laid upon the Table:

1. (1) Constitution Second Amendment Bill [B 121—87 (GA)]—(Standing Committee on Constitutional Development).
2. (2) Close Corporations Amendment Bill [B 122—87 (GA)]—(Standing Committee on Trade and Industry).
3. (3) Public Accountants’ and Auditors’ Amendment Bill [B 123—87 (GA)]—(Standing Committee on Finance).

as Chairman, presented the Fifth Report of the Standing Select Committee on Justice, dated 24 September 1987, as follows:

Bill to be read a second time.

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

1. (1) That notwithstanding the resolution adopted on Monday, 27 July, the hours of sitting on Monday, 28 September, shall be as follows:
   14h15 to 18h45
   20h00 until the House adjourns upon its own resolution;
2. (2) that the House at its rising on Monday, 28 September, adjourn until Monday, 5 October; and
3. (3) that notwithstanding the resolution adopted on Monday, 27 July, the hours of sitting with effect from Monday, 5 October, shall be as follows:
   14h15 to 18h45
   20h00 until the House adjourns upon its own resolution.

Mr Chairman, I am rising merely to tell the hon the Leader of the House at the outset—I saw him looking towards this side of the House questioningly a moment ago—that the people who are not here today are involved in a congress in Kimberley.

Surely their primary duty is to be here. [Interjections.]

Subsequent to the motion of the hon the Leader of the House on Monday, 21 September, we now, for the third time, have a motion before us which is going to suspend the business of this House for almost a full week.

I do not want to repeat the arguments raised by the hon the Chief Whip of the Official Opposition, but this motion of the hon the Leader of the House illustrates clearly more than any of the others the failure of the functioning of the tricameral parliamentary system. What is the factual situation? Let us examine it. [Interjections.]

Almost the whole of the legislative programme for this session will have been disposed of on Monday, 28 September. The only important subject still to be discussed is the President’s Council’s recommendations on the Group Areas Act, on which the Government appears to be very hesitant to adopt a standpoint.

Order! No, hon members must settle down. The hon member may proceed.

The one final Bill, viz the one on regional services councils, still has to be bludgeoned through this House after umpteen amendments of this Act—as has been the case at the end of every session during the past three years—in an attempt to get this mixed third-tier government off the ground. This House now has to adjourn in the hope that this Bill—it is not on the Order Paper yet, but still with the standing committee—will come through the standing committee and be tabled in this House within a week.

When we look at today’s Order Paper, as printed, we see that we are going to deal with the first four orders today, and that six amending Bills are scheduled to be dealt with on Monday. This will conclude the whole programme of this House.

When we see in addition that a total of 19 Bills still have to be disposed of by the standing committees, one would expect the standing committees at least to use the time in which this House is not going to sit to continue their work and to dispose of the Bills so that they can be submitted to the Houses. But what is the situation? When I look at the standing committee meetings that have been convened, I see that four meetings have been convened for Tuesday 19 September whereas there will be meetings for the Standing Committee on Foreign Affairs and for the Standing Committee on Public Accounts on Wednesday 30 September. That will bring things to an end. This means that there will be no activity whatsoever in this Parliament of the RSA on Thursday and Friday.

I think there is going to be a Catering Committee meeting! [Interjections.]

It is clear, therefore, that the engine of this tricameral Parliament has seized and come to a complete standstill. [Interjections.] All the work of this House of Assembly is coming to a complete standstill—at the expense of the taxpayers of this country—pending better days which may dawn during the subsequent week. Anyway, better days for this country will not dawn politically or economically as long as that Government is in power. [Interjections.]

This side of the House is ready to dispose of the remaining legislation next week, including the Regional Services Councils Amendment Bill, and to bring this unproductive and time-wasting session to an end. The mere fact that the hon the Leader of the House could not tell us on Monday what would happen next week, merely illustrates once again the unplanned, ad hoc way in which the business of this House is at present being arranged. [Interjections.]

We on this side of the House object most strongly to that and that is why we cannot support this motion of the hon the Leader of the House and shall be voting against it.

Mr Chairman, the last time I spoke on this subject in this House was before a by-election was held in a municipal ward in Randburg, and since then we have succeeded in giving the NP a very good hiding in that by-election. [Interjections.] We beat the Independent Movement as well. I must confess I wish that we could also beat them on this subject of these constant delays in the meetings of this House.

As the hon member for Pietersburg has said, this is the third time that we have had to debate this matter. In total we will now have suspended the proceedings of this House for no less than six days. Had we sat on the two days over which we adjourned I believe that we could actually have finished the business of this Parliament very competently and without any problems today.

We have had a number of early adjournments. Why? Predominantly because Ministers were not available to deal with Bills which were on the Order Paper waiting to be dealt with. I believe we are now going to sit for nearly two more weeks. Imagine the cost to the South African taxpayer of keeping this enormous Parliament plus all the public servants who are down here for the session, going for an additional two weeks! It is an expensive exercise and I think the hon the Leader of the House will agree. Every week that a session is extended costs the South African taxpayer a great deal.

R6 million a week.

I understand from my hon colleague that it costs something like R6 million a week. I do not know whether that figure is correct or not but on that basis the motion before the House and the previous similar motions will cost the South African taxpayer something of the order of R12 million. [Interjections.]

To the extent, however, that I have perhaps been unfair to a number of hon Ministers on that side in saying it was the fault of the Ministers and that the legislation was not ready, I think one can be more specific than that. I think primarily the blame lies with one hon Minister in particular, viz the benchmate of the hon the Leader of the House, the hon the Minister of Constitutional Development and Planning.

That hon Minister is an absolute master of ad hoc solutions. Consistently it is his department which gums up the works and affects the proceedings of this House. During the previous session and this session it was his legislation, which is normally bad legislation anyway, which arrived at the last minute, or not at all, that created the problem. Look at the previous session, Sir. During the last session of 1986 we were told that we were going to be back here for a couple of months in order to deal with legislation which actually never arrived. This session the legislation which we probably should have dealt with last session arrived late and the result is that the hon the Minister is trying to scramble it through the standing committee without proper consideration and, in the process, delaying the proceedings of this House.

In response to what the hon member for Mooi River said on the last occasion we debated this matter, and who seemed to think that the fact that I was objecting to this meant I was against the standing committee system, I want to say I am not. I think in fact that that is about the only good thing to have come out of the whole tricameral system. [Interjections.] It has its problems, make no mistake about that. The standing committee system whereby one has to divide into three Houses before one can vote and whereby one has to have three separate quorums contains these deceitful mechanisms to ensure that the majority in the White House can always push anything through. That is a silly state of affairs and only results in gumming up the works.

Basically I have nothing against the standing committees and I think they have in fact made a very real contribution to better legislation in this House. However, this Heunis factor, this ad hoc syndrome, I believe is both dangerous and expensive. As I have said, this Parliament which should be adjourning today, will now be going on for almost two weeks.

One of the reasons for the delay is by the Regional Services Council Amendment Bill. Why is that delaying matters? It has to go through, because the original ad hoc legislation, the Act which has already been passed, is so bad that it has to be altered so that matters can actually move ahead. In terms of that Act divisional councils had to be scrapped by the end of July. There is nothing, however, to take their place. They cannot be scrapped at this stage and this legislation has to be rushed through to deal with that situation.

We also know that that legislation introduced various taxation measures which have been slated throughout the length and breadth of this country. The latest slating of that particular legislation is in the report of the Margo Commission.

I believe this whole tricameral Parliament is an ad hoc solution.

Legislation by default.

We have consistently been told by the hon the Minister of Constitutional Development and Planning that it is only an interim measure until something better is introduced. What else, therefore, is this Parliament than an ad hoc parliament? These solutions are damaging and expensive and this latest delay is yet another device to try to make a racially-based system work. We reject it.

Mr Chairman, at the outset I want to say that we have full understanding for the glee in PFP circles about the election result in a by-election in a municipal ward. For them winning has become such a rarity that we can fully understand their pleasure.

It is a whole lot better than losing! [Interjections.]

I cannot understand how the hon the Chief Whip of the PFP can say that we are rushing through the legislation with regard to regional services councils. That piece of legislation has been before the standing committee for some months now. There is no question of rushing it through. When the hon member refers to a waste of money, I want to say that he and his party must stop their delaying tactics in standing committees. [Interjections.] That, Sir, is where the waste of money takes place. They are wheeling and dealing behind the scenes and they refuse to accept the concept of regional services councils, which this Parliament has approved and which is now part of our constitutional system. They are constantly doing everything in their power to sabotage, to a certain extent, an Act of Parliament.

When are you going to ban the opposition?

No, Mr Chairman, we are not wasting money. The waste of money also occurs here. I did not have time to make a full mathematical calculation, but if the figure of R6 million per week, which the hon member referred to, is correct, I think he wasted approximately R50 000 with his speech! [Interjections.]

*We must accept once and for all that we are no longer part of the Westminster system. [Interjections.] Parliament and the legislative procedure have changed dramatically in terms of the new Constitution. The best proof of this is that for some time now, during normal sessions, when it is not an election year, we have not sat for one day per week during the whole of the first half of session. Why not? To give standing committees an opportunity to dispose of their work during session. Not one of those hon members or opposition parties has ever complained about that and said it was a waste of money. [Interjections.]

The principle was accepted, and that is why it is essential to create time and scope for the standing committee system in the new system which gives hon members, including those in the opposition, more opportunity than ever before to influence legislation. We must stop this sterile debate, therefore, that hon members are still basing on the misconception that it is a disaster when Parliament does not sit. Standing committees are part of Parliament, and when standing committees are working, Parliament is working as well.

What about next week?

I shall come to next week in a moment.

I therefore want to appeal to hon members to accept that we have a new Constitution. They should also be grateful to accept the bigger role the new Constitution offers opposition parties in legislation; it is a bigger role than they ever had in the Westminster system. They utilise that role, sometimes in a positive way, often in a negative way, to assist in developing a new culture in which the legislature comes into its own to a greater extent than is the case in the typical Westminster system.

Do hon members want to go back to the old sterile situation in which we simply submit legislation, in which they are outvoted time and again, in which they make a big fuss in the House, but have no opportunity whatsoever to make a positive contribution to improving the legislation? No, Sir, the new system requires us to suspend the business of the House on occasion—we shall do so often in future—so that Parliament can do positive work in the interests of South Africa by means of its new extensions, the standing committees.

We therefore make no excuses for adjournments which are intended to give committees an opportunity to prepare themselves to discuss legislation and to produce work.

Reference was made to the previous adjournments, but this Order Paper before us, which we disposed of yesterday, has a number of items which were produced during those same adjournments. Every one of the adjournments during the past weeks was productive, therefore. This has meant that time in which the full House would have had to sit has been saved and these adjournments have enabled the members who were not participating in those standing committees to go and do constituency work without being absent and leaving big empty spaces here like the ones in the benches on the opposite side of the House at the moment.

And on that side?

Where are the Ministers? [Interjections.]

The hon the Ministers are governing the country. [Interjections.]

I now want to come to the motion before us. The report of the President’s Council on the Group Areas Act and a whole series of matters is of fundamental importance to South Africa. It concerns a matter which is at the root of many people’s political standpoints, fears, expectations and attitude to life. I do not think anyone disagrees with that, but I see the hon member is shaking his head.

Mr Chairman, with reference to what I have just heard, may I ask the hon the Leader of the House whether the Government will take a specific decision, during this long week that lies ahead and before we discuss that report, on the President’s Council report on the Group Areas Act?

Mr Chairman, the hon member must wait until the debate begins. We shall inform him then. [Interjections.]

I want to know from the hon members of the Official Opposition whether they want to discuss that report or not. [Interjections.] I am convinced that if they are really serious and do not simply want to make petty propaganda, they will want us to discuss that important report here in the highest Council Chambers of the country. I want to know from them who among them has read that report.

Who has received it? [Interjections.]

No, they do not have it yet, and I want to tell them today that they are going to receive it.

When?

Hon members will receive it today. It is going to be tabled today. [Interjections]

The President’s Council worked on that report for two years. It is a thick book. Do hon members want to conduct a meaningful debate and study the report? Do they regard their task in this connection in a serious light and do they want to form their own point of view by studying the report thoroughly, or do they want to base their arguments on hearsay and the interpretations they have read in the newspapers? Hon members need time to discuss this matter thoroughly.

We on this side of the House take our task seriously, and we think we need time. [Interjections.] We as the Government need time to put forward Government standpoints meaningfully in such a debate, and hon members on this side and on the opposite side need time so that we can conduct a meaningful and in-depth debate on this important report.

This adjournment is slightly different from the previous ones. The emphasis is not primarily on committees, but specifically on giving members time and opportunity to make a thorough study of the report and then to come back to conduct a proper debate on that important matter.

Mr Chairman, may I ask the hon the Leader of the House whether he is aware that to the best of my knowledge this report has not been distributed to members of Parliament? [Interjections.]

I shall translate the previous statement which I made a few moments ago and that is that the report will be tabled today.

Why so late?

The hon member must first read it and then he will find out why it is so late. It was a massive task to duplicate that full report and logistics required the period of time which elapsed.

*There are a few important pieces of legislation that still have to be disposed of, and this adjournment provides for the finalisation of that legislation as well. It also gives hon members and chairmen of standing committees the opportunity, while they are here, to make use of the time to work on legislation with a view to the 1988 session without incurring additional costs.

It is therefore the decision of hon members themselves whether or not they going to make productive use of these few days in which the full House will not be sitting. We on this side of the House do not see it as a waste, but as an opportunity to continue to make a productive contribution in the best interests of South Africa.

Question put,

Upon which the House divided:

Ayes—91: Alant, T G; Aucamp, J M; Badenhorst, C J W; Bartlett, G S; Bosman, J F; Botha, C J van R; Botha, J C G; Botma, M C; Brazelle, J A; Camerer, S M; Christophers, D; Clase, P J; Cunningham, J H; De Beer, L; De Klerk, F W; Delport, J T; Dilley, L H M; Durr, K D S; Edwards, B V; Farrell, P J; Fick, L H; Fismer, C L; Fourie, A; Geldenhuys, B L; Graaff, D de V; Grobler, A C A C; Grobler, P G W; Hattingh, C P; Heine, W J; Heyns, J H; Hugo, P F; Hunter, J E L; Jooste, J A; King, T J; Koornhof, N J J v R; Kriel, H J; Kritzinger, W T; Kruger, T A P; Le Roux, D E T; Malherbe, G J; Marais, P G; Maré, P L; Maree, J W; Matthee, P A; Meiring, J W H; Mentz, J H W; Meyer, A T; Meyer, W D; Myburgh, G B; Nel, P J C; Niemann, J J; Oosthuizen, G C; Pretorius, J F; Pretorius, P H; Rabie, J; Radue, R J; Redinger, R E; Scheepers, J H L; Schlebusch, A L; Schoeman, R S; Schoeman, S J (Walmer); Schoeman, W J; Schutte, D P A; Smit, F P; Smith, H J; Snyman, A J J; Steenkamp, P J; Steyn, P T; Swanepoel, J J; Swanepoel, K D; Swanepoel, P J; Terblanche, A J W P S; Thompson, A G; Van Breda, A; Van der Merwe, A S; Van der Walt, A T; Van Deventer, F J; Van de Vyver, J H; Van Gend, D P de K; Van Heerden, F J; Van Rensburg, H M J; Van Vuuren, L M J; Van Zyl, J G; Vilonel, J J; Vlok, A J.

Tellers: Blanché, J P I; Jordaan, A L; Ligthelm, C J; Maree, M D; Schoeman, S J (Sunnyside); Smit, H A.

Noes—25: Barnard, M S; Beyers, J M; Burrows, R M; Coetzee, H J; Dalling, D J; Derby-Lewis, C J; Eglin, C W; Ellis, M J; Lorimer, R J; Malcomess, D J N; Olivier, N J J; Paulus, P J; Pienaar, D S; Prinsloo, J J S; Snyman, W J; Soal, P G; Swart, RAF; Uys, C; Van der Merwe, S S; Van Gend, J B de R; Van Vuuren, S P; Van Wyk, W J D; Walsh, J J.

Tellers: Schoeman, C B; Snyman, W J.

Question agreed to.

Mr Chairman, on behalf of the hon the Minister of Justice, I move the motion printed in his name on the Order Paper, as follows:

Agreed to.

Mr Chairman, on behalf of the hon the Minister of Justice, I move the motion printed in his name on the Order Paper, as follows:

Agreed to.

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

Mr Chairman, I should like to ask the hon member for Kimberley South whether this person whom they wish to appoint to the President’s Council is the same person who used to be an NP organiser, who stood for provincial office and was elected in a by-election in the Stellenbosch constituency, and who subsequently, as a result of certain malpractices in regard to postal votes which he was alleged to have handled, paid admissions of guilt on four charges of malpractice in terms of the Electoral Act?

If he is the same person I believe he is not fit to hold public office. However, I would like to ask the hon member whether he is in fact the same person who paid admissions of guilt on four counts of contraventions under the Electoral Act.

Mr Chairman, the hon gentleman who is being proposed is Mr Neels Ackermann. He is the regional secretary of the NP and he inflicted a crushing defeat on the PFP when he stood against that party in an election in Stellenbosch. I am not aware of his having been guilty of any contraventions of the Electoral Act. [Interjections.] I want to put a counterquestion to that hon member: Was he found guilty of any contraventions in terms of the Electoral Act? Was he guilty of any misdemeanours in terms of the Electoral Act? To the best of my knowledge, this hon gentleman did not appear in any court, nor was he found guilty.

But he paid an admission of guilt! [Interjections.]

Mr Chairman, may I ask the hon member whether he has any knowledge of Mr Neels Ackermann paying admissions of guilt for contravening the provisions of the Electoral Act? Does the hon member have any knowledge of admissions of guilt having been paid by this person on four counts? [Interjections.]

If the hon gentleman I am proposing was guilty of any of those alleged offences, he would have been unseated in any case.

Mr Chairman, I think the situation has become relatively clear. We understand that the person concerned did sign an admission of guilt. That is precisely what it was. In four cases he admitted to having been guilty of contravening the Electoral Act in which case it was not necessary for him to appear in court. I believe that before this appointment is made an enquiry should be held into these particular circumstances. As things stand, however, we have no option but to vote against the motion of the hon the Chief Whip of the NP.

Order! Let met just state the procedure clearly. Questions have been asked and replies given, which is slightly out of the ordinary. A speech has also been made by an hon member. Is there any other hon member who wishes to address the House? Does the hon the Chief Whip wish to reply?

