House of Assembly: Vol39 - WEDNESDAY 7 JUNE 1972

WEDNESDAY, 7TH JUNE, 1972 Prayers—2.20 p.m. SELECT COMMITTEE ON HEALTH BILL

Report presented.

PERSONAL EXPLANATION Mr. T. G. HUGHES:

Mr. Speaker, on Monday I raised a point of order in connection with an interjection by the hon. member for Carletonville, who, I thought, had said that the hon. member for Houghton had no right to talk in this House. He denied it. Sir, and I interjected: “That is untrue”. My attention has been drawn to Hansard, where he is reported as saying that she had no right to “sit” in this House. I withdraw my interjection.

SPEAKER’S STATEMENT ON ARTICLE IN THE “SUNDAY TRIBUNE” Mr. SPEAKER:

I have to inform the House that on my attention being drawn to an article entitled “The Rate for the Job or How to make R10 650 (minimum) a year without really training” which appeared in the Sunday Tribune on 14th May, the Secretary to the House on my instructions wrote to the Editor of the paper informing him that I considered the tone of the article to be such that it cast reflections on especially the moral and ethical standards of members of Parliament and that it could be interpreted as constituting a contempt of Parliament in that it undermined the respect due to and the authority of Parliament as an institution.

The Editor was further informed that if a suitable apology and retraction of any remarks which could be construed as reflections on Parliament and its members was published in a prominent position in the Sunday Tribune, I would be prepared to recommend to the House that the matter should not be taken any further.

On 21st May, the Sunday Tribune published my letter in full together with an apology and explanation, but as I did not consider these to be adequate, I requested the Editor to call at my office.

After a full discussion of the matter, I received a further letter, dated 1st June, in which the Editor in my opinion apologized adequately and withdrew any possible reflections on Parliament and its members.

In accordance with the undertaking given in this letter, it was published prominently and in full in the Sunday Tribune of 4th June. In view of its terms, I feel that the matter need not be taken any further and I recommend accordingly.

HOURS OF SITTING OF THE HOUSE *The MINISTER OF TRANSPORT:

Mr. Speaker, I move—

That, notwithstanding the provisions of Standing Order No. 22—
  1. (1) the hours of sitting on Monday, 12th June, shall be:
    • 2.15 p.m. to 6.30 p.m.
    • 8 p.m. to 10.30 p.m.;
  2. (2) on Tuesday, 13th June, business shall be suspended at 6.30 p.m. and resumed at 8 p.m.;
  3. (3) on Wednesday, 14th June, business shall not be suspended at 6.30 p.m.; and
  4. (4) on Tuesday, 13th June, and Wednesday, 14th June, the House shall only be adjourned upon its own resolution.

With the promised co-operation of the Opposition, I expect that we shall complete the business of this House on Tuesday evening at the latest. If it should then be necessary, we shall meet on Wednesday only to receive the messages from the Senate.

The business still to be disposed of before the adjournment of the House, comprises all the Orders of the Day up to and including Order of the Day No. 19. I know, Sir, that hon. members have undertaken to speak as little as possible, and if they keep to that promise, we shall definitely finish by Tuesday evening.

Mr. A. HOPEWELL:

Mr. Speaker, this has been agreed amongst the Whips, and I think this is an all-time record. Normally we object to late sittings, and I hope it will not be necessary for us to sit late next week. I think this is largely due to the fact that the Minister, the Leader of the House, has been able to get his colleagues, the other Ministers, to collaborate and to introduce their legislation early. We have had no waste of time this year; there have been no early adjournments. At the beginning of the session the legislation was available to members for study. We have had nearly 106 Bills to consider this session. We hope that, as a result of the good example the Minister has set this year, we shall carry on in the same way next year and thus minimize night sittings, which are not in the interests of members or in the interests of good legislation.

A further matter I should like to raise relates to Select Committees. This year we have been able to achieve results in this House because we have referred more Bills to Select Committees. Members have had the opportunity of studying technical Bills in Select Committees, and of giving them their due consideration, thus saving the time of members in this House. I think this is an example worth following, although it does place an added burden on the individual members. Many members of this House have spent many hours on Select Committees, with no Press headlines and no special mention, but the work has been well done. We hope, as we have now trained the Minister to accept the excellent advice we have given him in the past to bring the legislation on early, that he in turn has passed that on to his colleagues. If he has done so, we shall see progress in future. We support the motion.

The MINISTER OF TRANSPORT:

Mr. Speaker, I can assure the hon. member for Pinetown that I am always prepared to accept good advice, as long as it is in fact good. I must say, Sir, that the co-operation between the two sides of the House has been excellent this Session. I cannot wish for anything better. I am quite convinced that, if we receive the same co-operation in future, we shall be able to deal with every session of Parliament in the manner in which we have dealt with this one. We did a lot of work; we did it expeditiously; we had no undue delays; we had no obstruction and we had no trouble whatsoever. As the hon. member has said, we have passed quite a number of Bills. I also agree that sending Bills to Select Committees is an excellent thing. It gives members the opportunity of examining Bills in detail. When such Bills then come before the House, very little discussion takes place.

In all the years that I have been Leader of the House, we have always followed that procedure, as the hon. member knows! That is why I have always received the full co-operation of the hon. member for Pinetown and his predecessor. I can assure him that I appreciate the co-operation, and with further co-operation we should finish even before Tuesday night. It all depends on hon. members on that side because, after all, Sir, they are the members who talk so much. If they were really to constrain themselves and talk less, we might get finished on Monday night.

Motion put and agreed to.

APPROPRIATION BILL (Third Reading) * Mr. G. DE K. MAREE:

Mr. Speaker, when the House adjourned yesterday evening I was expressing my deep disappointment about the conduct of the Opposition in connection with the student demonstrations and the Police action in that connection. We heard here about rough handling and “hamhandedness”. I am disappointed that we did not hear a single word of appreciation from the Opposition for the level-headed way in which the Police performed their duties under extremely serious provocation. I think the Opposition owes it to them, and I trust that one of their speakers will also decide to assure the Police of their thanks in these circumstances. Sir, while discussing the subject of youth, one cannot neglect to point out that in this day and age our youth are growing up under very difficult circumstances, They are faced with very difficult problems, and those who want to take a firm stand and adopt a certain standpoint must do so under extremely difficult circumstances.

Sir, it is surprising how many times we, as the National Party and the Government, are accused of indoctrination. If we perhaps give talks or lessons, at school or over the radio, dealing with the traditions of our people, with their religious background, it is said we are indoctrinating the young people. But I have never once heard the Opposition objecting to the way in which our young people are being indoctrinated by foreign elements, by Communists and other destructive agitators. They are apparently not very much concerned about that, because those people are playing right into their hands. Therefore I want to convey my thanks here today—and I am sure that I am doing this on behalf of the overall majority of the South African public—to the hon. the Prime Minister and his Cabinet for their action in this country against the Communist henchmen, i.e. anarchists and terrorists, that want to paralyse the country.

*Dr J. H. MOOLMAN:

Firstly I want to say a few words about the remarks the hon. member for Namaqualand made yesterday when he began his speech and said that the Afrikaners on this side of the House allow themselves to be used to discredit the Afrikaner. I first want to deal with that, and then I want to come back to the hon. member for Namaqualand. Sir, I want to link this up with the many remarks made by the hon. the Minister of Transport in connection with the same matter, i.e. that the Afrikaners on this side are “detribalized” (“ontstamde”) Afrikaners.

*An HON. MEMBER:

Serfontein says so.

*Dr. J. H. MOOLMAN:

I am surprised that a senior Minister like the hon. the Minister of Transport—whom we have told on numerous occasions from this side of the House that we have the utmost regard for him because not only is he a very senior member, but for the most part he acts in a very responsible way—was guilty here yesterday of such an allegation. If he had motivated his remark, stating that he had said it in the heat of the Brakpan struggle, it would have been another matter, but since he repeated this remark in the calm atmosphere of this House I cannot but express my surprise and disappointment. I asked myself why, in this House yesterday, the hon. member was guilty of stirring up hatred between the White races in this country, because what he did was nothing less than stirring up brotherly hatred between the Whites in this country. I ask myself why the hon. the Minister goes out of his way to belittle the English on this side. Does he not know that today tens of thousands of marriages take place between English-speaking people and Afrikaners, a process that is physically and biologically building up a South African nation here? Why does he go out of his way to belittle the English? And I ask myself why he goes out of his way to belittle the Afrikaners on this side? What does he gain by it? Does he not realize that as a senior statesman his utterances in this House can cause a much greater degree of estrangement between the Whites than even these student demonstrations? While I am now speaking of student demonstrations, which the hon. member for Namaqualand also referred to, I just want to say that the standpoint of this side of the House was clearly stated here by the hon. the Leader of the Opposition. He made it clear that we do not condone the demonstrations, but …

HON. MEMBERS:

“But.”

*Dr. J. H. MOOLMAN:

We are in favour of any group of people being allowed to express their views and to demonstrate as long as they do not contravene the provisions of the Act. We are also as strongly in favour of law and order being maintained under all circumstances. If demonstrations take place … [Interjections.]

*Mr. SPEAKER:

Order! Hon. members must give the hon. member a chance to make his speech.

*Dr. J. H. MOOLMAN:

If there are demonstrations, which are permitted by the Act, they ought not to be opposed by any section of the population subject to the fact that the demonstrations take place in an orderly fashion and that the provisions of the Act are not contravened. Under those circumstances a demonstration can serve as a safety valve. If there are people who go beyond the bounds of the Act, whether they be students or agitators or whatever …

*An HON. MEMBER:

Then give them a hiding.

*Dr. J. H. MOOLMAN:

…we must arrest them and bring them up before the courts, not give them a hiding, as the hon. member here behind me has just said. Sir, I also want to state clearly that the condemnation of the Police action is not aimed at Police.

*An HON. MEMBER:

At whom then?

*Dr. J. H. MOOLMAN:

It is aimed at a Minister who gave instructions for the Police to take such action. It is aimed at the Government and the Prime Minister who said here that the Police would take the same action if there were a repetition of this incident.

*Mr. G. DE K. MAREE:

Yes?

*Dr. J. H. MOOLMAN:

Sir, compare the Police action last Friday with that on Monday. One can only have the utmost praise for the Police action on Monday here in front of the Cathedral. They conducted themselves with tact. Where they thought it necessary to arrest people, to bring them before the courts at a later stage, they did so. That is how the Act ought to be implemented. There was a world of difference between the Police action last Friday and that on Monday. Sir, I repeat that the very responsible Police Force in this country has to act under difficult circumstances when such demonstrations are in progress. We have the utmost respect for their actions, and the Police are not the people we are criticizing.

*The MINISTER OF INFORMATION:

May I put a question to the hon. member? Can he explain to us why the United Party acts the way it did in Johannesburg, when Mr. Widman, United Party M.P.C., took exception to the presence of students wearing blazers at the polling booth, the legal venue for casting one’s vote, but the demonstrating students in Cape Town are protected by the U.P.?

*Dr. J. H. MOOLMAN:

Sir, it is not worth while replying to that question. In Oudtshoorn students were egged on by supporters of that side of the House to take action at the polling booths. We must not blame each other.

Sir, I should like to come back to the hon. the Minister of Transport. In his speech yesterday the hon. the Minister indicated that he is very concerned about national unity. I believe him; he has given evidence of this throughout his career. But why did he act the way he acted here yesterday? Why does he call Afrikaners on this side of the House detribalized Afrikaners? Are we not living in an era when there are so many internal threats, and threats from without, against the White race that we must close our ranks and take action as one united national group? As long as this hate campaign is being stirred up we cannot act as one united people. Sir, I should like to put it in these terms to the hon. the Minister and to everyone on the other side who makes such accusations: We on this side can stand up, without any difficulty, and say that there are just as many people on that side of the House who hate the English as there are people on this side that hate the Boers —in fact, many more. There are English haters on that side … [Interjection.]

*Mr. SPEAKER:

Order!

*Dr. J. H. MOOLMAN:

There are, on the other hand, just as many people on that side of the House that never speak a word of English. I am actually entitled to say that there are many of them who refuse to speak English. I shall go further. There are many of them who cannot speak English properly. I want to go even further. I know of no member on this side of the House who cannot understand Afrikaans and I know of no member on this side of the House who cannot speak Afrikaans, no matter how broken the Afrikaans may be. [Interjections.]

*Mr. SPEAKER:

Order!

*Dr. J. H. MOOLMAN:

But if an hon. member can speak both languages, and he can understand both languages, he is entitled to speak whatever language he wants to. There are lots of members on that side of the House who have never spoken a word of English in the 11 years I have been in this House. Must I now hold it against them that they are English-haters merely because they do not do so, as it is being held against the English here that they are Afrikaner-haters because they do not speak Afrikaans? What happens to our national unity? What happens to the linking up of the White races so that they can form a solid unit and protect themselves? I repeat that if we on this side of the House wanted to do so, and as responsible people we shall not do so, we would … [Interjections.] The accusations made by the hon. the Minister of Transport to the effect that on this side of the House the Afrikaners are “detribalized” I, as an Afrikaner, would like to reject with contempt. [Interjections.] I notice that the hon. member for Namaqualand is not present. I indicated that I wanted to come back to him. He made the remark that Afrikaners on this side of the House are being used to plough the Afrikaners under, and I reject that with contempt.

*An HON. MEMBER:

When is a person an Afrikaner?

*Dr. J. H. MOOLMAN:

I should like to come back to certain statements made yesterday by the hon. member for Namaqualand when he spoke of the Coloureds and parallel development. When I interrupted him and he told me: “Can there be anything more reasonable or more sensible than what the Government is doing in connection with the parallel development of the Coloureds.” The Minister of Coloured Affairs is not present at the moment, but this concerns the relations policy of the Government. I ask the hon. the Minister of Coloured Affairs, as I did two years ago, whether he means parallel development to the very end, i.e. an eventual sovereign Parliament for the Coloureds? He replied: “Yes, if necessary.” I shall now ask any person, who wants to stand up on that side of the House, certain relevant questions in connection with the Coloured policy, this policy of the Government which is moulded on parallel development and which the hon. the Prime Minister said he did not have an answer for; our descendants must decide about it. Let me now ask this question. Is it parallel development up to a point where they will have a parliament on parallel lines to this one, to a point where they must decide about their own matters, so much so that they will make decisions about defence, transport, finance and foreign affairs? Does the parallel development go that far? Where does it stop? How far must their parallel development go? Must it only go as far as their perhaps having education and local affairs under them? Or is it parallel development that makes it possible for them to have the same development as the Whites in this country have, so that they also have a parliament with the same kind of powers this parliament has without an overall parliament? We want the answers to that. It is no use letting those aspects hang in the air and then saying: “Yes, parallel development up to a certain stage, and after that we don’t know any more.” The Government must spell this out for us so that we can see what it looks like and where it is heading. This brings me back to certain remarks of the hon. the Minister of Bantu Administration. He accused this party of being in a political labyrinth and said there was a confusion of tongues, that this party had built a tower of Babel and that it was engaged in a “rethink”.

HON. MEMBERS:

Yes.

*Dr. J. H. MOOLMAN:

I am glad hon. members are saying “yes”. I want to allege that if there is a party that needs a “rethink” it is the party on that side of the House. There is the party that needs a “rethink”. [Interjections.] When we come to Coloured Affairs we find the hon. member for Moorreesburg saying that there must be a Colouredstan.

HON. MEMBERS:

Where do you get that from? Where did he say that?

*Mr. SPEAKER:

Order!.

*Dr. J. H. MOOLMAN:

Then we come to the hon. member for Piketberg who wanted an extension of the Senate with Coloured representation in that Senate.

HON. MEMBERS:

Where did he say that?

*Dr. J. H. MOOLMAN:

Then we come to the Minister of the Interior who morning noon and night propagates better relations between the Bantu and the Whites and a narrowing of the gap between salaries and wages for the White and non-White labourers. But then we go further than this and we come to the Minister of Labour who propagates evasions of the provisions of the Wage Act in connection with border areas and the salaries in border areas. If we now want to speak about a confusion of tongues and of a “rethink” we must look at that aspect of the situation. Where is the Government heading with this policy on all these matters? Then we come to the hon. the Minister’s statement of a multinational Bantu population.

*Mr. S. A. S. HAYWARD:

May I put a question?

*Dr. J. H. MOOLMAN:

No. Then we come to the hon. the Minister of Bantu Administration’s old statement that the Bantu is a multi-national group. That is an old statement of the Minister. The White population, which is drawn from many national groups, is a White population. They are Frenchmen, Hollanders, Germans, English and many other races besides, but they are one population, the White population. But the Coloured population is also one population. They are drawn from so many backgrounds it isn’t true. They are also one population. When it comes to the Bantu there are many peoples, according to the Minister. Then he says we are still talking of a race policy. Of course we are talking about a race policy. There are many Bantu races. There are many races in the country, but there are not many Bantu peoples. I wonder whether I could have the hon. the Minister of Bantu Administration’s attention? [Interjections.]

*Mr. SPEAKER:

Order!

*Dr. J. H. MOOLMAN:

Thank you, Mr. Speaker. Do you know why the hon. the Minister is so fond of speaking about the Bantu peoples? For the simple reason that he is afraid of ever mentioning that there are South Africans living in this country, Brown South Africans and Black South Africans. He is ashamed of mentioning it. He will not mention it. He is afraid of mentioning it. And it is a fact that those of us here in South Africa are White South Africans, Brown South Africans and Black South Africans, whether we want to know it or not. I am not speaking of the Afrikaners. I am speaking of the South Africans. I am not speaking of the Afrikaners or of the Boers; I am speaking of the South Africans as such.

*The MINISTER OF BANTU ADMINISTRATION AND DEVELOPMENT:

What is stated in the Citizenship Act?

*Dr. J. H. MOOLMAN:

Supposing we were to reach the stage where we eventually accepted the hon. the Minister’s statement and his ideology of the creation of separate Bantustans. I want to acknowledge frankly that the time is fast approaching when we shall have to accept it. With every succeeding step further territorial authorities are being established with powers like those of the Transkei. It is merely a question of time. If the hon. the Minister does not do so, he is not keeping his promise. But if he does so, and one, two, three or more independent Bantustans are created, it will be an accomplished fact which this party will not be able to get away from and will have to accept. I also want to say that we shall have to accept it. But this does not affect the 7 500 000 Bantu who are at present living in the Republic. I have already said previously that according to calculations there will be 10 million Banut living in the Republic in 1980. There will not be the slightest possibility of their being shifted to the Bantustans. By the year 2000 there will be 20 million to 25 million Bantu in the Republic. What will the position of that group of people in the Republic be as far as our relations politics is concerned?

The hon. gentleman said yesterday that there is such a confusion of tongues in connection with the non-White bloc that we want to bring to Parliament—the 16 members—that we are now running away from that. It will be a long time before we are running away. That is the only method there is of giving representation to the many Bantu living in this country. That is the only method. But I want to go further. Within the scope of the Government’s policy of the establishment of separate Bantustans as such …

*The MINISTER OF HEALTH:

May I put a question to the hon. member?

*Dr. J. H. MOOLMAN:

Oh, Mr. Speaker, I have only 6 minutes left. Within the Government’s policy in connection with the establishment of Bantustans they have no safety valve for the millions of Bantu living in the Republic. They will sooner or later have to accept the policy of the United Party, i.e. that one is entitled to say to a person: Your country is actually out there, where I have created possibilities for you and where you can have representation. But if you are living here with me in the Republic, and your residence is of a permanent nature, I can create for you a possibility of representation in the supreme council as such, which will be a specific representation by Whites. The hon. the Minister must give some good thought to this for a moment.

The hon. the Minister went further and said: We want to give them more land, and there have now again been negotiations about what we want to allocate to them in the consolidation of the Bantustans. One must, of course, try to consolidate the areas as far as possible without interfering with the existing order. This is natural, and this side of the House has already asked many times that the areas be consolidated and that we should be told where the boundaries will be. But do it quickly, and do not say, like the hon. the Deputy Minister says, that it could take 15 years to consolidate the Ciskei. Get it finished with; say where the boundaries are and say that it will take two years.

*The DEPUTY MINISTER OF BANTU DEVELOPMENT:

You are talking nonsense now, Oom Jan.

*Dr. J. H. MOOLMAN:

This side of the House, in the person of the hon. member for Transkei, said that there is a possibility that we shall allocate more land to them. We have also said where. We said, did we not, that it would be next to the metropolitan areas where these people are. Our policy also contains the principle that they will have proprietary rights of the dwellings and the premises where they are living and that they can bring their families along. In terms of our policy we want to give that land to them. What is so strange in that? Does that signify a confusion of tongues?

*The DEPUTY MINISTER OF BANTU ADMINISTRATION AND EDUCATION:

You have so many policies; I do not blame you.

*Dr. J. H. MOOLMAN:

Oh, Mr. Speaker, the hon. the Deputy Minister may stand up and speak at some stage or other; I would not interrupt him as many times as he is interrupting me. There is only one method of creating loyalty in the many people living here in South Africa, whom I regard as Black, Brown and White Afrikaners. and that is to give them proprietary rights here and to have them become a part of the country. That is the only method. This method being employed by the hon. the Minister, i.e. the shifting of national groups and people all over the country, causes the seed of disturbances to germinate. I wish the hon. the Minister would accompany me for once to Dimbaza and Mdantisane—not in his capacity as Minister and accompanied by his senior officials. I wish for once that he would just take a drive with Jan Moolman; I would then stop there. I want to show the hon. the Minister that without our saying a word— we can just sit there for a quarter of an hour in the car—there will be dozens of men who will ask us: “Master, do you not have any work for us?” The same goes for the other places. Only recently they flocked around me and asked if I did not have any work for them. I have already said in this House repeatedly that the people cannot come out on the rations they receive, because there are more of them living in the houses than are registered. The rations are not enough and they are going hungry. It is monstrous and inhuman to do that to people. As long as the Governments policy stays as it is and it continues to remove people here from the Western Cape and elsewhere and cram them into urban areas within the Bantustans, where they are without work and do not know what to do, there will be a breeding ground for Communism and insurrection. I cannot understand why the Government continues with such a policy, continuing to cram people into these areas. They go on saying in this House that there are no unemployed Bantu … Will the hon. member for Witbank please stop talking to the Minister? The Minister persists in giving the House the assurance that there are no unemployed Bantu. There are tens of thousands of them.

*Mr. J. C. GREYLING:

Where are they?

*Dr. J. H. MOOLMAN:

I do not have the time to go into that now. The reason for that is the fact that they are not allowed to work where there is work. The result of this is that our factories and industries work only eight hours a day, instead of 16 hours …

*The MINISTER OF BANTU ADMINISTRATION AND DEVELOPMENT:

Oh!

*Dr. J. H. MOOLMAN:

There comes the Oh now! There is only one way we can eliminate this gap between exports and imports …

*The MINISTER OF BANTU ADMINISTRATION AND DEVELOPMENT:

The statistics contradict you.

*Dr. J. H. MOOLMAN:

The statistics do not contradict me in so far as there are no factories working 16 or 24 hours per day in this country. Will the hon. the Minister tell me where they are? None of the thousands of industries we have work 16 hours per day. Go and have a look in Germany, Japan and America and see how many there are working 16 hours a day. See how many there are working 24 hours a day. How do they build up their exports so that they exceed their imports and how do they manage their advantageous trade balances? Specifically because they use this method to create additional exports by way of industrialization and the increase of their exports. Here an industry does not even have enough Whites to work one shift, let alone enough Whites to work two shifts. And what about the trained Bantu who can supplement the Whites in working two shifts? As long as this Government is in power this story of thousands of people who do not have work in this country will continue. And that is how long the famine in many of their ranks, the unbalanced inhabitation of the Republic and their story that there are many Bantu peoples, but only one White people, will continue. The fact remains that we shall have to make a plan. I want to tell hon. members opposite that apart from the campaign they had at Oudtshoorn, and apart from the lesser degree of success in the Brakpan election, which is very much of a temporary nature, the voting public will remember that the people on that side of the House are the ones stirring up this hate between the Whites year in and year out, even long after Brakpan. The electorate will remember that this side of the House presents the realization and the example for the cohabitation of Whites in this country; they will not always be voting for that side of the House, because their time has run out.

*Dr. F. HARTZENBERG:

Mr. Speaker, the hon. member for East London City has just made the allegation here that in the homelands there are Bantu who are unemployed and cannot obtain work. I invite that hon. member—he asked the Minister to go for a drive with him and have a look— to come with me to the Western Transvaal where the farmers now have to harvest their crops and cannot get Bantu in the homelands because all the Bantu have been employed. These people now come along to the Minister to obtain permits to recruit labour in our neighbouring states because all the Bantu in the homelands have been employed. I invite that hon. member to come and have a look so that he may see for himself. The hon. member for East London City did his utmost this afternoon to indicate that there is not a confusion of tongues in the United Party. It is a pity the hon. member stopped talking about South Africanism and about Black and White South Africans so soon, because if he had gone on he would have announced a new United Party policy. The hon. member says there is not a confusion of tongues in the United Party. I now want to tell him that the hon. member for Bezuidenhout disagrees with the United Party on at least five points. He has support in the person of the hon. member for Von Brandis, and also in the person of the hon. member for Wynberg. I want to mention to the House the five points in respect of which the hon. member for Bezuidenhout disagrees with the United Party. At the United Party congress last year the hon. member for Bezuidenhout said—and we all know about this—that …

*Mr. W. V. RAW:

Were you there?

*Dr. F. HARTZENBERG:

Mr. Speaker, that hon. member was there, and I am now asking him to tell us if what I am now going to say is true or untrue. At that United Party Congress the hon. member for Bezuidenhout said that those who think that Bantu must be represented by Whites are living in a fool’s paradise. I am now asking the hon. member for Durban Point whether it is true that that hon. member said it. [Interjections.] I am asking the hon. member whether it is true—did the hon. member for Bezuidenhout say it or did he not say it? [Interjections.] Various English-language newspapers, inter alia, the Cape Times of 18th September, 1971, stated that the hon. member for Bezuidenhout had said it. The Cape Argus of the same day confirmed this. The hon. member for Bezuidenhout says that the United Party is living in a fool’s paradise if it thinks that it can have Bantu represented by Whites in this House. That is not all that he said at that congress. The United Party believes in White leadership for South Africa. But he, the hon. member for Bezuidenhout, supported the resolution about separate freedoms at that congress.

*Mr. W. V. RAW:

That is untrue.

*Dr. F. HARTZENBERG:

We all know that they agreed to a compromise there. That is the second point of disagreement between the hon. member for Bezuidenhout and the United Party.

The third point, in respect of which the hon. member for Bezuidenhout disagrees with the United Party, is the federation question. They speak of a race federation, but the hon. member for Bezuidenhout says that a federation can be a federation of areas. He disagrees with them on that point. The hon. member for Von Brandis supported him. When the hon. member for Wynberg makes a similar noise she is “zipped”. I say that there is a confusion of tongues in the United Party.

The fourth point, in respect of which the United Party and the hon. member for Bezuidenhout disagree, is the development of the Bantu homelands. The hon. member for Bezuidenhout says the Bantu homelands can develop to full independence. This is altogether in conflict with the United Party’s policy, and I want to quote to hon. members from the hon. member’s own article as it appeared in the Sunday Times. The hon. member for Bezuidenhout states—

Naturally more power can be transferred to a geographic region than to a national unit on a communal basis …
Mr. W. T. WEBBER:

Mr. Speaker …

Mr. SPEAKER:

Order!

*Dr. F. HARTZENBERG:

… there is no power which cannot be transferred to a geographic political unit. Such a unit could even develop to full independence if this is what is wanted.
Mr. W. T. WEBBER:

Mr. Speaker, may I …

*Dr. F. HARTZENBERG:

Sit down!

*Mr. SPEAKER:

Order!

Mr. W. T. WEBBER:

Mr. Speaker, may I ask the hon. member a question?

*Mr. SPEAKER:

The hon. member for Pietermaritzburg District wants to ask a question.

