into articles of clerkship with that auditor at that stage. He is simply working there. After having obtained his mathematical qualification, he is entitled to enter into his articles of clerkship, and the Bill makes provision for a reduction not exceeding 12 months in respect of the period he worked without a contract. The hon member for Sunnyside is an auditor, but as far as I know, clerks have to do five years service at an auditor, and not six years, as the hon member claimed.

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

No, I do not have the time to answer questions now. I am simply bringing it to the hon member’s attention that my experience has been that clerks have to enter into a five year contract for articles of clerkship with auditors, and not six years, as the hon member intimated. [Interjections.] The reduction in the period mentioned in the Bill, is therefore not a reduction from six years to five years. The only reduction taking place is that period during which the clerk did service with an auditor in terms of an informal “articles of clerkship”. With these words, I take pleasure in supporting the Bill.

Mr Speaker, as has been said on a number of occasions, this is a very short Bill which contains two main measures, namely the articles of clerkship and the definition as to what is improper conduct. We find in clause 4 an enabling provision which enables the profession to recover costs which are incurred in an inquiry into improper conduct. As such we will support this measure.

The hon member for Sunnyside made the statement that the accounting and auditing profession is probably the one profession that gets the least amount of credit. I am inclined to agree with that. They do have a tremendous function to fulfil in our society. As he has said, every company has to have its books audited. Those of us who serve on the Select Committe on Public Accounts know that our own Auditor-General has a tremendous task in auditing the accounts of the State which amount to some R20 000 million. The Auditor-General similarly also has to audit the accounts of the SATS, the R6 000 million or R7 000 million of expenditure during the year. Those of us who serve on the Select Committee on Public Accounts also find when one looks at the provisions of the Strategic Procurement Fund that the accounts of the companies that are setting up the strategic supplies also have to be audited by auditors. We rely very heavily on the auditing profession to ensure that all these matters are carried out in a correct manner. As has been said by others, we are finding more and more groups of people seeking professional status. We had a Bill before the House earlier this session in which we agreed to establish a profession for land surveyors. Over the years we had quite a number of these cases.

The one thing that concerns me is that repeatedly over the years we have had Bills come before the House designed to strengthen the control of improper conduct. We have one on the Order Paper now, namely the Estate Agents Amendment Bill. In that Bill there is a clause in terms of which a disciplinary committee is set up which is going to ensure that estate agents do not act in an improper manner. The point I want to make this evening very briefly is that I am rather concerned—I am a professional engineer myself and there are also many other professional people in the House—that there are so many professional men and women who act in an improper manner to such an extent that we have to have measures brought before us here to establish disciplinary committees etc, or to impose penalties to ensure that these people are brought to book. I think it is an indictment of the professions.

Your own profession has done it.

Yes, certainly. I am not criticizing any particular profession. I am speaking in general. When I became a professional engineer I committed myself to a certain code of ethics and a code of conduct. I like to think that I have tried to abide by that in my professional life. What is of concern to me is that there are professional people who do not act in a professional manner, whether they be engineers, lawyers, accountants, auditors or who ever. I think it is an indictment of the profession. If, as the hon member for Vasco has said, it is desirable that we should give more and more power to the professions to govern themselves, then I think they should look to their own laws and consciences as to whether they have in fact tightened up their own actions.

Then they must have the authority.

Yes, certainly. The appeal I am making tonight is that the professional organizations should try to impress upon their members that they are professional men and that they should act in a professional manner. The professions themselves must look to their own affairs especially their professional training, to establish where they fall short, whether it be at universities or within the professions themselves. If the professions impress upon their members that they are professional people and that they should act accordingly, and they do so, we would not have this type of legislation before us. Having said that, we support the measure.

Mr Speaker, I want to say thank you very much to these hon members who participated in the debate, the hon members for Walmer, Vasco, Sunnyside, Ermelo and Amanzimtoti.

The hon member for Vasco referred to a few specific matters, inter alia to the prescribed penalty, and asked whether it could not be amended. However, I wish to draw his attention to the proposed subsection (1) viz, which provides that:

I can assure the hon member that all these aspects have been cleared up with the profession, and they have indicated that this is the way they would like to have it. Therefore I should not like to change this.

Concerning the question of the quantum of the costs which may be recovered, I take it that the profession has certain prescribed rules in this connection which they apply as a professional code.

†In conclusion I want to refer to a point raised by the hon member for Amanzimtoti. He asked whether it was necessary to bring a Bill before the House in which provision is made to combat improper conduct in this profession. I think the hon member is quite right when he says that it is rather sad that we should have to take this step, but on the other hand we also have the question of human fallibility which we cannot get away from, even if we are dealing with a professional man. Whatever one’s profession may be, one has to contend with that, and therefore we must make provision for it.

Question agreed to.

Bill read a Second Time.

Bill not committed.

Bill read a Third Time.

Mr Speaker, I move:

That the House do now adjourn.

Agreed to.