No, Mr Chairman. Question put,

Upon which the House divided:

Ayes—92: Alant, T G; Aucamp, J M; Badenhorst, C J W; Bartlett, G S; Bosman, J F; Botha, C J van R; Botha, J C G; Botma, M C; Brazelle, J A; Camerer, S M; Christophers, D; Clase, P J; Cunningham, J H; De Beer, L; De Klerk, F W; Delport, J T; Dilley, L H M; Durr, K D S; Edwards, B V; Farrell, P J; Fick, L H; Fismer, C L; Fourie, A; Geldenhuys, B L; Graaff, D de V; Grobler, A C A C; Grobler, P G W; Hattingh, C P; Heine, W J; Heyns, J H; Hugo, P F; Hunter, J E L; Jooste, J A; King, T J; Koornhof, N J J v R; Kriel, H J; Kritzinger, W T; Kruger, T A P; Le Roux, D E T; Malherbe, G J; Marais, P G; Maré, P L; Maree, J W; Matthee, P A; Meiring, J W H; Mentz, J H W; Meyer, A T; Meyer, W D; Myburgh, G B; Nel, P J C; Niemann, J J; Odendaal, W A; Oosthuizen, G C; Pretorius, J F; Pretorius, P H; Rabie, J; Radue, R J; Redinger, R E; Scheepers, J H L; Schlebusch, A L; Schoeman, R S; Schoeman, S J (Walmer); Schoeman, W J; Schutte, D P A; Smit, F P; Smith, H J; Snyman, A J J; Steenkamp, P J; Steyn, P T; Swanepoel, J J; Swanepoel, K D; Swanepoel, P J; Terblanche, A J W P S; Thompson, A G; Van Breda, A; Van der Merwe, A S; Van der Walt, A T; Van Deventer, F J; Van de Vyver, J H; Van Gend, D P de K; Van Heerden, F J; Van Rensburg, H M J; Van Vuuren, L M J; Van Zyl, J G; Vilonel, J J; Vlok, A J.

Tellers: Blanché, J P I; Jordaan, A L; Ligthelm, C J; Maree, M D; Schoeman, S J (Sunnyside); Smit, H A.

Noes—24: Barnard, M S; Beyers, J M; Burrows, R M; Coetzee, H J; Derby-Lewis, C J; Eglin, C W; Ellis, M J; Lorimer, R J; Olivier, N J J; Paulus, P J; Pienaar, D S; Prinsloo, J J S; Schoeman, C B; Snyman, W J; Soal, P G; Swart, R A F; Uys, C; Van der Merwe, S S; Van Gend, J B de R; Van Vuuren, S P; Van Wyk, W J D; Walsh, J J.

Tellers: Dalling, D J; Malcomess, D J N. Question agreed to.

Mr Chairman, I move:

In considering legislation of this nature, the needs that developed in the growing security industry in South Africa were evaluated. The conclusion was reached that security has developed into a fundamental and integral part of society in the Republic and that legislation has become absolutely essential in order to organise and regulate the security industry in South Africa; to establish a discipline for the security situation in the Republic in general within which security services can be rendered; to render a qualitative service to the benefit of security; and to ensure a high degree of co-ordination and co-operation at all levels in the security industry.

†The object of the Bill is to provide for the establishment of a juristic person, to be known as the Security Officers’ Board, to deal with and to exercise control over the occupation of a security officer, and to maintain, promote and protect the status of that occupation. The Bill will be applicable to a security service, which is described as a service rendered by a person to another person for a reward by making himself or a person in his employ available for the protection or safeguarding of people or property in accordance with an arrangement concluded with such other persons, or by advising such other persons in connection with the protection or safeguarding of people or property in any manner whatsoever.

A service which an employee renders on behalf of his employer is, however, expressly excluded in the definition of a security service. This exclusion refers to internal or the so-called in-house security situation where employees, as a result of their service contract, render a protective or security service to their employers. The exclusion of the in-house security situation from the ambit of the Bill is based on the point of view of non-interference in the work relationship between employer and employee. It also served as an important starting point in the investigation which preceded the drafting of the present Bill. In order to achieve its objectives the Security Officers’ Board has sufficient authority which will enable it to function as a juristic person.

*The composition of the board is regulated in section 4 which provides that the board will consist of six security officers who will be selected by the Minister from a list of names compiled in terms of subsection (4), as well as an officer of the South African Police designated by the commissioner and an officer referred to in section 2 (2) or (3) of the Internal Security Act, No 74 of 1982, and any two additional persons who, in the opinion of the Minister, are fit and proper persons to serve on the board. The members of the board shall be appointed by the Minister.

Section 4 (4) (a) makes provision for an important procedure in respect of the submission to the commissioner of a list of names of persons who have practised the occupation of security officer for at least seven years and who are competent to be appointed as members of the board. Such a list of names can be obtained directly from associations and organizations of security officers or through the mediation of a federation of such associations or organizations in terms of subsection 4 (b), the commissioner then draws up a list of 12 names of persons whose names have been submitted to him, and who in his opinion are representative of security officers in the Republic. This list of names is then submitted to the relevant Minister to enable him to appoint the six security officers who are to serve on the board.

Furthermore, the Bill makes full provision in respect of the term of office and the payment of allowances to members of the board, the vacating of office and the filling of vacancies, as well as the election of the chairman and vice-chairman of the board. Arrangements are made for the holding of meetings. Section 9 empowers the board to appoint an executive committee which will consist of at least three members of the board. The possibility of delegating the powers of the board to the executive committee, is envisaged in section 9(3).

†Section 10 (1) embodies an important clause which prohibits persons from rendering a security service. It also prohibits the employees of a person who renders such a service from being used to render security services, unless they have been registered as security officers.

It stands to reason that this clause cannot be brought into operation overnight in respect of every sector of the security industry. Its introduction will have to be preceded by the publishing of dates in notices in the Gazette. Different dates can be determined for the various categories of security officers. Such notices shall be published at least 180 days before the date specified therein. The application of the provisions of section 10 (1) will thus take place in a systematic manner, and it will not have a restricting effect on the functioning of the security services. Section 10 (5)(a) empowers the Minister, after consultation with the board, by notice in the Gazette to exempt any security officer or any category of security officer from any or all of the provisions of the Act.

In terms of section 10 (5) (b), the Minister can direct that the provisions of the Act be applied to an employee or to an employee who belongs to a category of employees, who renders a service to an employer for the safeguarding or protection of the property of the employer.

Section 10 (5) (a) and (b) gives sufficient flexibility to the Act, and any application or representation for the application of these powers shall be judged on merit and with the necessary consideration of the objectives of the Act.

*Application for registration as a security officer shall be made to the board, and shall be accompanied by a complete set of fingerprints of the applicant, if the applicant is a natural person, together with the prescribed application fees. Disqualifications in respect of registration as a security officer are laid down in section 12. If a person has at any time been found guilty of an offence specified in the schedule to this Act, or of improper conduct, or if he is of unsound mind or is under the age of 18 years, he is, as a rule, not fit to be registered as a security officer. However, the board has the authority to deviate from these disqualifications.

The board can withdraw a certificate of registration of a security officer, should the security officer, at any time after he has been registered, be found guilty of an offence specified in the schedule or if he is found guilty of improper conduct or if he is of unsound mind. Withdrawal of a certificate of registration may also be ordered by the court.

Persons who have been registered as security officers will be required to pay the prescribed annual amount to the board on or before the prescribed dates. Section 19 empowers the board to draw up a code of conduct for security officers. This code of conduct may be declared binding by the Minister by means of a notice in the Gazette.

The position regarding improper conduct is set out in section 20 and provision is made for the conviction of a security officer should he contravene a provision of a code of conduct which has been declared binding, or if he commits an offence listed in the schedule to the Act.

Provision is made for an appeal to the Minister in cases where a person is aggrieved by the board’s refusal to issue a certificate of registration; or because his registration as a security officer has been withdrawn or suspended, or in the case of a conviction under section 20 on a charge of improper conduct or the imposition of a fine or admonition as a result of the conviction.

†Authority is also given to the Minister to establish a fidelity guarantee fund for security officers by notice in the Gazette. The objective of the guarantee fund is to compensate a person for the amount of any loss suffered due to the theft by a security officer of any money or property of that person, or due to any other offence committed by a security officer in connection with money or property of that person.

Sections 22 to 28 contain full prescriptions regarding the membership, management and control of the guarantee fund, contributions to and payments from the guarantee fund, as well as protective measures in respect of claims which can be made against the fund.

Of particular importance are the provisions of section 32 which empower the Minister to promulgate regulations and which, among other things, make provision for regulation prescriptions regarding the collection of contributions on behalf of the board, the training of security officers and the establishment of guidelines regarding the wearing of uniforms by security officers. Certain powers are also given to the South African Police to enable them to ensure that the provisions of the Act are properly adhered to.

Section 35 lists a number of offences that can be committed, should the provisions of the Act be contravened and on conviction a person shall be liable to a fine not exceeding R1 000 or to imprisonment for a period not exceeding six months, or to both such fine and such imprisonment.

*Provision is also made for certain of the powers of the Minister to be delegated to the commissioner or to an officer of the South African Police duly appointed by the commissioner. It is clearly stated that such delegation of powers does not prevent the exercising of a power by the Minister himself.

In conclusion, I wish to mention that the present Bill has been preceded by years of intensive research and close consultation with academics and experts in the security industry. The draft Bill which was published in Gazette No 9366 of 10 August 1984 for general information and the extensive comments which were offered thereon, served as a basis. The present Bill is to a large extent the answer to the need for the upgrading and co-ordination of the occupation requested by the security industry itself. The contents of the Bill have also been received with acclaim by leaders in the security industry.

It is hoped that the Bill will satisfy the needs and that it will serve to promote security in the Republic.

Second Reading resumed

Mr Chairman, on behalf of this side of the House, I am pleased to participate in this debate with the aim of expressing our opposition to this Bill.

The CP accepts and is aware that security has developed into a fundamental and integral part of South African society, and that it is necessary for legislation to order and regulate the security industry in the RSA. It is necessary to bring about a discipline in respect of the security industry in South Africa within which security services are rendered. The CP also agrees with the objective of the legislation, which is to make provision for the establishment of the Security Officers’ Board with the function of, inter alia, exercising control over the occupation of security officer and to maintain, promote and protect the status of the occupation. The CP therefore has no objection to the desirability of or the necessity for legislation to regulate the functions, obligations and activities of security officers. The CP’s objection, however, is based on the provisions of clause 4(3) of the Bill. It reads:

The provision that a member of the board may also be a citizen of a state the territory of which formerly formed part of the RSA is completely unacceptable to the CP because the provisions of clause 4(3) not only envisage the establishment of a mixed board, but also involve specific Blacks in the board, in particular Blacks from states the territory of which formerly formed part of the RSA.

As recently as during the election earlier this year, and thereafter as well, various NP speakers bragged about the fact that the TBVC countries had gained independence. The NP has described this time and again as one of the milestones it has reached. However, what is happening now? Firstly, the Restoration of South African Citizenship Bill was passed by Parliament in 1986, and this led to the absurdity of the so-called dual citizenship. Now the NP comes along with a provision such as the one embodied in clause 4(3) of the Bill.

In this way the so-called milestones of which the NP was once so proud are being knocked down one by one. Yes, the milestones are being knocked down one by one because, after all, they are obstructing the path to integration the NP is now preparing for those who have turned their backs on the policy the NP once stood for. [Interjections.] The NP path to integration leads to one thing only, and that is a unitary state with general citizenship and universal franchise, as devised by the architects of this path.

For this reason the TBVC countries are being broken down piece by piece, the intention being to make them part of this envisaged unitary state once again. After all, the Government is obsessed with bringing about one undivided South Africa; this is why there is talk of the equal sharing of power, which includes Blacks up to the highest governmental body in the country.

The NP is rejecting the policy on which the Afrikaner people voted it into power in 1948. By accepting the principle of power-sharing, the NP is saddling a horse it is never going to ride. To tell the truth, the NP is saddling an elephant—a large, black elephant. If the NP thinks for moment that it will be able to control, manage and ride that elephant so that minority rights in South Africa can be protected and guaranteed, it is making a big mistake because ultimately that elephant is going to toss the NP off its back and in this way trample the future of the White people in South Africa under its great feet. [Interjections.]

We have already heard with monotonous regularity the NP’s great emotional parrot cry of “adapt or die”, but “adapt and die” is the stark reality we are dealing with because the change the NP is advocating is the devastating…

Mr Chairman, on a point of order: Is the hon member confining himself to the legislation under discussion?

Order! The hon member is not confining himself to the legislation. The hon member must return to the legislation.

Mr Chairman, I want to conclude. [Interjections.] This is the stark reality we are dealing with because the change the NP is advocating is devastating, planned destruction, designed to create a unitary state. Consequently, the CP…

Order! Either the hon member will return to the Bill now or he will resume his seat. The hon member may proceed.

As you wish, Mr Chairman. I am doing so. Consequently, the CP does not support this legislation because it finds the provisions of clause 4(3) totally unacceptable. [Interjections.]

Mr Chairman, I listened with disappointment today to the hon member for Ventersdorp as the spokesman for the Official Opposition on the legislation under discussion. The voice of the AWB resounded very clearly through this House today…

Order! The hon member could also return to the Bill. [Interjections.]

The Official Opposition clearly does not have a problem with the philosophy of this legislation but in fact with the provisions of clause 4(3), which makes the legislation colourless.

The CP is almost like Henry Ford, who said he did not mind what colour they painted his car as long as it was black.

That is the policy of the NP!

The CP is so obsessed with the colour white that any colour is acceptable to them as long as it is white. It does not matter to them that we have other people of other colours in this country, too.

That is not true and you know it.

I find the attitude of the CP…

Mr Chairman, on a point of order: The hon member said: “That is not true and you know it”…

Order! Which hon member said that?

I did, Mr Chairman.

Order! The hon member must withdraw it.

I withdraw it, Mr Chairman. [Interjections.]

The CP is not prepared to renounce its policy of a master-and-servant relationship. The concepts of co-operation and negotiation do not exist for them.

“Baas en Klaas.”

They want to prescribe to everyone, and deny the existence of anyone who does not want to fall in with what they prescribe. It is extremely important that all of us, including the hon members of the Official Opposition in particular, take cognisance of the reality of the South African situation once and for all. We cannot deny the existence of Blacks, Coloureds and Asians. Nor is it possible to wish away people of colour.

Because we cannot ignore the existence of people of colour we shall once again have to take cognisance of the needs and rights of these people, and where institutions could be created to regulate and protect the rights of groups…

Mr Chairman, on a point of order: Is the hon member now speaking to the Bill under discussion?

Order! The hon member may proceed.

… they will have to be given a say. People of colour form by far the greatest percentage of workers in this industry; as many as 90% of all workers in this industry are people of colour. Should the need arise and should suitable candidates from their ranks come forward, clause 4(3) now creates the opportunity to give representation on this board to coloured persons as well. It is not, however—please take note—a prerequisite for the functioning of the board that coloured persons should serve on it, and as far as the composition of the board is concerned the hon the Minister will allow himself to be guided by the needs that exist and the availability of suitable candidates, from other population groups as well.

This legislation is the product of years of research and painstaking work. By means of this legislation there will now be order in this large and important industry, and it is therefore my pleasure on behalf of this side of the House to support the envisaged legislation.

Mr Chairman, this Bill, as hon members have already indicated, is the product of a very long period of negotiation, submission of evidence, and discussion. At this stage I should just like to express my appreciation, in his absence, to the chairman of the standing committee, the hon member for Krugersdorp, for his exceptional patience and guidance in this regard, and also to the officials who assisted us. I see Col Calitz is sitting over there. He will certainly be witnessing the events taking place here today with great relief, since this legislation, with which he has been dealing for years, has now been taken off his back. I am pleased he could finish this task today.

I think that with regard to this Bill, the committee really has done its best and really has gone out of its way to ensure that the Bill will serve its purpose and that consultation takes place over as broad a spectrum as possible and that, as far as possible, the standpoints of all interested parties are all given thorough consideration here. This has not always been easy because initially there were fairly divergent standpoints. I think a certain degree of success has been achieved in the sense that it was possible to resolve many of the problems through negotiation, submission of evidence, and discussion.

I want to say straight away that to this very day I still have certain reservations with regard to this Bill. These reservations perhaps lie in the fact that for us the Bill creates the potential for a new bureaucratic problem. I am not unaware that there is a need for order in this growing industry. If a degree of order does not exist in the industry, this could easily lead to the creation of a whole series of private armies.

We are therefore in favour of creating a degree of order but—hon members should be aware of this, too—the danger does exist that if this legislation is not administered with the greatest circumspection, it could once again lead to problems. In that regard one can only express the hope that the hon the Minister’s department will in fact deal with the matter with great circumspection.

It was interesting to note that whereas we were trying to involve as many members from the private sector as possible in the constitution of this Security Officers’ Board, so that they could make the greatest possible contribution and could even appoint people directly, they in fact shied away from that responsibility and preferred to shift it onto the hon the Minister and his department. It is strange that such a situation should arise with regard to the private sector but it seems to me that this has to do with the fact that unity and understanding among the various interests within the industry itself are by no means always present.

They trust the police.

Yes, they trust the police more than they trust one another. That was the way it was put, and if that is so they really had to be mistrustful of one another, but this is evidently what the position is. Therefore in this regard one has to hope that the Bill will be administered wisely, and I hope that in years to come this will be apparent.

There are just one or two other matters I want to touch on. One is the question of the list of offences mentioned in the Schedule, that disqualify persons from serving as security officers and from being registered as such.

It will be noticed in documentation before the House that the PFP is opposed to the fact that the Internal Security Act appears on that list.

It is not that we are unsympathetic to the idea that persons found guilty of certain offences that do fall under the Internal Security Act will be disqualified; we would be in favour of that. However, the insertion of the Internal Security Act as such has created a problem for us for the simple reason that persons can indeed be found guilty of offences in terms of that Act in circumstances that are unacceptable to us from the viewpoint of traditional, classical criminal law.

Hon members know that presumptions are created in that Act, and they know there are definitions that are not always clear; they are sometimes vague. Hon members also know that in that Act offences are created that are very serious, but offences are also created that are far less serious. We feel that if a line is not drawn at some stage, and if a distinction is not made separating the serious from the less serious offences, and making provision for the possible abuses that could take place in terms of that Act, we are not prepared to go along with having that Act form part of the Schedule. This is the most important reservation we had in that regard.

What a previous provision which did indeed form part of the Bill amounted to was that a person would be disqualified if any action in terms of chapter 3 of the Internal Security Act had been taken against him. This means that any person would ipso facto be disqualified if he had been detained for the prevention of some activity, or if a restriction of any kind was imposed on him, and chapter 3 makes provision for a number of possibilities. The committee agreed that it would not be fair for that provision to go through unchanged. It was consequently removed from both clause 12 and clause 15 of the Bill and inserted into the Schedule. Therefore there was in fact an improvement in that regard.

Under the circumstances, therefore, we shall be supporting the Bill. Of course, it will be understood that we can have no sympathy with the CP’s reasons for opposing this Bill.

To conclude I just want to make the point that this is the only Bill from the hon the Minister’s department to have come before the Standing Committee on Security Services in over a year. Let me say straight away that I find this situation somewhat disturbing. At this stage of our history that hon Minister’s department is a key department. The way its affairs are controlled and administered is of the utmost importance. If this is the only Bill from that department that Parliament has dealt with in a year, that is an indication that Parliament and this standing committee are at this stage quite clearly not playing the part they should be playing.