*Dr. F. HARTZENBERG:

Mr. Speaker, I have told him that he must sit down. [Interjections.]

*Mr. SPEAKER:

Order! No, the hon. member does not want to answer a question. [Interjections.]

*Dr. F. HARTZENBERG:

That is the fourth point in respect of which the hon. member for Bezuidenhout disagrees with the United Party. I now ask them why they are so excited. Why are they so rowdy? Am I now telling lies? [Interjections.] Why are the hon. members so boisterous? Why are they not laughing? [Interjections.]

*Mr. SPEAKER:

Order! I am now going to put a stop to this disorder in the House. I am going to bring the first hon. member to book who makes another interjection in the House.

*Dr. F. HARTZENBERG:

That is typical of the United Party. That is the confusion that reigns in their ranks. The way they are now going on, everyone is shouting out his own story.

There is a fifth point in respect of which the hon. member for Bezuidenhout disagrees with the United Party. This is in respect of the question of the political and geographic consolidation of the homelands. He states in his article that those homelands can be consolidated politically and geographically. In the Sunday Times of 28th May, 1972, he states—

Opinion is growing that the Bantustans should be geographically, politically consolidated and be vested with meaningful political powers.

That is what that hon. member states. When the report of the Select Committee on Bantu Affairs was brought up for discussion a week or two ago, the United Party voted against the consolidation of the Ciskei. I now want to put a fact to the hon. member for Bezuidenhout, who is certified as being an honest man by the English Press. I watched the hon. member that day. He was here in the House, and when we voted on the Select Committee’s report about the consolidation of the Ciskei homeland he did not vote. I want to put it to him that he did not see his way clear to voting with his party. I want to ask him to stand up and to tell me whether I am right or wrong when I say that he could not square it with his conscience to vote with the United Party against the consolidation of the Ciskei. That is why he saw to it that he was not present here in this House when we voted on this matter. I am telling hon. members that there are five points in respect of which the hon. member for Bezuidenhout disagrees radically with his own party. If the hon. member for Bezuidenhout does not want to give an explantation, these hon. members who were so boisterous may do so. These are the five points. Then there are other points as well that I am not taking into account. The reason why this state of affairs prevails in the United Party is because there are two different groups of people in that party.

*Mr. A. VAN BREDA:

Three.

*Dr. F. HARTZENBERG:

Perhaps there are more, but there are two as far as I can see. On the one hand there are verkrampte imperialists and on the other hand there are a lot of liberalists. Now this hon. member says that they do think. They cannot think hard, because the moment they think hard the people get a fright. They know that what they are thinking cannot be stated. That is why the United Party comes along and does what it has repeatedly done this Session. They do not ask themselves how they feel about a matter, because they know that their feelings differ. There is no unanimity. That is why they ask themselves what the voters would like. Then they announce a policy that is conservative, as the hon. member for Durban Point tried to intimate the other evening, i.e. that the United Party is a conservative party. It is clear that they announce it and then ask themselves how they are going to put it into effect. In implementing that policy they go to work in such a way that the liberalists in that party are the ones to win. The United Party’s history gives evidence of this; it is a characteristic of their personality. They cannot escape their split personality. They form an ambivalent organism, in reality a political hermaphrodite. I want to mention to hon. members quite a few points out of their history which will explain this to the hon. members.

*Mr. W. A. CRUYWAGEN:

It is an ugly thing, isn’t it!

*Dr. F. HARTZENBERG:

It is a dangerous thing. On 21st September, 1912, Gen. Botha said the following about the race question in South Africa at Heidelberg. The newspaper report reads (translation)—

The Kaffir question was the most difficult of all, but he believes that it can be solved by segregating the Kaffirs in certain parts and giving them some degree of self-government there—not elsewhere.

That was the United Party’s policy in 1912. The three most important aspects, which emerge clearly from this, are the following. Firstly, it is regional separation, to “segregate them and give them … self-government there”—in other words, secondly, political separation. Thirdly, it means giving them the right to self-determination. Sir, I am now telling you that that is the National Party’s policy. In other words, in 1912 the United Party began where the National Party has always been. That was in 1912; but what happened? Gen. Botha actively went ahead. He wanted to give effect to it and placed legislation on the Statute Book. Thus we obtained Act No. 27 of 1913, according to which land had to be purchased. He went further and appointed the Beaumont Commission to determine where more land should be purchased. In 1917 he came to Parliament to pilot a Bill through here that was to give effect to the Beaumont Commission’s report and according to which the Bantu were to obtain the franchise in their home areas. Then the liberalists in that party revolted. What happened then? Gen. Botha capitulated and in 1923 Gen. Smuts stated the following in the House of Assembly—

The Native question is so large. We know so little about certain factors which seem almost beyond human control.

The problem then became so large, as far as he was concerned, as to be beyond human control. In the war years a deputation of the Afrikaans churches went to consult Gen. Smuts and Mr. Hofmeyr. They then told that deputation the following in respect of this urgent question (translation)—

We have no policy. It is impossible and undesirable to formulate a fixed policy. Solvitur Ambulando—the matter will resolve itself as it goes along.

Thus the United Party progressed from apartheid to a point where they had no policy. Where do we now stand? From no policy they progressed to where they are now with political integration and they say that the various national groups in South Africa must be represented in this Parliament. Then they want to carry out all kinds of consultation, etc., to eventually arrive at something which they themselves cannot yet recognize, but which is, in fact, going to be integration. Sir, I say that they have moved from apartheid, the policy of the National Party, which Gen Smuts and Gen. Botha began with in 1912, to integration—from the extreme right to the extreme left.

I want to give you another example. The United Party says they will apply influx control. But I am now telling you that the liberalists in that party will take care of that. To satisfy the conservatives there they will say they are going to apply influx control. Then they are going to apply it as they did, in fact, apply it while they ruled. In terms of the Natives (Urban Areas) Act of 1923 they had powers to implement influx control. They could deal with the unemployed Bantu in the urban areas and control influx. I now want to read to you what a United Party member said during those years about what it looked like when they implemented influx control. What was the comment of the then member for Losberg, a certain Mr. Wolmarans? On 28th May, 1945, he stood up in this House and said the following to the Minister:

The influx of natives there is very large and I want to point out that in my own constituency, Losberg, where we had between 50 000 and 60 000 natives last year, there were approximately 105 000 natives last month.

Mr. Wolmarans continued:

They come from all over the country. They are loafing in the locations and our farmers in this constituency cannot get the natives to work for us.

This is a United Party man who is saying this:

We cannot harvest our mealie crop. These natives now do the following. I said so last year and I should like to repeat it. They do not work in Johannesburg and they do not work for the farmers but during the night they take lorries and drive out to our farms and steal our sheep. Last year I said that they even stole pots and pans from the farmers.

That is what things are like when the United Party men rule:

If no reception depot under Police supervision is established soon we may just as well stop farming. In the Johannesburg district stock thefts increased within one year from 143 148 to 164 536.

He continued (volume 54, col. 8279)—

All the young natives from our farms flee to the towns. Today in our rural areas we have only old native women and the very young natives left. The other grown-ups who dress in a grand style loaf in the towns and at night they get onto a lorry and rob the farmers.

This is now typical of what happens when they rule. This was a United Party member of the House of Assembly speaking, and it was under United Party rule. He is telling his Minister: “We cannot go on any longer under this Government.” In other words, what this man was doing was telling the people: “Vote for the National Party if you want to get out of this situation.”

Mr. Speaker, my time is almost up; I cannot go on giving you further examples, but it is clear that within the United Party we have those two groups. Not one of them can say what is really in his mind. They know that the National Party’s policy is the only policy that can be adopted in South Africa. Every time they formulate a policy they try to make the electorate believe that it is the same as the National Party’s policy, but they say that they would just implement it a little differently. Sir, that is specifically the point. Those people will carry out their policy so that the effect it has is completely opposite to the effect of the policy which this side of the House implements.

*Mr. T. H. HOON:

Mr. Speaker, one can probably not find a better description for the United Party’s conduct during the past session than did the Star of 31st August, 1971. In that issue it is stated—

You never know where the emphasis lies and what the party advocates.

There is probably no one who could give a better description of the Opposition. In the past week we again saw a display by the official Opposition, the hon. members on that side of the House, in which they stated: “You must do this, but …” However, they never told us exactly what they would do with these demonstrating students. When we were faced with a lot of students who rebelled against order and authority here in South Africa, the United Party was trying, on the one hand, to satisfy the conservative United Party supporters in the rural areas, but on the other hand they were also trying to keep the liberalists here in the cities, who still belong to their party, on their side. In this whole process the National Party stated its standpoint very clearly in respect of these people who rebel against order and authority in South Africa. Our Prime Minister, and all our party leaders, made our standpoint very clear. Sir, like other hon. members I also received telegrams from my constituency, and today I just want to mention a few of them to you. Here is one from the National Party District Council of Dibeng. It states (translation)—

National Party expresses it full support to the Prime Minister. Associate ourselves with the steps taken against student demonstrations and we loyally support our leader.

The second comes from the District Council of the National Party in Brulpan. It states—

The voters of Brulpan District Council appreciate the way in which the Government is nipping the student demonstrations in the bud and request the House of Assembly to take stronger action.

Then, Mr. Speaker, I want to quote you a telegram that I received from an immigrant, a certain Mr. Pavlakis. He states (translation)—

Good luck with strong action against university student demonstrations. Would like even stronger action.

Sir, I could likewise quote you several of them today. The United Party very clearly tried—they also tried it in this debate—to woo these people who favour the Progressive Party at the moment. They are also trying to woo the other people in the rural areas. Then the United Party people are the ones who say that the youth of South Africa are on their side! I should like to refer to what is stated in the United Party’s booklet “You want it? We have it!” In connection with this policy of White leadership of an undivided South Africa, they state:

The quality of leadership depends on education.

I should like to refer to an expert investigation instituted by Prof. Jannie Pieterse of the University of Pretoria. He drew up a report, and brought to light that 68,2 per cent of all young people in South Africa support the National Party; 18,4 per cent of them have no party ties, and only 8,1 per cent support the United Party; 2,8 per cent of them support the Progressive Party. We also find in this report of Prof. Pieterse, entitled “Jeug en Arbeid” (Youth and Work), and I quote from page 87 (translation)—

It is noteworthy that the percentage of young people who range themselves on the side of the United Party decreases as their educational qualifications increase. 10,7 per cent of the young people with a Std. VIII or lower education qualification support the United Party, as against 3,2 per cent of those with a degree and higher education qualifications.

[Interjections.] Sir, I should like the United Party to listen to this. It is interesting to read further—

In contrast to this it strikes one that those who support the Progressive Party consist, proportionately, more of young graduates. Of those falling into this category, 8,1 per cent associate themselves with the party concerned as against 6 per cent with Std. VIII and lower education qualifications.

The United Party states, in connection with its policy of White leadership of an undivided South Africa: “The quality of leadership depends on education.” If I were a member of the United Party I would pray that no one in South Africa obtains higher education qualifications, because these figures, brought to light by this investigation, are damning as far as the United Party is concerned. These indications are a red light as far as the United Party is concerned. 3,2 per cent of young graduates support the United Party while 8,1 per cent support the Progressive Party. This investigation also brought to light that 74,2 per cent of the young graduates in South Africa support the National Party. In respect of young people with post-matriculation diplomas or certificates, 74,1 per cent support the National Party. In respect of young people with Std. IX and X qualifications, 67,4 per cent support the National Party.

Another interesting aspect which this investigation brought to light is that the percentage of young people supporting the National Party increases as they get older, i.e. become more sensible and responsible, while endorsement of the United Party decreases accordingly. That is why I am saying that the United Party men have, in this debate, fruitlessly tried to catch the votes of this group of demonstrating students of the University of Cape Town, those people who want to overthrow order and authority. They wooed them fruitlessly, because the details indicate to us that such people range themselves on the side of Mrs. Helen Suzman and her party. I also believe that the youth of South Africa will continue to reject the United Party because its policy is unrealistic and amounts to racial domination. According to its race federation policy the United Party wants to give 4 million Whites 166 representatives; to 2 million Coloureds it wants to give only 6 representatives in this House; 2 representatives in this House to half a million Indians and 8 representatives to the 15 million Bantu. At present the United Party’s policy spells White domination, which will eventually result in Black domination and the destruction of the White man here in South Africa. I shall indicate to you. Sir, why I am making this statement. When the Bantu and Coloured representation was terminated in this Parliament, the Coloureds had 4 representatives here and the Bantu had 3. Without any referendum taking place the U.P. now wants to give the Bantu eight Bantu representatives in the House of Assembly and six in the Other Place; to the Coloureds they want to give six Coloured representatives here and two in the Senate, without having held a referendum, which they are so fond of referring to. They say that the representation of these people will not be changed other than by a referendum, but they have already indicated that the Coloureds will be represented by their own people in this Parliament. We want to ask the United Party whether these six Coloureds, when they take their seats in the House of Assembly, can also become members of that party’s caucus, as Mr. Graham Eden, a previous representative of the Coloureds in this House of Assembly, was a member of the United Party caucus. I wonder whether the quotation of Major Van der Byl in the Cape Times of 7th February, 1962, is still the United Party’s attitude. He was asked whether, under United Party rule, a Coloured could be admitted to the Cabinet and whether he could become Prime Minister. Major Van der Byl said at the time—

They will not be “qualified M.P.s” and so will have all the privileges and rights of M.P.s. They can be invited into a Cabinet, and, if they have enough support, can become Prime Minister.

Sir, such things the United Party men will say in Gardens, but in Kuruman they would not even tell the electorate that the Coloureds would be represented by Coloureds in Parliament. I want to challenge the hon. member for Walmer to come and say at Kuruman that they will give the Coloureds six Coloureds in the House of Assembly, because there the hon. member and his Party deny this.

*Mr. T. HICKMAN:

But you are then saying it.

*Mr. J. H. HOON:

I am saying it for you but you are too afraid to come and say it in the rural areas.

*The DEPUTY SPEAKER:

Order! The hon. member must address the Chair.

*Mr. J. H. HOON:

I beg your pardon, Mr. Speaker.

*Mr. A. FOURIE:

May I pose a question?

*Mr. J. H. HOON:

Sir, I do not have the time to reply to a question from that hon. member. Sir, I am referred to the United Party booklet. “You want it? We have it!” in which they state that these six Coloured representatives will be either Whites or Coloureds, but at Kuruman they say they will be Whites. That is the two-faced policy, which we have recently had from the Opposition again, which is coming so clearly to the fore there. I want to tell the hon. member for Maitland that he is “on a trip” if he believes that the Coloureds would choose a White person to represent them in this Parliament. The United Party says that this representation of the non-Whites in this Parliament will only be changed by a referendum that will be held, but, as I have already indicated, they have already changed the number of representatives of the non-Whites in this Parliament from 4 and 3 to 8 and 6, without a referendum having been held. They are giving their leader full powers to formulate policy. They also state in their policy that these eight Bantu representatives will be Whites and that the Indian representatives will be two Whites, but they give the full say to their leader in formulating the policy, and I should like to quote to you from the Sunday Times of 4th November, 1971,—

With almost religious fervour, they entrusted him (Sir de Villiers Graaff) with supreme, policy-making powers, and virtually assured him that they would lay down their political lives for him.

At Calitzdorp during the Oudtshoorn by-election Mr. Marais Steyn was presented as the Deputy Leader of the United Party and the future Deputy Premier of South Africa and successor to Sir De Villiers Graaff. He has indicated, on certain occasions, that the Bantu will eventually be represented by their own people in this Parliament. Sir, the hon. member for Bezuidenhout has also been mentioned as a possible future leader of the United Party.

*An HON. MEMBER:

Who says he is a leader?

*Mr. J. H. HOON:

The hon. member for Bezuidenhout said—

The situation in South Africa is changing rapidly and it is changing radically. Anybody who continues to believe that Black and Brown people will be satisfied with a few paternal political crumbs from the White man’s table is living in a fool’s paradise.

In other words, since the United Party members have given full powers to their leader to change their policy, and since we have seen the standpoints of the hon. members for Yeoville and Bezuidenhout, we must accept that in future they will also allow the Bantu and the Indians to be represented by their own people in this Parliament if the United Party should come into power.

*Mr. J. D. DU P. BASSON:

To the hon. member for Kuruman I just want to say that I have personally stated at a meeting in Kuruman that the Coloureds should be represented here by their own people, and that I was given a full motion of confidence at that public meeting. I should very much have liked to reply to all the points raised by the hon. member, and particularly to the points raised by the hon. member for Lichtenburg. To the hon. member for Lichtenburg I just want to say that I have already replied to most of his points here, and also outside the House. Almost every point that he mentioned was wrenched out of context. But, Sir, I do not on this occasion want to speak about myself. Serious things have happened in the country, and I should like to discuss them. Sir, very few South Africans will feel happy about the South Africa they see before them at the present moment. We are faced with student strikes and the expulsion of students; the closing of universities; with student demonstrations; with baton-charges by the Police; public protest meetings all over the country; the dispersal of people with tear-gas; and now a general prohibition on open-air meetings in the leading educational centres of our country. Concern, dissatisfaction and unrest is breaking out on a large scale all over the country, and to all these events the Government has only one mundane, simple reply, and that is that there are agitators and “Sinister forces” which are inciting these people, and that is the simple answer to what is happening. As the hon. the Prime Minister put it on Monday, “the students are simply puppets”; there are sinister forces behind them. He added—I quote him—that he will not hesitate to act against those forces, but he is hesitating.

*An HON. MEMBER:

Hear, hear!

*Mr. J. D. DU P. BASSON:

Why is the hon. member shouting “hear, hear” now? The hon. the Prime Minister says that he has information, but why does he not root out those sinister forces he refers to; why does he not deal with them? Or is the hon. the Prime Minister simply evading the facts of the situation with words?-—for he has the power to deal with those so-called sinister forces. Why does he not do so? Sir, simply to attribute everything which happened to communist agitation is the greatest absurdity ever. It is in fact in China and Russia and the communist countries of the world where one finds the severest action against what they call the capitalistic liberalism. The fact of the matter is that there will always be agitation. To agitate is the essence of politics. But it is the task of the Government to ensure that genuine grievances which are being objected to, are not allowed to fester, but are eliminated as quickly as possible. But that is precisely what the Government is not doing.

*Mr. L. LE GRANGE:

What genuine grievances must be eliminated?

*Mr. J. D. DU P. BASSON:

I am busy speaking; just give me a chance. That is precisely what the Government is not doing. Every time there is dissatisfaction and that dissatisfaction erupts, as has happened so many times before in the past, and has happened again now, and will happen again in the future, then it is simply the work of a lot of agitators, and the Government does nothing. We have seen this again in the speeches made here. Not one single attempt is being made to try to investigate and eliminate the underlying causes.

*Mr. J. A. F. NEL:

What underlying causes?

*Mr. J. D. DU P. BASSON:

I shall furnish just one practical example: At the Indian University in Durban large-scale strikes have recently occurred. The rector, Prof. Fanie Olivier, said the following in a statement on the strikes which are in progress there—

This is not an academic strike and has nothing to do with internal problems at our university. It is an expression of Black solidarity against what they term, white authoritarianism.

Now surely it is fatal, if this is what the rector says, to dismiss the matter by saying that it is merely a group of agitators who are stirring up artificial grievances among these people. Why do they not listen to the leader of the Indians whom they themselves appointed, Mr. Rajab; the man whom they appointed as Chairman of the Indian Council and who has told the Government in the clearest terms what is troubling the Indians and what is troubling the students? He recently issued a sharp warning to the Government and said that dissatisfaction is welling up among the Indians over the callous way in which the Group Areas Act is being applied, the cruel disruption which this frequently causes, and the fact that a South African who is an Indian may not even undertake an ordinary journey from one province to another without having to obtain a permit from a magistrate. Sir, in every country of the world one finds that the students, who are the intelligentsia of a nation, are the people who feel the problems of their nation most acutely. Does the Government really think that it can educate people, as it is doing at all the different non-White universities, to become leaders of their community, and that those leaders must then have the mentality of slaves and must be satisfied to see their people being humiliated and restricted in a hundred and one different ways? I say that unless the Government investigates each case thoroughly and ascertains to what extent disturbances and dissatisfaction at the universities are the result of …

*The DEPUTY MINISTER OF BANTU ADMINISTRATION AND EDUCATION:

May I ask a question?

*Mr. J. D. DU P. BASSON:

No, I do not have the time. He talks of genuine grievances which can be eliminated. My argument is that there are genuine grievances which can be eliminated.

*The DEPUTY MINISTER OF BANTU ADMINISTRATION AND EDUCATION:

It is a disgrace.

*Mr. I. D. DU P. BASSON:

If this is not done, a desolate time of chronic rebelliousness among the students, and particularly among the studying non-White youth, lies ahead for us.

*An HON. MEMBER:

Mention those grievances.

*Mr. J. D. DU P. BASSON:

Not one speaker on the opposite side has put himself out to see whether there are any genuine grievances which trouble these people. I have just mentioned a few of these grievances. I mentioned the case of the Indians. If you are an Indian, and you achieve the status of a student and become a leader of your community, would you be satisfied with the way in which the Indians in South Africa are being treated? I would not, believe me. Why should they? But the Government is doing nothing to find a solution for dissatisfactions, which can be eliminated. They merely put the blame on a small group of agitators every time, and then sit back until all the situations develop into chronic disturbances in South Africa.

*The DEPUTY MINISTER OF BANTU ADMINISTRATION AND EDUCATION:

You are an agitator.

*The DEPUTY SPEAKER:

Order! The hon. the Deputy Minister must withdraw that.

*The DEPUTY MINISTER OF BANTU ADMINISTRATION AND EDUCATION:

I withdraw it …

*Mr. J. D. DU P. BASSON:

I do not mind what the hon. member says. To what extent does the same apply to the young people at the English-language universities? I do not have the time to go into the whole matter of our English universities and institutions, but there is one important aspect I want to submit to the Government, in calmness, and I hope I have calmness here, for I am in earnest over this one aspect which I should like to bring to the attention of the Government. In the first place it so happens that one finds the most irritability among White students at the English-language universities. There is acute dissatisfaction among English institutions and English churches and among English clerics and among the English-speaking public in general. There is no doubt whatsoever that the majority of students at the non-White universities, in fact most Coloured, Indian and Black leaders of South Africa, have sympathy with the feelings of the English institutions. I am simply mentioning the facts, and shall then come to what I want to suggest. In this lies, to my mind, the danger of countrywide tensions in future. In the second place it so happens that the entire effective governmental power in South Africa is in the hands of one language group, the Afrikaans-speaking South African, the Afrikaans-speaking persons who support the National Party. I am simply stating the facts. The Government, the Cabinet, the Public Service, the Police Service, most administrative bodies, control boards, the National Education Council, the Publications Board, in particular, are not only controlled but dominated by Afrikaans-speaking Afrikaners, Afrikaners who support the National Party. I am not dealing now with the reasons why this is the case. I am simply stating the facts as they are, first. Between these two things I have mentioned, in the first place the irritability in English circles and, in the second place, complete Afrikaner control on the other hand, there is a connection, whether we want to admit it or not. However unwilling we may be to admit it, it is time we faced up to it.

*Mr. P. Z. J. VAN VUUREN:

It is the will of the voters.

*Mr. J. D. DU P. BASSON:

No, it is not the voters who appointed the Publications Board in its present form … [Interjections.] Very well, then, say it if you wish. I am not dealing now with the causes of the situation. I am saying that there is a connection between the two, and I shall indicate what the essence of the problem is. Control is one thing, but domination is something else again. Afrikaner nationalism is accepted as a perfectly natural thing. No reasonable person can have any objection to it. But the impression is beginning to gain ground among the English, individuals and organizations, that Afrikaner Nationalism is changing into a form of Afrikaner imperialism, and that the Afrikaner, through the National Party, is using its political position of power to force its own attitudes, tastes and ideas on all other groups and institutions with different ideas and traditions. I do not like to generalize. However, English-speaking persons have very frequently been accused by some of their own people and newspapers of being insufficiently active in the political sphere. Let me say that we have had that experience in the United Party. In general it is true that the English-speaking person does not have the same taste for active politics which the Afrikaner has. But there are certain traditions in his British background which he feels exceptionally strongly about, and in regard to which he reacts very quickly. These include …

*Mr. T. LANGLEY:

This is not Britain.

*Mr. J. D. DU P. BASSON:

But good heavens, we have not manufactured or found all our traditions here either, as if out of the blue. Every nation has a back ground. The South African English-speaking people have developed traditions here which are peculiarly English traditions. I shall mention two. The English-speaking person, rightly or wrongly has a very strong feeling for civil freedoms, and for the autonomy of his universities. He has in general a philosophy of life which is further from the authoritarian concept and closer to the liberal concept than that of the average Afrikaner.

*Mr. T. LANGLEY:

That is only when he holds the position of power.

*Mr. J. D. DU P. BASSON:

That is why it affects us.

*The DEPUTY SPEAKER:

The hon. member for Waterkloof must give the hon. member a chance.

*Mr. J. D. DU P. BASSON:

When he feels that the Government is interfering excessively with the nature and character of, for example, English universities and their autonomous traditions, he reacts swiftly. It annoys the English-speaking person when world-famous English literary works, works which can be read in every English-language country in the world are banned here, and that this is done by a body such as the Publications Board, which is controlled overwhelmingly by Afrikaansspeaking persons and which supports the ideas of the National Party. Time does not allow me to make a further analysis of this matter. I come into contact with enough people in the English-speaking world to know that they are beginning to say and think that the country is governed by the Afrikaner as if the Afrikaans outlook is all that counts in this country. The issue here is not the official recognition of the English language. On that score the Government has never made any mistake that I know of. It is very precise on that point. The issue is cultural rights. The impression which is gaining ground among English-speaking persons—and, once again I am simply stating the facts—is that the Afrikaner, through the National Party, wants to force his tastes, views and ideas on the other cultural groups. Every time an English literary work, or a well-known English film, which can be read and seen everywhere in the English-speaking world, is banned here, or if a statue is removed because certain Afrikaans-speaking persons insisted on this being done, it strengthens the feelings among English-speaking persons that the country is being governed as if the wishes of the Afrikaans-speaking sector are all that counts. In my opinion this is a very unfortunate, but also a dangerous development, and it is for that reason that I am bringing it to the attention of the Government here. Yesterday, in my absence, mention was made here by the hon. member for Virginia of Gen. Hertzog’s famous two-stream statement. At the time Gen. Hertzog was accused of wanting to divide White South Africans artificially. That was not true. All that Gen. Hertzog did was to emphasize that we are dealing with two cultural identities, namely the Afrikaans and the English, that each was entitled to its own culture and to cherish its own traditions. However, he never stopped saying that there should be mutual recognition and sympathy for one another’s culture and traditions. The logical outcome of that is: Whoever has the political power in South Africa in his hands, he does not have the right to govern the country as if the other person’s views and traditions need not count. The Government will have to take a fresh look at the way in which it is governing the country if it wants to ensure the harmony for which the hon. the Leader of the House pleaded yesterday. I have never yet encountered an English-speaking person who meddled with the peculiarly Afrikaans character which universities such as Stellenbosch and Potchefstroom have. Nor would we tolerate it.

*Mr. L. LE GRANGE:

They had better not.

*Mr. J. D. DU P. BASSON:

As a Government of Afrikaans-speaking persons the Government will have to display greater patience with the more liberal traditions which are peculiar to the English universities, and particularly when it comes to the English culture, English education, and English literature. Then it ought not to be left mainly to Afrikaans-speaking persons, who are party-politically orientated, to take the principal decisions in that regard. The Government should take care that Afrikaner nationalism is not converted into Afrikaner imperialism. It will do none of us any good. It ought to go back and consider again the full significance and the full implications of Gen. Hertzog’s two-stream ideal which was described by C. M. van den Heever as “the greatest idea Gen. Her zog bequeathed to South Africa”. [Interjections.]

*The DEPUTY SPEAKER:

Order!

*Mr. J. D. DU P. BASSON:

As far as student activities are concerned, I hope that the Government will get done with the foolish story that the taxpayers are contributing to the studies of students and that they should, for that reason, be good little children and not dabble in politics. That is utter nonsense. The taxpayers do not consist only of Nationalists. The money which is received is not the property of the Government. Everyone pays taxes; it belongs to all sectors of the population. Where could one have hoped to find students who participated to a greater extent in party-politics and who were more active at Stellenbosch than the Prime Minister, the hon. the Minister of Community Development and I? Where is there a political party in South Africa which uses and ropes in school children, university students and training college students for political demonstrations to a greater extent than the National Party? [Interjections.] This happened again recently on a large scale at Oudtshoom and Brakpan, and I have no objection to that. I rope in young people in my constituency on as large a scale as possible; I do not fight without the youth. Nor do I object if the National Party uses university students to demonstrate for apartheid. What I do object to is that the Government is applying a double standard. They encourage schoolchildren and university students to demonstrate in public for apartheid and for the National Party; to hold processions and demonstrate. They have no objection to that, but the Police are sent in when students who think differently demonstrate in public against apartheid. Is that democracy? It is as much democracy as there is a man in the moon. [Interjections.]

*The DEPUTY SPEAKER:

Order! Hon. members must keep quiet now so that the hon. member can make his speech.

*Mr. J. D. DU P. BASSON:

I listened here … [Interjections.]

*The DEPUTY SPEAKER:

Order! The hon. member for Prinshof must contain himself.

*Mr. J. D. DU P. BASSON:

I listened here to the explanation given by the hon. the Prime Minister and the Minister of Police of the events last Friday. I listened to what they said, and most of what they said was not relevant. What are the ascertainable facts, the facts which any person can ascertain? In the first place, there was a group of students from the University of Cape Town who were demonstrating on church property. It was a lawful demonstration; they had the permission of the church authorities to stand on the steps of the church and hold their demonstrations there. Whether or not we like their political views, it falls within the law that they may hold their views they have, and which they gave expression to on the placards there. Through the use of a loud-hailer a technical contravention was then committed.

*Mr. J. T. KRUGER:

Oh, a technical contravention?

*Mr. J. D. DU P. BASSON:

There was jostling and pushing …

*The DEPUTY SPEAKER:

Order! A moment ago I made an appeal to the hon. member for Prinshof; would he please comply with it now?

*Mr. J. D. DU P. BASSON:

He is wasting my time. Mr. Speaker, as a result of that an entire division of armed police, with batons, were sent in, and they charged down on unarmed students and hit out right and left. This is one of the most reprehensible episodes in the entire history of that Government. What was even worse, however, was this; According to the statement of the officer in charge—the hon. the Minister of Police confirmed it here —the order he issued was: “Clear the steps!” Please note, “Clear the steps!”; but when the steps had been cleared and the students had fled into the church, why did the police pursue them into the cathedral? The order had been to clear the steps. Why are some of them assaulted in the church and dragged back to the steps, if the purpose was to clear the steps? Why were students in the streets, away from the steps, held on to by their clothes and beaten? The photographs are there. Here is a photograph in Die Ékirger. I saw a man, away from the step being held and beaten. Why were manner of the public literally assaulted, long after the steps had been cleared? I myself saw how a young man, simply because he displayed sympathy for the students coming out of the church, was attacked from behind with a baton and pushed up the street for 30 paces while being beaten from behind with the baton as far as he went. At the same moment—I have been given permission to use his name—Dr. Pieter van Biljon, editor of the Medical Journal saw how a kneeling girl was hit from behind by a policeman with a baton—long after the steps had been cleared. This was war, ordinary war on the citizens of Cape Town. It was a punitive expedition. Disorder was created by the people who have to maintain order in South Africa. The hon. the Minister of Police gave himself away. On Monday he said in this House, and it forms part of the record: “We wanted to beat the students”.

*An HON. MEMBER:

What were you doing there? [Interjections.]

*The DEPUTY SPEAKER:

Order!

*Mr. J. D. DU P. BASSON:

This is what makes the matters so serious. Look, let us clear up this matter now. In a democratic country it is an imperative requirement that the police should be politically impartial. They must protect all people, also those who are opposed to the party-politics of the governing party. But here we had political partiality, and their feelings got the better of them. It is clear to me that there is something seriously wrong with the ideological training of our police recruits, and that they are not being taught to distinguish between the interests of the State and the interests and the policy of the party in power. This is a matter to which we shall have to give more attention.

In a statement after the event the hon. the Prime Minister stated quite clearly that he “will maintain law and order in South Africa, regardless of the person”. But this does not seem to be the case from his speech. He did not utter a single word of disapproval relating to the misdemeanours committed by certain policemen. He gave no assurance that it would not happen again. On the contrary; he came here and said that they should do the same thing again. Is this the example a Prime Minister should set the people and the country? He offered no word of apology to members of the public who had been assaulted. He gave no indication that the people who had been assaulted would be compensated—which he ought to have done. He gave no indication that the guilty ones would be disciplined.

In conclusion I want to say that the least we on this side of the House expected from the Prime Minister was that he would tender an apology on behalf of the Government to the Anglican Church for the way in which the cathedral was unnecessarily desecrated. [Interjections.]

HON. MEMBERS:

Never!

*The DEPUTY SPEAKER:

Order!

*Mr. J. D. DU P. BASSON:

Mr. Speaker, I am astounded to hear this from these people. My tradition as Afrikaner is that we do not desecrate churches and synagogues. This is not part of Afrikaner tradition. [Interjections.] The Prime Minister is a man of the church, he is an Afrikaner, and I tell him that both as a man of the church and as Afrikaner he ought to tender an apology to the Anglican Church for the desecration of the Cathedral last Friday. I say that it is not yet too late. He can still do so.

*The DEPUTY MINISTER OF TRANSPORT:

What if the church becomes a political forum?

*Mr. J. D. DU P. BASSON:

Have you never yet heard a political speech in a church? [Interjections.] That member was not here. The order was to clear the steps. There was no justification for entering the church and going in there to beat people inside the church. [Interjections.]

*The DEPUTY SPEAKER:

Order! If the hon. members do not pay heed now, I am going to take strict action.

*Mr. J. D. DU P. BASSON:

I want to tell the hon. the Prime Minister that it is still not too late for him as a man of the church and as Afrikaner to offer an apology for the desecration of a church. If he does not do so …

*Dr. J. C. OTTO:

Why do members of the congregation not object to their church being misused.

*The DEPUTY SPEAKER:

Order! The hon. member for Koedoespoort must contain himself.

*Mr. J. D. DU P. BASSON:

…we can only deplore it and regard it as tragic that such a man should be in charge of affairs in South Africa at such a time as the present.

*Mr. H. H. SMIT:

Mr. Speaker, if there was ever an occasion on which the dilemma of the United Party and its own frustrations was demonstrated, it was the speech of the hon. member who has just resumed his seat now, and the speech made yesterday by the hon. member for Durban Point. I shall deal with the statement I have just made now, but I cannot but say to the hon. member for Bezuidenhout, right at the outset, that he emerged here today in a way I never expected of him. It undermined the respect I still have for him as politician. In the first place, I want to say to the hon. member, and I hope that he is going to listen to me now, that he stated at the end of his speech that there had been no apologies from the hon. the Minister of Police for the actions of the Police against members of the public who were injured in the crowds. All of us sitting here heard the hon. the Minister say that it was a pity that some members of the public were injured in the crowd, where one was unable to make out who was who. He apologized for that.

*Mr. J. D. DU P. BASSON:

Not the Prime Minister.

*Mr. H. H. SMIT:

Now I ask the hon. member with what motive he makes such a statement here, since he knows what the circumstances were which prevailed there. The hon. member also referred to the desecration of the church. His hon. Leader is sitting next to him, who said in a more responsible speech the other day that under those circumstances it was a case of when is property private property. I want to go further.

*Mr. P. S. MARAIS:

How did the Torch Commando not storm the Groote Kerk?

*Mr. H. H. SMIT:

Yes, here the hon. member is reminding me how the Torch Commando, which supported that side of the House, damaged the property of the Groote Kerk in the early ’fifties by flattening the railings in their charge to Parliament.

*An HON. MEMBER:

Did you apologize at the time? [Interjections.]

*Mr. H. H. SMIT:

I want to say that it is an evil day for South Africa, and I said the same thing a year ago in a motion, when churches, specifically the World Council of Churches, associate themselves with the terrorist movement in the world. We are now witnessing evil movements in our country in that people who want to disturb law and order, sheltered behind the pillars and behind the doors of the church for their evil business. The hon. member spoke as an Afrikaner today and asked how the English-speaking sector must feel about these things. I am not English-speaking, but I have many English-speaking friends, and I do not think that any decent English-speaking South African will put up with the sanctity of his church being violated by people smoking cigarettes in its precincts and getting up to all kinds of things there. This they do in the name of the Almighty. I want to ask the hon. member for Bezuidenhout whether there was not an occasion, in the days of Christ himself, when the Temple was desecrated by moneychangers and by dealers in pigeons, and He Himself had to drive them out with a whip. I read that a leader of the Church, of the Christian Institute, said here at a meeting in Cape Town—or perhaps I am wrong; perhaps it was one of the clergymen of the Cathedral itself—that he believed that this Cathedral will always be there at the service of politics.

*An HON. MEMBER:

The Rev. King.

*Mr. H. H. SMTT:

Yes, it was he, indeed. No. this is what we are dealing with, and I cannot understand why the hon. member for Bezuidenhout went to these extremes today to make such utterances.

* An HON. MEMBER:

It was merely holy Japie today.

*Mr. H. H. SMIT:

This remark which he made, that it was nothing but war on the citizens of Cape Town …

*An HON. MEMBER:

Surely that is absurd.

*Mr H H SMIT:

Sir, I walked among the citizens of Cape Town here for a full hour on Monday afternoon, and I heard the remarks of those citizens. They were there out of curiosity. I received telephone calls and conducted personal conversations with English-speaking friends. One of them told me—

Please tell your Prime Minister that we are all behind him and the Government in this situation.

He also told me—

I fought during the last war. I fought against Nazism and Fascism, but I never fought to get this sort of thing we are getting from certain university students now in Cape Town.

Let us get this matter into its correct perspective. The hon. member said it was war on the citizens of Cape Town. I have always had respect for the hon. member; he expresses a standpoint which differs from mine, but he is at least responsible. But, Sir, surely this is not responsible language. Surely this is the language of incitement. I can well imagine, when the flood of student disturbances was unleashed over Western Europe a few years ago on the instigation of Danny the Red, that there would also be persons …

*Dr. C. V. VAN DER MERWE:

Red Japie, man.

Mr. W. T. WEBBER:

Mr. Speaker, on a point of order …

*The DEPUTY SPEAKER:

Order! The hon. member who said that, must withdraw it.

*Dr. C. V. VAN DER MERWE:

“Red Japie”, Sir?

*The DEPUTY SPEAKER:

Yes. The reflection is there. The hon. member must withdraw it.

*Dr. C. V. VAN DER MERWE:

May one no longer say a person is “red”?

*The DEPUTY SPEAKER:

Order! Is the hon. member going to withdraw it?

HON. MEMBERS:

Make it “pink” Japie.

*Dr. C. V. VAN DER MERWE:

Very well, Sir, I withdraw it.

*The DEPUTY SPEAKER:

The hon. member may proceed.

*Mr. H. H. SMIT:

Sir, I can image that on that occasion, during the activities of Danny the Red in Western Europe, when he converted some of the largest cities in the world into what was virtually complete chaos, there were also Press organs and that there were also elements who used the language which the hon. member for Bezuidenhout used here this afternoon. This was then “total war on the citizens” in those cities. This afternoon I had lunch with a voter of mine who returned a day or so ago from Paris. He told me that the police are still standing at the university there after all these years—he saw it last week—to ensure that these things for which Danny the Red was responsible, do not happen again. Why did the hon. member have to choose the course of this extremely unresponsible language?

But, Sir, I said at the outset that the debate reveals to me the dilemma of the United Party, the frustration which emerges in the difference between the hon. member for Bezuidenhout and the hon. member for Durban Point. I shall quote it to you. Read his speech, from which his frustration is clearly apparent. They stand at opposite poles. But now the hon. member for Bezuidenhout, in an attempt to make himself acceptable to the English-speaking section of that party, tried this afternoon to be a second Prof. Jan Loubser. He went just a little further. Prof. Jan Loubser. in his speech, was simply trying to verify the Afrikaner. The hon. member went further this afternoon and interpreted the English-speaking sector of our community, but in a very incorrect way. But look how he interprets the Afrikaans-speaking section as against the English-speaking section. He said—

Afrikaner Nationalism is accepted as a perfectly normal thing …

I am pleased to hear the hon. member still saying that—

… but the English-speaking sector is beginning; to feel that this is degenerating into Afrikaner imperialism.

That is the same as what Jan Loubser said.

*An HON. MEMBER:

Hear, hear!

*Mr. H. H. SMIT:

There an hon. member is saying “hear, hear!” But from the hon. member for Durban Point we have to hear, day after day, and also from other hon. members on that side, that we are, in contrast to imperialism, dividing up the country because we do not want to begrudge any nation and any people its own existence.

Mr. Speaker, where, in the actions of this Government or of responsible Afrikaans-speaking leaders, is there the element of Afrikaner imperialism, or of forcing our will upon the other language groups? There is no possibility of that. What we say is this: We believe that the Afrikaansspeaking section of the population, which has from its earliest days been forced by circumstances to make its own plans and to work out its own approaches according to which it must deal with the situations in Africa, has a special contribution to make to the situation in our country. That we are trying to do. But, Sir, I reject with contempt what the hon. member for Bezuidenhout, an Afrikaans-speaking person, said today, namely that the Afrikaner is degenerating, in his efforts to attain his ideals, into Afrikaner imperialism.

*Mr. J. D. DU P. BASSON:

I did not say that; you did not listen.

*Mr. H. H. SMIT:

There is no group in this country which gives greater recognition in fact to nationalism, the culture and everything pertaining to other kinds of people. That is why I say that I feel ashamed as Afrikaner at the way in which that hon. member this afternoon tried to gain access to a section of the English-speaking population, particularly when I take into consideration what he said in this same House in 1953. On 5th February, 1953, the hon. member said (Hansard, vol. 81, col. 704)—

There is not a single important point in the principles on which the United Party was established in 1934, to which it is still true today.

This he was saying even then. But, Sir, the hon. member went further in the course of that same speech and referred to that publication of the United Party by the name of “Verkiesingcnuus”. He quoted from that and said (col. 705)—

It contains a copy of placards which were posted up throughout South Africa and what did those placards say? “Wipe out Nationalism.” Not “Wipe out the Nationalist Party”.

This the hon. member said himself and he continued—

Perhaps they have the right to say that. Or not “Wipe out Purified Nationalism” but “Wipe out Nationalism”. That was their declaration of faith. I can go further. I have here a political handbook which was issued by the other side called “A Political Guide for Young and Old”, and here, on page 12, is a special chapter on “Nationalism”. This is what that chapter says: “Nationalism comes from the cave-dwellers.”

The hon. member quoted this himself in this House. He went on to say—

Here is a drawing of two barbarians with a cave as background; and listen to this: “Nationalism stems from the isolationism of the primitive cave-dellers. But when man began to develop through the ages and became more civilized and better educated he gained wider visions … We feel certain that by now you will begin to realize that the Nationalist Party is actually inspired by the spirit of the early cave-dwellers.”

But what did the hon. member try to do here this afternoon? He was back with what he had condemned, only in modem language. He tried to hold up that image of Nationalism and the National Party.

*Mr. J. W. E. WILEY:

By whom was that chapter written?

*Mr. H. H. SMIT:

It was written by your party. The hon. member went further, in the course of the same speech, and said (col. 708)—

That side openly resisted every single Afrikaans movement, whether cultural or economic. They regarded a purely economic movement like the Reddingsdaad-bond, cultural bodies and movements like the F.A.K., the Voortrekkers and the South African Folk Dancers with hostility and suspicion; even Volkskas, which is a commercial bank and has nothing on earth to do with politics.

But this afternoon the hon. member depicts an image here, in order to gain access to a section of the English-speaking community, of the Afrikaner as if he is an imperialist. I say the hon. member did this because he is engaged in an internal struggle against the imperialism which still exists in that party. Now he is projecting this on to the National Party.

Sir, I want to come to another matter. A few weeks ago Pres. Nixon paid a visit to Peking and Moscow. By means of the contacts between the three most important capital cities in the world, treaties were signed and talks held which create the impression that peace in the world is assured; the big powers are not going to make war on one another. But is it not ironic, that precisely while this is happening, various forms of revolutionary warfare, of subversion and terrorism, swept through the world like a tidal wave? During these times we in this country have not only experienced the onslaughts of terrorists on our borders; we have also experienced the onslaughts of terrorism in the air. One of our aircraft was hijacked. During that same time three people from Japan, whose Government dissociated itself completely with such matters as this, opened up with machine-guns on innocent people at the airport of Tel Aviv. At the same time bombs were thrown in West Germany, and during the same time the kidnapping of diplomats, of businessmen, and so on, is continuing. Does it not give us food for thought that although an umbrella is being opened up over the world by way of contact between capital cities, as if there is peace at the highest level, subversion in the variety of forms in which it appears, is increasing? It is as if the nations of the world are powerless against it.

Sir, I am not a person who looks for a communist behind every bush, but what I am going to say here this afternoon I am not saying on my own authority either. I am saying it on the authority of an institution such as the Institute for Strategic Studies in Britain, and its counterpart in Washington. They describe as forms of revolutionary warfare not alone terrorism in the form of murderous gangs, and terrorism in the air and at sea, and the kidnapping of people, but also spiritual terrorism, the abuse of churches, as was done here, and the abuse of church organizations in making funds available to murder-gangs. They also mention the emergence of student violence throughout the world, and this brings me back to the point I want to make in regard to the situation here in this country. As I have said, I do not see a communist lurking behind every bush. But if a person is interested in the security of his country, he would be blind if he does not see a clear pattern to what is happening now, and what happened three to four years ago in Western Europe. What happened there, Sir? One man by the name of Danny, the Red, hurried from one city to another, from one university to another, and organized small militant minority groups and looked for alleged grievances.

I want to return to that, with reference to what the hon. member for Bezuidenhout said a moment ago about genuine grievances here and there in Western at universities in South Africa. I want to concede that there may perhaps have been grievances here and there in Western Europe, but the matter was extended past those grievances, for associated with those student disturbances there were very soon people who had nothing to do with universities, people who in fact had never seen a university before, and what was the result? The result was that there was chaos in Western Europe, that cities were almost set ablaze and that important universities virtually lost their prestige, their ability to teach and undertake research work.

I have mentioned here before what a retired professor of political history at the free University of Berlin told me. He said: “The best thing I can tell you about my university which was established to replace the famous old Humboldt University, which disappeared beyond the Wall, is the fact that I have nothing more to do with it, that I retired as a professor.” But that is not all he told me. Four years ago he was in South Africa and he then told me: “You must be grateful for the sense of responsibility of your students in South Africa.” He added: “If the day comes when this begins to raise its head, you must know from the experience in Western Europe that you must act before it is too late.” The hon. member for Bezuidenhout came here this afternoon and blamed the Government for doing nothing to eliminate the genuine grievances; that the grievances in fact have been allowed to fester, and have not been removed. That is what the hon. member for Bezuidenhout is now saying.

But, Sir, did the hon. member for Bezuidenhout look into what the grievances are and what the motivation is in the minds of those who are behind these things which are now happening at the different universities? Sir, I have here in my hand one of the pamphlets which was distributed by the student council of the University of Cape Town, in which the following is stated—

This week is free education week. We have tried to draw attention to the four major weaknesses in our education system. This is a call to (1) remove the differences in White and Black education …
*An HON. MEMBER:

Does the United Party agree with that?

*Mr. H. H. SMIT:

Sir, if there are differences, what is the reply of the hon. member for Bezuidenhout to this: Must one give in to this by allowing demonstrations which could result in violence? The pamphlet goes on to state—

(2) Free our schools of Nationalist indoctrination.
An HON. MEMBER:

That’s it.

*Mr. H. H. SMIT:

An hon. member on that side says: “That’s it.” Mr. Speaker, do you know that the same group of student leaders who organized these demonstrations last week went around to high schools— they who accuse us of Nationalist indocrination—and distributed pamphlets there among young schoolchildren? Before I come to what is stated in the pamphlets, I just want to say this: I was not hatched out under a turkey and I do not allow myself to be bluffed …

*Mr. W. G. KINGWILL:

An ostrich.

*Mr. H. H. SMIT:

Yes, I readily grant the hon member that. Perhaps he would liked to have been hatched out under an ostrich. Sir, I do not allow myself to be bluffed by the sage advice of Mr. Budlender who, chronologically, is a sixth year student at the University of Cape Town but, academically, a first year student; I do not allow myself to be bluffed by his sage advice and his accusations of indoctrination, for my information—and this was conveyed to me by a parent of a young man who is studying at the University of Cape Town—is that in the first 14 days the initiation at that university consists, not of the ordinary traditional student initiation which most of us went through and enjoyed, but of indoctrination of the worst degree. For that reason you see who was in the forefront. Did you see Mr. Budlender when the loud-hailer was used in the street, or did you see a first-year student, behind whom he was hiding? Who are sent to the Stellenbosch hotels to hold teach-ins for senior students? First year students from the University of Cape Town, after the process of indoctrination they had to go through.

*An HON. MEMBER:

And Suzman was one of the speakers.

*Mr. H. H. SMIT:

Yes, the hon. member is quite correct The hon. member for Houghton is one of the speakers who appears regularly at the indoctrination there. And not only but at Stellenbosch—I have it here in my hand—a pamphlet is published which is also teeming with untruths, just like this pamphlet which was distributed at the schools, a pamphlet which was drawn up by a paid organizer of the Progressive Party, with the support of the hon. member for Houghton, and it is teeming with untruths. Now I want to say this to the Progressive Party, and then I want to say to the hon. member for Durban Point, those are their frustrations. He spoke of frustrations in his speech the other day, and asked why there are such people because they are helping the National Party. I want to tell the hon. member for Durban Point that they are definitely not on our side. They are the people whose frustrations are looking for an outlet because they cannot find satisfaction in the leadership on that side of the House. It is in fact their own children; these are people from their own homes. They cannot find satisfaction in the policy of that side of the House, and that is why they find an outlet in things of this kind, in the indoctrination of young students and, to exonerate themselves they go to schools and distribute pamphlets to young school-children which are teeming with untruths, like this one as well. This is one of the grievances which the hon. member for Bezuidenhout spoke about.

Students have opposed these concepts …

He is referring to Christian national education and Youth Preparedness …

… since their inception, because they are nothing more than subtle forms of indoctrination, although the Government would have us believe otherwise.

Then he goes on to say—

Article 6 of the Christian National Education Manifesto says …

This is an old thing which has nothing to do with the National Party, dating from the year 1942—

… “in no subtle way anti-Christian or non-Christian or anti-Nationalist or non-Nationalist propaganda be made”

But these things are not even contained in that document. This is an open distortion of the truth, and it is being swallowed. This is an attempt at indoctrination in schools in its worst form. This great campaign is being waged against the programme of youth preparedness. What is the object of youth preparedness? It is to make our young people aware of their country, which will not maintain itself and remain standing on its own feet, but which needs the muscle-power and the brain-power of every young person to protect it. That is why what is envisaged in this programme is to my mind in complete agreement with the views of a man who has far greater insight than we do, or most of us do, Mr. Anthony Harrigan, a well-known American writer, who gave a lecture here in 1969 to the Institute of International Affairs, and said the following (translation)—

What we need in countries like South Africa and America is carefully planned and well supported programmes in citizenship training for the young people, so that they do not lose faith in their country’s values and aims, so that they can reply to the sophisticated arguments of the nihilists, and so that they can have a moral and intellectual framework for their own lives.

From that source it is supported, but here the truth is distorted and a process is set in motion which presents this side of the House, the Afrikaans-speaking people specifically, as neo-nazis and fascists. The hon. member for Bezuidenhout came very close to that this afternoon in the way in which he presented us. The hon. member for Durban Point as well was speaking the other day and he said that we are not Nazis but then he began to tell about what has happened in Germany and Austria and those countries, and subtlely he tried to create the impression, precisely the same as these demonstrators and inciters from the University of Cape Town who implied that this was an authoritarian Government which was tending towards the same things the Nazis did.

*Mr. W. V. RAW:

I warned you!

*Mr. H. H. SMIT:

Mr Speaker, I have already said to the hon member that we were not hatched out under turkeys. They have taken fright at the frustrations among the young people from their own ranks who are not satisfied by the policy offered by that side of the House. Now their own frustration lies therein that they do not know how to deal with a situation such as this. Responsible students, from the university which I represent and other universities, will not lend themselves to things like this which happened here because they believe in law and order. Students at those universities are not concerned either about the ban which has been imposed for the coming week or so on open-air demonstrations. They do not need them, nor will they allow themselves to be influenced by the first year teach-inners from other universities to act in this way. If there was ever a time that the people of South Africa were grateful for a Government which can maintain law and order and meet the needs of all in this country then it is in these times which we are now going through.

Mr. W. T. WEBBER:

Mr. Speaker, the hon. member for Stellenbosch has used up half an hour of the time of the House. All I can say to him in reply is that he should read the leading articles which have appeared in the last two issues of his own newspaper, the official mouthpiece of the Nationalist Party in the Cape, Die Burger. Those two leading articles put this whole question in perspective. I commend to the hon. member for Stellenbosch that he should read his own newspaper before he comes here to waste the time of the House with the nonsense which he has spoken during the last half-hour.

It was made clear by us on this side of the House that we are not in favour of this type of street democracy …

HON. MEMBERS:

But?

Mr. W. T. WEBBER:

… but—they are very nervous of that “but”—my leader and the hon. member for Durban North in particular, together with other members of this House, have put certain pertinent questions to Ministers on that side of the House which have as yet not been answered. These questions were put on Monday afternoon, and they still remain unanswered. These questions were: Why was the “betoging” allowed to continue for so long; why force was used, and whether it was necessary that so much force should be used; why was no warning given; who were the thugs in plain clothes, unidentified and with no identification; and what about the police with no numbers? We have had 11 hours of debate since those questions were asked, but we have not had one answer to them. Why does the hon. member for Stellenbosch come here and waste our time talking about these things?

He knows that the pamphlets he referred to have been rejected by us on this side of the House. They were rejected by my leader on Monday afternoon. But now, on Wednesday afternoon, he comes again with the story about the pamphlets. But I want to leave him as I have other very important matters to discuss in this House as well.

But before I come to these, I am very glad to see that the hon. the Minister of Justice is in his seat. I sincerely hope that we are going to hear from him this afternoon.

The MINISTER OF JUSTICE:

What for?

Mr. W. T. WEBBER:

The hon. the Minister asks “what for?” I believe that the hon. the Minister owes this House an explanation of the wholesale banning order which he has made. The hon. the Minister of Justice in his statement says that he has good reasons which warrant this action. Well, Sir, we can accept that. But I do believe that this hon. Minister owes this House a statement of those good reasons …

An HON. MEMBER:

What for?

Mr. W. T. WEBBER:

…so that this House can also be aware of the reasons which require such a drastic step in this country. I am glad he is here. Perhaps we will hear from him a little later and perhaps he will do us the courtesy of advising us of the reasons for this drastic step that he has taken.