I had hoped things would be different and in that regard I just want to point out that at the bottom of the Order Paper today there is a notice of motion which I gave yesterday and which I hope will be discussed at some stage. I doubt that this will happen but it would indeed create the opportunity for this House, too, to have some say in the diverse and extremely important activities of the Department of Law and Order rather than simply to occupy itself with a Bill which, considering the circumstances in which we live, is actually of far less importance than the other activities of the hon the Minister’s department.

Mr Chairman, the hon member for Green Point began so well I almost thought he had been converted. However, he then came along with reservations which according to my calculations could easily have cost the House R30 000. I think the hon the Minister will reply to him as regards his reservations. One of the things he mentioned was a private army. I believe the hon member for Green Point could use his influence with the End Conscription Campaign to try to prevent that as well.

I should also like to support this Bill because in my opinion it rectifies one of the great deficiencies that have arisen in the past year. Particularly since the declaration of the state of emergency, certain organisations have mushroomed everywhere. It is true that there are various organisations that have rendered excellent service in this sphere over the years, and continue to do so. As a result of the “fly by nights”, however, the image of security officers has come sharply under the spotlight. I remember a recent case when I was buying petrol somewhere on the East Rand and a patrol van with the logo of a security organisation pulled up next to me. The officer in the van was noticeably under the weather, with his bottle of booze next to him on the seat and his hair and beard completely unkempt. I trust the security industry will be able to put this legislation to good use, which was thoroughly thrashed out by the standing committee in consultation with the industry, in order to keep this necessary service up to standard. This is essential for its own future. This is an important matter, since they have to render such an essential service to our country.

A second point I should like to raise is that a degree of concern exists among certain people in the industry that the members who will be serving on the board that is to be established are not really going to fulfil the needs. In this regard I should like to request that the hon the Minister ensure as far as possible that those who are appointed be more directly associated with the security service organisation, although I do concede that of course a healthy balance should be maintained. I should like to explain my statement. In my opinion the greatest need is in respect of the status of security officers and their standards and not in respect of the manufacturing industry, for example, safe manufacturers and so on. In the case of the manufacturing industry, in respect of alarm systems, for example, there is always the Bureau of Standards which can and should be approached to set standards for the industry. In my opinion the people who should be serving on the board should definitely have extensive experience in the selection, training and control of security staff, and all other aspects.

I want to express the hope that security services in South Africa will prosper and grow into a fine service organisation as a result of this legislation before us.

Mr Chairman, the chairman of the standing committee asked me to excuse him as he could unfortunately not be present here today. In his absence I should like to thank him and other members of the standing committee for the work which they did. I thank him also for his good leadership, something which the hon member for Green Point also mentioned. The standing committee worked on this Bill for more than a year. They effected many amendments and one can see that it is a better Bill than the one originally submitted to them. This is, according to me, another example of the value of the standing committees, on which people can make contributions so that we have a better product in the end.

The hon member for North Rand said that we should take note of the realities in South Africa and also take them into account in the implementation of this legislation. This is exactly what we envisage with this Bill and I shall come back to that when I reply to the hon member for Ventersdorp.

The hon member for Germiston District asked us, when we appoint members of the board, to appoint people who are associated with or involved in security service organisations rather than those who are, for example, involved in the manufacturing business. I can assure him that I shall deal with the appointment of members of this board with the greatest circumspection. We shall not simply make irresponsible appointments. We realise that we are starting a new system and that we shall have to do it with circumspection and consequently I shall take the hon member’s observation into account.

As far as the hon member for Green Point is concerned, firstly I should like to thank him for supporting this Bill. I am glad about that, because at least it is something for which one can thank the PFP. Apparently they have seen that the Bill is a good thing. Even they have realised it.

Nevertheless, the hon member expressed certain reservations. Firstly, he is worried that we might now be creating a new bureaucratic problem. I want to concede immediately that the administration of this Act could degenerate and develop into a new bureaucratic establishment, if we do not handle it very carefully. There are allegedly—we are not yet completely sure of the correct figures, because the standing committee could not acquire them—approximately 300 000 people employed in outdoor security, such as security officers in security organisations.

I want to assure the hon member that my department is really not looking for more work. Nevertheless, it is an undeniable fact, that the security industry is an important industry. We cannot argue away the fact that the industry itself requested us to be more involved in its arrangement. This business does important work, and therefore I shall try, on my part, to find the happy medium, so that we do not create too much additional work for my department, which already has much work. I want to assure the hon member that, as far as things are under my control, I shall not allow a new bureaucratic situation to be created which will get out of hand.

The hon member requested that the administration be carried out with circumspection. I think he should be used to the fact that, from our side, we try to handle the administration with circumspection. I want to give the hon member that assurance.

The hon member had a further reservation in connection with the Schedule and the Internal Security Act, as I understood it. I want to add that the security officers perform important functions. Among other things they are involved in protecting and guarding properties, buildings, institutions and industrial complexes which are extremely important national keypoints. Inevitably they also handle matters of a sensitive nature, and for this reason these people must be screened properly. We all agree on that score.

The hon member has a problem with the idea that a man could have been banned, and so on, in terms of the Internal Security Act, and that it will count against him. I want to point out to the hon member that an amendment effected by the standing committee provides that it is only applicable to cases where persons were found guilty of an offence specified in the Schedule to which the hon member is objecting. The steps which can be taken against a person, according to Chapter 3 of the Internal Security Act, such as banning orders, prohibitory provisions, detention for questioning, and so on, will only be applicable if these measures are contravened and if there was an actual conviction.

I want to point out to the hon member that his fear that a minor contravention may unfairly disqualify a person, is really not justified, because representations can be made to the board where each case will be considered on its own merits and disqualifying convictions will be negated in deserving cases so that a person can be appointed as a security officer. I think we have incorporated the necessary safety measures. They are flexible enough so that in cases where there was no actual conviction, these persons will not be disqualified. I cannot share the hon member’s fears. I think the standing committee eventually arrived at a fair conclusion.

The hon member then came forward with a surprising thing. We have just had a debate on the legislation and so on, and each year since I have been sitting here, I remember that the hon members of the PFP have complained about the amount of legislation which the Government puts before Parliament. However, the hon member for Green Point has just said that it is disturbing that this Ministry has only submitted one Bill to the standing committee during the past year. Consequently the hon member is now asking for more legislation. That is what the hon member is saying. [Interjections.] Now that hon member is shaking his head, but what else did he imply?

I said that the law…

He said we must come forward with more laws. It seems to me that this is a department for which laws are now being made, and which is administering that legislation. Surely we should not go looking for legislation now. The opposition speaks of wasting money and of Parliament sitting for a long time, but the hon member is asking for legislation so that Parliament can sit for longer and we can waste money. When the hon Chief Whip of his party stands up and criticises this side of the House for wasting money because the House is sitting for a long time, the hon member cannot ask for legislation which will mean that the House will sit for a really long time. [Interjections.] No, one should at least be consistent.

The hon member for Green Point referred to his notice of motion which appears on the Order Paper. I do not want to spend time on that now—perhaps there will be another opportunity to debate it if it is moved up—but I just want to say that he is not a friend of the Police. Let us be honest with each other about this. We noticed that again today. We discussed the Police Vote on 2 September in this House and spoke about the conduct of policemen. There was an opportunity to discuss the matter fully. But now the hon member says that he does not get a chance to talk about it. There were opportunities during the Third Reading of the Appropriation Bill as well as other opportunities which the hon member had to debate Police matters fully.

We are not hiding anything. The SA Police is open for debate. We are not afraid of debates; we are not afraid when the attention of the public media is directed onto our activities. We welcome it, because our cause is just. We are not ashamed or scared of this attention.

Mr Chairman, I appreciate the hon Minister saying that they welcome debates, and in the light of that, I want to ask the hon Minister whether he would be prepared to use his influence with the Whips so that the motion of which I gave notice on the Order Paper, will at least be discussed in the House. Will he be prepared to give his support for that, so that we can at least have the opportunity to discuss it, seeing that we will not have work for so many days during the next two weeks?

Mr Chairman, the hon member is again advocating that the House sit for longer. They complained this morning that we waste too much money by sitting here. I do not understand the hon member. I have just told him we have had opportunities during the course of the year to discuss the way the Police have handled many things. We have had enough time. The opposition is in control of the time allocated to the discussion of the Police Vote.

No, not at all!

Yes, the opposition discusses how much time should be allocated with the Chief Whip of Parliament and then it is approved. It is not in my hands.

The hon member is now asking me to support the idea of another debate on the Police. We have repeatedly held debates on the Police in this and the other Houses of Parliament. We have focused attention on them. As far as the hon member’s motion is concerned—he asked for an enquiry into the cases against Weaver, Kruger and Villet—I want to give the hon member the assurance that the Commissioner of Police has already announced that he is having these cases investigated urgently so that they can be submitted to the Attorney-General and so that the law can take its course. We are not hiding anything.

The hon member sees that the Police are winning, and he cannot take it. This is why he is now coming forward with this as a red herring to see if he can get something against the SA Police again. I have repeatedly said we do not approve things which are wrong; we rectify matters. I assure the hon member of that. The hon member must, however, stop criticising the Police when we do not deserve it.

I should like to return to the Bill. The hon member distracted me for a bit, but I now want to come back to the hon member for Ventersdorp. That hon member spelled out his party’s opposition clearly, and we understand that. Then the hon member went on to make a political speech. He did not talk about the legislation at all and you, Sir, asked him to come back to the Bill.

I should like to react to what the hon member said, because it concerns reasonably fundamental points of departure. I want to react to the CP’s objections to the Bill by saying that there is a possibility that people of colour may be appointed to the board. I concede that that is the case. This confers on citizens of independent Black states, the former homelands, the opportunity to have representation on a board of the Republic of South Africa.

It is true. It is also true that this Bill is colour blind and that it offers the principle of equal opportunities to each security officer to become more professional. We acknowledge that, because we insist that it is a very important principle. No differentiation is made on the grounds of ethnicity, colour or race, and the Bill seeks in an objective way to regulate security officers as such, and not colour groups. We are regulating security services.

People of colour—the hon member for North Rand referred to this as well—make an extremely important contribution to security services in the country and a substantial part—by far the most—of the work-force in the security industry consists of people of colour. If security officers of colour or citizens of states which were formerly part of the Republic, are nominated for appointment to the Security Officers’ Board, and this is submitted to me I shall, in terms of the Bill, have to consider it.

We shall try to constitute a board objectively—and I want to emphasise this point—which is, as far as possible, representative of all security officers in the country. The aim must be to make the creation of a representative board possible, rather than the creation of a non-representative board based on colour bar distinctions. A representative board is going to be my aim.

Citizens of states which formerly formed part of the Republic, do provide security services here, and are per se already part of the security business in the Republic of South Africa. I feel they should also have the opportunity to be nominated for appointment on the board. The criterion remains, however, the question whether the appointment of such a citizen will lead to the creation of a more or a less representative board.

The formulation of clause 4 (3) was, according to my information, well received by the security industry, and, after all, this is what it is all about. It is about those people themselves. It was also well received by the other Houses of Parliament and they support it wholeheartedly.

The hon member only objected to citizens of the TBVC countries, but it is a fact that thousands of the citizens of those countries are part of the security business in South Africa. Does the hon member not want us to give them representation? He must tell me now.

I want to put a second question to him. He only objected to citizens of the TBVC countries. What should happen to the citizens of the self-governing states? Must we appoint them to the board? The hon member did not deal with this in his speech, but I should like to know his standpoint on that matter.

I should like to know what the CP says about it, because they must remember that some of their people have security organisations and are involved in the security industry. How does the CP fundamentally feel about this thing? May people from the self-governing national states serve on this board, or may they not serve on it either? The hon member can simply nod or shake his head and then I shall know what he wants to say. [Interjections.]

Here we go again. Hon members sit for a year on a standing committee, in which they can make contributions. I presume they made their contributions there, but then they still oppose a Bill here this morning which is aimed at regulating an important industry. They object and express their opposition to it. They are going to vote against it because they say the TBVC countries must not get representation on this board. However, they have not yet thought about what we must do to give those people representation. They have not yet thought—if they have, they have not told me about it—what we must do with the people from the self-governing national states. How must we give them representation? [Interjections.]

This is the standpoint of the Official Opposition on important legislation which we are trying to pilot through in order to take the realities of South Africa into account. I do not think we shall get a reply from the CP. We must accept that we will have to carry this load on our own, and that the NP Government, as usual, must accept the responsibility, like all kinds of things which we have already done in South Africa, of bringing order to this industry, without any help from those opponents of ours.

I thank hon members once again for their contributions.

Question agreed to (Official Opposition dissenting).

Bill read a second time.

Mr Chairman, I move:

The main thrust of the Bill is the closing of loopholes which have been created because the income tax jurisdictions of certain neighbouring states have moved away from our own, thus providing very favourable tax havens right here on our doorstep and within the rand monetary area. The tax experts have been exploiting these loopholes to the full and the stage has been reached where it is essential to take active steps to stop the substantial erosion of our tax base. Had the treasuries of our neighbouring states been enriched by the activities of the tax avoiders, those activities could perhaps have been tolerated. As it is, however, the only real winner is the tax avoider, and the loser is thus the general body of taxpayers; this state of affairs is unacceptable to any fiscal authority.

Representatives of the TBVC countries were earlier this year informed that the loss of revenue resulting from the many schemes in operation was of such magnitude that it could no longer be tolerated, and that amending legislation would be submitted to Parliament as soon as possible. Copies of the, Bill have therefore already been transmitted to the appropriate authorities for their information.

Details of the steps which the Bill contemplates in this connection are set out in the Explanatory Memorandum, but I shall mention them very briefly here. They are:

1. (1) The deeming of all interest received by a resident of South Africa from a source in a neighbouring country to be from a source within our country except if the interest is effectively connected to a business carried on through a permanent establishment in such neighbouring country. The taxpayer will, of course, be entitled to appropriate relief in respect of any foreign tax on the same income.
2. (2) The limitation of the exemption enjoyed by foreign individuals and companies resident or incorporated in neighbouring countries in respect of interest received by them from stock or securities issued by the Government and certain parastatal organisations. This particular exemption, the purpose of which is to encourage foreign investment in these stocks, has been shamelessly exploited by South African residents and companies which have formed subsidiary companies or trusts in neighbouring countries. Henceforth, the exemption will be denied to these particular recipients of this interest. The corresponding exemption from the residents tax on interest will be withdrawn at the same time.
3. (3) A further deeming section is to be introduced into the Income Tax Act—section 9A. In terms of this section, investment income which is diverted by South African residents and companies to companies and trusts controlled by them in neighbouring countries will, in certain circumstances, be apportioned to the South African resident and taxed in his hands. The circumstances referred to are where the taxation system of the neighbouring country does not impose a tax which is materially similar to the normal tax imposed in South Africa and the rate at which the tax is imposed in that country is less than 40%.
4. (4) The Sixth Schedule of the Act is to be further amended to bring within its ambit any policies issued by an insurer in a neighbouring country, and to deem any amounts received by South African residents and domestic companies which are funded out of the proceeds of such policies to be insurance benefits which are received from a South African source.

This step has become necessary because certain insurance companies have commenced issuing non-standard policies in neighbouring countries, thus securing for the holders of such policies what is, on paper, foreign-sourced income for South African residents. It should be clear from the amendments which have been introduced over the last few years to the Sixth Schedule that it is the intention of the Government that gains made on non-standard policies should be subject to tax. I was therefore disappointed to learn that insurers would go to such lengths to assist taxpayers to avoid tax on the gains on these policies.

Another area in which gross exploitation of our tax system has taken place is films. Clever tax planners operating in foreign countries devised schemes for the exploitation of the taxation systems of those countries. When the governments of those countries closed the loopholes, the idea was transferred to South Africa. By structuring the schemes in our country in such a way that artificially large exporters’ marketing allowances can be claimed, a tax saving of such magnitude is generated that even ventures which, from an economic point of view, could never hope to be viable are, in fact, profitable.

All this was achieved without placing the participants at financial risk and, which is perhaps more important, without benefiting the South African film industry to any noticeable extent.

My department has for some months been searching for a formula which will, as far as possible, eliminate these malpractices, but at the same time not harm the South African film industry.

The provisions of the proposed new section 24F of the Income Tax Act have been drawn up in consultation with representatives of the local film industry, and I believe that they will achieve their objectives of curbing artificial financing schemes and ensuring that only films which have a high South African content enjoy the benefits of the marketing allowance. I am, however, disturbed to hear that other schemes, similar to those relating to films, are already in operation, or are being planned. These new schemes involve books, records and computer software. As soon as more information in this connection is available to me, the proposed section 24F will be expanded in order to cover this new situation. We will act swiftly in this matter.

At this point I must sound a note of warning to that tireless and resourceful band of workers, the tax planners, and to their many clients. Tax planning, as such, is something which any prudent person can be expected to undertake. When, however, the planning is of such a nature that wise and well-intended provisions in the law are made use of by means of unnatural and artificial schemes in order to generate income for a limited class of persons, and at the expense of their fellow citizens who are unable to reduce or avoid their full tax liability in any way, then, I think one is entitled to question the morality of the schemes. The message we have been trying to convey to the public for several years is that if they attempt to go beyond the spirit of the law and abuse a particular provision using artificial means, we shall act to prevent an unacceptable loss of revenue. Hon members will be aware that in the last three years we have enacted several important measures without which our corporate tax base may have been reduced to negligible proportions. Retrospective legislation, especially in so far as taxation is concerned, is not something to be resorted to lightly but may sometimes have to be applied in order to combat blatant abuse.

However, Mr Chairman, if the Bill contains bad news for some of the people who are avoiding tax, there is also good news for an important sector of the public, namely our senior citizens. Worldwide there has been an increasing sense of responsibility towards those who have borne the burden and in the heat of the day have helped to build up the structures we value so much. This has led to the current trend towards establishing retirement centres where the not so young can be housed in relative security and have at hand adequate catering and other facilities, should they need them. Here in South Africa, the churches and other religious organisations have largely given the lead in this matter and they have been greatly helped by the Government by means of generous loans at very favourable rates of interest. Clause 9 of the Bill introduces a new section 10 (1) (cF) in terms of which exemption from income tax will be granted to non-profitmaking organisations which provide retirement facilities for persons over the age of 60 years. The organisations must, of course, comply with certain conditions and these are spelt out in the draft legislation. The amendment, if approved by Parliament, will be made retrospective in order to meet those organisations which came into being some time ago and whose tax status was, until now, uncertain. It is not the intention to extend the exemption to taxpayers or organisations which are operating retirement centres on a commercial basis.