It was said a little earlier that the chickens of the Nationalist Party’s policy have come home to roost. I want to speak this afternoon of chickens. I want to speak about the iniquitous scandal which has developed in the poultry industry in South Africa. I am very sorry to see that the hon. the Minister of Agriculture is not here. The Deputy Minister is here, but that is not enough. A request was made especially that the Minister of Agriculture should be here because I will make certain allegations against him and against the administration of his department this afternoon. I am constrained to go ahead, and to register my protest at the fact that he is not here to answer the charges which I will lay this afternoon. I am going back to the 25th April, 1969, when in this House the hon. the Deputy Minister introduced a Bill, the Animal Diseases and Parasites Amendment Bill, and said, and I quote from Hansard (vol. 26, col. 4796):

The Amendment Bill which is being laid before the hon. House today was drafted in conjunction with the South African Police as a result of the smuggling trade in poultry and brood eggs which has presumably assumed disturbing proportions recently and which constitutes a great disease threat to our country’s livestock.

The hon. the Deputy Minister went further:

In this way, for example, the outbreak of Newcastle disease in the Western Cape in 1968 was a direct result of smuggled poultry … Unfortunately there were persons who availed themselves of these methods to introduce in the main brood eggs, poultry, fancy birds such as budgerigars, parrots, etc., into the Republic illegally and on a large scale.

In col. 4797 he said the following:

It is also being provided that the premises where smuggled animals are found, may be declared quarantine stations, which means that adequate official control will be applied there.

As a result of this Bill certain action was taken by the hon. the Minister, but unfortunately he failed in his actions. On the 21st August, 1970, we had a further Animal Diseases and Parasites Amendment Bill before this House, which on this occasion was introduced by the Minister himself. I quote him from Hansard (vol. 29, col. 2362) as follows:

Therefore I am asking this House for this power today, not to abuse it, but in order to act against unscrupulous people who are prepared to take chances for the sake of personal gain, to the detriment of the health of our country’s livestock and our farmers’ economy.

The hon. the Deputy Minister and those members on that side who were aware of the circumstances here, will know that this whole matter was the subject of extreme criticism, because of the extreme powers which we gave the hon. the Minister at the time he made that statement and, because the hon. the Minister made the case that it was necessary for him to have these extreme powers to handle this tremendous threat to the livestock industry in this country. This afternoon I want to ask the hon. the Minister, why has he not exercised those powers? Sir, from the evidence I have brought you have heard that he was aware of the smuggling. Questions have been put to the hon. the Minister in this House and he has named the people who have smuggled poultry into this country. But, also as a result of questions, we find that the hon. the Minister did not use the powers he asked this House for. Instead of that he came to an agreement with the smugglers, and he has allowed them to continue to farm with this smuggled produce, to the detriment of the poultry industry in this country in two ways. Firstly, because of the diseases which have been introduced by that poultry, and secondly, because of the harm he has done to other breeders of poultry in this country, who have been unable to face the unfair competition from these types of birds. We in this House are aware that the poultry business in this country has become a multi-million rand enterprise and that many people have spent many millions of rands developing here in this country top-quality birds, birds which can hold their own with most of the breeds in the world. But through the lack of initiative of this Minister and through his failure to exercise the powers which we gave him he has allowed these unscrupulous smugglers to put some of them out of business because of the birds they had. Is this right? Is it right especially in the light of the fact that the Minister gave us to understand that he was asking for these powers, particularly the power whereby the premises will be deemed to be a quarantine station, so that he could take control, in the name of the Republic of South Africa, of the smuggled stock and make it available to the poultry industry in this country, and thereby to break the monopoly which has been created by the smuggling and thereby to give all the people of South Africa the benefit of these breeds? These breeds were developed in the United States of America. The hon. the Deputy Minister gave a reply to a question—that is not in question at all—that these breeds were developed in the United States of America and which were found on farms in the Transvaal—I will name them a little later—on which, on the admission of the hon. the Minister, there was no evidence whatsoever of modern scientific breeding equipment or facilities. But it goes further than that. When the questions were put, why did the hon. the Minister try to hide the facts? Why did we not get straight answers to straight questions? Why did we have to keep coming with other questions before we could get somewhere close to the truth? I do not believe—this is one charge that I lay at the feet of the hon. the Minister today—that we have yet got the whole truth despite the questions that have been asked. I do not believe that we have all the answers to all the questions that we have asked.

Mr. S. A. S. HAYWARD:

You seem to know the truth.

Mr. W. T. WEBBER:

The hon. member says that I seem to know the truth. I know quite a bit, but I do not know it all and I believe the hon. the Minister does know it all, but he has not taken the necessary steps. On 26th May I asked the hon. the Minister of Agriculture whether cases of illegal importation had come to his notice. The answer was “yes”. I asked whether he had taken any action against these persons and the answer was again “yes”. When I asked what the action was and against whom, I was referred to the Department of Customs and Excise and the South African Police from whom details should be obtained. Then I asked further questions about whether permission had been granted to any persons or organization to continue to farm with such stock, as well as whether it was made known to the public and to other poultry farmers that the department was aware of this illegal entry of the stock. I also asked whether other poultry farmers were invited to obtain such stock from the department in terms of the undertaking which the Minister himself had given us in the previous debate. I further asked whether permission has been refused to any persons or organizations to farm with such stock. The answer to all these questions was:

(3) —(6) Fall away as breeding material concerned was intercepted.

We further asked the hon. the Minister whether the intercepted poultry breeding material referred to in his statement of 26th May is being used for propagation purposes. Does this House know what the answer was? It was: “No.” That was on 30th May, this year. On the 26th May we also put the following question to the hon. the Minister:

Whether the pure parent strains of poultry used for crossing for the production of hybrid chickens known as (a) Eagle, (b) Falcon, (c) ACS 72, (d) Rocket, (e) Queen, (f) Harco and (g) Cobb are present in the Republic?

His answer was:

The parent strains of poultry used for crossing for the production of hybrid chickens known as (a) Eagle, (b) Falcon, (c) ACS 72, and (d) Rocket are presumably present in the Republic and of those known as (e) Queen, (f) Harco and (g) Cobb are not present in the Republic.

In answer to the question in which districts they were used, he said:

Presumably in Benoni, Johannesburg and Pretoria districts.

When we asked him where they were developed, when they were introduced into South Africa and by whom they were introduced, the answer was that it was unknown. These questions were put on the 26th May. On 30th May, in reply to the question on what circumstances or evidence does he base his presumption that the parent strains of poultry used for crossing for the production of the various hybrid chickens which I have mentioned, are presumed to be present, the hon. the Minister replied that the presumption is based on the presence of parent strains which were similar to the parent strains of poultry used for crossing for the production of hybrid chickens mentioned. Then he gives the names of the farms which were Delta hatchery, Rock Farms, Anderson Chick Sales and Heatherdale. This is where he said that there was no evidence of scientific breeding. He was asked in each case in which countries the parent strains were first developed and where the hybrid was first produced. The answer was that presumably the parent strains were first developed in the United States and that the hybrid was first produced in the United States. On 30th May we further asked him whether any farmers were farming with smuggled parent strains of poultry used for crossing for the production of hybrid chickens known as Eagle, Falcon, ACS 72 and Rocket. The answer was “Unknown”. To the question whether it was made known to the public that these strains were being farmed with, the answer was “No”. To the question whether other poultry farmers have been able to obtain such stock for breeding and other purposes, the answer was “Unknown”. To the question on whether he will make a statement, the answer was “No”. The hon. the Minister conceded the presence of these strains in South Africa, of these hybrid chickens. When he said that it was not known whether they were existing in this country, surely he must know what is going on in the poultry industry, or does he not? I am very sorry that the hon. the Minister is not here. I must really express my regret …

*The DEPUTY MINISTER OF AGRICULTURE:

You have said that three times now.

Mr. W. T. WEBBER:

… because it is no good the hon. the Deputy Minister answering this. I do not believe that the hon. the Deputy Minister is involved in this at all. I say this because I know that the agreement with the smugglers was made by the Minister himself and that is why we asked for him to be present. He made an agreement with these smugglers. He should have been here from the beginning. Here …

*Mr. S. A. S. HAYWARD:

Mr. Speaker, on a point of order, is the hon. member allowed to say that an agreement was made with smugglers?

The ACTING SPEAKER:

Order! The hon. member may proceed.

Mr. W. T. WEBBER:

I want to show the House an advert which has been circulating in this country for years. It is advertising the following strains of chickens: “Rocket—Rhode Island Red crossed with Barred Rock and Falcon—White Leghorn crossed with Rhode Island Red.” Yet the hon. Minister in reply to the question said that he does not know whether they existed in this country. Look at them in this advert. It goes further and reads that at the sixth random sample test which was carried out in 1970-’71 by the Minister’s department at the Glen Agricultural College a certain strain came out tops. What strain came out tops? The first, the second and the third places were taken by Rocket. The hon. Minister says that he does not know Whether they exist in the Republic. How can he say such a thing? This is one of the reasons why I say that there is a lot more to the story than has appeared from the answers which the hon. Minister has given us in reply to questions. One further question that we put to the hon. the Minister was whether a request for an investigation into the poultry industry has been brought to his notice and whether he will appoint a commission to investigate the industry. The answer was: “Yes, I am aware of the request for the commission of inquiry,” and “No, I will not appoint a commission to investigate the industry.” Why will he not appoint a commission? What is being hidden? Big money is being made and lost by people in this respect. One of the most iniquitous things is the fact that these chickens are being produced on a franchise, a franchise from the United States of America whereby some person is enriching himself to the extent of R1-00 for every 104 chickens which are hatched. When you think that the South African public consumed over 50 million broilers during the last year, this comes to an awful lot of money. That only refers to broilers, apart from the other more than 10 million registered laying birds which exist in the Republic and apart from the millions of unregistered birds which exist in the Republic. This gives you some idea of the immensity of the amount of money involved in this racket which is being perpetrated and which is hiding behind an agreement signed by that hon. Minister of Agriculture.

Mr. W. G. KINGWILL:

Where is he?

*An HON. MEMBER:

In the Senate.

Mr. W. T. WEBBER:

I asked the hon. Minister whether any action was taken against any persons or organizations in this regard and he referred me to the Department of Customs and Excise and the South African Police. I put a similar question to the hon. Minister of Police and his reply was in the affirmative and he said that he had taken action at the request of the Department of Agricultural Technical Services against certain people. The Police assisted the officials of that Department in the investigation of alleged illegal importation or smuggling of poultry stock and eggs. Why could the hon. the Minister of Agriculture not answer the question? Then his officials took action in terms of Act 13 of 1956. The Police merely acted as the agents; but it was his department that took the action. But no, Sir, the hon. the Minister of Agriculture could not give us the answer. I put a subsequent question to the hon. the Minister reading—

Whether inspectors of his department have investigated or supervised poultry breeding and/or production of hybrids known as (a) Eagle, (b) Falcon, (c) ACS.72 and (d) Rocket in South Africa; if so, in each case, (i) when did they first do so, and (ii) on whose farms.

The answer was—

Inspectors investigated but did not supervise.

Mr. Speaker, I want to ask the hon. the Deputy Minister: How long were the inspectors of his department on those farms? Not how many days, weeks or months, but for how many years were they on those farms? Then the hon. the Minister of Agriculture can give us an answer such as this! I know that his officials were there for years, not just for months, and that they first went to these farms on 27th August, 1969, and that the farms were owned by the companies Heatherdale, Anderson, Van Rhyn, Valeview, Blaauwberg, Strathaven, Gramelt and Dundarach. They found various strains there. I asked the hon. the Minister further what strains were found when they first went on to the farms. The answer was—

Layers: One R.I.R., one Barred Rock and four White Leghorns. Broilers: One Cornish Game and three White Plymouth Rocks.

These were the strains. But I further asked what other strains there were or what strains were present when the hon. the Minister’s officials were withdrawn from those farms, years later. The answer there was “Unknown”. But the hon. the Minister knows that when he first went on to those farms, there were only Rocket producers available and that when his inspectors were finally withdrawn, all four strains were present. In other words, these other strains were introduced while his inspectors were supervising that farm. Let me go further. I asked another question reading—

Whether he has made agreements with any of these farmers; if so, (a) on what dates and (b) what are the conditions of each such agreement?

The reply of the hon. the Minister was—

Yes. (a) 25th June, 1971.

That date is significant. I will come back to it in a minute. The reply further reads—

(b) Conditions of agreement: (i) Admit confiscating seizures and quarantines were justified.

In other words, it was an admission by the farmers that they had smuggled stock—

(ii) Seizures and quarantine to be withdrawn.

What right had that hon. Minister to make such an agreement with such a firm, that he would withdraw the seizures and the quarantine, for which he had come to this House and asked for special legislation?—

(iii) No claims to be instituted against Government for actions taken. (iv) Each party to pay his own costs. (v) Government may disclose information as Minister deems necessary. (vi) Agreement signed on behalf of— Stafirma Holdings, Heatherdale Trading, Anderson Chick Sales, Anderson Chick Sales (Cape), Comet Hatchery.

Sir, I know that there were other conditions to this agreement, but the hon. the Minister did not divulge them in reply to the question. One of those was an agreement indemnifying a certain person who would have been the chief witness for the State, had this matter come to court. I do not say this ill-advisedly; because, after a series of supplementary questions to the hon. the Deputy Minister, I asked—

Mr. Speaker, further arising from the hon. the Deputy Minister’s reply, can he tell us whether there was any agreement with the companies concerned whereby they would not proceed against any individual in a civil court? The Deputy Minister (of Agriculture): Yes, there was an agreement.

Why was this House not given that answer when the original answer to the question was given? Why is the department or the Minister hiding the facts from this House, and from the people of South Africa? This is why I repeat the call which has been made by 28 senior veterinarians in this country, for a commission of inquiry into the poultry industry.

Mrs. C. D. TAYLOR:

Rainbow Chickens?

Mr. W. T. WEBBER:

No, not Rainbow Chickens. But I go further. As I have said, this date, 25th June, 1971, is important, because that is the date, according to the reply which the hon. the Deputy Minister gave me, on which this agreement was made. I have here a letter dated 11th July, 1971. some 17 days later, signed by the hon. the Deputy Minister, addressed to a firm of attorneys, asking that witness, who had been indemnified in terms of an agreement on 26th June, to sign an affidavit. What for, Sir? What does the department still require from this gentleman? Having signed an agreement and having come to an agreement with these smugglers whereby they would not be prosecuted, they still require an affidavit from this prime witness. Why? Mr. Speaker, this whole thing stinks.

An HON. MEMBER:

A “fowl” smell.

Mr. W. T. WEBBER:

Yes, it has a “fowl” smell, as my hon. friend says. I think the hon. the Deputy Minister and his department owe the poultry industry in this country, which has developed into a tremendous enterprise, an explanation. Our South African poultry breeders—and I refer to South Africans, not these smugglers, half of whom are immigrants who have come into this country—have developed an industry which is supplying the people of South Africa with the cheapest form of protein available. I want to say that poultry meat today is half the price it was 15 years ago, and I challenge anybody to show me any other commodity which is half the price it was 15 years ago. That, Sir, is only because of the efficiency of our own poultry producers in this country. I believe that this Deputy Minister and his department owe that industry some protection, protection against unscrupulous people such as these—and I use the Minister’s own words when I refer to “unscrupulous people”—who have done this for their own gain. So I repeat the demand for a commission of inquiry into the poultry industry.

But in addition there are certain questions which the hon. the Deputy Minister must answer. Will he reopen the case? Is there anything in this agreement with Anderson Chick Sales, and the others, whereby he will not reopen the case? Because in terms of the law as it stand today, with the amendment which we passed in this House in 1970, the Minister can still act against them in respect of all progeny, let alone the parent stock only. Will he now take action? Will he take the advice of the judge who heard the last case and bring this matter to open court, and let us have the truth? What is he going to do to protect the breeders who have been ruined through the negligence of the State, because they have not been able to compete against this sort of competition? Why, after we passed Act 46 of 1970, was the department afraid to use it? The hon. the Deputy Minister said, in a supplementary reply, that if they had acted, 50 per cent of the broiler chickens in South Africa would have dried up. Mr. Sneaker, he knows that that was not right, because …

Mr. SPEAKER:

Order!

Mr. W. T. WEBBER:

I beg your pardon, Sir; I did not mean it that way.

Mr. SPEAKER:

The hon. member must withdraw those words.

Mr. W. T. WEBBER:

I withdraw them, Sir, The hon. the Deputy Minister should have known that in terms of the amendment which we passed in 1969, the department could have continued to breed with these birds. They could still have been available to the people of South Africa and to the poultry producers, the broiler farmers and others. That was a puerile excuse. Furthermore, at the time when he took these additional powers in 1970, he was already aware of the fact, so he cannot now hide behind the fact that it would have taken 50 per cent of the broiler birds in the country out of production if he had proceeded with the action.

In conclusion I must refer to the other point, and that is the question of the diseases which have been introduced by these birds. The hon. the Deputy Minister is aware that certain diseases have been introduced. He is also aware that more virulent strains of diseases which we had in this country have been introduced. I call as evidence the words of the hon. the Deputy Minister when he introduced the amendment Bill in 1969. He said that the outbreak of Newcastle disease here in the Western Cape in 1968 was directly attributable to smuggled stock. But again they have failed to act, and we have this dreadful scourge of Newcastle disease sweeping through the Republic today. In the words of the Deputy State Veterinarian in Pietermaritzburg, this latest strain of Newcastle disease discovered in Umlaas Road and Cato Ridge last week is far more virulent than any we have ever had in this country before. Is the hon. the Deputy Minister certain that this has not been introduced by this smuggled stock? [Time expired.]

*The DEPUTY MINISTER OF AGRICULTURE:

Mr. Speaker, I have decided I am definitely not going to get cross, because if someone tells you that your Minister has entered into an agreement with smugglers, one does not want to descend to that level and in that case one is not prepared to become excited. I have a clear conscience when it comes to the lot of wild, unsubstantiated allegations levelled by the hon. member at the Ministry in respect of the handling of this poultry industry. The hon. member said the Minister was not here and I was not good enough to reply to him. I know he is superior to me; he is much better informed as far as these matters are concerned. Unfortunately my mother taught me not to insult people, and it is no fault of mine that this is not the case as far as he is concerned. I just want to say that this entire matter is not concerned with the poultry industry; it concerns a certain Prof. Douglas Coles. The United Party did not place those questions on the Order Paper, Sir, Prof. Douglas Coles put those questions for them. The whole Act was initiated by the hon. member for South Coast initially approaching me and saying that Prof. Coles was heading for bankruptcy because he had to compete with people who had smuggled chickens into the country. We established that that was in fact the case, and the Opposition was good enough to help us pilot that Act through all its stages in Parliament. We immediately took Anderson Chick Sales to court. In reply to the questions I mentioned it cost us R130 000. We lost the first case on the audi alteram partem rule. We went back again and the law advisers told us: Take a different course of action. But in the meantime all those Heatherdale and Anderson Chick Sales farms were under quarantine and were being looked after by veterinary surgeons whose services were badly required throughout the country. Their salaries alone cost us more than a R¼ million in that period, and we lost the case again on the basis of various legal aspects. We were advised at the time that if we were to do what the hon. member for South Coast had requested and what Prof. Coles had requested at that stage, i.e. to take action and destroy those chickens, it would have meant that 50 per cent of our country’s 50 million broilers would have been killed off. and the broiler is the food of the poor man. We said we could not afford it. I said time and again in my replies that we were aware of the fact that chickens and eggs were being smuggled, but that we had no hold on this industry. For example, we caught a man with a portable radio at Jan Smuts Airport; the batteries had been removed and replaced by six hen’s eggs. How is one able to exercise control over such an industry? We are faced with an accomplished fact; what must we do? But now the hon. member has requested a commission of inquiry. What nonsense and what a waste of time to request a commission of inquiry while we have been consulting directly with the poultry industry, the South African Poultry Organization, throughout and have asked them what we should do. I do not want to reply to those questions put by him, Sir, I merely want to say this to you: There are a few of his friends who are going to get hurt, but he is the last person to talk about monopolistic conditions. He and all the members of the United Party opposed us when we said that a person may not increase his stock of laying hens by more than 10 000 per year. Who is talking about monopolistic conditions now? His friends, the Tongaat Sugar Company, wanted to add a quarter of a million hens to their production in one year. They opposed this Act, and now he says we are playing into the hands of monopolies.

Where have you ever heard such nonsense before? When we were negotiating with the Poultry Association, we told them: We accept that we cannot stop smuggling, and now we are going to allow, even if it were to be under franchise, companies to bring chickens into the country under permit, irrespective of whether they have been bred in America or in France or in any country, on condition that the birds are kept under quarantine at Onderstepoort. If they are free of disease, the department may retain 10 per cent or a certain number of those chickens and distribute them amongst small farmers—I do not think the hon. member is aware of this arrangement—and the remainder he may use to increase his broilers. Sir, the small farmer is protected every time, but now the hon. member has come forward here and said that we are monopolistic. He spoke of 26 or 28 outstanding veterinary surgeons who had made a request. All this appeared in the Farmers Weekly. In all respect, Sir, they were not 28 outstanding veterinary surgeons; they were all old retired veterinary surgeons who were in our department previously but who are no longer in our service. Look at their ages. They are older than the hon. member for South Coast, and that is really old. Sir, if I have to reply to this type of allegation, then I say …

*An HON. MEMBER:

Who is getting cross now?

*The DEPUTY MINISTER:

I am not getting cross, but if my conscience is clear, the hon. member may put lists and lists of further questions; because these are old wive’s tales; he hears the one story here and the other there. A few personalities are concerned here. I am sorry Prof. Douglas Coles went bankrupt, but whose fault is that? Sir, listen to how the hon. member contradicted himself. He said we owed the poultry industry and the broiler industry a debt of gratitude for being sufficiently efficient to bring about a reduction in their price, while the industry itself tells us: “Allow us to import chickens from abroad, because the weight increase of the foreign chickens is much more rapid than that of the locally bred chickens.” Can you see how the hon. member contradicted himself? Sir, as far as this chicken story is concerned, I want to say frankly to the hon. member that we are not prepared to appoint a commission of inquiry. We shall only do so if the South African Poultry Association, a recognized organization of organized agriculture of our country, requests the appointment of a commission of inquiry. If they request it. I shall do so at any time, but we shall not appoint a commission of inquiry if a member of the United Party such as the hon. member for Pietermaritzburg District requests us to do so.

*Dr. A. P. TREURNICHT:

Mr. Speaker, I do not wish to return to the discussion in regard to the student matters, except to accentuate something here which to my mind should in fact be accentuated in this House, and that is the attitude adopted by those students who are not involved in the demonstration, the vast majority of students who neither concern themselves with this kind of activity, who are quietly continuing with their studies, nor seek a confrontation with the bearers of authority in the community: students who, moreover, do not allow themselves to be taken advantage of by others standing far behind the scenes, but who very soberly reflect and debate on national issues where this is appropriate and where it belongs. May I just add that I think the method which is followed by some students and which has led to confrontation with the Police, is a very naïve one, a very naïve, over-simplified method which does not fit in with people who want to pass for the intelligentsia of the country. One does not conduct a debate with oversimplified slogans and by standing on the steps of cathedrals and churches.

Mr. Speaker, I should like to devote the rest of my speech to another matter, and that is to react to an accusation levelled by the Opposition, namely that the National Party is supposedly saddled with an outmoded 19th century ideology, that the policy of separate development, the policy of the development of separate nationhoods and peoples, is supposedly an obsolete ideology.

*Mr. J. O. N. THOMPSON:

For South Africa as it is today.

*Dr. A. P. TREURNICHT:

I want to come to that. I shall honour the hon. member for Pinelands later on with a reference to his interjection. Sir, this would supposedly amount to nationalism or separate nationhood being an outmoded ideology. This would supposedly, especially from the point of view of economists, not correspond with the demands of a modern economy or with the situation created by the Industrial Revolution, namely the economic inter-independence of peoples and individuals. In the light of this inter-independence of peoples and individuals, it is supposed to be inappropriate to speak of national existence and political sovereignty and peoples being separated by boundaries. It is claimed— and here I am going back into the history to a certain extent—that after the dissolution of the large community of the Roman Empire, the Western peoples lived in small, more or less autonomous communities for more than 1 000 years. Those small communities were self-sufficient to a large extent. But then the great Industrial Revolution came along and the economic seclusion of those national communities was forced open and they were made interdependent through a division of labour. This is the point on which the major emphasis is laid, namely the division of labour. And this interdependence of the various communities is now being used as an argument in an attempt to prove that there is little or no place for nationalism in the modern, so-called “great society”. I want to suggest—and I shall substantiate it—that it is in fact the United Party which is to my mind saddled with the remnants of an outmoded ideology, also dating back to the 19th century. The 19th century was not only the century of the rise of nationalism, but also the mother of the laissez-faire liberalism, the free trade liberalism, with the attendant evils. Mr. Speaker, it is that ideology which did not only bring a great deal of misery to the masses, but also created a proletariat and was directly responsible for the rise of socialism and communism, and this is not a statement I have made up myself; any student of political philosophy will confirm it.

Let me take a few random examples from history: In his Wealth of Nations Adam Smith teaches the lesson of free trade and that all ties and restrictions, especially on the part of the State, should be abolished if all people are to share most effectively in the commodities of life which all of them are helping to produce. This is what was said by Adam Smith in 1776; it is rather far back, but his views found an echo in the 19th century, and the remnants of that philosophy are echoed in the United Party’s pronouncements in politics. Ostensibly there should be no protection, but free competition, for all people are equal. Jeremy Bentham, in turn, applies this laissez-faire liberalism to the political sphere in his maxim—

Law and government are necessary evils; the lesser thereof, the better.

I find an echo of that in the events of the last few days: “Law and government are necessary evils; the lesser thereof, the better.” Now, this ushered in the period of free trade and laissez-faire. The object of the laissez-faire slogan was the breaking down of the resistance of autonomous and self-contained communities, the removal of all import control and obstacles to free production and free trade in all parts of the world. It was the slogan of that time. It was to give the major impetus to the Industrial Revolution. What does an expert such as Walter Lippmann say in his book The Good Society about this ideology and the fruit it bore in the 19th century—and that fruit is still hanging in the 20th century as well—

Men have not known whether to bless the new order or to curse it. To multitudes it has brought a very great improvement of their standard of life; to others a brutal disruption of their habits. Thus to some the 19th century seems a century of progress, to others a century of degradation. For the division of labour produced much more wealth.

And this did happen—

But it also produced a proletariat. The division of labour made them inter-dependent and therefore founded their prosperity on the principle of peaceable collaboration, but it also made them dangerously insecure against those who did not collaborate.

This is Walter Lippmann in his assessment of liberalism and free trade liberalism, which finds its echo in politics as well. He said—

There was progress and poverty. There was democracy and insecurity. There was legal equality and social inequality. There was great moral enlightenment which abolished slavery and caste. There was a multitude in the great cities …

This is what some friends want, the congregation of large masses in the cities— “Let them come, we shall create opportunities”—

… uprooted from the soil, deprived of their ancestral conditions, without significance to dignify their lives or faith to console them.

What Lippmann wants to say here, is that the laissez-faire trade liberalism with its dogma of equality and free competition never overcame a fundamental inequality. That inequality perpetuated itself in a class grouping, which turned into the class struggle, and here I can quote Prof. Andrew Murray of Cape Town.

To go a little further, as far back as 1848 Disraeli described this economic discord amongst the population in his social novel entitled Sybil, subtitled “The Two Nations”, to indicate the inequality. In that novel he pointed out the inequality that was brought on by this liberalist free trade policy. But I should like you to listen to a pronouncement of J. S. Furnivall, who furnishes a description of the cruelty of the laissez-faire policy in the Netherlands East Indies, where the point at issue was not only the free trade and the free play of the economy, but where the community reaped the fruits of it. He said (translation)—

While Europeans and Chinese grew richer under the liberal policy, the aborigines grew poorer instead of richer. Furthermore, freedom of trade did not promote integration in the society. On the contrary; the European section rapidly increased in numbers and grew richer, and the Chinese element even more so, while, in an economic sphere which had become increasingly smaller, the aborigines had to stand by and see disorder being created in their social life without their being absorbed into a greater social order.
Mr. W. G. KINGWILL:

Rather quote Graaff.

*Dr. A. P. TREURNICHT:

I feel sorry for the hon. member if he cannot understand this. Perhaps he does not move on that level. This is the point I want to make: There one has a great 19th century ideology and its destructive effects on a community wanting the free play of the economy without having regard to the values, the traditions and the ties of a particular community. To many this brought great wealth, but to others it brought poverty and being trod upon and especially social, cultural and religious disruption.

But whilst the laissez-faire as an unacceptable policy has served its purpose in practice, has nationalism also served its purpose in the world? Is the National Party Government in South Africa the only Government which is following a policy of political and social separation in a pattern of economic interdependence? Hon. members opposite would very much like to make out that South Africa is out of step with the rest of the world. Sir, if nationalism is a real factor in South Africa, then it is also a real factor in America, in England, in the Netherlands, in Belgium, in Black Africa, in Europe and in Asia. I want to mention a few examples. Let me first put it this way, namely that if the awareness of differences and the refusal of the one to be dominated by the other— and that is what we are concerned with in South Africa: a refusal of the one to be dominated by the other—amount to racism, then racism is displayed far and wide and deep, too, in the rest of the world. Let me merely mention what is happening in America, the country which so frequently points out to us how out of step we are, in regard to their own immigration laws, the McCarran-Walter Act of 1952, to show what discrimination is applied in respect of certain population elements and certain members of nationalities from elsewhere in the world—

The quota system based upon national origins, has remained intact.

And what does this look like in practice? This is the great America, the great society! 25 000 Germans are admitted, 65 000 from Britain, the huge number of 3 200 from the whole of Africa and the huge number of 3 290 from the whole of Asia. These are the numbers that are admitted to America according to that quota. Then Prof. Van den Haag says—

Orientals suffer a very special type of discrimination qua Orientals even though they may be naturalized citizens.

Let us take a look at the position of the Negroes in America, of whom they say that they have 30 per cent non-Negro blood in them, the Negroes who only account for 11 per cent of the population, the Negroes who no longer have a West African culture but have become Americanized, the Negroes in respect of whom compulsory integration is applied in America. That 11 per cent is as far from being accepted socially as has ever been the case in history before, and one finds evidence to the effect that in the North there are even worse forms of discrimination and segregation than has ever been the case in history before. I shall read to you, Sir, a quotation of what was said by an American, a sociologist—

A certain amount of ethno-centrism is a normal and necessary ingredient of all group life.
Mr. W. G. KINGWILL:

“Ethnocentrism,” what does that mean?

*Dr. A. P. TREURNICHT:

The hon. member may look it up in a dictionary but if I can be of any assistance to the hon. member, “ethno-centrism” refers to thinking from within the framework of the inner circle of a specific ethnic group. He said—

It is the basic characteristic that differentiates one group from another, and that is fundamental to social structure.

This is simply what I tried to say in my first speech in this House.

As far as England is concerned, one also finds an influx of non-White immigrants there, but the “British way of life” lays down certain qualifications in respect of the admission of people to Britain. There is a thick report which the Institute of Race Relations recently made available on “Colour and Citizenship,” and in which it is indicated how people of a different colour simply are the object of discrimination, even in the British way of life. The same thing applies in Canada, but I am going to pass it by. But, after all, it is being said now that we are saddled with a 19th century obsolete philosophy, the separate development of peoples. What happened in regard to the separation between India and Pakistan, when people were afforded the opportunity of living together on territory of their own, where they would not rub shoulders with one another all day? Eight million people changed their addresses and were sorted out in order to prevent friction. And in Israel, at the time of the establishment of a homeland for the Tews, 800 000 Arabs left the territory, and I do not think all of them did so voluntarily. If I understand the matter correctly, the Arabs were actually forced to have number-plates of their own. I am merely mentioning this to hon. members so that they should not point a finger at the National Party as people who are race or people-conscious. This is the case all over the world, and this is the case in the United Party with the emphasis they place on the diversity within the population. The only thing is simply that they do not want to carry through the implications of this diversity to their logical conclusion when it comes to relations among the population groups in South Africa. To state my point fully, I want to take a country such as Yugoslavia, which, after all, is a homogeneous country with a homogeneous population. Under communist control there are 20 million people in six republics, but they are members of five different peoples with four religions and they speak three languages.

*Mr. E. G. MALAN:

But in one country.

*Dr. A. P. TREURNICHT:

But, for all that, as the hon. member for Orange Grove ought to know. Tito experienced very great difficulty with nationalism and the expressions of nationalism by these people under the central control of a communist state. Take Switzerland, the country which ought to be an example of co-existence among the various cantons. One has the problem of the French-speaking section in the Jura area who want to secede from the German-speaking section in another canton within the Swiss federation. This merely confirms once again a South African phenomenon which has to be handled by the National Party. Let us take Belgium. For 140 years Belgium lived under an individualistic constitution. In Belgium they have French-speaking and Flemish-speaking people who, as far as their citizenship is concerned, are simply Belgians. Those people changed their constitution after 140 years so that the rights—not only cultural rights in general but even economic rights—of the Flemish-speaking section in that country might be safeguarded and constitutionally entrenched as against those of the Fench-speaking section.

*Mr. E. G. MALAN:

They are all represented in their Federal Parliament.

*Dr. A. P. TREURNICHT:

That hon. member ought to know, too, that there are in addition three separate cantons which are situated towards the German side, namely Eupen, Malmédy and St. Vith, which have their own language.

*Mr. S. J. M. STEYN:

Under a federal state.

*Dr. A. P. TREURNICHT:

Yes, under a federal state. These friends are talking about a federal state. Have they already forgotten the words of their own leader in 1959, when he said—more or less the following idea—that in the long run it was the numbers that turned the scale. The same thought was expressed by Dr. Verwoerd in connection with the agitation for bringing Coloureds into this House. He said in the long run one created friction and would to an increasing extent have a cold civil war between those groups because each group would want its interests to be represented here to the maximum and would want to play them off against those of the other. This we want to and will also prevent.

Let us take the example of Cyprus. Cyprus experienced dramas in its struggle for coexistence. For more than two years the bloody incidents on Cyprus poisoned the political life of Europe. On more than one occasion these incidents almost led to international intervention and a general war. On 11th October, 1964. a charter was adopted in terms of which the rights of minorities were guaranteed. Autonomy was granted to all minorities in regard to education, cultural life, religion, status of persons, and so forth. What does Prof. Lamberty say in this regard?

*Mr. E. G. MALAN:

In one state.

*Dr. A. P. TREURNICHT:

The answer is contained in the quotation which I shall now give the hon. member for Orange Grove. He said—

What will permit the Turkish Cypriots, in other words, the Turkish ethnic cultural and linguistic community, to remain what it is—a separate community alongside the ethnic, religious and linguistic community of the Greeks, is after all autonomy, a system of apartheid …

And that is a word used by a Flemish author.

…in the field of administration, culture and religion. Since then it has become relatively peaceful in Cyprus.

If in those countries, this led to those countries recognizing the principle of apartheid, how much the more will this not be the case in a country such as South Africa where the Whites are well in the minority. Here where they are numerically fewer than the two Bantu peoples, it is essential for a policy of apartheid to be followed, one of coexistence, autonomous coexistence, the Whites and the various non-White peoples side by side with them.

*Mr. S. J. M. STEYN:

Mr. Speaker, I have listened attentively to the speech of the hon. member for Waterberg. I want to tell him in all amity that there is a place for speeches and a place for lectures. Here in Parliament we debate. As far as I was able to follow the lecture given by the hon. friend, I want to draw his attention in the first place to a fact which he did not mention. This is that the last time an attempt was made in South Africa to apply apartheid with independent States for White and non-White was in the first half of the 19th century—by the liberal government of Great Britain. That was when it separated the Cape Colony and Kaffraria in such a drastic way that for years the area between the Kei and the Fish Rivers was no man’s land. No one was allowed to inhabit it. This worked so beautifully that there was one war after another between the colonists and the inhabitants of that area. It was strongly advocated by the liberalist Dr. Philip, and it was only when a conservative thinker such as Sir George Grey came and saw the foolishness of the attempt to separate what could not be separated, and sent White magistrates to administer that area that peace was achieved in South Africa. The other point in his speech which struck me particularly was the fact that towards the end of his speech he quoted one country after another where there were problems with multiracialism. It is true that in every one of the examples which he mentioned the races got autonomy. They got it within the same political context, however, in the form of a federation. This was the case in Cyprus and Belgium and in many other countries. No attempt was made there to cut the state to pieces as is advocated by the policy of the Nationalist Party. So I want to thank the hon. member with all my heart. We shall read that speech again, because we were given many weapons with which further to promote the federal idea of the United Party.

†Mr. Speaker, I think this is an opportunity to take the debate we have had so far into quick review. It is interesting that whereas the country was expecting this Parliament, in this last major political and financial debate of the session, to deal with some of the outstanding problems that we face in this country, events compelled us to spend a large amount of our time on immediate events taking place quite close to us outside this House. I think that since we discussed this matter two days ago in full, something has appeared of which this House should take not. While on Friday the South African Police, obviously on the instructions of the Government, or certainly in carrying out the policy of this Government, acted strongly, so strongly that a revulsion of feeling swept throughout the country against the highhanded action that the Government instigated on that occasion, we have had since, as a result of public reaction against the Government’s policy, larger gatherings in Cape Town and in other cities of South Africa where apparently the police did not listen to the Prime Minister, who said on Friday that whenever it was necessary the same methods would be used in future. On Monday, and again thereafter, they used standard and orthodox police methods, methods that my hon. leader recommended in his speech and in which he was supported by other people. I would like to draw the attention of the House to the difference between orthodox Police action and politically inspired Police action, as was indicated by the Minister of Police in his speech during this debate, by reading reports of what happened from the Nationalist Party’s own Press. For my purpose, I have taken Die Transvaler, because it is a Transvaal newspaper carrying eye-witness reports of what happened here in Cape Town and in other cities. Let me read the House an eye-witness description in Die Transvaler of events in Johannesburg on Monday, as reported in yesterday’s Die Transvaler. The heading was, “Wits-optog het stad ontwrig”.

*Mr. J. P. A. REYNEKE:

You rejoice at it.

Mr. S. J. M. STEYN:

On the contrary, I rejoice that South Africa has a Police Force which, if given the chance, can act in this responsible manner … [Interjections.] The eye-witness report reads as follows—

Die Polisie het een keer geweld ge-bruik. Dit was voor die kerk na uiter-matige uitlarting. Brig. J. H. Schroder, waarnemende Afdelingkommissaris van Polisie, het die skare vier keer versoek om uiteen te gaan. Na nog ’n finale waarskuwing het hy aan die Polisie gesê: „Verwyder hulle sonder geweld.” Polisiemanne het met knuppels toegesak. Toe Brig. Schroder dit sien, het hy ’n konstabel ingehardloop. hom aan sy kraag gegryp en met die een hand van sy voete gelig. Hy het die konstabel van aanranding laat aankla.

Then I read on—

Origens het die Polisie die grootste ge-duld aan die dag gelê en aanhoudend mooi met die Witsies gepraat wat in hegtenis geneem wou word.

That is what happened in Johannesburg. There were none of the unhappy scenes that we saw in Cape Town on Friday.

*Mr. J. P. A. REYNEKE:

Mr. Speaker, may I ask the hon. member a question?

Mr. S. J. M. STEYN:

No, Mr. Speaker, I am not prepared to answer questions. In the same newspaper I read how matters were handled in Cape Town on Monday. It reads as follows—

Student en mense wat politieke munt uit gister se beoogde betoging teen soge-naamde Polisiegeweld wou slaan, is deur ferme en slim Polisie-optrede gefnuik. ’n Situasie wat niters plofbaar was, is deur kalm optrede deur Polisie-offisiere heeltemal geblus.

The report further says—

Op een stadium het moeilikheid ge-dreig en toe het kol. P. A. Crous, Dis-trikskommandant, die bevel gegee dat die skare verwyder moet word. Die polisiemanne, met knuppels gereed, het na die studente op die Katedraal se trap-pe beweeg. Terwyl hy „Nee, nee!” ge-skreeu het, het kol. Crous die trap op-gehardloop en van die Polisie gegryp wat besig was om die studente te slaan.

*I can go on in this way. It was responsible behaviour and a tremendous contrast with the events of Friday. It was the Police of South Africa as we know them. They are responsible people.

†Mr. Speaker, I ask myself: Why this contrast between what happened on Friday and what happened on Monday? Looking at what happened on Monday, I want to assume for argument’s sake that the students who gathered on the Cathedral steps were committing an offence.

HON. MEMBERS:

Japie says they were right.

Mr. S. J. M. STEYN:

I say that I want to assume it for argument’s sake. The questions put by my hon. leader the day before yesterday have not been answered, despite the whole series of speeches that came from the opposite side of the House. One question was: Why was the gathering on the steps allowed to continue so long?

Mr. Speaker, I want to say that I have experience of young people. I was one myself at the University of Cape Town. I say that if you put 200 students in a confined space like the Cathedral steps with nothing to do except to excite one another, and they are faced by policemen, tempted to seek a confrontation with the policemen, you are looking for trouble. The hon. member for Houghton referred to a previous demonstration by students on those steps that lasted an hour and was peaceful. If, after an hour, the Police had used their authority under the Riotous Assemblies Act and had warned those students to disperse after they had done their “thing”, after they had achieved what they wanted to, the incidents on Friday would never have happened. The second question is: Why was Police action prolonged after the need for force had ended, after the meeting had been dispersed? There is eye-witness account after eye-witness account of the continued use of force by the Police. I can find only one answer. That answer I find in the speech of the hon. the Minister of Police in this House the day before yesterday. He said most distinctly when he was asked why the students were beaten up—

Ja, omdat ons die studente wou slaan. Omdat die studente die sondebokke was en ons nie ander mense wou straf nie, omdat ons ’n aksie teen die studente ge-had het.

As I said by way of interjection on that occasion—the Minister did not react to that interjection—this means that our Police were used not as a force to maintain law and order, but as a punitive force, as a force to mete out punishment against people found guilty by executive action. I want to say that if we want to play with fire in South Africa, we should use our well-disciplined Police Force, who will do what is expected of them, in this way. Then, indeed, we are looking for serious trouble. Let us remember one thing about the South African Police. There is not one of us, not even the students who demonstrate the way they do, who does not sleep peacefully in his home at night—because the South African Police are maintaining peace and order. It should be the duty of the Prime Minister and his Government above all other people to see that the Police Force of South Africa is respected and is used in a manner that will continue to earn for it the respect which it so richly deserves from the public. I say, and I say it without any fear of contradiction, that if the actions of Friday are to be repeated because the Government „wil mense slaan, want hulle het ’n aksie teen hulle”, we are going to create a situation in South Africa where the Police will be hated and where their task of maintaining law and order in South Africa will be made infinitely more difficult than it is today. I think that the Government should be warned and that the nation should note that this Government, i which has shown itself to be unfit to govern South Africa in so many repsects, is now also becoming a danger to law and order in South Africa because of its misconception of the functions of the South African Police. I want to read something else. There was another eye-witness of the events on Monday, and that was Mr. Piet Beukes, the former editor of Die Landstem. He is an experienced journalist and this is what he had to say talking about Monday—

Die Polisie het gistermiddag met verbasende kalmte en nog meer geduld die reuse-skare van baie duisende mense hanteer. Daar was insidente waar betogers smalende opmerkings na die Polisie geslinger het. Hier en daar is die moeilikheidmakers kort en vinnig vasgevat en dan het die gejou van ’n deel van ’n groot skare weerklink, maar oor die algemeen was almal tevrede dat die Polisie hulle werk om vrede en orde te bewaar, goed en deeglik uitgevoer het. Dit is ook wat brig. M. P. Loubser, as Adjunk-kommissaris van Polisie in Wes-Kaapland, voorspel het. Net voor die samedromming van die groot skare, het hy laat weet: „Ons wil nie ’n herhaling hê van Vrydag se voorvalle nie en ons sal ons bes doen om soortgelyke voorvalle vandag te vermy.”

*We on this side of the House take off our hats to such a man, and we are glad that he was not misled by the statement of the Prime Minister that he wanted to see the things which happened on Friday happen again and again whenever it was necessary. [Interjections.] I just want to say that I am glad that the Police Force of South Africa shows more responsibility than the Prime Minister of South Africa.

HON. MEMBERS:

Hear, hear!

*The PRIME MINISTER:

If it is necessary, they will do their duty.

*Mr. S. J. M. STEYN:

The fact that the hon. the Prime Minister wants to tell me now that the violence which we saw on Friday was necessary in order to punish a small group of students …

*The PRIME MINISTER:

It was necessary.

*Mr. S. J. M. STEYN:

… with a loud-hailer, confirms what I have already said, that the Government and this Prime Minister in particular are unfit to govern South Africa because of a lack of judgment. What is the Government doing by acting in this way? [Interjections.]

*Mr. SPEAKER:

Order!

†They start playing into the hands of the extremists amongst the students. After the events on Friday, rejoicing went up from that small group of extremists who are trying to misuse the student body of South Africa. My hon. leader quoted it on Monday. He quoted the speech by one of these young men where he was gloating with joy that as a result of the actions which took place on Friday, public opinion was veering into sympathy with the actions of some of these students. Why must the Government of South Africa assist these agitators by making them martyrs and by giving the impression to the public that they are suffering injustices from law and order? I think the nation should be warned that as a result of the action of this Government, people who may have sinister intentions towards South Africa, and especially towards the body of students of South Africa, are being assisted in their nefarious practices by the extremism and lack of control of the Government. That should be said. We are aware of extreme elements amongst the students of South Africa. They are at work amongst students all over the world. They are people, like Prof. Marcuse of California, who have a theory that the time is past that the Communists can expect the workers of the world to unite against our free democratic system, because the workers prosper too much under our system. Marcuse says that there are other elements in the population today who are frustrated. Then he mentions minorities, such as national minorities. I suppose they would include statutory minorities, such as we have in South Africa as well. He mentions students because students under our way of life, our system of life, have their dependence on others prolonged much longer than is normal. People under our system who want to be educated, are dependent upon others up to the age of 22, 23 or 24 before they can become independent individuals in their own right, because they have to be prepared for life at the expense of the community. In nature, a young male and young female at that stage are in the prime of their life, playing an important part in the defence and life of the community. But these people are not allowed their natural outlets, and the communists and other people who want to destroy our way of life, know this, and they seek to exploit the students. The Government is not appreciating this. The Government, by indulging in extravagances, as it did on Friday, is assisting the people who want to misuse our students in South Africa.

We on this side of the House certainly pay tribute to the great majority of the students of South Africa, responsible men and women, taking their preparation for life seriously, grateful to the community for making it possible for them to enjoy higher education. I think they, their parents, and the university institutions should be warned that they must not be misled by the follies of our Government into not appreciating the dangers that face them. I must commend to them all the statement made by Dr. Marius Barnard yesterday here in Cape Town, when he drew their attention to the fact that if this Government is not to their liking—and there they have the sympathy of 80 per cent of the population of South Africa—the answer is not to seek revolution, not to seek “change” by extra-democratic and extra-parliamentary methods, but to join the political party of their choice and to help change public opinion so that it can be exercised at the ballot box where it belongs. I can only say one thing: I hope the Government has now learnt its lesson by the contrast between Friday, and Monday and Tuesday, and that we will never see a repetition of the excesses that marred the good life and the face of South Africa last Friday, because the Minister of Police said “hv het ’n aksie teen die studente en hy wil hulle slaan”.

*The MINISTER OF POLICE:

You know that is untrue.

*Mr. SPEAKER:

Order! The hon. the Minister may not say that. He must withdraw it.

*The MINISTER OF POLICE:

Mr. Speaker, I withdraw it. but it is untrue.

*Mr. S. J. M. STEYN:

Mr. Speaker, it is not untrue; here is my witness—the Minister’s Hansard. I have read it; I shall read it again—

Yes, because we wanted to beat the students, because the students were the culprits and we did not want to penalize other people because we had to take action against the students.
*The MINISTER OF POLICE:

Start right at the beginning.

Mr. S. J. M. STEYN:

The Minister can squirm as much as he likes—he is on record and I leave him to history … [Interjections.]

*Mr. SPEAKER:

Order!

*The MINISTER OF POLICE:

You are running away from the truth.

Mr. S. J. M. STEYN:

Mr. Speaker, now I am looking at the rest of the debate. I am trying to find a speech of importance that was made …

The MINISTER OF SPORT AND RECREATION:

Only yours.

Mr. S. J. M. STEYN:

No, Sir, I do not say that; my speech is not made yet. I think, for example, of the speech made by the hon. the Minister of Bantu Administration and Development, who said that the United Party was confused about its race policies. I have never heard bigger nonsense than that; but I am not going to argue it; I am going to put it to the test, a very simple test. If we are confused about our policy, how come that we are confident enough about our policy to allow 16 representatives of our non-Whites in this House, without fearing that they would make it impossible for us to govern ever again? And how does it come about that the Government opposite, who are so confident that they have a clear-cut solution to the Problems of South Africa, which everybody must support whether they are consulted or not, tell us through the mouth of the Prime Minister that if we allow non-White representatives in this House, even though they are only one-tenth of the total …

Sir DE VILLIERS GRAAFF:

No, representatives of the non-Whites.

HON. MEMBERS:

He has already said it.

Mr. S. J. M. STEYN:

… Coloureds and representatives of the other non-Whites in this House, even if they are only one-tenth of the representatives in this House, then the National Party will never govern again. Which party has confidence in its policy? I do not think any Prime Minister has ever publicly admitted that he cannot hope to get the support of the people in terms of his policy, as this Prime Minister did when he made this admission that his policies are so rejected by the people they affect, that if he allows them a minimum of representation in this House, it will be the end of his Government for all time. Sir, if ever there were people who were confused and out of touch with reality and truth, it is hon. members opposite, under the leadership of the Prime Minister who can make a confession like that.

Then there was a speech by the hon. the Minister of Transport on national unity; he was obviously trying to talk away the speech he made at Brakpan, obviously seeming to intend to apologize for the actions of the hon. the Minister of Defence in the speech that he made here during the Budget debate. But, Sir, his speech ended in confusion; it ended in a lot of loose ends that had no connection. We on this side of the House would like to put it on record that if we want national unity in South Africa we must live national unity. National unity must be visible; it must be manifest in our organizations, in our being together, in our common activities and, above all, national unity must be evidenced in the respect that we have for a man’s right to use his own language. And, Sir, that is our objection to the attitude of the Nationalist Party during the Oudtshoorn and Brakpan by-elections. This attitude of racism had a temporary success at Oudtshoorn, but already in Brakpan we saw the revulsion of the people developing against this extremism. What was the charge of the hon. the Minister of Defence? It was an attack upon members on this side because they spoke their own language in this House, and for that reason they were “Boerehaters”.

*An HON. MEMBER:

That is not true.

Mr. S. J. M. STEYN:

Sir, he was followed by Die Transvaler, which published a list of names of members on this side of the House who were unilingual, who could not speak Afrikaans. That list included name after name of men who are fully bilingual, men like my hon. friend, the member for Walmer, whose grandfather was on the personal bodyguard of Paul Kruger during the Boer War and who speaks Afrikaans, perhaps not as eloquently but certainly more correctly than the Prime Minister himself; but he had to be listed by the Nationalist Party as unilingual, in order to stir up feeling between Afrikaans- and English-speaking, as being unilingual, disrespectful towards Afrikaans and a Boerehater. Sir, I hope that one day next session I will have the opportunity of making a few positive suggestions to the hon. the Prime Minister as to how he can prove that national unity to him is not only a matter of faith at its best, or lip service at the worst, but also something which he is willing to live out in his private and in his public life. Then, Sir, I just want to say this because time is getting short. There was something unreal about this debate in that we did not have sufficient opportunity at the end of the session to emphasize once more the greatest need for South Africa, if we are to survive as a civilized community and if we are to experience peace amongst the races in this country. Here I find that there are voices —lone voices as yet, but growing voices— on the other side of the House who support the United Party in its view that we need greater material resources soon in order to make it possible for us to find solutions to our problems. I think it is tragic and most shortsighted that there are hon. members of this House who accuse us and, for example, the Minister of the Interior, who support us by implication at least, that we are materialists; that we are only interested in things of the body and not of the spirit. I want to admit. Sir, that we regard material strength as of vital importance to the survival of South Africa. My hon. leader has on more than once occasion stated that we have to go faster than we are going today: that we cannot be satisfied to be No. 18 in the list of nations if you have regard to the gross national product of the nations of the world. We have to grow faster; we have to have more resources and more strength; we have to have the money to do justice to all the people, whichever policy we carry out. Even if we are to go completely loony and carry out to its logical conclusion the policy propounded by the Government, we will need money to carry it out; we will need resources to carry it out; we will need educated men and women to carry it out; we will need the wherewithal fuels to carry it out. At the moment we are not achieving what is required in order to be able to meet the problems of South Africa. Sir, if we take our living standards and look at our per capita income as a nation, we find that in the years from 1958 to 1968, our gross domestic income grew by 5,1 per cent a year, but at the same time our population increased by 2,5 per cent a year, so that the net increase in our income per capita was only 2,6 per cent. But in the case of the countries which form part of the European Economic Community, their net income, calculated in the same way, was growing at the rate of 4½ per cent per annum; they were surpassing South Africa; they were moving further ahead of South Africa; some of them were overtaking us and some of them were moving further ahead of us. I want to say, in support of the attitude of this side of the House, that we have to do better if we want to survive in this part of Africa. We have to do much better. We have to do better, and in order to do better we need certain things; we need immigrants, and we will not continue to get immigrants if our standard of living falls below that of Europe to which we look for immigrants. People very seldom move from a more well-to-do community to a poorer community. We will have to make better use of our own human resources. We shall have to spend more money on education. We shall have to remove some of the artificial barriers that prevent our people from making the contribution to our progress of which they may be capable. We should follow the example of Germany, which after the war had to absorb 12 million immigrants from Eastern Europe. Germany did not look upon those immigrants as a problem; Germany looked upon their arrival as an opportunity to train them and to make them work for the progress of the German people until today Germany has the highest standard of living in Western Europe. Sir, we can look at Japan with 100 million semi-illiterate people at the end of the war. Today Japan is second only to the United States of America because it is spending two or three times as much as we do on the education of its people. Sir, we can look to Israel, a small state with a small population, maintaining itself against a whole hostile sub-continent, because it relies upon the skills of its people and the high educational standards of its people. Sir, you must remember what Senator Norwood said before he became a politician. He warned us that we were spending only 3 per cent of our national income on education, while the countries of Western Europe were spending 41 per cent and Russia a bit more than 7 per cent. Sir, these are the things to which we should be attending. We should take steps to move our labour from less productive activities to more productive activities. This again is one of the reasons for the success of Germany, Japan and a country like Italy. But we do not do that, Sir; we put up barriers against it. Two-thirds of our Bantu people are still engaged in agriculture, many of them on a subsistence basis in peasant activities; they should not be given more land on which to suffer poverty, but we should use our resources to create industrial opportunities for them. We would then be doing what is wise and in the interests of South Africa. [Time expired.]

*Mr. F. J. LE ROUX (Brakpan):

Mr. Speaker, I do not think it is necessary for one to say much more about this excited tirade delivered by the hon. member for Yeoville in respect of student matters, except to repeat the basic statement that the students themselves chose the place where the occurrences took place, and, furthermore, that the attack on the students came after an officer had been attacked; that they started acting in an unlawful way at the time so that the Police were fully justified to act as they did. I think we can leave the matter at that. We may perhaps just add that it is the attitude, as the hon. the Prime Minister put it, that if the students were to act as they did last Friday, the Police would deal with them in the same way again. We accept this, and if somebody was perhaps injured, he has his basic and logical rights. Sir, is it not very significant and strange that only two weeks ago we listened here to the praises of the Police being sung for their competency when the Police Vote was under discussion in this Budget debate? A wonderful song of praise was sung about the qualities and actions of the Police in the past year. It was even requested to have medals struck for certain members of the Police Force. Now one asks oneself: Why this sudden change of attitude? Why, after such a wonderful song of praise, such as the one we heard, and after the Police had been bedecked in laurel branches, was this sudden attack made on the Police? The reply which involuntarily comes to mind is that the United Party is realizing that it is losing leftist votes, and now it must curry favour with this side as well. That is the whole intention. They must make an attempt to draw some of the votes from the Progressive Party because they realize there is a swing to that side.