As a result of the recent termination of important double taxation agreements it has been necessary to evaluate the provisions of the Act to establish whether South African taxpayers would be subject to double taxation or experience any problems Certain areas have been identified and the following amendments have been proposed to alleviate hardship:

1. (1) Firstly, the shipping industry which has been operating in very adverse circumstances has also had the problem of double taxation. An exemption has been provided for foreign shipping in terms of the proposed section 10 (1) (cG) which will operate if similar relief or an exemption is granted to South African owners and charterers of ships. I have no doubt that the shipping companies involved will bring the exemption to the notice of the relevant taxation authorities and this will alleviate their problems.
2. (2) In terms of the proposed section 6quat, relief from double taxation may be granted to residents of the Republic by means of a rebate in respect of foreign taxes on income which is also subject to normal tax. The relief may be granted in substitution for relief available under a double taxation agreement, but is naturally particularly necessary when there is no agreement in force.
3. (3) An exemption from non-residents tax on interest has been proposed for interest accruing on any loan which is subject to the Debt Standstill Agreement where the interest was exempt from tax under the provisions of a double taxation agreement prior to 1 July 1987.
4. (4) In many cases interest accruing on loans from the United States of America, which was exempt from tax under the provisions of the double taxation agreement, would also have been exempt from non-residents tax on interest in terms of section 64C(k) of the Act, because the loan was used for long-term industrial, mining, housing or community development. Application for exemption in terms of section 64C(k) was never made for these loans as it was not necessary and as the section requires that the application for exemption must be made prior to the obtaining of the loan, these loans cannot now be exempted. The proposed amendment to section 64C(k) permits the Minister to grant exemption in respect of interest accruing on these loans even if application is made for exemption after the loan was obtained.

An exemption from undistributed profits tax has also been proposed for any company which satisfies the Commissioner that directly or indirectly more than 50% of its shares are held by a foreign public company, whose shares are quoted on a foreign stock exchange and it derives the greatest portion of its income from sources outside South Africa. This will make it easier for foreign companies to do business in our country.

†There are two or three other matters about which hon members may wish to have some particulars. The first of these is the prescribed rate of interest, as defined in section 1 of the Act. That rate is at present 15% and it applies where all types of taxes chargeable under the Act are paid late. Since this year interest is also payable to an individual taxpayer should he overpay his provisional tax. The interest is also calculated at a rate of 15% on the amount overpaid.

Now that interest rates have fallen considerably, a unique situation has developed in that the Receiver of Revenue has become a deposit-receiving institution, paying a rate of interest not easily obtainable elsewhere. In some cases large overpayments of provisional tax are believed to have been made.

While we are reluctant to do so, we are obliged to propose that the rate of interest paid in respect of overpayments of provisional tax be reduced to 12% per annum. Since the interest due in respect of the late payment of overdue taxes is, in a measure, intended to be a form of penalty, we cannot undertake to reduce that rate unless interest rates drop appreciably further. Conversely we cannot make rates on provisional tax so attractive so as to effectively turn the Commissioner’s office into a deposit-receiving institution. The proposed amendment will be found in clause 2 of the Bill.

The second matter I wish to deal with is the proposed amendment to the secrecy provisions in section 4 of the Act. These provisions are very strict and are designed to ensure that the very confidential and personal information which taxpayers are required, or may choose, to disclose to revenue officials is not made known to third parties. The only exception to the non-disclosure rule is that the Auditor-General, in the performance of his duties in terms of section 42(1) of the Exchequer and Audit Act, 1975, may have access to documents in the possession of Commissioner for Inland Revenue.

The Customs and Excise branch of the Department of Finance has, in the Customs and Excise Act, made provisions which are materially similar to those found in section 4 of the Income Tax Act. Since both Inland Revenue and Customs and excise are engaged in the collection of revenues for the State, and both fall within the same Department of Finance, it seems illogical that information available to Inland Revenue, which could be of assistance to Customs and Excise for the purpose of preventing of combating the evasion of customs and excise duties, should be withheld from the Commissioner for Customs and Excise. It is therefore proposed that that section be amended so as to permit the Commissioner for Inland Revenue to provide his colleague, the Commissioner for Customs and Excise, with information in these limited circumstances. The Customs and excise Act is likewise being amended so as to permit the Commissioner for Customs and Excise to supply the Commissioner for Inland Revenue with information for the same purpose. The Commissioner for Inland Revenue has asked me to mention, as I mentioned in this House the other day on behalf of the Commissioner for Customs and Excise, that his discretion to exchange information in terms of this section will be delegated only to officers of the rank of director or higher. The decision to exchange information will therefore be taken by very senior officers. The Commissioner for Customs and Excise, as I mentioned the other day, will follow the same practice.

Finally, Mr Chairman, it will be noted that some limited amendments are being made to the Seventh Schedule of the Act, which deals with the taxation of fringe benefits. These amendments, together with those being made to section 8 of the Act, introduce no new principles, but are of a housekeeping nature and designed to take account of changing circumstances. Full particulars are given in the Explanatory Memorandum.

Thus far I have made no reference in this speech to the report of the Margo Commission. This is because the report has already received so much publicity and because the Government has already made known exactly what line of action it is taking in order to ensure that the recommendations contained in the report receive the full and proper consideration they deserve. However, that is not to say that matters relating to the Margo Commission cannot be discussed here today. Suffice it to say that none of the amendments proposed in this Bill is in conflict with the recommendations of the commission.

Second Reading resumed

Mr Chairman, we have received a full and comprehensive explanatory memorandum from the officials on the Bill under discussion. We want to thank them for it because it helped us to understand what the legislation dealt with.

Furthermore, I also want to mention that the hon the Deputy Minister gave a fairly comprehensive explanation of the Bill in his Second Reading speech, which we also had the advantage of receiving in good time. For this reason I feel it is unnecessary to spend too much time on the comprehensive provisions of this Bill and I therefore want to say at this early stage that we shall not be voting against the Bill.

However, if we may refer briefly to the most important provision of this Bill, it is the provision embodied in clause 8 of the Bill which concerns the closing of the gaping loophole that exists at present for people to avoid paying the correct amount of tax to the Republic of South Africa by using the so-called tax havens outside the jurisdiction of the Republic of South Africa. We agree with the hon the Minister that what I am tempted to call the abuse of a factual situation should have been stopped long ago. Those people are avoiding taxation without paying any tax at all in the countries referred to, or really deriving any income. The legislation has also allowed them to avoid paying tax in South Africa. We want to give our wholehearted support to this situation being brought to an end.

It is disturbing to realise to what extent financial institutions—I want to refer in particular to insurance companies—have made use of this loophole to help their clients avoid paying tax. We are therefore quite satisfied with this provision in the legislation.

I have just a few words of criticism to express. I know it is particularly difficult to define precisely the discretion of the Receiver of Revenue in tax legislation so that the question of whether he has exercised his discretion in terms of the provisions of the Act can be duly tested in court. In this regard I want to refer in particular to clause 8 which inserts the new section 9A. I am talking in particular about subsection (3)(b) in which discretion is once again given to the Receiver. The provision reads as follows:

Thus the right of objection and appeal is now being granted. As that provision on how the Receiver should exercise his discretion read, one could accept that to all intents and purposes it would be almost impossible for an objection or an appeal to succeed. The discretion afforded the Receiver here is limitless. We therefore want to argue that it could almost be said that the Receiver will rule, without applying any criteria at all. Let me put it this way: This is a case of lazy legislation. It is lazy because one has no proper criteria that can be tested in court. We therefore have our misgivings about that provision. However, that is simply by the way.

Another matter I want to refer to briefly is the question of interest payments either by the State, in the case of an overpayment, or by the taxpayer, in the case of an underpayment of his provisional tax. It is not quite clear to me why this amendment is being effected in clause 2 of this Bill. As the Act read, it provided that a prescribed rate with reference to any interest in terms of this legislation was payable, that is to say a rate of 15% per year, or another rate which the Minister of Finance would specify from time to time by notice in the Gazette. In other words, as the Act stood the Minister of Finance could amend that rate simply by placing a notice in the Gazette and why it is now necessary for the rates of 15% and 12%, respectively to be included in the legislation is not quite clear to me. Apart from that it has now been explained to us that in the case of an overpayment by the taxpayer the rate is reduced to 12% to prevent taxpayers from possibly misusing the Receiver of Revenue as a deposit-receiving institution, because of the attractive rate of 15%, whereas in the case of an underpayment the rate remains 15%. I am not convinced that this is altogether fair. I accept that there should be a certain punitive element in the provision in the case of an underpayment, but I would personally think it only reasonable that the interest rates for both the taxpayer and the State be the same.

In conclusion I want to say that the hon the Deputy Minister, in his Second Reading speech, warned the taxpayers and those assisting them that in the case of tax avoidance schemes it may be necessary in the future to consider introducing legislation with retrospective effect in this House. This warning the hon the Deputy Minister made is serious, and should this happen I think there would be grave consequences, and I am not convinced that measures with retrospective effect ought to be used in the case of tax legislation, and in this regard I cannot agree with the hon the Minister as wholeheartedly as before.

We could perhaps have taken this opportunity, while dealing with the Income Tax Act, to discuss the Margo Report as well. The hon the Deputy Minister referred to this in his Second Reading speech but I do not think this is the appropriate occasion. The time for that will come because the fact remains that the marginal rate for individual taxpayers in South Africa is at present unacceptably high. This influences productivity and, to put it plainly, the average man no longer feels like exerting himself when he simply has to give up almost half of his earnings, which he earned with that extra exertion, to the State. We therefore hope that if we convene next year the hon the Minister of Finance will come forward with genuinely constructive proposals to solve once and for all this problem concerning the pressure our unacceptably high inflation rate is exerting on the increasing tax burden of the individual taxpayer. It is a fact that the rate of taxation for individual taxpayers in South Africa has become unacceptably high. It is therefore not surprising that the individual taxpayer is starting to become resentful of paying tax, whereas this ought not to be the case.

Is this the reason why numerous people hire the best brainpower in the country to help them, as often and as well as they can, to avoid paying tax? If our system of taxation were more reasonable, that evil—let us call it that—would have been far less prevalent than is at present the case in South Africa. With these few words I want to say that we shall not be voting against this measure.

Mr Chairman, it is a pleasure to speak on behalf of this side of the House in support of the Income Tax Bill of 1987. I am pleased indeed that the hon member for Barberton is supporting this Bill on behalf of the Official Opposition. He does express some reservations but I do not believe that they are really valid.

Insofar as the proposed new section 9A (3) (b) is concerned, he expresses his reservations as to the discretionary powers of the Commissioner. However, we do know that it is normal in income tax to have departmental practice. I think departmental practice does develop over the years and is accepted tax practice. Furthermore, there is a right of rejection and appeal so I do not believe there should be any fears insofar as that is concerned.

In so far as the rates of taxation are concerned, I think it is known that our rates are considered to be high but much has been done over the past few years. Only six years ago our marginal rate of tax was 72% whereas we are now down to 45% at maximum rate. Over the past few years South African tax consultants and other experts have built up an outstanding reputation in respect of their expertise in ensuring that their clients pay the minimum amount…

Mr Chairman, on a point of order: I think there is no quorum present in the House.

Order! Will the Secretary please establish whether there is a quorum present in the House?

Quorum

The attention of the presiding officer having been called to the absence of a quorum, the division bells were rung.

A quorum being present, debate resumed.

As I was explaining I think our tax consultants and experts have built up an outstanding reputation over the past few years to ensure that their clients pay the minimum amount of taxation possible. Regrettably, however, it seems as though a stage has been reached where certain loopholes that these guru’s have found have been rather shamelessly exploited, and taxation has been avoided through various cunning and even underhanded schemes to the detriment of the general body of taxpayers and the fiscus.

The main object of the Bill before us is to close the loopholes created because of the income tax jurisdiction of certain neighbouring states within the rand monetary area moving away from our own. Steps have become necessary to stop the manipulative erosion of our tax base. Although I think the tax authorities have been aware of the problem it has assumed such proportions that it can no longer be tolerated.

In addition to fixing the rates of normal tax of individuals and companies for the year of assessment 1987-88, the Bill provides for certain other amendments. These are to close the loopholes that I discussed and there are also other amendments of a housekeeping nature. Clause 2 amends section 1 of the principal Act. It defines the term “neighbouring country” and it provides that interest from a neighbouring country shall be deemed to be interest from an investment source from within the RSA.

Furthermore, the exemption enjoyed by foreign investors in respect of interest earned by them from stock or securities issued by the Government or parastatal organisations has also been abused by South African residents who invested their money in these neighbouring states in subsidiary companies or trusts and in this way avoided tax. This Bill will deny them that exemption.

Certain other provisions affecting cross-border transactions are also proposed, in particular a deeming provision in respect of investment income and also affecting investment in non-standard insurance policies which will now be taxed. These provisions became necessary to halt the basically dishonest tax-avoidance schemes which have become prevalent.

Clause 2 (1) (b) introduces an amendment to the prescribed rate of interest payable on provisional tax which is paid in advance and which is currently receiving interest at the rate of 15%. Large overpayments of provisional tax have been made in order to enable taxpayers to earn a higher rate of interest than is available in the marketplace and the amendment now provides a lower rate of 12% interest payable to a taxpayer from 1 October 1987 in order to prevent further abuse of this provision.

Clause 3 enables the Commissioner to supply information to the Commissioner for Customs and Excise for the prevention or combating of the evasion of duties or levies administered by the latter. There is no reason why this information should be withheld, because provisions are made for secrecy to be preserved.

Finally, limited amendments are made to Schedule 7 to the Act relating to the taxation of fringe benefits. These amendments together with those effected to section 8 of the Act introduce no new principles, but are of a housekeeping nature and are designed to take account of changed circumstances such as the effects of inflation. I think it is important to note that none of the amendments proposed in this Bill are in conflict with the recommendations of the Margo Commission. Those recommendations will still receive the full and proper consideration they deserve. I have pleasure in supporting this Bill.

Mr Chairman, taxation is never a popular subject, but we are all aware of the very real need to tax citizens in order to govern and to provide the necessary services. We see this particular Bill as the focal point of all Government activities, in the sense that its primary purpose is to provide the wherewithal for Government, namely the bulk of the necessary finance.

It is more than a Bill dealing with housekeeping matters as such. It actually empowers the Government to raise the money it requires by way of taxation in order to govern. Therefore, when looking at this Bill we need to consider the effectiveness with which the Government is in fact conducting its tasks. For that reason we on this side of the House do not support the Bill. There are aspects with which we are in agreement, but we believe that Government political and economic policies have failed to address the declining trend of confidence in the South African economy. We believe that a resumption of confidence is the key to economic well-being. This Government’s inability to restore confidence is the fundamental reason for the fact that we have a lack-lustre economy today, and this we cannot afford. As has been said so often in this House, we must have growth in order to provide jobs for the growing number of unemployed.

As the hon member for Yeoville said in this House not long ago, people do not only vote at election time, but they also vote with their money, their labour and their actions. Today people are voting against this Government by not spending their money. Consumer spending is at a low level as is private fixed investment. This is the one election in which all South Africans have an equal vote, and clearly the message differs markedly from that of the Whites-only election in May of this year.

Inflation continues unabated. Some were expecting a marginal decline in the inflation rate for August and they will be disappointed to learn that, in fact, the increase for August remains the same as it was for July. Again the lower income earners are worst affected. Food costs rose by 1,2% in August alone and represent a staggering year-on-year increase of 22%. We now have a hefty increase in the bread price in the offing and there has also been a recommendation that GST exemptions on certain foodstuffs are to be withdrawn.

Clearly the causes of inflation are complex but we share the view expressed in the Cape Times editorial this morning viz:

It is this lack of confidence which is leading to increasing unemployment. There are fewer people employed today than there were three years ago.

Having said that, I should like to move the following amendment:

One of my colleagues will be dealing with the question of tax loopholes, specifically as far as neighbouring states are concerned, but I would like to make some comments on tax avoidance in general. We recognise that our tax structure is complex and that tax avoidance has become a kind of “royal game”. The rewards are enormous: An army of consultants and advisers has assaulted our tax legislation and has parcelled out the largesse in the form of legally avoided tax payments. The problem is that given a certain level of expenditure, tax not paid by some has to be borne by others. Normally, those most accomplished in this sport of kings, ie tax avoidance, are the wealthy.

The situation has therefore become untenable and recommendations contained in the Margo Report are to be welcomed. Similarly, measures contained in this Bill are welcomed. However, we want to express a word of caution on what appears to be an increasing reliance on retrospective legislation. The hon the Deputy Minister himself has admitted that this is not something to be resorted to lightly, but may sometimes have to be applied in order to combat blatant abuses. We believe we have to exercise extreme caution in this area. People make decisions in good faith and they rely on the existing legislation. Also in certain instances loopholes have arisen due to faulty legislation, and I do not believe that it is necessarily fair to punish certain people who, acting in good faith, made decisions based on that legislation. In all circumstances therefore we believe that retrospective legislation has to be very carefully considered.

A specific case in point is the proposed new section 9A, as contained in clause 8 (1), designed to counter tax avoidance by establishing investment companies in neighbouring countries. Such income will in future be deemed to be from a source within the Republic. This change will affect years of assessment ended on or ending after 21 September 1987.

As a result of this a company with a June year-end, earning income in July 1986 will not be affected. However, a company with a September year-end, earning income this month—that is 14 months later—will in fact be affected. This seems to be arbitrary and unfair, particularly as in both instances the taxpayer may have acted in good faith but is not given the opportunity to defend his situation.

As stated earlier, loopholes must be closed in order not to allow an unfair shifting of the incidence of tax onto the less fortunate. However, care must be exercised to ensure fairness and also—this is very important—to enable taxpayers to plan with confidence. That links back to what I was saying earlier in terms of business confidence and the need to actually promote investment. We therefore believe that on occasion retrospective legislation could achieve just the opposite and make planning very difficult.

I am pleased that in dealing with the exploitation of our tax system in the film industry malpractices will be eliminated without harming the industry as such. In particular I note that these changes have been made in consultation with representatives of the film industry. We believe this is necessary as our film industry needs to be encouraged and nurtured.

Measures to encourage the provision of housing for the aged are also to be welcomed. Many of these people, living so close to the breadline, are experiencing tremendous hardships.

Could the hon member tell me which retrospectivity clauses he is against in this Bill? Could the hon member tell me which clauses he is referring to?

I am referring to the clauses that deal with the formation of companies outside the borders of this country where the Bill will take effect for those companies having year-ends from 21 September. Activities and transactions which they would have entered into will therefore be incorporated in the Bill.

Correct. You are quite right.

I was welcoming the provisions to facilitate the provision of housing for the aged. It is hoped that these savings in tax will in fact be passed on in reduced rentals and will also encourage the provision of further housing.

I also wish to make a few comments regarding interest. The hon the Deputy Minister has correctly noted in his speech that the 15% interest rate payable has encouraged overpayments of provisional tax and this has resulted in the irrationality of people desiring to pay tax too soon. I understand this also represents unfair competition to the banking sector and the interest rate has therefore been reduced to 12%, which we support. However, the interest charged on overdue taxes is to remain at 15%.