I just want to deal briefly with this matter: It is in fact obvious to all right-minded people that when a party prides itself on being the alternative Government, one would expect that party to want to pit its policy against that of the Government on every occasion it has. This advice was also given to the United Party by the Star in 1969 prior to their union congress, in the following words—

We hope the United Party will spell out precisely how it will govern this country in accordance with the facts of life and progress. Let the United Party in this context tell us more about its race federation plan; and there should be no false modesty or coyness about developing intelligent, fair and workable proposals for the races to be represented in the central legislature. This is a fact which has to be faced and the country will be greatly indebted to the United Party for facing it courageously.

But on 19th April, during the debate on the Vote of the hon. the Prime Minister, the hon. the Prime Minister again created a golden opportunity for the hon. the Leader of the Opposition to state the policy of the United Party in regard to their federal idea. The following question was put pointedly to the hon. the Leader of the Opposition not only by the hon. the Prime Minister, but also by the hon. the Minister of Transport: What are your ideas? What will the composition of the federal Parliament be? To this the hon. the Leader of the Opposition replied—

That, Sir, will be decided as a result of consultation … The hon. gentleman is. of course, entitled to ask for any details he likes. He need not think that I am going to be led into those traps.

Mr. Speaker, John Citizen is at least entitled to know what the Leader of the United Party’s ideas are on this matter.

Then there were three by-elections in which the United Party had the opportunity of pitting its policy against that of the National Party, but what did we have in Brakpan? Yesterday we heard from my friend, the hon. member for Oudtshoorn, how the United Party had avoided dealing with its policy there. In Brakpan we had this type of thing from the hon. member for Yeoville (translation)—

Vote for the United Party and let the Government hear you grumbling. Vote against the Nationalist Party as a protest, not for the United Party, but against the Nationalist Party, or, if you cannot do otherwise, then stay away from the ballot box. Vote for Steynberg, then Brakpan will supply the only doctor in the Provincial Council.

And then this as well—

The Nats take non-White cash to fight the U.P.

And then this audacious statement—

It is the bloody Dutch Reformed Church that is hampering progress in South Africa.
* HON. MEMBERS:

Disgraceful!

*Mr.F. J. LE ROUX (Brakpan):

There is also the sneering reference to the “deep Platteland”—

The further one moves away from the areas of sophistication the more votes come the way of the Nationalist Party.

We consulted the Shorter Oxford English Dictionary for the meaning of “sophistication”, and I do not think that what is meant by the “areas of sophistication” has the meaning mentioned in the Oxford Dictionary, because there we find: “Sophistication: the process of investing with specious fallacies or misleading by means of these falsifications”. I think the meaning which should be attached to this word “sophistication” is “refinement, breeding, decency”. In other words, the less decent one is, the more inclined one would be to vote for the National Party. I hope the voters of South Africa will take cognizance of that. Then, the most priceless of all. is that in the debate on the Part Appropriation Bill in February, the hon. member for Yeoville again launched a similar tirade in respect of the pamphlet distributed by the National Party and which is sub judice at present—I do not want to go into the merits of that pamphlet. He said—

What does one make of a political party that, in order to fight a lost cause, because they know that the sand is slipping under their feet, indulge in political propaganda which is untrue, which is a pack of lies, which is deliberately intended to appeal to the emotions of the people in an irrational manner …

Business interrupted in accordance with Standing Order No. 136 and debate adjourned.

BUSINESS NAMES AMENDMENT BILL

Bill read a First Time.

REVENUE LAWS AMENDMENT BILL (Second Reading) The MINISTER OF FINANCE:

Mr. Speaker, I move—

That the Bill be now read a Second Time.

This Bill amends the Financial Relations Consolidation and Amendment Act, 1945, the Transfer Duty Act, 1949, the Estate Duty Act, 1955, the Licences Act, 1962. the Banks Act, 1965, and the Stamp Duties Act, 1968, and it repeals the Registration of Businesses Act, 1909, of the Transvaal.

Stamp Duty: The Stamp Duties Act (Item 15 of the First Schedule) imposes a duty in respect of the registration of transfer of a marketable security, other than a stock exchange transaction. An exemption from the duty is provided for in cases of a transfer from a principal to a nominee or vice versa or from one nominee to another. Manifestly, the reason for the exemption is that transfers of the nature referred to do not bring about any change in the beneficial ownership of the securities.

But as I said in my Budget speech the intention of the exemption is being circumvented by the use of nominees to transfer ownership of securities without the necessity for registration of transfer. A simple illustration of what is happening is that when securities which are held by a nominee are sold, the purchaser does not take immediate transfer: instead the nominee continues to hold the securities but on behalf of a new principal. Since there is no registration of transfer the incidence of duty does not arise and when the securities are eventually transferred to the new owner the exemption in respect of a registration of transfer between nominee and principal is claimed and apparently allowed by transfer secretaries who are not always aware of the true facts of the transaction. It has always been, and still is, the attitude of my department that the exemption does not apply to a transfer of this nature because it does bring about a change of beneficial ownership, but there could be a divergence of opinion and the matter is now being put beyond doubt.

A new duty, equivalent to the duty in respect of registration of transfer, is being imposed in respect of the acquisition of any marketable security in cases where, before the acquisition, the security was held by a nominee for the transferor or where, after acquisition, the transferor becomes the nominee for the transferee. The duty must be denoted on a deed which must be executed by the parties to the transaction and lodged with the nominee concerned. The nominee is required to refrain from making any payments to the transferee in respect of dividends, interest, etc., or from acting as a nominee of the transferee until the necessary deed has been executed and stamped. This new duty will not apply to stock exchange transactions which would be subject to the marketable securities tax or where registration of transfer between the transferor and the transferee has taken place which would normally attract the old duty.

The terms of the existing exemption applicable in the case of transfers between nominee and principal and vice versa are also being tightened up. The exemption will henceforth only apply in the case of a transfer from principal to nominee, if at the time of registration of the transfer the principal is the beneficial owner of the security and the transfer brings about no alteration to his interest therein and, in the case of transfer from a nominee to a principal, if there has been no change of principal during the entire period that the nominee held the security.

The old exemption in respect of a transfer from one nominee to another disappears, but a new exemption is being introduced which will apply in cases where there is a change of nominee without any change of the beneficial interest of any person in the security and provided the transferor has held the security as nominee for the same person throughout the time that he was the registered holder.

I said in my Budget speech that it was not intended to interfere with banks and stockbrokers who make use of nominee companies for the convenience of their clients without any evasion of duty. Several new exemptions are being introduced to cover these cases and the procedure for obtaining them is simple. All of these provisions as well as those concerning arbitrage transactions, to which I will refer later, have been fully discussed with those most interested.

I now come to arbitrage transactions which are put through on the local stock exchange and a stock market of a foreign country. Such transactions are exempt from the marketable securities tax, but stamp duty is payable in respect of the registration of transfer of the securities to the purchasing broker. Representations were made to the effect that the incidence of this duty was making the South African stock market less attractive to arbitrageurs. An exemption is being introduced to cover these transactions and it is hoped that this will increase the flow of foreign exchange to the country.

Another exemption from the duty in respect of the registration of transfer of marketable securities which is being introduced, and which 1 am sure will be of interest to groups of companies, covers the transfer of securities from a subsidiary company, to its parent. The prerequisites to the granting of this exemption are that—

  1. (i) the subsidiary was wholly owned by the parent during the twelve month period preceding the take-over;
  2. (ii) a consideration of not less than the market value of the securities passes; and
  3. (iii) the take-over is in anticipation of the reorganization of the affairs of either company.

Finally, an exemption is being introduced to cover the stamp duty on the customs and excise documents which travellers or tourists are required to complete in connection with goods which they bring into the Republic for temporary purposes.

Transfer Duty and Estate Duty. The amendment to the Transfer Duty Act provides for an exemption from the duty in respect of property acquired by the Electricity Supply Commission, while the amendments to the Estate Duty Act are purely textual.

Licences: Hon. members are no doubt aware that the several provincial councils have been given power to take over the licensing of trades and occupations in their particular provinces. They have not yet been able to exercise these powers and in order that they will not be deprived of the revenue from this source provision is made in this Bill for the duties and certain penalties collected under the Licence Duties Act, 1962, on or after 1st April, 1972, to be paid into the provincial revenue funds.

It is not competent for the provincial councils to legislate in regard to certain trades and occupations, all of which are regulated under various Acts of Parliament. The Financial Relations Consolidation and Amendment Act. 1945, is being amended to add several more occupations to this list. They are the occupations of insurer, building society, banker or banking institution and board of executors or trust company. Insurers and building societies are not licensed under the Licences Act, 1962, but under the Insurance Act. 1943, and the Building Societies Act, 1965. respectively. The Licences Act is now being amended to abolish the licences which it prescribes for banks, boards of executors and trust companies with effect from 1st January. 1973. At the same time the Banks Act. 1965, is being amended to provide for a licence for banks which are registered thereunder. This licence is similar to the one which applied under the Licences Act, 1962. and it will apply also to those boards of executors and trust companies which are registered as banking institutions. Those which are not so registered may be liable for a broker or agent’s licence under the Licences Act, 1962.

As in the past hon. members have been given an explanatory memorandum which fully explains the provisions of the Bill.

Mr. S. EMDIN:

Mr. Speaker, we have to thank the hon. the Minister for the explanatory memorandum that he gave us, but I do want to say that it does not fully explain the provisions of the Bill. We have gone through it a great number of times and we have not found the explanatory memorandum very clear. The hon. the Minister’s speech this afternoon will help us in some regard, particularly in regard to the question of stamp duty on the transfer of shares. I think we may now get some clarity. But this Bill deals with a number of matters, as the hon. the Minister has said, ranging from transfer duty to estate duty licences, banks, the Stamp Duties Act, etc., and on most of these clauses we have no comment to make They are straightforward issues and are acceptable to us. But we do have some problems in regard to this question of stamp duty on the transfer of shares. Firstly, we go along with the hon. the Minister in regard to arbitrage. I think he has done the correct thing in removing stamp duty on arbitrage to encourage foreign investment in South Africa and funds flowing into South Africa. We accept these provisions.

But then there are the provisions restricting existing exemptions applicable to the registration of transfers from principals to nominees, and nominees to principals and nominees to nominees. The hon. the Minister is perfectly correct. We know that there have been evasions; we do not know the number, but there have been evasions where nominees have been involved in regard to the transfer of shares. I wonder if the hon. the Minister is not going too far in this Bill. Until now the law has permitted a beneficial interest in shares registered in the name of a nominee to pass without attracting duty and in this way the burden of duty has in fact been reduced. What is now proposed is that this method of acquiring shares shall also attract duty. Is the case not going to be that the amount of additional duty that is going to accrue to the State as a result of the provisions of this Bill, is going to be very substantial, far in excess of the amount the hon. the Minister has budgeted for in his Budget? We would have hoped perhaps that with the change in the Act. which is going to bring him a lot more income, he might have given consideration to reducing the rate of duties. Perhaps he will give consideration to that next year.

There is another problem which worries us. It does appear that where a share is registered in the name of a principal, he is preferred as against the person who has shares registered in the name of a nominee. If shares are registered in the name of an individual, share transfer duty is only paid when that share transfer is registered. The hon. the Minister knows what happens in practice. I sell shares; I sign the transfer; I attach it to the scrip and I deliver it to the broker in most cases. There is a period of time—I think it is six months—before the expiry of which transfer has to be registered if the share transfer duty is to be normal. Otherwise, penalties are involved. I may sell and deliver the scrip to B, who does not register it. He then passes it on to C and C to D. These shares can go through a great number of hands until finally that share transfer is registered and stamp duties are paid. Now, what happens in the case of nominees, is that where you have shares registered in the name of a nominee, duty is payable on acquisition. At the point of time where the acquisition of shares is made, you must pay the share transfer duty because you have acquired those shares. Whether you register it or not is not important. Therefore, it seems to me that a person who buys shares from a nominee holder is in a worse position than a person who buys shares from a principal. If you buy from a nominee holder, you must pay on acquisition whereas if you buy from a principal, you only pay on registration. I should like to have the hon. the Minister’s reaction in regard to that situation.

We understand that the Committee of the Johannesburg Stock Exchange and the commercial banks had sight of these provisions and were consulted when the Bill was framed and that they have no objection to these provisions. Under those circumstances we will support this Bill.

*Mr. A. S. D. ERASMUS:

Mr. Speaker, I should also like to support the hon. the Minister in regard to this legislation. We are glad that this legislation has come before the House. This matter of stamp duty evasion by nominees is a very old one in South Africa. It is a practice which has increased tremendously in recent times.

Before coming to that, however, I just want to refer to the arbitrage transactions which will now enjoy exemption in terms of this legislation. I want to thank the hon. the Minister for that. I also think that the Exchange will be very grateful for that, because by means of this exemption which facilitates arbitrage, the movement of investment and capital is directed far more easily to South Africa. This does not place any obstacle in the way of that.

I want to come to a few things said by the hon. member for Parktown. The hon. member said he was of the opinion that the hon. the Minister had gone too far. I cannot follow his argument if he says that the hon. the Minister has gone too far. We have the fact that evasion is taking place. Who can say exactly how much evasion does take place? No one can say. If this legislation results in far more funds being collected than was anticipated, it means that this legislation was long overdue. After all, if we collect the money, it is to the benefit of the Government and of all of us. I cannot support the hon. member’s argument that the Minister has gone too far. I do not think he is right in this respect. Of course, it is very difficult to determine here exactly at what stage one is to pay duty. It is difficult to determine whether the nominee is to pay duty at the moment when the transaction takes place or whether he is to pay it at the moment of registration. Of course, in transactions negotiated by means of stockbrokers, it is much easier. Then we know precisely when these transactions take place. The problem lies with the private transactions, those not passing through brokers. In that case, the registration of shares only really takes place when the shares are registered in the register of the company. In the meantime various transactions may have taken place before registration takes place.

Now the Act imposes on those people the strict obligation that they have to declare such transactions and that they have to pay if they do not do so. In the end they are traced anyway, because the register of that company is inspected in any case. When those transactions have taken place, the transfer documents must be there. I think that if there are problems in this connection, they will very soon be ironed out in practice. I do not think it is very easy at this stage to say exactly how this is going to work out. but I believe that as we have the legislation here it will be a very easy thing to do. I do hope the revenue we shall collect will be far more than we expect, because then it may reduce the taxation on all levels. With these few words I want to support this Bill.

Mr. D. D. BAXTER:

Mr. Speaker, I would like to seek further clarity from the hon. the Minister in regard to his amendments to the Stamp Duties Act. He appears to have effectively closed the loophole as far as the avoidance of stamp duty on transfers is concerned, where ownership changes, but the registration remains with a nominee company. I entirely agree with that purpose, that aim and that legislation. This is, however, a very complicated piece of legislation and I am not sure—and I would like clarity on this point—whether in the process of closing the loophole as far as individuals are concerned, where shares change ownership but registration remains with the nominee company, he has not also drawn into the net other transfers which are at present exempted from transfer duty. He may or may not have intended to draw them into the net.

I refer particularly to transfers within a financial group, or transfers of shares within a mining company, or within a conglomerate company, for example, transfers from parent company to subsidiary or from subsidiary to subsidiary, in which case the ultimate ownership remains with the holding company. Then there is no change in the ultimate ownership of those shares. I am not sure whether it is the Minister’s intention that transfers of this nature should or should not attract stamp duty. To my way of thinking, it is desirable, within a financial group such as a mining company, that there should be freedom to transfer, without attracting stamp duty, from parent company to subsidiary, between subsidiaries and from subsidiary company to parent company if necessary. Such freedom facilitates good organizational procedures. it facilitates having the proper management lines of authority, and it facilitates good accounting procedures. I think the usual practice in these large groups is to form a nominee company which holds the group’s investments in subsidiary companies. Under the Act as it stands at present, with such a nominee company you can have transfer from the parent company to the nominee company, the parent company being the principal, and you can have changes of ownership of shares registered in the name of the nominee company without there being any change of registration of those shares.

In other words, there is virtual freedom of movement at present for transfer to take place within a financial group. In terms of this Bill in front of us transfers from a parent company, as principal, to a nominee company, or vice versa, are now going to attract stamp duty, because nominee companies of this type, the type that is registered by a financial group, are no longer termed “nominee companies” in terms of this legislation. Because such nominee companies are not owned by banks or brokers, the exemptions applying to transfers between principals and nominee companies are not applicable. The only provision made is the provision to which the hon. the Minister has referred, namely for transfers to take place from subsidiaries to parent companies in certain circumstances—I think he will agree with me— which are rather circumscribed.

At the same time, under this new proposed legislation, you can have transfers or changes of ownership between subsidiary companies through the medium of such nominee companies as I have described, as long as there is no change of registration; because this nominee company is not qualified to be a nominee company according to the definition of a nominee company under this legislation. In other words, some types of transfers within a group in terms of this proposed legislation. are going to attract stamp duty, and other types are not. I think it is important that we know the intention of the Minister in regard to this legislation and have clarity as to whether transfers within a group of the type which I have described, are intended to attract duty.

The MINISTER OF FINANCE:

Mr. Speaker, the hon. member for Parktown is completely right in saying that this Bill is one of the most difficult Bills to understand. I fully agree with him that even the explanatory memorandum is not much clearer than the Bill. I only have admiration for the people who drew up this Bill and the explanatory memorandum. I also agree with the hon. member that there is some truth in what he says about the transfer of shares by nominee companies and to individuals. But the hon. member knows full well what the disease is which we want to cure. Unfortunately, this is the only way in which we can cure this particular disease. If in the course of time, within a year or so. we find that we are going too far in this respect, we shall certainly next year come back and amend this legislation.

What we are after, is the transfer of shares, which is really a transfer of beneficial ownership. In the case of—I think this is the point we have mainly in mind— shares which are bought on the Stock Exchange, they pay marketable securities tax, and they are not affected in this case. Many of the shares he makes mention of, fall under this category for which marketable securities tax is paid and which do not attract any stamp duty.

I cannot agree with the hon. member where he says how this law has permitted …

Mr. SPEAKER:

Order!

Business suspended at 6.30 p.m. and resumed at 8.05 p.m.

Evening Sitting

*The MINISTER OF FINANCE:

Mr. Speaker, when business was suspended earlier this evening, I was telling the hon. member for Parktown that I am not in full agreement with his assertion that the Act has until now allowed the transfer of shares between companies without stamp duties being paid. The actual facts of the matter are that exemption (g) was inserted in the Act in 1968 for the very purpose of making it possible for a transfer of shares to take place between a nominee and a principal and between a principal and a nominee and between two nominees without payment of stamp duty provided that no change in beneficial ownership takes place. Unfortunately it so happened that certain companies abused this concession. I received the complaint that this abuse of the law—this evasion of the law by means of a loophole —was assuming large proportions, and my hon. friend maintains that when we close it —when we close the gap—there will be a substantial rise in revenue.

† It is true that there will be a substantial rise in revenue. It only goes to show you to what extent the law has been evaded. Unfortunately the law has been evaded by nominees passing on shares from one nominee to the other or from one owner to the other between nominees without registration of the shares although there was a change of beneficial ownership.

The hon. member for Constantia asked me whether the effect of this Bill would not be to bring within its ambit certain persons or companies that should not be brought into its ambit. The hon. member quoted the example of certain interlinked companies, of which groups we have several in this country. He expressed the idea, as far as I can remember or as I understand him, that it has always been the case and should be the case that share transactions within groups of companies should be allowed free of tax. I must say that this is just the type of thing which we wish to stop. It is exactly this interaction, this buying and selling of shares between companies, within a group of companies particularly, where this tax has been evaded. This Bill makes provision, as the hon. member knows, that this Bill shall not apply in cases where there is a subsidiary company passing shares to its parent. However, where groups of companies make use of a nominee company and where they put all their share transactions with one another through a nominee company without registering the shares, they really evade what is the main aim of the Act. That is why we are starting to close this loophole. I merely want to say that I cannot agree with the hon. gentleman that this is something which should have been left out of the Bill.

Mr. D. D. BAXTER:

Is the hon. the Minister aiming at closing the gap between different companies or is he aiming at closing the gap in respect of share transactions within one group of companies, because it is my contention that share transactions within one group are desirable …

Mr. SPEAKER:

Order! The hon. member may only put a question.

Mr. D. D. BAXTER:

The second question I should like to ask the hon. the Minister is whether he is aware that nominee companies registered by companies and neither by banks nor by brokers, are not subject to the provisions of this Bill.

The MINISTER:

I did not quite follow the last question of the hon. gentleman, but I can reply to the first one by saying that the intention of the Bill is that tax should be paid in the case of the transfer of shares between all companies, irrespective of whether they are individual, separate companies that buy shares from one another or whether they are companies within a group of companies. It is only in the case where there is a company which is a wholly-owned subsidiary company of another that an exception is made. In the case of all other companies this tax has to be paid.

Mr. D. D. BAXTER:

Mr. Speaker, may I repeat my second question? Is the hon. the Minister aware that the new provision which he is making in this Bill whereby changes of ownership of shares held in a nominee company, while still registered in the nominee company, will be subject to the new tax, is only applicable to shares registered in a nominee company that is owned by banks or by brokers and not a nominee company that is owned by a financial company?

The MINISTER:

I do not exactly know what the hon. member means, but if he means that the exception to the rule applies to nominee companies owned by banks …

Sir DE VILLIERS GRAAFF:

Or brokers.

The MINISTER:

… yes, or brokers, I can inform him that there is a reason for that. The bank often buys for a client and before the registration of the shares in the name of the client, the bank holds those shares. A broker may buy shares for a client and then holds those shares without registering them. He helds them until he registers those shares in the name of the client. He holds them as a nominee company. In these cases no tax is to be paid.

Motion put and agreed to.

Bill read a Second Time.

INCOME TAX BILL (Second Reading) The MINISTER OF FINANCE:

Mr. Speaker, I move—

That the Bill be now read a Second Time.

As in the past a memorandum which explains the provisions of the Bill in great detail has been made available to hon. members.

The first object of the Bill is to give effect to my taxation proposals regarding normal income tax, and the rates for the current year of assessment are prescribed in the First Schedule to the Bill. For individuals the rates are the same as those applicable for the previous year of assessment except that the loan levy is not reimposed and that the surcharge is increased from 10 per cent to 20 per cent. In 1972 the aggregate of surcharge and loan levy amounted to 30 per cent on basic normal tax where the tax was R5 000 or more. This meant that 78 per cent of that portion of the taxpayer’s income which exceeded R28 000 was diverted to the exchequer. The Government acknowledges that this high marginal rate could have a disincentive effect, and it is our earnest desire to reduce this rate. Unfortunately, circumstances do not at present permit a drastic reduction but the change which is being brought about will reduce the maximum marginal rate to 72 per cent for the 1973 tax year.

This increased surcharge will not apply in the case of persons over the age of 60 years whose taxable incomes do not exceed R5 000. Persons over the age of 65 years were previously not liable for the loan levy if their taxable incomes did not exceed R5 000 for the year. They were, however, liable for the surcharge of 10 per cent imposed on basic normal income tax. The abolition of the loan levy and the increase of the surcharge would have meant an increased total tax bill for these people, and it is to obviate this that the increased surcharge has not been made applicable to them. It was also found possible to extend the concession to persons between the ages of 60 and 65 years whose incomes do not exceed R5 000.

In the case of companies, other than gold and diamond mining companies, the basic tax also remains the same but the loan levy on company tax is reduced from 7½ per cent to 5 per cent and the levy on dividend income from 7½ per cent to 3 per cent. A surcharge of per cent on company income tax is imposed. There is no change in the rate for the gold and diamond mining companies.

The Bill also amends the Income Tax Act to provide for the several concessions which I mentioned in my Budget speech. These are—

  1. (i) the tax exemption in respect of the interest accrued on deposits in a savings account with a building society under the State-Aided Home-Ownership Savings Scheme;
  2. (ii) the partial exemption, varying from 33½ per cent to 100 per cent depending on the amount of the particular taxpayer’s taxable income, applicable to income in the form of dividends is extended to dividends on indefinite period or fixed period shares in any permanent building society;
  3. (iii) the removal of the provisions which required the R500 allowance deductible from the earnings of a married woman to be reduced progressively in cases where the combined income of the husband and wife exceeds R8 000;
  4. (iv) the extension of the date by which factory plant had to be brought into use and the date by which the erection of factory buildings had to be completed in order to qualify for the machinery and building investment allowances from the 30th June, 1973, to the 30th June, 1975; and
  5. (v) the increase of the exporter’s allowance from the existing 50 per cent to 75 per cent of market development expenditure, or to 100 per cent of market development expenditure in cases where the year’s export turnover exceeds the basic export turnover by more than 10 per cent. Also the basic export turnover which is presently fixed at the average of the export turnovers for the preceding three years will henceforth be based on the average of the three poorest export turnovers in the preceding five years. These two concessions are being made in pursuance of the Interim Report submitted by the Reynders Commission of Inquiry into Export Trade. There are certain other aspects of this tax incentive which will be studied during the recess.

I mentioned in my Budget speech that in order to simplify administration the loan levy which has been paid by people who are removed from the income tax register, namely women who marry, people who leave the country permanently or people who are no longer likely to be liable for tax, will be refunded to them. The Bill now provides the Secretary with the authority to do this. Also for the sake of administrative convenience he is being given the power to set off the loan levy due to tax payers against any taxes which may be owing by. them but only in those cases where the whereabouts of the person concerned cannot be traced.

I now come to the matter of single premium insurance policies to which I also referred in my Budget statement. Life insurance has traditionally provided a means for the prudent man to build up capital for the future and at the same time protect his dependants. In the last year or so some insurance companies have been marketing a new type of policy which is a radical departure from the orthodox life policy. It is designed to cater for those who already have the capital and are looking for a means of investment with profit. These policies provide for the payment of a single premium and guarantee a specified return after a relatively short period, sometimes as short as three years. In some cases the profits may even be drawn in advance in regular instalments. In essence this type of policy is nothing more than an investment in a fixed deposit but, as the law stands, the proceeds escape tax and this is undoubtedly a big attraction. I said in my Budget statement that the loophole in the law would have to be closed and this will be achieved by the provisions embodied in the Sixth Schedule which the Bill adds to the principal Act. If has not been easy to draft this piece of legislation which must counter the tax avoidance, but at the same time not interfere with genuine insurance business. The provisions are most complicated but they are explained fully in the memorandum and I will not go into any detail here. In a nutshell, the position is that gains which arise from insurance benefits paid under a policy which is not classified as a standard policy or from any consideration received for the cession of the rights under such a policy will be subject to tax.

Paragraphs 10, 11 and 12 of the Schedule lay down the requirements for a policy to be classified as a standard policy. Briefly, it is one which, firstly, requires the premium to be spread evenly over a period of at least five years and, secondly, prohibits the payment of any benefit within a period of 10 years other than normal bonuses, or benefits which arise by reason of the death or disablement of the person insured. Exceptions are made to cover cases which can be regarded as genuine insurance even though the premiums are paid in a single sum. Thus, a policy which does not meet the requirement that premiums be paid over a period of at least five years but which provides only death or disablement benefits will be deemed to be a standard policy, while any non-standard policy will become a standard policy if for a period of 10 years no benefits have been paid out and no loans have been made and there has been no change in ownership.