I merely wish to observe that the interest paid to taxpayers at 12% is taxable whereas interest paid by taxpayers at 15% is not tax deductible. The difference is, therefore, not a mere 3% but approximately 9% to 10%.

We accept that some of the changes contained in this Bill are positive. We have, however, moved an amendment as we do not believe that this Government has come up with the necessary package to stimulate the economy, to encourage investment or to create very necessary jobs.

Economic and political confidence go hand in hand. We believe the political aspirations of all South Africans have to be met and that anything less than this will be irresponsible nit-picking.

Mr Chairman, it is rather amazing to me that the hon member for Pinelands, on behalf of his party, should move that this Bill be opposed. I think it has possibly to do with the fact that during the election the PFP told the public that marginal rates of taxation would be increased the moment the election was over.

As we have seen from this Bill this is not the case and it has once again been shown how they have disinformed the public with regard to the state of the economy.

They further state that one of the problems of the economy is the state of confidence. I think they should look to themselves…

Tell that to the Governor of the Reserve Bank.

… and ask themselves what contribution they make to the confidence of the man in the street in the economy of South Africa. [Interjections.]

Ask Dr De Kock!

It is very interesting to listen to how glibly we are told that the other main reason for lack of confidence is Government expenditure. What we are never told, however, is which sectors of Government expenditure they are prepared to cut.

The Department of Constitutional Development and Planning.

When one asks them whether they would cut down on welfare and educational expenditure, there is a deafening silence. When one asks them whether they are going to cut spending…

[Inaudible.]

… on law and order… [Interjections.]… one is again met with a deafening silence. When we ask them whether they mean to cut down on defence spending, we get no answer at all, Mr Chairman.

*It is also interesting to note that two of the travellers to Dakar are not here today…

Dagga or Dakar?

… otherwise we might have received an answer. The main purpose of this legislation is to close certain loopholes that have developed as a result of the fact that the tax laws in certain neighbouring states have moved away from our own, creating tax havens which have been very successfully exploited by some of our tax consultants and tax institutions. South African citizens have established companies and trusts in neighbouring states, and dividends and interest earned in South Africa have been paid into them in order to avoid tax. Furthermore, the use of insurance policies that are taxable in South Africa has also been exploited in our neighbouring states.

†Another gap that has been closed is that related to the film industry. The instrument which has been mainly abused in this regard has been the exporter’s marketing allowance. This is dealt with in the proposed new section 24F. It is, as has been said before, been drawn up in consultation with members of the South African film industry in such a way that minimum harm will be done to our own fledgling film industry, while at the same time putting an end to the gross abuse of tax allowances. The hon the Minister has heard of other similar schemes afoot which involve books, records and computer software. I believe the hon the Minister should well look at the area in regard to trademarks and patents, and I trust that he will expand section 24F when it is necessary to meet these contingencies.

While one sometimes involuntarily admires the ingenuity of tax consultants, a species who will hopefully, after the Margo Commission Report, slowly begin to outlive their usefulness and, like the dodo and the dinosaur, possibly pass into extinction, one must remember that every successful tax evasion or avoidance scheme only increases the burden on the honest taxpayer. This can create a vicious circle. Tax evasion causes governments to increase tax rates, and this encourages more economic activity to sink from sight and disappear into the shadows of the nether world of the underground economy.

Mention has been made of the fact that a part of this Bill helps to provide for the aged, and I would like to thank the hon the Minister that clause 9 is retrospective in this regard.

As has been said before, this Bill is somewhat of a mixed grill, but its main thrust has to do with tax avoidance. I would like to use the rest of my time on the subject of the shadow economy.

In Italy it is known as the economia summersa, in Germany they speak of Schwarzarbeit and in America they call it the Black Economy. I think this is a term that is hardly appropriate in South Africa, and I would prefer to speak of the shadow economy or the underground economy.

The denizens of the shadow economy are those who conceal their activities from the taxman, and also from national figures. These activities normally take three forms. Firstly, there are the earnings from moonlighting or ghosting—the holding down of a second job—which remain unknown to the taxman. Secondly, there are earnings from illegal activities, such as prostitution or drugpeddling. Thirdly, there is the form of earnings which one could refer to as spending in kind. Here we include such activities as padding one’s expense account by using the office telephone for private purposes.

Moonlighting seems to have found its apex in Italy. A survey conducted in 1980 revealed that 54% of all Italian civil servants had a second job, 33% sold goods in the ministries during working hours, and 27% were doing other work during official working time, often running consultation businesses from their office desks. Anecdote suggests that the shadow economy has mushroomed in recent years all over the world, fertilised by the increasing burden of taxation. Not only have tax rates risen, but more people have become eligible to pay tax. Countries can thus be rated according to such factors as their burden of taxation, their burden of red tape and their tax morality. When one looks at the countries of Western Europe one could predictably conclude that the Swiss are the most moral taxpayers in the world. Certainly in Europe the Italians are the most immoral taxpayers. South Africans have until recently been on the whole in the high bracket of tax morality. We must, however, expect this to decrease as the informal sector of our economy increases. When one looks at other countries it appears that various estimates have been made in relation to what share of the GDP the shadow economy forms.

In Europe Italy heads the list at 30%, followed by Spain at 23%. Britain, Switzerland and France are estimated at 7%, and the USA at 5%. In the Third World, India estimates her shadow economy at 30% of GDP. In Burma it is nearly 50%, and in Taiwan between 20% and 30%. Taiwan has made great play of deregulating its economy and allowing hundreds of unregistered small businesses. In that country, too, thousands of barber shops are disguised as escort agencies and whoretels.

What is the position in South Africa? I believe we are at the bottom of a U-shaped curve—putting our figure at somewhere between 10% and 15%. As our Third World economy meets the First World the share of the shadow economy will diminish. As our First World economy becomes more sophisticated and more concentrated in the service and information sectors, the share of the shadow economy will increase as more people try to avoid and to evade tax.

Mr Chairman, it is with pleasure that I support the Second Reading of this Bill.

Mr Chairman, I am going to deal with one of the matters touched upon by the hon member for Wynberg, and also by the hon member for Pietermaritzburg South, namely the question of closing the loopholes in relation to the TBVC countries.

I must say that I would have thought that for the hon member for Wynberg, with his very small majority, to make snide remarks about the PFP was injudicious. [Interjections.] At the next election we shall call him to account for those remarks. [Interjections.] He is welcome to come to Johannesburg North any time he likes. [Interjections.]

Before we get onto that matter, there is another matter that I want to refer to in lighter vein. I notice in the Bill that there is no rebate for holders of the Currie Cup, and tomorrow there is a game taking place in Johannesburg. Hopefully the Currie Cup is to return to the Transvaal… [Interjections.]

That is the most predictable statement of the day!

It is a right statement!

… particularly if we can keep Naas Botha in Pretoria! There is a saying that these days HNP stands for “Hou Naas in Pretoria”. If we keep him there, it will be a lot easier for Transvaal to win the Currie Cup. I notice that the member for Edenvale is sporting Transvaal colours, and hopefully she is also supporting our side.

PFP does not stand for “Play for Province”.

Order! The remarks seem to indicate that the matter pronounced upon by the hon member is quite germane to this Bill! [Interjections.]

I am glad that the hon member for Kuruman is in the House today, because last week he quoted from Shakespeare, and I looked at the book of quotations this week to see whether there might not be something appropriate that I could mention regarding him. There were a number of quotations, but as they referred to an individual’s personality, his appearance or his mental capacity, I decided it would be inappropriate to use quotations of that nature, since I do not think it is correct or proper to be personal about members of this House. [Interjections.] There is one quotation from Benjamin Disraeli, however, which says: “Youth is a blunder, manhood a struggle, old age a regret.” I hope he has no regrets about his political fortunes. [Interjections.]

I want to return now to the Bill, and refer to the loopholes that are being closed with regard to the TBVC countries. Mention has been made of this by a number of speakers in this debate, and it is high time this happened. It is something that this Government should have foreseen. In their unseemly haste to provide independence for the TBVC countries, this matter was not taken into account, and in view of developments that took place in Ciskei in particular, it was possible for individuals to establish companies or trusts in Ciskei and avoid paying tax in South Africa. In Ciskei they pay little or no tax at all, and therefore there was little benefit for that territory. There was no benefit for the Ciskeian authorities.

To keep Ciskei on its feet, however, we have had to pump large amounts of cash into that territory, and therefore this attempt is being made to close the loopholes. It is my fervent hope that the loopholes are being effectively closed, and that there will be no further misuse of South African taxpayers’ money.

It is worthwhile mentioning a number of instances where taxpayers’ money has been squandered in some of these countries. For instance, in Bisho an airport was opened recently, and there was a report in The Argus of 9 July to the effect that Ciskei opened a R25 million airport and inaugurated an international airline. The first scheduled flight was cancelled, however, because the aircraft failed to arrive. The airport was officially opened by Pres Lennox Sebe at a ceremony attended by about 20 000 people. Twenty-five million rand of taxpayers’ money was pumped into an airport which is hardly ever used, 14 kilometres away from East London, where there is an adequate…

What do you know about it?

I know a lot about the Eastern Cape, my dear friend.

Do you know how many flights there are?

Yes, I know exactly what is going on. [Interjections.] I know a lot more about the Eastern Cape than the hon member might possibly know himself.

There is an adequate airport at East London and yet this airport of R25 million was built at Bisho.

Let me give another example, and I quote from a report in the Financial Mail of 28 August:

The allegation is that R4,5 million of public money was used to improve President Sebe’s private property.

Let me quote another instance:

An enormous amount of taxpayers’ money went into building that hospital.

Allegations like these are made about Ciskei as well as Transkei. There have been allegations that Ciskei is heading for technical bankruptcy from which it will be rescued by a bank loan of millions of rand for which the South African Government is standing surety. Yesterday we had allegations that the Prime Minister of Transkei was implicated in a deal involving up to R8 million—according to the news reports last night.

The point is that the South African taxpayer is obliged to provide these amounts of money which are squandered by these TBVC countries. It is therefore appropriate that this attempt is being made to close the loopholes. This squandering of money should have been anticipated by the Government when they rushed into independence for these territories. It is my fervent hope that the loopholes will now be adequately closed and that we will be able to control the expenditure of these vast sums of money in these territories in the future.

Mr Chairman, I want to convey my sincere thanks to the Official Opposition’s chief spokesman on finance for his support of the Bill. I also thank all the other hon members who took part in the debate and supported the Bill.

†I think, as a general statement, one must say that South Africa finds itself in a very difficult financial position and has very hard choices to make. Hon members will know that we cannot borrow—whatever the merits may or may not be. Hon members will know what happened with the debt standstill. Fact of the matter is that even if we wanted to, we cannot borrow substantially on foreign markets. I am not saying we should but we cannot. It is due to totally unfair circumstances but that is the reality. Moreover, even if we could, interest is already, I think, the largest or the second largest item on the South African Budget. Internally the Government cannot borrow any more because, as the hon member will know, we have already been crowding out the private sector on the capital markets of South Africa and the Government has already been arrogating too much of the national wealth. That is why the hon the Minister and the Government have said on numerous occasions that we must reduce Government expenditure as a percentage of the GDP.

What options do we have? We are a developing country and there are vast needs. The hon member for Barberton knows what the needs are. He knows that something like 50% of the people in this country are under the age of 15 or 16 and that they are not net contributors to the economy of this country. They are consumers, consumers of education, health facilities, housing etc. I am not criticising; it is a demographic reality. We have those demands. That is the point we have reached in our history, right or wrong. We have First World medical services and a Third World demographic growth. What must we do? What are the available options? I may add that we cannot increase taxation any further. The burden of taxation is too heavy in South Africa to fund that. We are bumping against the upper limits of where we can go with personal tax in particular. That is why the Government appointed the Margo Commission. The Government was not asked to do so by the opposition. The Government did it of its own volition. We have been saying these things for years. It is no use bluffing ourselves; we are dealing with a very difficult situation.

What must we do? One thing is to stop the abuse of the existing tax system. Where certain tax is due and payable to the State, it should be collected, so that the burden can be reduced or kept static for the genera! body of taxpayers in South Africa. That is exactly what we are doing. Would the hon member not say that is good management? He is nodding his head. He agrees.

I did say so.

The hon member agrees that that is good management. Having said that, he then moves an amendment. The hon member said this amendment was inspired by this morning’s editorial in the Cape Times. In support of his amendment, he quoted the following from the editorial:

The hon member referred to the Government’s management of its own business and he says that the Government is doing the right thing here. Is the hon member simply going to oppose everything the Government does, right or wrong? Here we are busy with something which is, on his own admission, the right thing to do and he opposes it!

I am not surprised that the hon members of the PFP have no credibility at all, because if this is the way they carry on, how can the public ever take them seriously about anything?

Who is squandering the money?

This Bill is not about squandering. I want to tell the hon members that if the Government does not collect this tax, it is equivalent to squandering money. It is money which we are collecting now, which otherwise would not have been collected; and if we had not collected it, it would be equivalent to squandering the public’s money, because this money belongs to the public. I say again that that hon member should be supporting us. His arguments are supportive, and then he moves an amendment which negates all the arguments which he himself has advanced. This makes it very difficult to take the hon member seriously. [Interjections.]

The hon member referred to the Margo Commission. He will know that everything we have done today is directly in line with the recommendations of the Margo Commission. I do not know what else I can say to that hon member, I really do not know.

*The CP’s chief spokesman said we had eliminated certain deficiencies. We thank him for his support. He experienced something of a problem with one of the discretions, and he put a very technical point. I am really in no position to reply to him on that point. He is a lawyer, and I am not. The Commissioner of Inland Revenue sent the following note to me:

†I shall go into the matter and if something arises, we shall certainly take it into consideration.

*The hon member wanted to know why we had laid down the interest rates in the legislation. We always do so. When we can and when Parliament sits and we are dealing with legislation, we always insert the interest rate. We also have the authority now to change that interest rate in the interim, if that should be necessary. In future it will not be necessary to wait until Parliament changes the interest rate. Interest rates fluctuate. Why did we fix this interest rate? We wanted to use the Receiver of Revenue to improve the Government’s cash flow and so, to an extent, we established an incentive for people to pay too much. The interest rates have dropped in the meantime, but this interest rate remains unchanged, and all the grannies who can no longer invest in the “granny bonds” can now use the Commissioner as a bank, because they will get an interest rate of 15% from him. I can tell the hon member that we received one such excess payment of R40 million from a person who was using the Commissioner as a bank. The Commissioner does not want to be a bank. He does not want people to hold back when it comes to these payments, but he does not want to compete with the banks either. We must therefore strike a balance which is fair to the taxpayer and which will help us to collect our tax. That is why we have done what we have done.

That hon member says the two interest rates should be the same. Things are different in cases in which the tax should have been paid, but was not, because we include a slight punishment. That is why that interest rate is a little higher.

The hon member said it was retrospective, and that one should be careful of retrospective legislation.

†Another hon member also mentioned the whole question of retrospectivity. Of course we are concerned about retrospectivity. I did say this in my speech, and the hon member mentioned that. As a matter of fact, most of the retrospective provisions in this Bill—I think there are four or five of them—are concessions. I do not suppose the hon member is objecting to the retrospective concessions; he is objecting to the retrospective impulse. Am I correct in making that assumption? [Interjections.] All right. The fact of the matter is that his colleague the hon member for Johannesburg North said that we must collect tax effectively; we must be effective.

[Inaudible.]

Yes, he did. He said we must be efficient. I will find his exact words in a moment, but he said that we ought to be efficient in our collection of tax. Now, I wish to tell hon members that if one wants to be efficient, one sometimes has to act retrospectively—provided only that one does so with due warning. Hon members should know that we have had endless talks with our partners in the region, in the forums which exist for these things, on this question of tax havens. The hon the Minister has gone on record several times—the last time was on 27 March—in issuing warnings.

We are not dealing with people who have good intentions, as the hon member for Pinelands said; we are dealing with people who have bad intentions. The people who make these investments know that they are busy with tax-dodges, with avoidance schemes. They know this; they are not innocent investors who are now being hurt and caught in the crossfire by an unfeeling Commissioner of Inland Revenue. These are not people with good intentions; these are people with bad intentions. The bad intention they have is to avoid taxation. They know this is wrong, and they have been warned. We will have no hesitation in dealing with that kind of tax avoidance. If we did not do so that hon member would be the first to complain and he would be quite right to do so.

The hon member for Pietermaritzburg South told us that the erosion of the tax base can no longer be tolerated. I thank him for his support of the Bill.

The hon member for Pinelands says we have failed to restore confidence. Now, I do not know what this Bill has to do with confidence, but if he wants to move that kind of amendment, I can only tell him that he must look at some of the facts which have been advanced recently, and which demonstrate growing confidence in our country.

The hon member for Wynberg made a very good speech here today. He spoke about the Black economy, the shadow economy. The informal economy in South Africa is also growing rapidly. Mr Weil of Checkers said the other day that he was scared that he was going to have empty shelves in Checkers soon, because he could not get stock.

He said some of the suppliers have a six to eight month delay in delivery. We know that southbound cargoes to South Africa are heavily booked and that means capital equipment on the way. I do not want to bore the House by quoting boring figures, but I have here a list of sales tax returns which confirm what Mr Weil has said. Our sales tax collections are very strongly up in spite of the fact that we have excluded fuel. There are two reasons for that. The economy is looking better than we think because of what is happening not only in the formal sector but more specifically in the non-formal sector.

However, let us forget about that kind of opinion. The reality is—the hon member knows it—that our reserves have doubled from R4 billion in April to roughly R8 billion now. He will also know what has happened to the exchange rate of the rand. The commercial rand when measured against a basket of currencies has appreciated and the financial rand has appreciated even more dramatically. The hon member may also know—it is new information and I shall inform him if he does not know—that since the new standstill arrangements with South Africa’s foreign creditors came into force in July 1987, foreign lenders to South Africa have converted 441 million dollars of their short-term loans inside the net to ten-year loans outside the net. Within the few short weeks and months since the new arrangements our foreign creditors have converted a very considerable percentage outside the net. They would not have taken those vast amounts of money outside the net if they did not have confidence in the future of the South African economy. They know that we have managed to maintain a surplus on the balance of payments which we promised we would do. We have been worthy of the confidence that some have shown in us and we have honoured the promises we have made. We have maintained that surplus on the balance of payments. Although the economy is not growing spectacularly, it is healthy and when compared to what has happened over the past four or five years the growth is considerable.

I want to look at other examples. When I talk to the merchant banks we have no trouble at all with trade financing at the moment.

We can also look at the outflow of capital. In the last six months of last year an amount in the region of R3 000 million or more left the country. In the first six months of this year a very small amount of money on balance left the country. That has dried up and we now see a return of funds to South Africa.

So by any definition he would like to mention, I can demonstrate to him that there is a return of confidence in the economy and it is growing. There is also a new self-assertiveness in South Africa. We have come out of a very difficult time in our history.