The provisions will not apply to any policy taken out before 1st January, 1968, unless the terms are varied subsequent to the 29th March, 1972, in such a way as to make it a non-standard policy and in so far as concerns policies taken out before 29th March, 1972, only those where the total pemiums were paid in a period of less than 12 months will be affected. In cases where the proceeds from a policy taken out before 29th March, 1972, are taxable, the taxable gain will be reduced by the amount of the taxable gain which would have arisen if the policy had been surrendered on that date. A further concession is that a gain which arises in consequence of the maturity of the policy or the death of the insured will not go to unduly increase the taxpayer’s marginal rate of tax. The amendments have been fully discussed by my department with the insurance industry.

The Bill also introduces several other amendments which I did not touch on in my Budget statement. They are the following:

Pension and Retirement Annuity Funds are not recognized for income tax purposes if these rules permit more than one-third of the annuity to which a member becomes entitled to be commuted for a single payment unless the annuity is less than R60 per annum. Having regard to the depreciation in the value of money this limit of R60 is being increased to R120.

Recoupment of Wear and Tear Allowances: Small ships. There are provisions in the principal Act whereby, subject to certain conditions being complied with, a recoupment of wear and tear allowances previously made which arises from the loss or disposal of a ship need not be taxed but, for purposes of calculating future wear and tear allowances, are set off against the cost of a ship acquired to replace the one lost. One of the conditions is that the shipowner must make a deposit with the Public Debt Commissioners pending the replacement of the old ship. The amendment being introduced will dispense with this requirement in the case of ships of less than 200 gross register tons. The amendment is being made in pursuance of representations by the fishing industry.

Building Society Interest: Residents of the Neighbouring States: The Building Societies Act, 1965, has been amended to make it possible for South African building societies to operate in the neighbouring states. The business conducted in these states must however be financed out of the investments emanating from residents of the territory and it is therefore only reasonable to regard the particular branch office as an institution of that territory. Accordingly, the interest derived by residents of the territories from investments made with the branches in the territories is being exempted from normal tax and the non-residents tax on interest.

Exemption in respect of Export Rebates: And exemption is being introduced to cover the rebates paid to exporters under the State Scheme to provide assistance in respect of the financing of the export of goods from the Republic.

Expenditure on Buildings in terms of an Agreement of Lease: The Income Tax Act permits a taxpayer who rents his business premises and is obliged by the terms of his lease to effect improvements to the premises, to write off the attendant expenditure over the period of the lease. The lessor on the other hand must include the value of the improvements effected in his income but the Act gives the Secretary a discretion to make him some allowance having regard to the period of the lease. The allowance which the Secretary usually makes to the lessor is sufficient to reduce the amount upon which he is to be taxed to the present value (discounted at 6 per cent), of the amount representing the value of the improvements due at the end of the lease period. Manifestly, the amount allowed to be deducted by the lessee always exceeds the amount on which the lessor is taxed, but this is fair when the parties are dealing at arm’s length. The lessee is allowed to deduct what he is out of pocket while the lessor is taxed on something which fairly represents the extent to which he has been enriched in the particular year of assessment. But, it has been found that lease agreements are being entered into between a lessee and a lessor who are effectively the same person, for example, a company and its wholly owned subsidiary, solely to make use of the tax benefit. The practice seems to be growing and it has become necessary to change the law so that the Secretary can refuse to make any allowance to the lessor in cases where companies are involved and either party to the lease holds more than 50 per cent of the shares in the other or a third person holds more than 50 per cent of the shares in both the lessor and the lessee companies.

Compensation for Railway Operating Losses: It sometimes happens that the Railway Administration undertakes to establish and operate a railway line to provide facilities for a particular undertaking on condition that it is to be compensated by the undertaking for any losses which it incurs. The Income Tax Act is being amended to permit the compensation so paid to be deducted for tax purposes. The law, as it stands, does not permit any such deduction being made.

Extension of Employees’ Housing and Development Allowances: The allowance in respect of employees’ housing applied to expenditure incurred in years of assessment ending not later than 31st December, 1971. This date is being extended to 31st December, 1974. Also, the last day by which applications for the development allowances in respect of industrial undertakings in economic development areas had to be made, is being extended from the 30th September, 1972, to the 30th September, 1975.

Donations to Certain Colleges: At present the deduction which is permitted in respect of a taxpayer’s donations to colleges is restricted to colleges which are established un-, der the Advanced Technical Education Act. 1967. There are, however, colleges which are established under other Acts of Parliament and the section is being extended to cover also donations to these colleges.

Farmers’ Livestock Reduction Scheme: Hon. members will recall that the Government has introduced a scheme to encourage farmers to reduce their herds and flocks more especially in the dry sheep farming areas as a part of the campaign to combat soil erosion and rehabilitate the veld. A farmer participating in the scheme could find himself faced with a large tax bill because what he sells his livestock for will of course constitute taxable income. An amendment is being introduced to afford a measure of relief in these cases. If, within a period of nine years, the farmer purchases livestock to replenish his flock or herd, he may elect that the assessment in which the sale of livestock was taxed be reopened to allow the cost of the new stock purchased to be set off against the proceeds from the sale of the old stock. The amendment will apply in respect of the year of assessment ended on the 28th February, 1970, but it will not apply in the case of farmers who have elected to be assessed under the scheme for equalizing tax rates under which adequate relief is given. The concession is the same as the one which applies in the case of farmers who have to sell livestock because of drought or stock disease.

Growth Funds: Although the unit trusts are defined as companies in the Income Tax Act, in truth their function merely is that of a conduit pipe and, as I mentioned in my Second Reading speech on the Income Tax Bill last year, it has been decided that the income received by them and passed on to the unitholders should be taxed in the hands of the latter. Accordingly amendments are now being introduced, effective as from years of assessment ending after 1st April, 1971, which will exempt the funds from normal tax on so much of the interest income received by them as they distribute to the unitholders in the form of dividends. The funds are already exempt from the loan levy and normal tax in respect of the dividend income received by them. In so far as the unitholders are concerned, full tax will be levied on the dividends received by them to the extent that these dividends are paid out of interest income received by the trusts, while the partial exemption, applicable in the case of dividend income, will apply only to that portion of the dividend received which is paid out of the dividend content of the income received by the trusts. Where the unitholder is a non-resident, non-resident shareholders’ tax and non-residents’ tax on interest will be payable on the respective portions of the dividends paid out of the dividend and interest income received by the trusts.

Provisional Tax: The provisional tax paid by a taxpayer is in the first instance credited to a suspense account in his name and transferred to his current account one hundred and twenty days after the close of his year of assessment. If the assessment for the year in respect of which the provisional tax was paid has by then been issued no problem arises. If, however, the assessment has not been issued the provisional tax will either be set off against any arrear tax which may be outstanding in the current account or give rise to a credit balance which the taxpayer will be able to claim to have set off against future provisional tax payments which become due. In either event the objects of the PAYE system are defeated inasmuch as the provisional tax payments are not set off against the assessment for the year in respect of which they were made. There is reason to believe that the weakness is being exploited in a large scale and that the provisional tax which is being “rolled” in this manner amounts to a substantial figure. With the computer which is now in use in my department it is possible to keep provisional tax payments for the current and three previous years in separate compartments to be available for set off only against the assessments for the relevant years. It is intended to introduce such a system, but before this can be done the time limit of one hundred and twenty days for transferring the provisional tax from the suspense to the current account which is prescribed by the Income Tax Act, 1962, must be removed.

The Bill also contains a few other minor amendments of an administrative nature. They are explained in the memorandum and I will not dwell upon them now.

Mr. S. EMDIN:

Mr. Speaker, this Bill introduces a number of important provisions and changes to our income tax laws. In the main they follow the proposals made by the hon. the Minister in his Budget speech. Unfortunately, time does not permit me to deal with more than one or two matters.

The most important matter is the change in the increase in the rate of surcharge on the personal and company income tax. As far as individuals are concerned, there was a surcharge of 10 per cent on normal tax last year, if the tax payable was less than R150. This year the surcharge is being increased to 20 per cent. There is the exception in respect of taxpayers over the age of 60 whose income does not exceed R5 000. Their surcharge remains at 10 per cent. This additional surcharge has the effect of increasing the amount of tax paid by the taxpayer very considerably. We cannot agree to this increase and we shall move an amendment in the Committee Stage to restore the position to what it is at present, namely a 10 per cent surcharge. The hon. the Minister has said again tonight what he said in his Budget speech that previously 78 per cent of the taxpayers’ income exceeding R28 000 was diverted to the Exchequer. Now only 72 per cent is diverted. This is correct, but up to a point, as the hon. the Minister knows. Of the 78 per cent diverted last year, 10 per cent was tax and 20 per cent was a loan levy which bore interest at 5 per cent and was returned to the taxpayer after seven years. Of the 72 per cent which will be levied this year, there is no loan levy and 20 per cent of the tax payable is a straight tax surcharge which the taxpayer will never see again. It is somewhat of a play on words, I suggest, to say that, whereas 78 per cent was diverted to the Exchequer previously, only 72 per cent will now be diverted.

In so far as companies are concerned, there are also a number of major changes. The rate of tax of 40 per cent remains the same, but the existing loan levy of 7½ per cent of the tax payable has been reduced to 5 per cent. Of course, the hon. the Minister does not like reducing anything unless he takes something at the same time. He has done it again. He has taken the per cent loan levy that he has reduced and he is now going to take it in tax which will not be refunded. That is a very good deal! I wish I could do one like that every day. We believe that this is also a retrogressive step and we shall move an amendment during the Committee Stage to restore the previous position.

At last the hon. the Minister is beginning to see the light. Just a small chink, but he is beginning to see the light, particularly in regard to married women. The ridiculous provision we had of reducing the married working woman’s special allowance of R500 per annum by £1 for every completed £10 by which the combined taxable income of both husband and wife exceeded R8 000 has at last been done away with, and we welcome this. It is interesting to note that this is the third amendment we have had to this provision for the married working woman since we persuaded the hon. the Minister to do something for the married woman in 1965. We look forward to the fourth amendment which will make the allowance, especially the allowance given to a married woman who works, something valuable. We look forward to a sharp increase by the hon. the Minister from R500 upwards. I shall not mention an amount because I do not want to set a ceiling for the hon. the Minister. I leave it completely flexible for him.

The exporters’ allowance has been stepped up fairly considerably. In effect—I think the hon. the Minister mentioned this in his Budget speech—in some cases, if an exporter takes the full benefit of his market development expenditure, it can cost him only 18 per cent of the amount he has expended. This is a valuable consideration. It is helpful to the exporters. We accept this, but I still believe, and I hope I shall be able to convince the hon. the Minister one day, that if he really wants to get exports moving, he must start thinking about a direct tax reduction on profits made from exports. It is a pattern which is taking place throughout the world. I do not have the time to repeat the arguments, the hon. the Minister knows them well enough, and we hope will do something about it. I am also glad that the hon. the Minister has seen the futility of his 7,5 per cent loan levy on dividends, on which we had quite a discussion last year. He has now reduced it to 3 per cent and I hope with the hon. the Minister that it will disappear completely next year.

Now we come to one of the most important aspects of this Bill, viz, clause 28, which deals with the addition of the Third Schedule of this Bill as the Sixth Schedule to the principal Act. This deals with single premium policies referred to by the hon. the Minister in his Budget speech, when he told us that a number of people were using these single premium policies in effect as fixed deposits and that the loophole would have to be plugged. This is true. I have heard of cases where single premiums of R1 million had been used in effect as fixed deposits and the person investing this premium has, let us say, 8 per cent interest free of tax. The hon. the Minister has certainly plugged it. It has been plugged to the extent of nine pages and 23 clauses of the smallest print possible, and in the most difficult legal wording I have ever seen in my practically 20 years in dealing with ordinances and Bills. I am not blaming the hon. the Minister, because it is a most difficult technical legal matter. Perhaps I might even want to compliment those who drew up this Bill, but we will have to see what happens in due course. The one redeeming feature is that I do understand from the insurance industry that there has been full consultation between the hon. the Minister and his department and the insurance companies and that they are satisfied with the matter. Our problem is that we are dealing in this Bill not with single premium policies, but with all life and endowment policies. They are all brought within the umbrella of this Bill. Some policies, many in fact, will be exempted in terms of the Bill, because the Bill brings in everything, exempts some things, and then provides for them to be brought in again. We are going round in a lovely circle, but every policy now falls under this umbrella or can be brought under it. It is quite impossible to deal, certainly in the time at my disposal, with this Bill. I am therefore going to ask the hon. the Minister a number of questions which I think will deal with the kernel of the problem and allow the public at least to know what the situation is. These are the questions: Is an ordinary life policy affected by the Bill? Does the position change if (a) a policy is pledged or has been pledged; (b) if a policy has been surrendered; and (c) if a policy has been borrowed against. Is a normal endowment policy of a ten-year term or more, affected by the Bill if it has a life cover as well? Does the position change if this policy is pledged or has been pledged, or does it change if the policy has been surrendered, and does the position change if you borrow against these policies? These are the normal types of policies and the normal things that happen to little people like me and others like me. Are all policies where total premiums paid by the insured are less than R2 000 per annum, the figure which appears in the Bill, exempted under the Bill? Does clause 13 (1) (b) of the Third Schedule condone partial as well as complete surrender benefits and does it, as well, not condone reversionary bonus benefits which are capable of being cashed? I think if the hon. the Minister will give us replies to these questions we will have a fairly reasonable overall picture of how these new provisions affect the average person who takes out an insurance policy purely for protection and is not in the least interested in trying to get an unfair advantage from the fiscus.

*Mr. A. S. D. ERASMUS:

Mr. Speaker, before replying to the points raised by the hon. member for Parktown, I just want to refer him to a statement he made during the Budget debate. He quoted from the speech I had made last year during the debate on the Income Tax Bill, and I think he did me an injustice. I do not want to go into everything he said, but he did say, inter alia, that I allegedly stated that inflation would be eliminated within three months. He probably quoted from the English Hansard. In fact, I think this is what he did. I just want to refer him to the Afrikaans Hansard which is a quite correct version; there it is stated quite clearly that I did not say that this would happen, but that I believed and hoped the rate of inflation would considerably decrease within three months. As a matter of fact, this is what happened after a period of five months. I am merely pointing this out to put the records straight.

The hon. member asked the hon. the Minister a lot of questions about the insurance section of the Income Tax Act. I want to tell him that if he had read that Act very carefully he would have had the replies to all those questions. We have never before had as detailed a description in South Africa of what is a standard policy and what is not a standard policy. All the points he raised here deal with standard policies. I want to congratulate the hon. the Minister because to my mind this is one of the best pieces of legislation I have yet read. No one who has dodged income tax in the past will have a snowball’s hope with the implementation of this legislation. There is not the tiniest loophole in this legislation.

Mr. S. EMDIN:

Mr. Speaker, may I ask the hon. member a question?

*Mr. A. S. D. ERASMUS:

Mr. Speaker, I only have five minutes at my disposal. I am sure the hon. the Minister will refer him to that clause in reply to the questions he asked. I also want to refer to the hon. member’s complaint that the income tax surcharge has increased from 10 per cent to 20 per cent. I should now also like to refer him to the complaint they made last year. Last year the Opposition lumped together the loan levy, the increase in the postal tariffs and the increase in the railway rates and told the people: Look how the Government has loaded and increased your taxes. We have told them over and over again that what they call taxes are not taxes but loans. But they wanted to create that impression. Now hon. members are complaining since those levies have been abolished this year. When one now argues on the basis of the points they raised last year, one can say that the people now pay much less than they paid last year. The people only pay a little more actual tax. I just want to refer briefly to those taxes. The ordinary man in South Africa is well looked after. According to my calculations a person who earns R5 000 only pays 12 per cent tax on that income. 88 per cent of that income he keeps for himself. Under this dispensation, with the additional 10 per cent surcharge, he pays R50 more than last year. Let hon. members work it out for themselves. I now want to tell that hon. member—he does not have to look up—that what I am now talking about are the effective percentages. This is the effective amount the taxpayer pays. The average man who earns R10 000 only pays 17 per cent tax and therefore keeps 83 per cent of his income in his pocket. That is the position. This person pays an additional R142 on account of the surcharge. The tax structure in South Africa has been very fairly divided. We pay tax according to what we can afford. The wealthy must also share their prosperity with the less wealthy in this country. This is done by way of taxation. The person with the high income is well looked after. Show me any country where a person who earns R30 000 only has to pay 40 per cent of his income in tax, still retaining 60 per cent to himself. This is what happens here in South Africa. Show me any country where the buying power parity is the same as it is for our rand; where you can make tax-free investments. In South Africa one can make tax-free investments of up to R280 000. From this one can derive a tax-free income of R18 000 per year. Show me the country where one can do that. I want to tell hon. members that this tax legislation had to increase the tax, because we still have the constant danger of inflation and we know that taxation is a fiscal measure that has to be used to control inflation. Those hon. members would be the first to accuse us if we do not do that. Surely that measure has to be there to restrict consumption.

The MINISTER OF FINANCE:

Mr. Speaker, the hon. member for Parktown has asked me to be more generous than I am liable to be. He has asked me to do away with the 10 per cent surcharge on individuals. He compared the provisions in this Bill with the existing tax system in which there is a 10 per cent surcharge tax and a loan levy of 12⅛ to 20 per cent. In the case of the higher taxpayer there is a combined surcharge and levy of 30 per cent. This has been reduced to a maximum of 20 per cent, instead of 30 per cent. Now the hon. gentleman says that there is a loan levy which is repayable and that this makes the difference. It is true. Will the hon. member also remember that every time in the past year during the debate when I mentioned the fact that this part was a loan levy which was to be repaid, we heard nothing but laughter and ridicule from the other side of the House? They actually said that this loan levy will never be repaid.

Mr. S. EMDIN:

No.

The MINISTER:

Oh, yes, they did. They regarded it as a tax and now suddenly they have discovered that it is a loan levy that has to be repaid. They did so particularly after the Budget statement when I told the hon. House that the first loan levy will be repaid in the coming year.

The hon. member also asked me about the surcharge of per cent on company tax. I was not very generous. The first, i.e. the 10 per cent surcharge on individuals, is estimated to bring in about R46 million. The other one on companies, which he asks me to give away will bring in about R14½ million. It amounts to a total of over R60 million which the hon. member now asks me to give away. I am not so generous as to accord to his request. I just want to say that this hon. member is the member who said in this House a few months ago and in speeches outside this House that the cupboard is bare. One of his greatest complaints against the budget was that our cupboard is bare. I want to show this hon. gentleman by the end of the year that the cupboard is no longer bare and that there will be sufficient money in the cupboard, particularly in the circumstances in which we live today.

Mr. G. J. BANDS:

And our pockets will be bare.

The MINISTER:

The hon. member has asked me a few questions in regard to insurance. I know the hon. member wants these replies to be on record. As they are of a very technical nature and of great importance in regard to this legislation. I shall try to reply to these questions as briefly and as concisely as possible.

The first question the hon. member put to me was whether an ordinary life policy was affected by the Bill. The answer is that it may sometimes be effected, but as long as it remains a life policy, and does not provide for the payment of other benefits (disregarding surrender benefits) the proceeds on death will not be taxed. The policy may, if it is changed considerably, by providing for other benefits or for an increase in premiums beyond the limits allowed under the Bill, or in certain circumstances, if it is surrendered within ten years or becomes a paid-out policy within five years, become a non-standard policy resulting in benefits under the policy becoming taxable.

The second question was whether the position changes if (a) a policy is pledged or has been pledged, (b) if a policy has been surrendered and (c) if a policy has been borrowed against. In regard to the first question, the answer is that a pledge of a policy with a third person will not result in the benefits under the policy becoming taxable. In the case of a surrender, if a policy has been surrendered in whole or in part during the first ten years of the policy, tax may be attracted. The position with regard to surrenders is also subject to some qualification. If the premiums under the policy were payable at regular, yearly or shorter intervals, and those premiums and any other premiums payable by the policy holder on other policies with the same insurer amount to R2 000 or less during the current tax year, or any of the four preceding tax years, the policy remains a standard policy even though it is surrendered.

The third question was in regard to these policies being borrowed against. If the policy is not one under which the premiums are payable at regular intervals for five years in the manner contemplated in paragraph 11, and it has been borrowed against—that is the loan is made by the insurance company—and no interest is charged or an abnormally low rate of interest. namely a rate of interest lower than the highest rate charged by the insurance company on standard policies, the policy ceases to be a standard policy and benefits may become taxable. Question three concerns endowment policies. The hon. member has asked whether normal endowment policies of a ten-year term are more affected by the Bill if it has life cover as well. The answer is yes. it may be. It is understood that all endowment policies have life cover. Such a policy is affected in the same way as a life policy.

Question number four reads: Does the position change if (a) a policy is pledged or has been pledged; (b) surrendered; (c) borrowed against? The answer is the same as the answers under question two. There is, as far as pledges, surrenders and borrowings are concerned, no real differences between life policies and endowment policies.

Question five is: Are all policies where the total premiums paid by the insured are less then R2 000 per annum, exempted under the Bill? The answer is “no”. The R2 000 rule only applies where there is an increase in premiums or the policy has been made paid-up or has been surrendered.

The sixth question of the hon. gentleman was: Does clause 13 (1) (b) of the Third Schedule, page 61—(a) condone partial as well as complete surrender of benefits; (b) not condone reversionary bonus benefits which are capable of being cashed?

The reply to (a) is: It does not make any difference whether the surrender benefits are provided for in the case of complete surrenders or partial surrenders. A mere provision in the policy providing for such benefits will not affect the status of the policy as a standard policy under paragraph 13 (1) (b). If, however, a surrender does in fact take place within 10 years, the policy will become a non-standard policy if the R2 000 rule, already mentioned, does not apply. Lastly, I come to reversionary bonus benefits. A reversionary bonus is normally not regarded as being payable until the policy matures or is surrendered. If a policy provides for the immediate payment of bonuses, it will not qualify as a standard policy under paragraph 13 (1) (b).

I just want to say in conclusion that I am sorry that so little time has been left for these income tax Bills. It is not my fault, as you know, Mr. Speaker. Ten hours have been set aside for the tax Bills, but most of this time has been used up under the other Bills, not by me, but by the members themselves, and only a very short time has been left. I hope that this position will be rectified next year.

Motion put and agreed to.

Bill read a Second Time.

CUSTOMS AND EXCISE AMENDMENT BILL (Second Reading) *The DEPUTY MINISTER OF FINANCE:

Mr. Speaker, I move—

That the Bill be now read a Second Time.

Before the First Reading of this Bill, copies of the draft Bill and the explanatory notes were made available to certain hon. members on both sides of the House so as to enable those members to study them.

The large volume of printing involved in the Customs and Excise Amendment Bill, 1972, owing to the metrication of the customs and excise tariff, has the effect that it will not be possible to promulgate this Amendment Act within 30 days after the end of the present session of Parliament.

Section 48 (6) of the Customs and Excise Act, 1964, provides that any amendment made under section 48 (1), (2), (3) or (3A) of the said Act before the start of a session of Parliament shall, unless Parliament otherwise provides, lapse 30 days after the end of the session in question. In the case of amendments made under section 55 or section 75 of the said Act, section 48 (6) is applicable, too. Unless this provision is disregarded, all notices which amend the Schedules to the Customs and Excise Act, 1964, and which were promulgated during the period 30th January, 1971, to 28th February, 1972, will therefore lapse 30 days after the end of the current session of Parliament. In order to prevent the relevant notices from lapsing, it has been deemed advisable to include in the Finance Act, 1972, a section for the purpose of disregarding, up to the date of the commencement of the Customs and Excise Amendment Act. 1972, the provisions of section 48 (6) of the Customs and Excise Act, 1964. in so far as such provisions relate to notices promulgated prior to 28th February, 1972.

Apart from the customary section in regard to the commencement of certain provisions contained in the Schedules to the Bill and in other less important amendments. the text of the Bill consists mainly of amendments that have become necessary as a result of the change-over to metric measures.

Although the metricated customs and excise duties were published beforehand in a Gazette for general information, and all possible efforts were made to keep the metricated rates of duty as close as possible to the current rates of duty, there is nevertheless a slight possibility that the metricated rates of duty or rebate provisions may be to the detriment of importers or manufacturers.

With this possibility in mind provision is now being made in clause 9 in terms of which the Minister may, after consultation with the Board of Trade and Industries, by notice in the Gazette, adjust the provision in question with retrospective effect to the date of commencement of the Amendment Act. This provision will lapse on the date on which Parliament meets during 1973.

The Schedules, which comprise the major part of this Bill, also contain—apart from the amendments to the Schedules to the principal Act which were effected prior to 28th January, 1972, on the recommendation of the Board of Trade and Industries by notice in the Gazette and which will now, in terms of the provisions of the said Act, be sanctioned as from 1st September, 1972—amendments that have become necessary as a result of the change-over to metric measures. These amendments were published with the approval of all the interested departments, including the Board of Trade and Industries and the Metrication Division of the South African Bureau of Standards, for general information and comment in Gazette No. 3251 of 15th September. 1971. All the representations received in this regard were considered, and in meritorious cases the requested changes were effected with the approval of the Board of Trade and Industries.

Mr. S. EMDIN:

Mr. Speaker, this is quite a lengthy Bill and I must say the hon. the Deputy Minister dealt with it very expeditiously. I shall take even less time.

The items dealt with in the Bill are mainly those which have already been published by the department and are brought to Parliament at the earliest time so that we have an opportunity of approving them. They deal in the main, as the hon. the Deputy Minister said, with the change to metrication. There are many changes to meet the new Brussels nomenclature. Other changes are Board of Trade and Industry recommendations which are submitted to the House after full inquiry by that board. There are other items too, and it is interesting to note that we have to drop quite a number of tariffs in terms of our agreement with GATT. There are quite a number of items where tariffs come down because of our GATT association.

I am glad to see clause 9 in the Bill where, if as a result of metrication, if a mistake has possibly been made and an excess duty charged, we give the hon. the Minister the right to reduce it. I think that is a very sound provision.

We are also glad to see that a number of items of sales tax have been reduced. The hon. member for Cape Town—Gardens, particularly, was very keen that it should be done on boats and I see that the duty has been brought down to practically half. We support the Bill.

Motion put and agreed to.

Bill read a Second Time.

FINANCE BILL (Committee Stage)

Clause 7:

Mr. E. G. MALAN:

Mr. Chairman, in reading the explanatory notes to this clause, we see that there is a certain amount mentioned which has been divided between the South-West Africa Fund, the Post Office Fund and the Central Fund. I now read from this explanatory memorandum (W.P. 6—’72)—

An amount of R1 440 581,41 of the abovementioned balance could not be identified.

I have no objection to a part of that amount being allocated to the Post Office. but what I should like to know from the hon. the Minister is how it is possible that such a very large amount in the South-West Africa Territorial Fund could have remained unidentified. After all, a couple of thousand rand one could understand, but this is. almost R1,5 million. I should very much like to know from the hon. the Minister what happened here. Here are State funds, here is revenue which went into the South-West Africa Fund, an amount of more than R1 million, and we are told that this is an intirely unidentified amount. For what purposes was this amount paid into the Fund; how was it discovered; when was it discovered; who discovered it? It seems to me that there is probably something irregular in this. After all, we are running the administration of this Territory and to find suddenly an amount of almost R1,5 million as a completely unidentified amount in a certain fund and then deciding to distribute it amongst certain funds, and so forth, does seem to me something rather strange. It might be entirely in order, but I believe we are justified in asking the hon. the Minister why exactly was this amount unidentified.

*The MINISTER OF FINANCE:

Mr. Chairman, the hon. member has no reason to be so suspicious about this amount.

Mr. E. G. MALAN:

I am always suspicious.

*The MINISTER:

In the first place, I want to point out to him that this oversight occurred in the Administration of South-West Africa before it was taken over by the Republic of South Africa under the 1969 Act. At that stage this oversight had already occurred, and consequently the hon. member should not blame us or the Republic for it now. In the second place, I can inform him that at that stage all the accounts—this is as far as my knowledge goes—had apparently not come in completely, and later, when all the accounts had come in completely, it was found after a time—it takes time to consider all the accounts—that in relation to the other funds the Post Office had built more in the past and that it was therefore entitled to a larger portion of the buildings fund. There was nothing irregular in this procedure; it was merely a question of all the data not having been available in full on that date under the old South-West Africa dispensation. When all the data became available, the correction was effected.