It is absolutely ridiculous for that hon member to move this kind of amendment to this Bill. I want to say to that hon member—I do not mean anything personal—that I miss the hon member for Yeoville here today. We all miss him and I am sure that he would not have advanced this kind of ridiculous argument.

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

Question affirmed and amendment dropped (Progressive Federal Party dissenting).

Bill read a second time.

Bill not committed.

Bill read a third time.

Mr Chairman, I move:

A number of amendments to the Transfer Duty Act, the Estate Duty Act, the Stamp Duties Act and the Sales Tax Act are proposed in this Bill. Amendments must all be dealt with in the explanatory memorandum to the Bill which has been made available to hon members.

I intend to confine my remarks to the more important aspects of the Bill. I want to start with the provisions in connection with the so-called revenue laws. Hon members will remember that the Black Communities Development Act was amended in 1986 to provide for ownership of immovable property by Blacks and the conversion of rights of leasehold into ownership. Although transfer duties are undoubtedly payable in respect of the acquisition of ownership in immovable property, irrespective of the population group of the buyer, the acquisition of the right of leasehold by a Black in terms of the aforementioned Act, is not subject to transfer duties. However, when the holder of a right of leasehold converts the said right into ownership the aforesaid Act provides that transfer duties are only payable in the case of certain conversions.

The provisions in the Black Communities Development Act dealing with transfer duties, unfortunately gave rise to a number of uncertainties and anomalies. It is for example unclear on what date certain rights of leasehold are subject to transfer duties and whether or not certain rights of leasehold are exempt from transfer duties. The amendment proposed by clauses 1 and 2 provides for a date of acquisition of, and value on which transfer duties are payable in respect of conversions of rights of leasehold into ownership.

Clause 26 deletes the applicable transfer duty provisions in the Black Communities Development Act and thereby ensures that all the said conversions are subject to transfer duties. Although all conversions of rights of leasehold into ownership will be subject to transfer duties, very few of the said conversions will in actual fact be subject to transfer duties, because there is a general transfer duties exemption of R30 000 in respect of the acquisition of land and its improvement and R12 000 in respect of the acquisition of unimproved land.

While I am dealing with transfer duties, I should like to draw the attention of hon members to the concession made to organisations providing housing for the aged. Clause 3 of the Bill provides for a new exemption from transfer duties in respect of non-profit organisations providing retirement facilities to persons over the age of 60 years. Such organisations will consequently, for the purposes of carrying out their activities, be able to acquire property free of the additional burden of transfer duties.

A similar exemption is foreseen in the Income Tax Amendment Bill, 1987, which must still be discussed by this House. As in the case of the income tax exemption it is proposed that the amendment have retrospective force in order to accommodate the organisations which started their activities in the past, but whose tax obligations were unclear. The exemption will not apply in respect of organisations running retirement centres for profit.

Hon members will notice that a number of amendments to the Estate Duty Act are proposed in this Bill. Although it has been said repeatedly that estate duty in its present form no longer meets the requirements of our times and the Margo Commission in fact recommended it be replaced by a capital transfer duty, the amendment is nevertheless deemed to be essential. In the first place it is to be expected that estate duty may still be collected for many years, even if it is decided to abolish it. Clauses 7, 8 and 9 are intended to streamline the collecting of the tax and to give certainty in respect of assessments.

In addition clause 6 amends section 4 of the Income Tax Act. In this clause provision is made for a deduction in the determination of the net value of an estate, ie those amounts which have been bequeathed by the deceased and are therefore not subject to estate duty. None of the existing deductions are being withdrawn, but certain loopholes are being closed.

Mr Chairman, because the proposed amendments are rather complex and are explained fully in the explanatory memorandum, I shall not discuss them in detail. Suffice it to say that the amendments ensure that double deductions in respect of the same bequests are not allowed. When deductions in respect of certain bequests are permissible, the amendments provide that such bequests must accrue to the relevant beneficiaries unconditionally. As long as we have estate duty, it is essential for loopholes to be closed and for administrative provisions to be effective.

In terms of the Stamp Duties Act, the payment of stamp duties must be denoted by means of adhesive stamps for the amount of such duty. Such a system is archaic in certain respects, and certainly in a sophisticated electronic age. For this reason the Commissioner for Inland Revenue is authorised by the Act, subject to certain provisos, to allow certain persons to pay stamp duties by means of the issue of a special receipt, instead of each document being physically stamped with adhesive stamps.

In terms of the amendment proposed in clause 10, the Commissioner will be authorised to allow banks to use the alternative system in respect of hire purchase agreements or financial leases, but this will be subject to the necessary control measures.

†Mr Chairman, sales tax has now been a part, and in many respects an essential part, of our tax system for more than nine years. During that time there have been extensive changes in some respects. It is perhaps an indication of the maturity of this tax that the amendments to the Sales Tax Act introduced this year are essentially of an administrative nature.

There are, however, three matters I should like to deal with, namely the proposed amendment to the secrecy provisions of the Act; the proposed exemption in respect of containers, wrapping and packaging materials and goods in the form of eating, drinking and carrying utensils, as well as the sales tax liability of charitable institutions which have not yet carried on charitable activities.

The amendments in respect of the secrecy provisions are to be found in clause 13. These provisions are very strict and are designed to ensure that the very confidential and personal information which persons are required or may choose to disclose to revenue officials, is not made known to third parties. The exemption to the non-disclosure rules is that the Auditor-General in the performance of his duties in terms of section 42. 1 of the Exchequer and Audit Act of 1975, may have access to documents in the possession of the Department of Inland Revenue.

The customs and excise branch of the Department of Finance has provisions pertaining to it in the Customs and Excise Act which are materially similar to those found in section 4 of the Sales Tax Act. Since both the Inland Revenue and Customs and Excise branches are engaged in the collection of revenue for the State, and both fall under the auspices of the Department of Finance, it seems illogical that information available to the Inland Revenue branch—which could be of assistance to Customs and Excise for the purpose of preventing or combating the evasion of customs and excise duties—should be withheld from the Commissioner for Customs and Excise.

It is therefore proposed that the section be so amended so as to permit the Commissioner for Inland Revenue to provide his colleague, the Commissioner for Customs and Excise, with information in these limited circumstances. The Customs and Excise Act is likewise being amended so as to permit the Commissioner for Customs and Excise to supply the Commissioner for Inland Revenue with information for the same purpose. The Commissioner for Customs and Excise is at present empowered to disclose certain information to the Commissioner for Inland Revenue relating to exports and imports.

The amendment to the Customs and Excise Act requires this limitation. The Commissioner for Inland Revenue has asked me to mention that this discretionary exchange of information in respect of this section will be delegated only to officers with the rank of director or a higher rank. The decision to exchange information will therefore be taken by very senior officers. The Commissioner for Customs and Excise will follow the same practice.

I also invite hon members’ attention to this significant concession to taxable services and hotel and catering enterprises. Earlier this year the Act was amended to provide an exemption in respect of containers and packaging or wrapping materials purchased by commercial enterprises, for example retailers and wholesalers, where such goods are intended to be disposed of to customers of such enterprises.

In terms of amendments proposed by clauses 14 and 21, taxable services and hotel and catering enterprises will also be entitled to acquire such goods tax-free, while hotel and catering enterprises will in addition be allowed to acquire free of tax goods in the form of eating, drinking or carrying utensils or articles, or serviettes, intended for resale as adjuncts to the supply of ready-cooked or prepared food or beverages. From now on the dry-cleaner will obtain his hangers and plastic coverings free of tax, whereas previously he had to pay for these inputs. Similarly the catering trade, take-aways and so on will not have to pay tax on the plastic knives and forks and the polystyrene food containers used in their business.

The amendment to the definition of charitable institutions proposed by clause 19 is intended to empower the Commissioner for Inland Revenue to register as a charitable organisation, for sales tax purposes, any organisation which has not yet commenced carrying on charitable activities. At present the Commissioner may only register such an organisation as a charitable institution if it is already carrying on its charitable activities. This position gives rise to problems where in order to carry on charitable activities, organisations first have to acquire goods which would be subject to sales tax. This is clearly inequitable and it is therefore proposed to allow such organisations to register as charitable institutions for sales tax purposes. In the planning and development phase, tax will not be payable in respect of purchases made by these charitable institutions.

Finally, when dealing with the aforesaid Acts, one cannot escape the fact that the Margo Commission has made far-reaching recommendations in regard to these taxes. However, I do not want to deal with these recommendations at this stage as it is necessary to await the recommendations of the special committee appointed to consider the commission’s recommendations. Suffice it to say that for as long as the Acts are on the Statute Books, it is incumbent to Parliament to ensure that the taxes are applied fairly and efficiently.

Second Reading resumed

Mr Chairman, in the case of this Bill, too, we received a detailed explanatory memorandum from the officials to explain the provisions of the legislation.

The provisions of the Transfer Duty Act are quite acceptable to us. In particular we want to welcome the exemption from transfer duty as regards the erection or acquisition of retirement villages for our senior citizens.

As regards the provisions on estate duty, the Bill now also provides for the elimination of the possibility of a double deduction for tax purposes. We have absolutely no fault to find with that. However, what I find interesting is that in his Second Reading speech the hon the Deputy Minister would seem to have accepted the recommendations of the Margo Commission on estate duty. This is the impression one gained in his Second Reading speech when the hon the Deputy Minister said that estate duty was now outdated and would quite possibly be replaced by capital transfer duty. I do not know whether the hon the Deputy Minister spoke out of turn, and whether we can accept that estate duty is now going to disappear from the Statute Book of South Africa. I would appreciate it if the hon the Deputy Minister could clear this up for us.

As regards the provisions on stamp duties, I think an essential adjustment is being made here, which is as it should be in the modern times in which we are living. I can still clearly remember that in the days when I was an articled clerk in Pretoria, when one had to work for someone in the deeds section, one’s most important task was to lick revenue stamps. As far as I am concerned it is still a miracle that we did not pick up some or other ailment in the process. If one can get rid of such unnecessary things it is in the interests of everyone.

However, when I come to GST, I must say we welcome the concession being made here. Allow me, however, to say something about this. In his Second Reading speech the hon the Deputy Minister said that since the introduction of GST the Act had already been amended and adjusted many times. The most important amendments made from time to time involved an increase in GST. Whereas initially it was announced that this form of taxation had been introduced to broaden the tax base of the State, we now find ourselves in the position that GST has become one of the most important sources of revenue for the State and, if things carry on like this, it may become the most important source.

I want to refer in particular to the effect which GST has on the purchase of goods of a capital nature. I have referred to this many times in the past, particularly as regards how it affects the farming industry. When one reaches the stage in South Africa where the GST on an average tractor is higher than the purchase price of a similar tractor ten years ago, I want to ask yet again that this matter be looked into. The agricultural industry simply cannot afford this at the moment. During the past few years—I want to warn hon members about this—owing to the financial position of our farmers, tractor sales declined to a minimum. Owing to their financial circumstances our farmers were compelled to repair old tractors. However, we have now reached the stage where many of those old tractors can no longer be repaired, or if they can be repaired it is no longer economically worthwhile. I want to ask that this matter be investigated now, as I think Mr Justice Margo’s commission found.

For that reason a GST rate of 12% is unacceptable to those of us on this side of the House and we cannot support it. We are in favour of GST, but not on a basis of 12% throughout. That is too high, and it has a distorting effect. In particular, apart from what I have said about the farming industry, it affects the lower income groups far more than the higher income groups. This is unacceptable to us.

For that reason, although we agree with most of the provisions in the Bill under discussion and the amendments made to the relevant legislation, as far as GST is concerned, although we are satisfied with the minor concessions which have been made, we cannot support it because we are of the opinion that GST must be adjusted. It should not have been increased, but decreased.

With these few words I want to say that in spite of the provisions in the Bill which we do support, because of our problems with GST, we cannot support the measure in its entirety.

Mr Chairman, the Bill proposes a number of changes to the Transfer Duty Act, the Estate Duty Act, the Stamp Duties Act and the Sales Tax Act.

The hon member for Barberton complained about one or two aspects of the Bill here.

†He first of all mentioned the speculation on the possible phasing out of estate duty and I think that is speculation only and I think it has no foundation. Perhaps the hon the Deputy Minister will reply further. As to the effect of GST on the purchase of capital goods in farming enterprises I think he has a very valid point. The cost of capital goods has certainly increased considerably. However, I think patience is a virtue and we must be patient during this time of tax renewal through which we are going. I think that we should see what comes out of the Margo Commission and I believe the farmers will be pleasantly surprised.

In supporting the provisions of this Bill I should like to deal briefly with a few aspects of it. Firstly, with regard to transfer duty I think that the amendments proposed by clauses 1 and 2 clear up the uncertainties regarding the payment of transfer duty where the rights of leasehold are converted into ownership and ensure that duty is not paid on improvements to the property made by the holder of the leasehold right when he takes transfer. This is a welcome provision.

Clause 3 amends section 9 and provides for exemption from transfer duty of any organisation formed with the sole or principal object of providing residential accommodation for aged persons over 60 or infirm persons subject to certain qualifying provisions which are clearly set out. This is a welcome amendment and it will assist considerably in providing housing for the aged and infirm which is something that is in very short supply at present. This will give impetus to the provision of this particular kind of housing.

As far as estate duty is concerned section 4 is amended by clause 6 to ensure that deductions made in the determination of the net value of an estate or property accrued to any charitable, educational or ecclesiastical institution of a public character are bona fide accruals. The proposed amendment to section 4 (q) is intended to prevent estate duty avoidance. In the past once the Master of the Supreme Court had given his filing notice to the executor no further estate duty could be levied. This did not cover the situation of fraud or the misrepresentation or non-disclosure of material facts by the heirs or by any other person including the executors where assets were concealed and where the Commissioner for Inland Revenue was thus illegally deprived of estate duty which he would otherwise have assessed.

Accordingly section 9A has been introduced to allow such assessment to be levied provided such an assessment is raised prior to the expiry of a period of five years from the date of assessment.

A further amendment is also introduced by clause 9 in that estate duty in terms of existing legislation cannot be recovered as easily as income tax or sales tax where provisions provide for assessments to be regarded as civil judgments.

Accordingly section 25 is to be amended by this Bill to bring it into line with the Income Tax Act and the Sales Tax Act. I think this will make it much easier to collect amounts which are legally due to the fiscus.

I support further the amendments to the Stamp Duties Act and Sales Tax Act which clear up some small difficulties that have been around for several years. Requests have been made in the past for these to be cleared up and at last this has been done. I think they are very welcome. With these few words it is a pleasure for me to support the Bill before us.

Mr Chairman, the hon the Deputy Minister made the point that the Margo Commission had made far-reaching recommendations in regard to these particular taxes. We support the contention that until the Acts are actually removed from the Statute Book and despite the recommendations of the Margo Commission it remains our duty to ensure that the taxes that are being levied are applied fairly and efficiently. We support that view.

It is furthermore fair to note that many of these taxes may well be incorporated into general taxes in the future as part of the general cleaning-up process of our tax legislation. The Margo Commission has made it clear that this is possible and indeed desirable, and we would encourage the Government to do this wherever possible.

We are not going to oppose this Bill but we wish to, express our opposition to clause 9 which deals with the special rights of the Commissioner in recovering debts due to the State.

The clause reads that a statement certified by the Commissioner and filed in any competent court has the same status as a civil judgment delivered in that court. We recognise that a similar clause does exist in income tax legislation and that the clause in this Bill merely seeks to amend legislation relating to estate duty. We nevertheless believe that it is a deviation from normal legal practice and we are therefore opposed to it.

We believe that there is a fundamental principle involved. The claim of the Commissioner should be clearly set out so that the debtor has the opportunity to defend his position before judgment can be given.

As a final point I wish to comment on the inclusion of the provision of coin-operated laundry services as a taxable service for sales tax purposes. This obviously brings coin-operated laundries into the same realm as ordinary laundries. The principle is clear and we support it. I merely want to ask how such tax will be recovered in a non-inflationary way in that the provider of the service having to pay the tax will obviously seek to recover it from his customers. I understand that in many of these coin-operated laundries the coin denominations will not allow him to recover the exact amount of tax involved and it is unlikely that he will recover less than the amount he has to pay to the Government. It is more likely that he will overrecover and this surplus overrecovery will increase his profit. We see this as inflationary and we ask the hon the Deputy Minister how in fact this will be done. With that we support the Second Reading of this Bill.

Mr Chairman, it was very pleasant to receive such a good, detailed explanatory memorandum along with the Bill. It greatly facilitated the studying of the Bill. We are very grateful to the department for this document.

The hon member for Pinelands must excuse me if I do not react to his speech. I do not have many problems with what he has said.

I am, however, concerned about the attitude adopted by the hon member for Barberton. Mr Chairman, if it is convenient to you, I should like to discuss it after the resumption of business.

Mr Chairman, before the suspension of business to fortify ourselves, I indicated that I should like to say a few words on the speech of the hon member for Barberton. The hon member for Barberton is usually someone with whom one can differ and argue. It is not his habit to make a fool of himself, but I cannot understand his argument this morning, in the sense that in the legislation of today we have by no means dealt with the AWB rate. I beg your pardon, I mean AVB (GST) rate. [Interjections.] Yes, for our people, who have to pay one and endure the other, the two are equally bad.

The fact is that today we have only spoken about how the GST legislation may be improved. We have certainly not discussed the GST rate. How can the hon member, who said that he agreed with GST… [Interjections]… or rather with the GST tax… [Interjections]… say that he opposes this legislation on the grounds that the rate is too high?

Order! In order to remain within the ambit of the legislation, the hon member must clarify his use of the alphabet a little. The hon member may continue. [Interjections.]

Mr Chairman, may I ask hon members to interpret my every “w” as a “v”. [Interjections.]

If the hon member wished to argue about the principles contained in this legislation, he should have argued about the clause that provides that transfer duty must be paid where a right of leasehold on land is converted into freehold ownership. Transfer duty must then be paid on the difference. If the hon member wished to argue about the principles this legislation, he could have done so on the strength of that subsection, because his party is opposed to Blacks obtaining property ownership in South Africa. In this way he would have been acting in accordance with their policy if he had opposed this legislation on that score. I shall leave it at that.

When one reads through this Act, one is grateful that charitable organisations involved in the care of the aged subject to certain exemptions in terms of this legislation. In the new philosophy underlying the policy with regard to the care of the elderly, there is an increasing tendency to have this done by private enterprise. Therefore I am grateful that this concession is being made.

Order! Hon members must please lower their voices. The hon member may continue.

I see it as a problem, however, that clause 12, in which provision is being made for exemptions for charitable organisations, reads, inter alia—

In my opinion it is not linguistically correct to say that someone is going to carry on doing something if he has not yet started to do it. After all, one must start something before one can carry on with it. In my humble opinion there is definitely a linguistic problem here.

As far as the Sales Tax Act of 1978 is concerned, it is gratifying to see that we are not waiting for the Margo report to appear before making corrections and adjustments in the GST legislation and in other taxation laws either.

It is interesting that section 4 of the principal Act is being amended to allow the Commissioner for Inland Revenue to pass on information to the Commissioner for Customs and Excise.

The reason for this change is also interesting. This change stems from the taxation legislation of 1981 when an additional import duty on jewellery was imposed. That legislation was the cause of the present situation, in South Africa, according to the hon member for Yeoville, in which 80% of the jewellery sold in this country has been smuggled in. It is smuggled in so that the customs and excise duty does not have to be paid on it. It is only when it is sold that GST is paid on it. The fact that the Commissioner: Inland Revenue can furnish the Commissioner: Customs and Excise with this information, will mean that these smuggled items will be traceable, and that offenders can then be fined. In this connection I am pleased that although this essential change has been made, the Commissioner: Customs and Excise is being prohibited from furnishing any other party with information he has obtained in this manner from the Commissioner: Inland Revenue. If he did furnish this information, he could be fined fairly heavily. Therefore I am very grateful that one is at least protected in one’s ordinary daily life.

I have already mentioned that I am glad we are not making constant use of the excuse that the GST legislation and other changes to taxation legislation must be held back, simply because we are awaiting the report of the Margo Commission. We are always prepared to make the necessary changes.

In May this year I wrote a letter to the hon the Deputy Minister in which I asked for the lifting of GST on grain sorghum products. My motivation is that in South Africa there are several basic foodstuffs that have been exempted from GST. Basic foods such as meat and milk, and especially bread and mealie-meal, have been exempted. Even rice has been exempted from GST because it is a basic foodstuff that is unprocessed and is also the staple diet of a section of our population.

What about liquor?

Mr Chairman, the hon member for Stilfontein, who shares a bench with me, says that liquor is also one of the basic products that we need. There are probably hon members who agree with him, but I should prefer not to express an opinion on this matter. [Interjections.]

The fact remains that an anomaly exists in respect of the product manufactured from grain sorghum, which is one of the basic foodstuffs of the Tswana people. Sorghum is such an important basic food that at present there is a very active export market of grain sorghum and grain sorghum meal and porridge—not of maize—to Botswana, Bophu-thatswana and Lesotho. I wish to appeal once again to the hon the Deputy Minister to rectify this matter. If GST is levied on grain sorghum products—basic foodstuffs consumed by large numbers of the less privileged—and it is not levied on the products with which grain sorghum has to compete, it has two results. The first is that grain sorghum is placed in a critical position as far as competition is concerned. Secondly, it is also true that the population group that consumes grain sorghum as a staple foodstuff, is unfairly prejudiced, because no GST is levied on the staple foodstuffs of other population groups.

Mr Chairman, I should like to thank hon members who have participated in this debate.

The hon member for Barberton, the chief spokesman of the Official Opposition, welcomed the legislation but said that because the GST rate had been increased, he could not support the Bill.

†I understand he wants to register a protest because of the GST rate. He is, of course, entitled to do that and he has chosen this debate as an opportunity to do so. Oscar Wilde said there is nothing as futile as two people arguing opinions. I therefore do not think it is going to be very fruitful for us to enter into an argument about it now.

*The fact of the matter is that we agree with that. That is why we had the Margo Commission appointed. The hon member knows full well that the personal tax that we discussed earlier is too high. The GST rates are also too high. There are of course several reasons for this. The actual and fundamental reason is of course that we have permitted the tax base to be narrowed. In this regard I can tell the hon member for Heilbron at once that the proposal he made is also totally in conflict with the guidelines set in the Margo report, in terms of which we ought to expand the tax base, not narrow it. If we want to reduce rates we must expand the base. Mr Justice Margo therefore proposes several ways in which this objective may be achieved.

Mr Chairman, may I put a question to the hon member across the floor of the House? Is the hon member in favour of fresh foodstuffs being included in the ambit of GST or not? The hon member says he is not. Therefore he does not want us to include fresh foodstuffs within the ambit of GST. Nevertheless he asks that we reduce the rates. Can the hon member then tell me where the money for this is to come from? You see, therefore, that this is impractical, Mr Chairman. The hon member cannot argue in that way. It is simply illogical. One cannot on the one hand say that the tax base must be broadened while on the other one is not prepared to sacrifice anything. The fact of the matter is that that hon member will know perfectly well that it is stated in the Margo report that it costs us—I hope I recall the figures correctly—R1,8 billion not to collect GST on fresh foodstuffs, which are in fact excluded from GST. The amount which reaches the needy people, the real target group in this regard who ought to benefit—is a mere R300 million.

Would R300 million be too much?

To help needy people? No, the hon member does not wish to reach needy people. What does the hon member mean when he asks whether R300 million will be too much?

We do not want to debate in this way!

Mr Chairman, the hon member says we must reduce GST. That is why he does not want to support the Bill. At the same time, however, he says that we must not broaden the tax base. Surely that makes it simply impossible, Sir.

Mr Chairman, someone referred earlier to Scof, the Standing Committee on Finance. I am pleased that we have had the opportunity this year to have the tax laws informally discussed in Scof. This was done through the mediation of the chairman of the committee and the Chief Whip of Parliament. I believe it was a good start. We also hope to have a new convention develop out of that, and that in this way we shall be able to find a way of having our tax laws discussed in one way or another, particularly on the basis that we have done it this year. In general this has helped all of us.

Then the hon member asked whether I had maintained that we were going to abolish estate duty; whether we were now anticipating the Margo report in this regard. The answer to this is no. If the hon member reads my Second Reading speech he will note that I said that estate duty in its present form is no longer in line with the demands of the times, and that the Margo Commission had in fact recommended that it be replaced by something else. Accordingly the Margo Commission makes certain proposals. The fact that the legislation in question now no longer satisfies the demands of our time is something that I have mentioned at several public meetings over the past two years. The hon the Minister of Finance has also referred to this on several occasions. To tell the truth, he also referred to it when he made the concessions under the present legislation. At the time he said that he would like to do it because the legislation in question is no longer in line with the demands of our times.

†Mr Chairman, if I am not mistaken the amount of revenue the State derived from that tax last year was something like R90 million. When one thinks of the huge industry which is engaged in accomplishing the tax savings and of the way in which we immobilise capital in our country by persisting with estate duty, it becomes clear that at the end of the day this expenditure is completely non-productive. One of the great challenges facing our country is indeed the productive use of our existing capital base. Even the Margo Commission, when it addresses itself to various questions—capital gains tax happens to be a case in point—looks for ways and means to unlock the capital resources of our country, and we will really have enormous demands on our capital resources and on entrepreneurship if we want to employ people on the scale on which we need to, given the burgeoning populations we have. That means that a high premium will have to be placed on entrepreneurship and that entrepreneurs will have to be aided to remain entrepreneurs. We cannot afford the situation we have now, in which people retire at the age of 50 to begin planning their estate, whereas the peak of their earning years is reached only much later. They should be allowed to make use of their enormous skills and capital and to remain entrepreneurs, because that is what they can do best instead of putting their money completely out of their reach in trusts while spending their time planning their tax affairs.

*The hon member for Barberton also mentioned that he did not want to have sales tax on capital goods. I agree with him; I too am opposed to tax on capital goods and turnovers, because one then has double tax, the so-called “cascading”. The Margo report also contains a proposal in this regard and when we examine the entire tax system we shall undoubtedly have to examine this aspect as well.

What makes it difficult, of course, is the fact that 20% of the tax we are currently collecting by way of sales tax, comes from capital goods. This makes it difficult if one does not have a total rearrangement because if one does not have a total rearrangement it will simply increase the rates from the remaining GST burden.

We shall therefore have to look at the matter as a whole, but I am sympathetic towards what the hon member had to say in that regard. He referred in particular to tractors, but this of course applies to all capital goods.

†The hon member for Pietermaritzburg South more fully explained some of the most important measures contained in this Bill and supported them. I am most grateful to him.

The hon member for Pinelands spoke about the recommendations in the Margo Report and about estate planning in particular. He said it remains for us to maintain the efficiency of our tax system to the last moment, even if we are going to alter it. That is vitally important. One of the big problems of our tax system at the moment is the lack of efficiency. I do not know if I have mentioned it here, and if I have, I apologise. However, for every 1% growth in gross national product in our country, the growth in GST is only something like 0,93%, and for every 1% growth in gross national product, the company tax yield is only 0,7% or something like that. Yet, the growth in the personal tax for every 1% growth in the GNP is something like 1,6%, so one can see where the fiscal drag comes from. The situation then becomes compounded. It is therefore very important that we maintain the efficiency of all the tax instruments we have, lest the burden grow on those sectors which are efficient, like personal tax.

The hon member also mentioned coin-operated laundries. If he looks at clause 20 of the Bill he will see that very soon these people will rate as service industries and if they have turnovers of under R50 000 they will be delisted in any case and they will pay tax at source and not on their turnover. That would resolve the hon member’s problem. I do not know whether a normal coin-operated laundry can have a turnover of much over R50 000; it is probably much lower than that. That would be the remedy for them, and the remedy is in the law itself. We have, however, been in touch with these people and should it not prove to be an effective remedy, then we will look at something else—maybe dealing with them sui generis, because it is true that if one has a 50c slot machine then your next increase must be a 100% increase if one has to put two coins in the slot. I understand that very well.

*The hon member for Heilbron spoke about the jewellery industry. I urge him to read the report by the Board of Trade and Industry on the jewellery industry which has just appeared. It contains an extensive discussion of the jewellery industry and also shows us that this is not a simple matter that only affects tax; it affects so many things—the deregulation of several laws, and so on. Another major problem they have is the turnover and the margins that are so low. We shall therefore have to examine the entire structure of that industry. We are in fact engaged in doing so. Mintek is doing this, as well as the Board of Trade and Industry. We are also examining the tax aspect. If we can assist in that regard we shall do so. We are discussing the matter with the Board of Trade and Industry at present.

I have replied to the hon member on the issue of grain sorghum. I think we should be very careful. We are so quick to talk about exceptions. The hon member spoke about tractors and about grain sorghum. However, when we look at the Margo report it is clear that our tax system is out of date and its base is too narrow.

†The Margo Commission tells us we must broaden our tax base. It tells us we must get rid of exclusions; that we must include everybody and abolish exclusions. If we should therefore persist on this present road by adding yet more exclusions to the already narrow tax base, it will get us exactly nowhere.

With these few words, Mr Chairman, I thank all the hon members who have supported this legislation.

Question agreed to (Official Opposition dissenting).

Bill read a second time.

Bill not committed.

Bill read a third time.

Mr Chairman, I move:

As is customary, the Bill deals with diverse matters affecting the State Revenue Fund. Contrary to other years, the Bill before this House consists only of a few clauses.

The various clauses are fully explained in the memorandum on the objects of the Bill, therefore I will deal only with the more important clauses.

Hon members are reminded that in respect of defence, provision is made but underfunded in the expectation that certain cash payments may not materialize during the year. Hence two amounts are provided for. The first is an amount defence is authorized to commit in a particular year which in fact is the actual budget. However, as happens in practice, the amount of cash required in the corresponding year to discharge and pay for the commitments entered into need not exactly match the commitment authorized. For this reason a second lesser amount which, it is envisaged, will be sufficient to meet the cash requirements is also allocated.

If at the end of a financial year it becomes clear that the amount allocated in respect of the cash requirements is insufficient, the allocation is supplemented by the shortfall in terms of section 1A of the Special Defence Account Act, 1974, normally during the following financial year by means of an appropriation in the Finance Bill. In respect of the 1986-87 financial year it was estimated that the cash requirements would be R200 million less than the amount defence was authorized to commit. It so transpired that at the end of the 1986-87 financial year that cash payment were in fact R190 million more than originally envisaged, which amount is now being appropriated by means of clause 1 of the Bill.

The purpose of clause 5 is merely to restore the situation as it was before the Provincial Government Act, 1961, was repealed last year. As hon members will be aware, all schools collect hostel fees, fees for a school fund, etc. The repealed section 88(3) of the Provincial Government Act, 1961, provided the necessary sanction to schools to retain such money and to use it to defray their expenditure. The same principle is now incorporated in the proposed clause 5.

†Clause 6 is fully explained in the memorandum. The railway line between Champet and Atlantis was constructed as a “guarantee railway line” for which purpose the Treasury granted interest-bearing loans in the amount of R32 000 000 to the SA Transport Services. This project was approved by Government to improve the transport of goods between Atlantis and the Cape Peninsula. It must be stressed that this project contributes greatly to Atlantis as an industrial area.

The purpose of clause 9 is to confer a discretionary power on the Auditor-General with regard to the presentation of certain statements of account to Parliament. The intention of this discretionary power is to limit the presentation of unnecessary detail for publication in his already voluminous report to Parliament in order to effect savings. Notwithstanding these new powers to be conferred on the Auditor-General, the status quo in respect of the certificate as well as the reporting to all such accounts will, as in the past, still be contained in his report to Parliament—vide section 45(1) of the Exchequer and Audit Act, 1975.

In conclusion I wish to thank members of the Standing Committee on Finance for their work on and contribution to this Bill.

Second Reading resumed

Mr Chairman, during the discussion of the previous two Bills, I referred to the exhaustive Second Reading speeches made by the hon the Deputy Minister to clarify and explain the relevant measures. I regret, however, that as far as the Bill under discussion is concerned, the hon the Deputy Minister did not make a very comprehensive Second Reading speech about the contents of the Bill.

I found the following especially striking. We discussed this Bill in detail on the standing committee. The respective parties all put their case with reference to each clause of the Bill. I find it very strange that precisely those clauses to which the CP objected and had reservations about were not covered by the hon the Deputy Minister in his Second Reading speech at all.

I am not going to take up the time of the House this afternoon by referring to the clauses we agree with in the Bill. Allow me, however, Sir, to refer to those clauses on which we differ.

The first matter I want to refer to is the following. Apparently the Government decided after the institution of the new dispensation and when the standing committees were established that a certain additional remuneration would be paid to the chairmen of the standing committees. We have always accepted that something of this kind takes place according to law. In dealing with this Bill, however, we have discovered that all those allowances paid to the chairmen of the standing committees during the past few years were paid without there having been any legislative authorisation at all for the payment thereof. In addition, at this late stage, we are expected to legalise the payment of that money—the taxpayers’ money—to the chairmen of the standing committees, with retrospective effect! We simply do not see our way clear to doing so, Mr Chairman.

What is more, Sir, we concede that some of the chairmen of the standing committees have a great deal of work. Before the new dispensation began, however, the chairman of the Select Committee on Public Accounts, for example, also had a great deal of work, but he never received additional remuneration.

What is the case now, however? We find that some chairmen of some standing committees have hardly any additional work. I should like to know whether the hon members on the opposite side can tell me how many times the Standing Committee on Foreign Affairs has met during the past three years.

Development aid has a lot to do with it.

What about in the beginning? How many times did those people meet? They had no work. Yet that chairman receives a considerable amount in remuneration. For nothing! We simply cannot approve that.

The next matter that the hon the Deputy Minister made no reference to in his Second Reading speech, was the contents of clause 7. It is true that in 1982, with the agreement and approval of the then Minister of Finance, Mr Horwood, as well as a Government guarantee, Greater Soweto obtained a foreign loan of $160 million. At the time the rand was equal to 92 American cents in terms of the rand-dollar exchange rate. It is rather surprising that that money was borrowed for certain projects which would normally be regarded as relatively long-term projects.

This foreign loan was negotiated for a period of seven years, guaranteed by the Government. The rand value of the loan was R72,9 million at the time. At the present exchange rate, the capital amount of that loan is quite a bit more than R300 million. What was never noised abroad, however, was that in terms of that agreement the taxpayers of South Africa were standing surety for the Greater Soweto Council, not only for the repayment of the capital of that loan, but also for the interest payable on that loan. The South African taxpayers have had to stand surety for the payment of the interest from the beginning.

Are the people of Soweto not South Africans?

I am talking about the taxpayers.

Are they not taxpayers?

Show me any other municipality in South Africa which gets interest-free loans from the Government. What is more, it was arranged that the Government would lend Greater Soweto an amount equal to that borrowed by the overseas banks to Greater Soweto for a period of 25 years. No capital was repayable for the first five years, but in addition no interest was payable.

What is the term of your Land Bank loan?

I do not have a Land Bank loan. In any case, if I did, I would pay interest on it.

It is interesting that the first instalment of a capital redemption for that loan was to have taken place on 29 May this year. We asked whether Greater Soweto had paid any interest. Had they paid that instalment which was payable at this stage? The answer to us was that it had not been paid. This first instalment on the loan had not been paid. No interest was paid on it. I predict that it will not be paid in future either, and that the South African taxpayers will eventually pay the full amount in capital and interest.

Is the experience we have acquired in respect of this matter not one of the reasons the hon the Minister of Constitutional Development and Planning is so eager to get his regional services councils going? Here we have a telling example of how discrimination was applied to the advantage of the Black community, despite the fact that this Government tells us we should move away from discrimination.

I ask once again which other local authority can get a loan from the Government on the same favourable conditions on which this loan was granted to Greater Soweto? I want the hon the Deputy Minister to tell us what their prediction is. Is Greater Soweto going to pay next year’s instalment? Can they and are they going to pay this year’s interest? In the last place I want to know whether the interest paid to the foreign institutions in respect of that foreign loan by the Government in the meantime is being capitalised on the amount that Greater Soweto will have to pay eventually and whether interest will be payable on such capitalised interest.

Since we are not at all satisfied with this provision which the hon the Deputy Minister did not even refer to in his Second Reading speech, we have no reason to support this measure; on the contrary, we have no choice but to oppose it.

Mr Chairman, I do not understand the dismay of the hon member for Barberton about certain clauses of this Bill which were not mentioned in the hon the Deputy Minister’s Second Reading speech. A comprehensive explanatory memorandum was issued with this amending Bill and in addition, this measure was discussed by the standing committee, in which there was plenty of opportunity for any member of the standing committee to enquire, request further information and obtain evidence about any clause. The objection that certain clauses were not dealt with comprehensively in the hon the Deputy Minister’s Second Reading speech, is not, therefore, just in my opinion.

I find it even more interesting that it seems that the Official Opposition has the ability, almost like Sherlock Holmes, of digging through every piece of legislation before this House to see whether there is some provision which is to the advantage of any Blacks, and then to oppose that provision. The impression one gets is that they are not at all interested in the merits of any legislation, but simply make a stand against anything that may benefit the Blacks in some way or another. It is interesting to take a look at a statement that was issued when this loan was made known. It was made available to all the members of the standing committee, and it spells out the purpose of the loan as follows:

When one observes the opposition of the Official Opposition, one may ask whether they are against the provision of such services in the Black areas. Are they opposed to every attempt at upliftment or development that affects Blacks? [Interjections.] I really cannot come to any other conclusion. There is no better way of promoting revolution than the attitude of opposing everything that may benefit Blacks in some way. [Interjections.]

This amending Bill contains a number of clauses, but time does not permit me to deal with each one comprehensively. The hon member for Kuruman will deal with certain clauses on behalf of this side of the House in his competent way. We understand that this amending Bill is traditionally dealt with at the end of a session in order to regulate or rectify a variety of matters. Usually it is not a contentious matter. We have learnt, however, that with the new Official Opposition in this House, the meaning of “contentious” has changed completely. I should like to support this Bill.

Mr Chairman, we on this side of the House will not be opposing this Bill. I would, nevertheless, like to make a few comments relating to it. I want to extend my apologies to the previous two hon members as I shall not be dealing with the question of the Soweto loans, although one of my colleagues will be doing so.

I should like to refer briefly to some of the clauses and I start with clause 3 which was also raised by the hon member for Barberton. This clause refers to the question of office-bearers and the definition of standing committee chairmen as being office-bearers for the purposes of the Payment of Members of Parliament Act. If we are going to define office-bearers as such we should include deputy chairmen of standing committees where they exist. We believe simply that this would be consistent and fair for if we recognise the chairmen of these standing committees as having additional responsibilities, the same should apply to the deputy chairmen where they exist. Regrettably this has not been done.

Clause 4 deals with the authority of Mr Speaker to authorise members’ absence from Parliament, which is laid down as a statutory 25 or 27 days, but may be increased where the House sits for longer periods. The wording specifically makes it clear that the authority of Mr Speaker may only be exercised for members generally and may not be exercised for an individual member or group of members. We on this side of the House believe that this is incorrect and that there are instances where Mr Speaker may be required to deal with individuals or individual groups. An example today is the fact that the hon member for Yeoville is not present and participating in the debate because he has absented himself due to the Jewish holidays. Earlier on the hon the Deputy Minister referred to the fact that he was rather sorry that the hon member for Yeoville was not here, and that is the reason why he is not here.

We argue that if absences for members generally are going to be allowed, particularly where Christian holidays apply, allowances should also be made for other members and groups such as the Jewish, Moslem or Indian group. Situations will arise where this will be necessary. We believe that that would be fair and that Mr Speaker should have the authority to grant such leave of absence.

With reference to clause 6 we accept that the SATS cannot be expected, as outlined in the memorandum, to operate at a deficit when having to pick up the tab for interest on money advanced by the Treasury. This is a situation where the SATS are obliged to incur the interest, but they are in turn being reimbursed by the Treasury for the operating loss including interest payments on that particular line, namely from Chempet to Atlantis. This is obviously a situation which has to be addressed and we support the clause which has done so.

Finally, the amended clause 9 deals with the Auditor-General and enables him to exercise discretion regarding the tabling of accounts in Parliament. Most hon members recognise that there is a host of bodies for which accounts have to be prepared by the Auditor-General and on which he has to report, and in the past all of these have been included in what has become a voluminous document. We support the legislation proposed in this connection, whereby the Auditor-General may at his discretion not include certain statements of account. We believe the situation is covered by the fact that he will nevertheless still have to report on those accounts and will obviously highlight anything that needs highlighting. Accordingly we support the Bill as tabled.

Mr Chairman, I want to thank the hon member for Pinelands for his support of this Bill. He raised some of his party’s objections to certain clauses, and I am sure that the Committees on Standing Rules and Orders will, in their wisdom, look at these objections in due time. I have no doubt that those objections of his will be met.

After this Bill before the House has been dealt with, the hon the Deputy Minister will be leaving for Washington where he will join the rest of our delegation to the IMF conference. On behalf of this side of the House I want to wish him well. May he enjoy a safe journey there and back, and Godspeed.

Before his departure for Washington, the hon the Minister for Finance pointed out to us that conditions in South Africa are much more favourable this year than a year or two ago when he attended a similar meeting. So we are looking forward with great anticipation to these discussions and to whatever further benefit South Africa may reap from them.

I would also like the hon the Deputy Minister to convey our regards and best wishes to the rest of the team in Washington.

*Now I should like to come to a matter which the hon member for Barberton discussed at length, and that is the question of the upgrading of Greater Soweto, the loan which was raised abroad at the time by means of a German bank through a consortium of banks, and the purpose for which it was raised. I did not really understand what the hon member for Barberton was objecting to most of all. Was it to the fact that the taxpayer, as a result of the non-payment of the interest by the city councils of Greater Soweto, would now be forced to pay in that amount, or was he objecting to the loan as such in principle?

It has been standard practice, for as long as I can remember, to finance one-off projects by means of loans, and not by means of taxpayers’ money. I accept that this was one of the reasons, and the considerations, for this loan of $160 million being raised at the time to improve the infrastructure in Greater Soweto. One must also take into account that we had a commission at the time, under the chairmanship of a former postmaster-general, Mr Louis Rive, who recommended, for example, that Soweto be provided with electricity. That loan was raised internally. It came to an extraordinarily large amount, namely R224,5 million. That loan was raised before 1979, and was spent over the period between 1979 and 1987. At the time the hon member for Barberton and many of his colleagues were still members of the NP. I therefore accept that they have nothing against the principle of a loan being raised for the sake of one-off expenditure such as this.

I come now to the question of the upgrading of the Black residential areas, and the improvement of the infrastructure there. Let us consider the $160 million loan which was raised in 1982, and let us cast our minds back to that time. We were in a period of a burgeoning economy, and if we had raised the loans internally at that stage, it would have placed unnecessary pressure on our internal capital markets. The objection at the time could have been that the Government was competing with private enterprise on the money market. In addition one must bear in mind that this loan was a soft loan, at an extremely favourable interest rate. Because it was possible at that time to raise foreign short-term loans at such favourable interest rates, the loan for Greater Soweto, for which the Government stood surety, was just as attractive as it was for many private companies to raise these loans. For example, the Wool Board was one of the organisations that raised a loan of that nature, and the hon member for Barberton is aware of the fact. It was because the conditions attaching to such loans were so favourable.

It is probable that at that stage the Government saw in this another sound benefit, and decided to afford foreign banks favourable to us an opportunity to silence their critics with good works in the form of loans. At that juncture—to be precise I am merely referring to 1982—it would probably not have been wise for the Government to float a loan internally. I do not think the hon member for Barberton has any objection to that. If he does, he must tell me.

I think his real objection is to the fact that this money was used to develop a Black residential area and its infrastructure in an area which according to the CP is situated within White South Africa.

And it was Connie who did it.

Yes, let us forget about a former hon Minister, who is now the hon member for Randfontein and a member of that party, who said that he wanted to make Soweto one of the most beautiful Black cities in Africa. [Interjections.] Let us say nothing further about that. The point I nevertheless want to make, Sir, is this: The only objection hon members of the Official Opposition, I think, really have to a loan of this nature is inherent in the fact that this money is being employed for the upgrading of Black areas in what they call White South Africa. [Interjections.]

I now want to put certain questions to these hon members. The hon member for Carle-tonville has just said that I am wrong; it is because Greater Soweto does not pay its debts that they are objecting to this loan. Did I hear the hon member correctly?

Yes, you heard me correctly!

Oh, I therefore heard the hon member correctly. When Greater Soweto has therefore paid its first instalment, which in any event only became payable this year, the hon members would not have been opposed to the clause in question. Is that correct? [Interjections.] Would they then not have been opposed to the clause in question?

The question is whether they are in fact going to pay their debt! [Interjections.]

No, Sir, I want the hon member simply to answer yes or no. [Interjections.] He has now put his foot in it. He has now given me a reply, and I want to know from him what his objection to this loan is. He said their objection to this loan lies therein that Greater Soweto has not paid its debt. If Greater Soweto had therefore paid this amount of just over R4 million, which was owing in May, the CP would not have opposed the clause in question. Is that correct? Do I understand the hon member correctly? [Interjections.]

Not a peep out of them!

You see, Sir, one cannot, when one is defending a fundamental standpoint which one may not disclose in public, drag other excuses into the arena to try to get a way with it in that way. [Interjections.] However, I shall leave the hon member for Carletonville at that. The Tswana have a saying that when one is collecting a full load of wood, one must not waste one’s time with twigs. [Interjections.]

Let us examine the programme of principles of the CP for a moment. In that programme we read that the party will at all times positively promote White majority occupation in the RSA.

Are you opposed to that?

Then they go on to say… Yes, I am opposed to that, because it is not practicable. [Interjections.] Then they go on to say, in this programme of principles, that the consolidation of every people’s territory and the settlement of every people under its own authority will be positively promoted. Now hon members must listen to how they propose to achieve this. They want to do this by means of industrial decentralisation, by way of financial measures…

Mr Chairman, on a point of order: Is the hon member for Kuruman dealing with a clause of the Bill under discussion?

What clause are you dealing with?

Order! I am listening carefully to the hon member for Kuruman in order to ascertain the course of his argument and how he relates what he has just said to the Bill. The hon member may proceed.

Mr Chairman, I am referring to clause 7 of the Finance Bill, as well as to the objection hon members of the Official Opposition are raising to the granting of a loan of R160 million in terms of this particular clause. [Interjections.]

Order! The hon member should, in his argument, deal just a little more specifically with the Bill. The hon member may proceed.

I am doing that, Mr Chairman. This time, however, it is just taking me a little longer than usual. [Interjections.]

Order! To use the hon member’s own image now: I am just afraid he is not going to collect a full load of wood. [Interjections.] The hon member may proceed.

Mr Chairman, I will load up the wagon very quickly if that is what will please you. [Interjections.]

I just want to say that when we examine this programme of principles of the CP and see all the things they want to do, I want to know from them whether this entire programme they have here, according to which they are going to relocate people, according to which they are going to establish new urban areas…

Where is that stated? [Interjections.]

It is stated here in the principles. If you want majority occupation in White South Africa… [Interjections.]

Order!

If the hon member wants majority occupation in White South Africa, how is he going to achieve that without relocating Black people? [Interjections.]

Order! Hon members really should not object when the hon member for Kuruman quotes something which they are frequently telling him to quote. The hon member for Kuruman may proceed.

Mr Chairman, can the hon members tell me whether they are going to obtain the money they are going to need in this kind of programme which they are proposing from the taxpayers, or are they going to obtain it from loans? [Interjections.] I tell you, Sir, if they want to apply sound economic principles, they will have to do it from loans, and not from taxpayers’ capital.

Foreign loans!

If they can obtain foreign loans at the favourable conditions under which we were able to obtain them in 1982, and they do not do so, they would be doing this country a disservice.

Mr Chairman, I want to join the hon member for Kuruman in wishing the hon the Deputy Minister a pleasant journey to the United States. I hope that his discussions at the IMF conference are going to be successful and pleasant. I also hope that he is not going to be that much engaged in the discussions at that meeting that he is not able to move around Washington to any degree. It is a very attractive city and I hope he will be able to get out and have a look at the public works and the layout of the city generally and enjoy all that Washington has to offer.

There is obviously a desire to make haste here this afternoon and so I will not take up much time. I also want to refer to clause 7 which has been referred to as the Greater Soweto clause. It has been made clear that that loan of $160 million which was negotiated in 1982 by the then Minister of Finance, Prof Horwood, and the three mayors of Greater Soweto, was to assist Soweto to provide financing for civil engineering works for the supply and distribution of water, the improvement of streets, stormwater drainage, major arterials and public transport facilities and construction related to sewage services.

Soweto is most probably the largest city in South Africa. There are an enormous number of people living there many of whom went there against their will—one does not want to go into all the sordid details of the removal of people from Sophiatown—and most of them would not want to live there if they had the choice, but the Group Areas Act requires that they stay there. They are not allowed to move into other areas. Also, the policies of this Government over many years prevented a sufficiently large tax base from being built up in that area for what became the municipality of Soweto or the municipalities of Greater Soweto which could be used to provide their own finance. They were forbidden to allow industries and commercial enterprises to be established in those areas so there simply is no way in which they are able to finance the large amount of development which is required in those areas. We think that the arrangement that was entered into in April 1982 was the correct thing and we support that and we support clause 7, because of all the circumstances that have been discussed here today with regard to the fall in the value of the rand and because of the situation that one finds in Soweto.

There is a problem there with regard to rental payments. It is a sensitive issue and one does not want to get involved in such an argument during the course of this debate. However, there is definitely a problem in Soweto and we believe it is correct that the Government is improving the situation to the extent that they are in clause 7. We not only support that clause but we support the Bill as well.

Mr Chairman, I thank the hon member who has just spoken for his support of the Bill.

The purpose of clause .7 is entirely technical. It is a question of the rand commitments and what they will be at the maturation of the loan. If by the time the loan matures the rand has appreciated substantially this may never happen. It is simply a measure of prudence in case something should happen. As a matter of fact—in so far as losses are concerned—the Exchequer has covered itself for the losses.

I think it was the hon member for Kuruman who dealt very extensively and very skilfully with this whole matter. I will not cover the same ground again because I am afraid that the chairman will rule me out of order as this clause has got nothing to do with what should or should not have happened in Soweto. This is purely a technical clause to cover the Exchequer should there be a loss at some future time because of the movements of the exchange rate. It has nothing to do with anything else.

The hon member for Johannesburg North raised this matter and, since he is from that city, one must reply to it. He says that we were remiss and that he is all for it. I agree with him that it was the right thing to do. He blames the Government and the Group Areas Act. Now I do not want to say that we are not guilty of perhaps overinvesting in the First World parts of our economy and underinvesting in some of the Third World areas of our country—I think it is true and we all know it. However, one should not blame the Government when it was primarily the responsibility of the Johannesburg City Council for over a century. The Johannesburg authorities simply ran away from their responsibilities. [Interjections.]

I do not want to turn this into a Group Areas debate but I can remember as though it was yesterday the time when Father Huddlestone was saying to the poor people of Sophiatown: “Don’t go, my children, don’t go.” Does the hon member have any idea of the horror that would have been unleashed upon those people now if they had listened to the poor advice that was given to them? [Interjections.] We should not start pointing fingers at each other.

The reality is that our country poses enormous challenges born of the urbanisation of all the people of this country. To some extent that is a universal challenge and to some extent…

The history of Sophiatown is sordid!

Yes, but that is part of the reason why the Government made this expenditure. This was only for the civil work. The electrification was done by means of local loans—the hon member will know that.

It was the proper thing to do and the Exchequer has behaved correctly in every respect. As the hon member said it followed upon the Rive Report.

*As far as I can remember the hon member for Barberton did not raise any objections to this story at that stage. I do not know whether he did so then or whether he is now objecting in retrospect. I think we should leave the matter at that.

The hon member also objected to clause 3 of the Bill which deals with office bearers. That hon member is a civilised and an educated man who has been a parliamentarian for a long time. He is a front-bencher and a veteran in this House. He therefore knows the traditions of this place, and he knows that there are offices in Parliament which have been in existence for hundreds of years without ever having been included in the Constitution. He knows, for example, that the title Leader of the Official Opposition did not even appear in our Statute Book for the first 50 or 60 years of our existence. He also knows that the incumbents of that office were not remunerated in the same way as normal members.

He knows very well that many of the offices in Parliament developed out of traditions and conventions and that it was not always necessary for these offices to be recorded. The fact that we are now recording them does not mean that we have suddenly created something new. These offices developed out of traditions and we are recording them in the Statute simply for the purposes of regulation.

†This is a matter for the Committees on Standing Rules and Orders. This is not a matter for the Treasury or for the Department of Finance, but a matter for Parliament itself—a domestic matter affecting Parliament. The reason for it being in this Bill, is that at this time of the year uncontroversial Bills come before Parliament. Traditionally this kind of Bill contains uncontroversial measures. This is a completely innocuous measure and we did not see it as controversial. If we had seen it as controversial, perhaps we would not have included it.

That hon member knows that the matter has been referred to the Committees on Standing Rules and Orders, which is the proper place for it to be discussed. He just comes and makes a fuss, because he is trying to show off.

*He knows very well that he has his tongue in his cheek when he says things like that because he knows he is not supposed to talk such nonsense here.

He is referring to the instalment of the Soweto loan which has not been paid. The fact of the matter is that Dr Simon Brand of the Development Bank is at present discussing the matter with the people to see whether we can find a way out of that dilemma.

I listened with great understanding when the hon member for Rissik replied to the hon member for Barberton. I asked myself what our future generations would to think if they were to sit in this Parliament and read the Hansards one day.

†What will they think if they read about the attitude of that hon member on the question of the great social problem of a big inner city area like Soweto, which after all is the largest metropolis in the world south of Milan? It is a new city facing vast new challenges of rapid urbanisation. I wonder how future generations will judge those two speeches when one listens to the sensitivity with which the hon member for Rissik dealt with this matter and the insensitivity and lack of compassion and understanding of the social consequences of what is happening in our country that flowed from the speech of the hon member for Barberton. I have very little doubt.

I am sorry if I hurt the hon member for Pinelands’s feelings in an earlier debate, because I was not trying to do so. However, the hon member for Pinelands is now speaking on behalf of the hon member for Yeoville who is not here because of the Jewish holiday. We miss that hon member very much and we must really arrange our debates better. The fact of the matter is that the hon member for Pinelands was really making a plea for the hon member for Yeoville. He also said that we must recognise the deputy chairmen of standing committees. I think the deputy chairman of that standing committee is a respected man and I also think that the position is a respected one. I think the conventions can deal with it, but if the hon member is not happy with the conventions or with the way in which this convention is being prescribed in the legislation, I think the proper place for it to be discussed is the Committee on Standing Rules and Orders. I ask that hon member to take it there.

Regarding clause 4, we do not have to argue about that. It is in the preamble to our Constitution that we stand for religious freedom and, insofar as what he has said is basically in conformity with our national stance on religious freedom, I think the place to discuss it is in the Committee on Standing Rules and Orders.

The hon member for Kuruman very brilliantly sketched the Soweto story. He also wished me personally and our party well at the IMF conference and I thank him for that. I also thank the hon member for Johannesburg North for his good wishes. I appreciate that very much. I agree with his sentiments on Washington which is a very beautiful city on a human scale. Whether or not we shall have the chance to look at it, I do not know. However, we shall try if we can.

We go to the meeting of the IMF where we will, of course, see mainly the banks. The hon member is correct. We will approach the banks with much more confidence. Many banks showed great faith in us a few years ago when things were really rough. I think we have proved worthy of that confidence that was displayed in us. To that extent we will meet with them with greater confidence than we have been able to over the past years. We have been worthy of the trust that has been placed in us. We have maintained a surplus on the balance of payments; we have paid back all the capital; interest payments and dividend payments have been maintained over this whole period; and we have honoured all the undertakings we gave in every respect. All this has happened at a time when other countries in the world have been defaulting. Our behaviour has therefore been against the general trend and that has brought us into even sharper focus as a sui generis case of a country that is performing well and has reacted only to political circumstances, and that we have done so in such a way as to regain the confidence of the international banking community.

With these few comments I thank hon members for their support.

Question agreed to (Official Opposition dissenting).

Bill read a second time.

Mr Chairman, I move:

Agreed to.