*Mr. E. G. MALAN:

How could the division have been made among the Central Fund, the South-West Africa Fund and the Post Office Fund if it was not known what those amounts represented, for it is said here “that it is an unidentified amount of almost R1,5 million” which you are now trying to distribute?

The MINISTER:

Mr. Chairman, it happens in the case of every Budget, even my budgets. I give an estimate of income and expenditure as at the 31st March of every year, and then after the 31st March, in April or in May, it appears that the estimates were not absolutely correct because at that particular date we did not have all the facts available yet, and this is the case here. The facts were not available, and the first division of funds was based on an estimate, just as we estimate our income and expenditure for every financial year.

Mr. E. G. MALAN:

Can you identify it now?

The MINISTER:

It has been identified.

Mr. E. G. MALAN:

Can you give us the particulars? You say that that amount can be identified and has been identified. Can you give us the particulars please?

The MINISTER:

Yes, I can give the particulars. There are three building funds. The one is the Consolidated Income Fund; the second is the South-West Africa Fund, and the other the Post Office Fund. These are the three funds which were building …

Mr. E. G. MALAN:

That is what you tell us in your memorandum. Can you give us the particulars?

The MINISTER:

What particulars?

Mr. E. G. MALAN:

The details.

The MINISTER:

Must I tell the hon. member which houses they built and on which stands they built them? Why should I give an account here of what happened in South-West Africa? It is not under our supervision. All I can say is that the division of funds has taken place, and I can give the hon. member the amount as shown here in the explanatory memorandum. The allocation of funds took place on the basis of the number of houses built by each of the different funds. That was the basis of the division. The hon. member will see in the explanatory memorandum how the division took place. There was no money lost. At the end of the period all the facts were not available, and when they became available the reallocation took place and no money at all was lost or put in the wrong place.

Clause put and agreed to.

Clause 11:

Mr. S. EMDIN:

Mr. Chairman, I raised the question of clause 11 during the Second Reading debate on this Bill. What is the necessity to give the I.D.C. the right to insist that the hon. the Minister should take over certain shares of theirs or certain commitments of theirs in underlying organizations like Iscor and Foscor, which were given as two examples? What is the necessity for this?

*The DEPUTY MINISTER OF FINANCE:

Sir, this matter actually concerns the Department of Economic Affairs. I think the first thing that will strike the hon. member for Parktown, is that this clause, which is being inserted here, cannot do any harm in any case, but it may serve a good purpose for any contingency which may not be foreseen at this stage. The position is that Parliament will be aware of all appropriations made for taking up shares in the I.D.C. We have the Act under which the I.D.C. is administered, which is also Parliamentary sanction. But both the department and the I.D.C. feel that this additional parliamentary sanction may be necessary for those cases where the I.D.C., for instance, would undertake a certain industry at the request of the Minister. The nature of that industry may be such that the Minister may feel at a certain stage that the State itself should take back the interests in that industry; or the position may be that the I.D.C. may request the State to take over its interests in that industry. This may happen in the case of a strategic industry, for instance. This may happen in the case of an industry which is of very great national importance, but which could be risky from a profit point of view. These are the possibilities that may arise. The examples furnished in the explanatory memorandum are Foskor and Sasol. To the best of my knowledge Foskor and Sasol are not implicated in this regard, but in actual fact these are only examples of the nature of the industries in which this situation may arise. In a case where the State would take back its interests, it means in essence, for all practical purposes, that it will exchange the shares it has in the

I. D.C. for its interests in that industrial undertaking and that the I.D.C. will then be relieved of responsibility. But there may also be questions of loans which, for instance, were negotiated by the I.D.C. and for which provision will consequently have to be made. This provision is really intended for a situation that may arise, and it is felt that this additional parliamentary sanction may be desirable.

Clause put and agreed to.

Clause 12:

Mr. D. D. BAXTER:

This clause 12 empowers the Minister to transfer moneys from the Stabilization Account to Revenue Account, and it gives effect to the announcement which he made in his Budget speech that he was going to take care of the final deficit on Revenue Account amounting to R140 million by means of such a transfer from the Stabilization Account to the Revenue Account. I want to know from the hon. the Minister whether, in view of developments which have taken place since the Budget, this transfer from the Stabilization Account to Revenue Account, in full or even in part, is going to be necessary; because one development has taken place since the Budget, a development which I would think is going to have a highly favourable effect on the country’s revenues. It is a development for which the Government can take no kudos at all, because it has been completely outside their control; it is a development which at the time of the Budget, I think, was largely unexpected, but it is a development which, besides having a directly favourable effect on the Government’s finances, will also have a favourable ripple effect on the economy as a whole. I refer, of course, to the very sharp increase in the price of gold which has taken place since the Budget. In fact, the price of gold since 29th March has increased from just over 48 dollars to over 64 dollars today. Once again, Sir, Dame Fortune has smiled very favourably on a Nationalist Minister of Finance; this time, I might say, completely fortuitously, at a time when this particular hon. Minister of Finance was faced with some real financial problems. But let me say from this side of the House that we welcome this development of a higher price for gold; we welcome the increased prosperity that it will bring to this country and the longer lives that it will give to our gold mines, because anything that creates a more prosperous climate in this country will help us to solve our more difficult racial problems. Mr. Chairman, I have said that the increased price of gold will have a directly favourable effect on Treasury receipts. How much will, of course, depend on what the average gold price over the whole financial year is, and it will also depend on the extent to which the gold mining industry uses the higher gold price to lower the grade of ore which is mined. But the magnitude of the improvement in the gold mining industry’s fortunes as the result of this development can be judged by the fact that on an annual gold output of 30 million ounces, which is a conservative estimate of the annual output of the industry, an increase of 10 dollars an ounce over the year, would mean additional income to the industry of R225 million, and an increase of only 7 dollars an ounce would mean R157 million a year. Whatever the additional value of the output of the industry this year, I think it can be said that a very high proportion of that additional value is likely to be reflected in increased profits in the industry and is therefore likely to yield substantial additional revenue to the Treasury. In addition to that, with the improved fortunes of the industry, the grant under the Mines Vote to marginal mines or the commitment for that grant, is likely to be reduced. That grant is reflected in the Estimates as R11 million.

I think it is important that the powers that are being proposed under clause 12, namely to transfer money from the Stabilization Account to the Revenue Account, should be used as sparingly as possible. The use of these powers means pumping additional money into an already inflationary situation in our country and in our economy. Let us not bluff ourselves that that inflationary situation is yet under control. I do not think the causes of the problem, which are fundamentally low productivity. have yet been tackled. We have in our present situation a pent-up demand for higher wages over a fairly wide front. We have not yet seen the full effect on prices of devaluation, because importers and manufacturers are still working off predevaluation stocks. We have not yet felt the full effect of import control on prices. We have certainly not yet felt the full effect of the additional liquidity in the economy on inflation. I admit that the higher gold price, and the liquidity and the foreign exchange reserves which it will generate, are themselves inflationary, but with them go benefits. I hope that the hon. the Minister will be able to avoid using this Stabilization Account and be able to use his windfall from the higher gold price, because I suggest it is better to keep the Stabilization Account for a rainy day rather than to raid it at the present time, when the last thing that the economy needs is deficit budgeting and transfers from the Stabilization Account to Revenue Account.

The MINISTER OF FINANCE:

It very seldom happens that the hon. member for Constantia and I agree, but I can say that in regard to the speech he has just made, I agree with about 75 per cent of what he has said. I am also very happy to know that the hon. member agrees with me, not only in regard to the growing signs of a rise in gold prices, but also in regard to the growing signs of progress in the economy in general. The hon. member seems to be very optimistic about the future not only in regard to gold but other matters too, otherwise he would not have come with the proposal that we should not use money from the Stabilization Fund. I want to agree with the hon. member that we should use this fund as sparingly as possible. I want to agree with the hon. member that we should try to replenish this Stabilization Fund for a rainy day as far as we possibly can. I was very happy to note that the hon. member said here that we must keep this fund for a rainy day. I remember quite clearly that I was again taken to task by certain members on the other side of the House for starting a fund for a rainy day. Hon. members opposite criticized me for doing such a thing in State finances. But I just want to say this that where I agree with the hon. member on these principal matters, I do not want to count my chickens before they are hatched. I do not want to make any definite promises that this will not be done. I only want to say that I am as optimistic as he is, maybe more optimistic than he is, and that I shall do my best to use as little as possible of that Stabilization Fund. On the contrary I will do my best, not only because of what we get from the gold sales, and the extra tax we get from the gold sales, but also the extra tax we get in other ways and from loans. I shall say more about this tomorrow when I reply to the Third Reading Debate. I shall do this in order to fill up our cupboard as much as possible so that it will no longer be bare.

Clause put and agreed to.

House Resumed:

Bill reported without amendment.

Third Reading taken without debate.

FINANCIAL INSTITUTIONS AMENDMENT BILL (Second Reading) The DEPUTY MINISTER OF FINANCE:

Mr. Speaker, I move—

That the Bill be now read a Second Time.

The Bill before the House contains amendments to seven of the Acts administered by the office of Financial Institutions, namely: the Insurance Act, 1943; the National Finance Corporation Act, 1949; the Pension Funds Act, 1956; the Friendly Societies Act, 1956; the Participation Bonds Act, 1964; the Banks Act, 1965; and the Building Societies Act, 1965.

Certain amendments affecting four of the Acts, are necessary to legalize measures which the Minister, with the approval of the Cabinet, already applied administratively during the latter half of 1971 as a matter of urgent need. These measures to which I shall revert presently, include on the one hand concessions made to building societies in an endeavour to cable them to draw a reasonable amount of funds for financing housing loans and, on the other hand, directives requiring insurers and pension funds to make additional contributions towards the financing of the public sector’s expenditure.

A further category of the amendments flow from an interim report of the Technical committee on banking and building society legislation which was laid on the Table of the House. In the report the Committee recommends that certain amendments be effected urgently to the Banks Act in order to augment the powers at the disposal of the Reserve Bank so as to provide the bank with adequate measures for purposes of credit control.

A third category includes amendments to the Participation Bonds Act, which are deemed urgently necessary so as to bring the conditions relating to this investment medium in line with those pertaining to comparable investments offered to the public by other financial institutions.

Finally a few amendments including those to the National Finance Corporation Act, are necessary to clarify certain aspects and to facilitate the administration of the relative Acts.

The Government’s development programme together with the ever increasing demand for infra-structural services resulted in substantial increases in the State’s expenditure during the last few years and the Government was accordingly obliged to increase taxes considerably in various fields. During the second half of last year it became evident that notwithstanding drastic curtailment of Government expenditure and although large foreign loans had already been obtained and the reaction of domestic investors in Government stocks and premium bonds had been encouraging, the actual and expected inflow of loan funds would not be adequate to cover the necessary expenditure. It was necessary in view of the Government’s determination to fight inflation that steps be taken without delay to find ways and means to finance the expected deficit on the Government’s loan account in a non-inflationary way.

After having investigated various ways and means to achieve an increase in the flow of funds to the Exchequer in a manner which would cause the least disruption in the economy and at the same time would make a meaningful contribution to the sounder financing of the State’s expenditure, the Government decided that pension funds and insurers should make additional contributions towards the financing of the Government’s loan account. In anticipation of the necessary covering legislation, these institutions were requested to hold a higher proportion of their assets in Government securities as from 1st October, 1971.

Pension funds enjoy total tax exemption while the contributions to such funds by members and employers are also exempt from income tax. This is an important means used by the Government to promote social security. It is therefore reasonable to expect these institutions, which are in fact attracting a very large share of the public’s savings, to channel a substantial portion of their funds to the public sector in order to assist in the financing of essential public services.

In the light of all the circumstances, the increases proposed in clause 7 of the Bill, in the percentages of total assets of pension funds which have to be invested in Government securities and in total prescribed assets (including Government securities), respectively, namely an increase from 10 per cent to 20 per cent as regards the investment in Government securities, with a corresponding increase in the total investment in prescribed assets from 40 per cent to 50 per cent of total assets, are deemed justified and reasonable.

A large portion of pension fund business is being conducted by long-term insurers as underwritten pension funds. In terms of the present provisions of the Insurance Act insurers are not required to maintain, in respect of the pension fund business which they carry on, the same percentages in prescribed assets and Government securities as those prescribed for privately administered pension funds in terms of the Pension Funds Act, although such underwritten funds enjoy the same tax exemptions as the privately administered pension funds. There is no good reason why such disparity in the requirement should exist and it is accordingly now proposed in clauses 2 and 3 of the Bill that a distinction be made between an insurer’s business conducted with pension funds and retirement annuity funds—the latter fall within the definition of “pension fund” for purposes of the Pension Funds Act—and its other business. In respect of their pension fund and retirement annuity fund business, insurers will be required to hold the same minimum percentages of Government securities and other prescribed assets as are required for privately administered funds.

As an important class of institutions which marshall large sums of the public’s savings, insurers, both long-term in respect of their business other than business carried on with pension and retirement annuity funds, and short-term, should, like pension funds, make an additional contribution towards the financing of the Government’s loan account. The proportion of their assets which is to be held in prescribed assets is not being increased but the minimum amount to be held in securities issued by the Government included in such assets, is being raised. In terms of the present provisions of the Act prescribed assets with an aggregate value of not less than 30 per cent of the amount of the relative liabilities in the case of long-term insurers or in the case of short-term insurers of the amount of the total liabilities plus the whole amount of the solvency margin (i.e. R100 000 or more depending on the size of the insurer’s business) have to be maintained and these assets are to include securities issued by the Government to the aggregate value of at least 10 per cent of the aforementioned liabilities. It is now proposed in clauses 2 and 3 that the latter percentage only be raised to 15.

Insurers and pension funds will have to comply from the start with the proposed ratios as far as new business is concerned, but they will be allowed a period of ten years in which any shortfalls in the relative kinds of assets in respect of existing business is to be rectified.

Mr. Speaker, I now wish to deal with the concessions made to building societies and banks in August, 1971, as now incorporated in the amendments proposed in the Bill.

Hon. members are, no doubt, aware that the Government. apart from assistance through the Department of Community Development in respect of the supply and financing of housing, has over the years made certain tax and other concessions to building societies with a view to promoting the provision of funds for financing home-ownership and to ensure that housing costs will remain within reasonable limits. These concessions include, inter alia, the issue, subject to certain limits per person, of subscription and indefinite period shares, the dividends on which are tax-free. Members will also recall that in his August, 1970, Budget speech, the Minister announced the introduction of a scheme in terms of which the Treasury was to subsidize the difference between 8½ per cent and the ruling mortgage interest rate, up to a maximum of 1 per cent, on loans not exceeding R12 000 where the property is valued at not more than IR161000 and is owner-occupied. The scheme was put into operation on 1st November, 1970, and since that time the Treasury has been paying a subsidy of ½per cent on all qualifying loans.

Under the conditions which prevailed, however, building societies experienced a considerably reduced intake of money during 1971 so that the granting of housing loans was drastically reduced and they were faced with a possible outflow of money from the movement which would have created serious difficulties. The Government was not in favour of a further increase in building society lending rates which would have enabled them to attract more funds by paying higher borrowing rates, but being alive to the housing finance needs of the public, it decided to grant certain further concessions to building societies in order to stimulate the flow of funds to societies without an increase in the interest rate and to increase the portion of a society’s funds which is available for mortgage loans.

The concessions then granted by the Minister and now set out in clauses 18 and 19 of the Bill include the increase of the maximum amount which a building society or a bank may allow any one person to maintain on savings account from R10 000 to R15 000; the relaxation of certain restrictions on the reinvestment of a fixed deposit with a building society and the temporary suspension of the requirement that building societies have to maintain prescribed assets over and above their requisite liquid assets. In the circumstances where tax and other concessions have been made to building societies, it is not considered logical that societies be required to invest part of their funds in Government stock and other prescribed assets. It is, therefore, proposed in the amendments that the Minister be empowered to exempt societies temporarily from the requirement to hold prescribed assets.

A further concession made by the Minister in regard to the taxing of dividends on building society paid-up shares will be dealt with in the Income Tax legislation.

I now come to the proposed amendments to the Banks Act (clauses 12 to 17 of the Bill). In the interim report of the Technical Committee to which I referred earlier, the amendments proposed to the Banks Act have been fully explained and I intend to deal with these only briefly. The Committee in consultation with the monetary authorities, decided to bring out an interim report on the provisions of the Banks Act having a bearing on monetary and credit control as amendments of these provisions have now become a matter of urgency. The problem with which the monetary authorities have been faced in recent years is the fact that the credit control measures which the Reserve Bank has at its disposal in terms of the present provisions of the Banks Act are inadequate.

When the banking sector during recent years became subject to large-scale changes in the monetary situation and the authorities had to take more stringent action than that provided for in the Banks Act, it was necessary to fall back on powers contained in the Currency and Exchanges Act of 1933. By way of proclamation directives were issued imposing credit ceilings on banks. However, such direct methods of control have disadvantages and should, therefore, if possible, not be used over a long period.

The direct methods of control have now been in operation for a number of years and have become very unpopular with banks and a return to more normal methods of control in the banking field is accordingly overdue. A few appropriate amendments to the Banks Act are necessary to permit of the present system being substituted with traditional methods of credit control at an early date.

The credit control which the Reserve Bank applies in terms of the Banks Act is by way of the amount of liquid assets which banks have to maintain against their liabilities. Accordingly it is the provisions of the Banks Act relating to liquid assets which for the present purpose require revision.

Firstly, the definition of liquid assets is important. The definition in our Banks Act is wider than that in corresponding legislation of most other countries. For regulatory purposes, the ideal would be for liquid assets to consist of notes of and cash balances with the Reserve Bank and Government securities only. In terms of the definition in our Banks Act, however, liquid assets in addition to the aforementioned assets, include a series of other assets such as bills and short-term debentures of the Land Bank, certain debentures and notes of the Industrial Development Corporation and instruments of the private sector, e.g. acceptances of certain banking institutions and certain bills or promissory notes arising out of the movement of goods. In addition the Registrar may approve other assets for purposes of the definition.

Some of these items enable a banking institution to increase its liquid assets by extending credit to the private sector thereby weakening the hold of the Reserve Bank on the general credit position. Whilst there is good justification for not including certain of these items, it is found that for reasons of practical expediency all such items cannot at this juncture be deleted from the definition. It is, therefore, proposed to restrict the scope of the definition to the extent that is now considered possible by, firstly, excluding certain interbank deposits and by removing the power of the Registrar to declare an asset a liquid asset and, secondly, by permitting the inclusion of acceptances of banking institutions and trade bills as liquid assets only to the extent of 20 per cent of the minimum amount of liquid assets required to be held by a banking institution.

As regards the amount of liquid assets to be held, it is proposed that in view of the trustee nature of its activities a banking institution shall at all times maintain liquid assets representing at least 30 per cent, 20 per cent and 5 per cent of its short-, medium- and long-term liabilities, respectively. This should be a minimum for all normal conditions which is only to be reduced in exceptional circumstances by means of special powers.

In terms of the present provisions of the Banks Act, the Reserve Bank, with the approval of the Treasury, may increase the liquid asset requirements to only 40 per cent and 30 per cent in respect of shortterm and medium-term liabilities, respectively, while an institution cannot be required to increase its liquid assets in any one month by an amount exceeding 4 per cent of the sum of its short- and medium-term liabilities. Experience has shown, however, that the extent to which and also the stages in which the liquid asset requirements may under the present provisions of the Act be increased, are not adequate to meet the needs of the economy. It is, therefore, proposed that the relative provisions of the Act be amended to enable the Reserve Bank, with the approval of the Treasury, to increase the minimum amount of liquid assets which banking institutions have to maintain, to not more than 60 per cent, 40 per cent and 10 per cent of the amount of the short-, medium- and long-term liabilities, respectively.

It is also proposed as a further strengthening of the hand of the monetary authorities, that the Reserve Bank be empowered, with the approval of the Treasury, to require that, either as an alternative to, or in addition to the aforementioned increase of minimum holdings, banking institutions maintain supplementary liquid assets amounting to not more than 70 per cent of the increase in their short-term liabilities, 50 per cent of the increase in their medium-term liabilities and 20 per cent of the increase in their long-term liabilities as from a stated date.

Under the present provisions of the Act, additional liquid assets can be required only on the one or the other of the two bases I have mentioned, whereas the proposed amendment provides for additional liquid assets on either of the two bases alternatively, or on both of them simultaneously. Provision is, however, made that in the case of both bases being applied, institutions will not be required to hold all together more than 100 per cent of the relative increases in liquid assets.

Compared with the maximum increase during any one month of 4 per cent under the existing provisions of the Act, the proposed amendments provide for a maximum monthly increase of 10 per cent.

Finally, the present provisions of the Act require that certain banking institutions maintain a cash reserve balance with the Reserve Bank amounting to not less than 8 per cent of their short-term liabilities. There is at present no provision for an increase in this reserve balance when the liquid asset requirement is increased. A combination of a variable liquid asset requirement and a variable cash reserve balance is considered to be the most effective bank credit control instrument under South African conditions. It is therefore proposed in the amendment that the Reserve Bank be empowered to determine that supplementary liquid assets be held either totally or partially in the form of supplementary cash reserves with the Reserve Bank or with the National Finance Corporation.

The Banks Act at present provides for the maintenance by banking institutions of prescribed investments—normally securities of a longer term nature than liquid assets —amounting to at least 15 per cent of their liabilities to the public. This requirement, however, is of little practical effect under present circumstances because prescribed investments by definition include liquid assets and the amount of liquid assets which the banks hold under present circumstances fully cover the prescribed investment requirement. It is accordingly proposed to eliminate this overlapping and to require banking institutions to hold prescribed investments amounting to 10 per cent of their long-term liabilities. It is further proposed to narrow the definition of prescribed investments by deleting private sector instruments. It will, therefore, include only public sector securities other than those ranking as liquid assets.

Banking institutions objected to their inclusion in the captive market for public sector financing. Since, however, the banking institutions’ long-term deposits are on the increase it is not unreasonable that they too be required to make a contribution from the long-term savings of the public, entrusted to them, towards financing the public sector’s expenditure.

I may add that the percentage holdings of banking institutions in South Africa of Government and semi-Government securities is much lower than in the case of banks in countries like Canada, Australia and the United States of America.

I shall not tire hon. members with details of the minor amendments to the Banks Act but merely wish to state that they include provisions aimed at eliminating certain malpractices such as those which occurred in the Sidarel case. Mr. Speaker, I now come to the final category of the amendments.

The proposed amendments to the Friendly Societies Act and the National Finance Corporation Act are merely in the Nature of rectifying clear omissions in the existing provisions. It is only the proposed amendments to the Participation Bonds Act (clauses 9 to 11) to which I wish to refer briefly. Hon. members will, no doubt, recall that this Act was put on the Statute Book in 1964 specifically to protect certain rights of the participants in participation mortgage bonds, following upon an appeal court decision to the effect that persons to whom participations in a specific mortgage bond had been granted by way of informal unregistered cessions were not secured but merely concurrent creditors in the insolvent estate of the person in whose name the bond was registered.

In view of the large amount invested in this manner by thousands of investors including many trusts, the Government agreed to pass legislation to protect the rights of the investors in participation bonds. The intention was that only relatively long-term funds of reasonably large amounts which normally would be invested directly in mortgage bonds should be mobilized by participation bond schemes for financing large bonds that cannot readily be financed by a single investor. It was not the intention that short-term funds of relatively small amounts should be mobilized by these schemes. Such funds should be invested with banks and building societies.

The Act which was prepared and passed with great speed, however, had a shortcoming in that no provision was made for a minimum period or size of investments. It soon became evident that the schemes— perhaps on account of an enhanced status afforded by the Act but also as a result of aggressive advertising—were attracting short-term funds on a large scale. In 1967 the Act was therefore amended so that future participants could transfer, cede or encumber their rights in a participation bond only after expiry of a period of three years from the date of acquisition of the rights. Upon repayment of the bond by the borrower at any time the amount could be paid out to participants.

Despite the amendment the flow of funds to these schemes accelerated substantially during 1970 and 1971 and caused certain imbalances in the economy. Among other ways devised by schemes to make investment in participation bonds attractive, it appeared that certain schemes circumvented the three year period by granting mortgage advances for one year only. In effect the participant’s investment was, therefore, fixed for one year only while it enjoyed the higher rate of interest applicable to long-term investments. In all the circumstances these schemes had no mean part in the strong upward pressure on interest rates during recent years.

It is of great importance in our economic system that available funds be used for the right purpose depending on whether they are short-term or long-term funds and that interest rates be kept at a reasonable level.

In order to curb the flow of short-term funds to participation bond schemes it is now proposed that the amount of an investment in a scheme be limited to a minimum of R1 000 and that the investment remain in the scheme for a minimum period of five years. In other words, if the bond in which a participation has been granted is repaid within 5 years from the date on which the investment was first made, the money may not be repaid to such investor but must be invested for at least the remaining portion of the five-year period in another participation bond in the scheme.

With the introduction of this minimum period of five years, investments in participation bonds will be brought into line with comparable investments with other institutions, e.g. debentures issued by subsidiaries of banking institutions.

Mr. Speaker, apart from the fact that the Technical Committee on Banking and Building Society legislation consulted closely with banks in framing the recommendations in their interim report, all the other categories of financial institutions affected by the amendments contained in this Bill have been consulted in regard to the proposed provisions by the Financial Institutions Office. The views of all these institutions have been duly taken into consideration in framing the provisions and I am pleased to be able to inform hon. members that there is a large measure of agreement on all the important principles involved.

Mr. S. EMDIN:

This Bill is another conglomerate and, as the hon. the Deputy Minister has pointed out, amends seven existing Acts. It is also in some respects highly technical, like some of the other Bills we have had here this evening. The main objectives are, firstly, to increase by legislation the amounts that must be invested in prescribed securities by insurance companies and pension funds. This is the de facto situation for which the hon. the Deputy Minister is asking for legal authority, and I wonder how correct it is for the Government, through its own agencies or through the Reserve Bank, to “request”— this is the word that they use—insurance companies and pension funds to increase their deposits with the Government, because a request of this kind is not a request, Mr. Chairman. I think one should be careful that the authority of Parliament is not usurped in these matters.

The second objective of the Bill is to ensure that the banks now also invest in prescribed investments. The third objective is to place greater power in the hands of the Reserve Bank to control credit, and the fourth objective is to replace bank credit ceilings by cash and liquid asset ratio control, for which we have been pleading constantly over the last five or six years. The Government eventually comes round to our way of thinking. Sir, The only difficulty is that it takes so long. This Bill, as the hon. the Deputy Minister has said, follows lengthy discussions with the banks and other institutions concerned. There was certainly not complete agreement between the Government and these institutions, but apparently some sort of compromise has been reached, probably very much on the basis of the “request” to invest more money with the Government. Obviously, Sir, the pension funds can see no reason why they should be required now to invest 50 per cent of the aggregate value of all their assets in prescribed securities, of which amount 20 per cent of the aggregate value of such assets must be in Government stock. They believe that the present requirement of 40 per cent and 20 per cent respectively is already excessive. Nor do the insurance companies subscribe to Government thinking that they should now, firstly, invest 30 per cent of their net liabilities in prescribed investments, of which investments 50 per cent, or 15 per cent of the net liabilities, must be invested in Government securities, instead of the present requirement of a straight 30 per cent of their net liabilities investment in prescribed securities with only 10 per cent in Government securities and, secondly, that they should be required—and this they regard in a serious light—to invest 50 per cent of net liabilities in respect of their pension fund and annuity fund business, of which 20 per cent of such net liabilities must be in Government securities, instead of a total investment at present of 30 per cent of net liabilities, of which 10 per cent only had to be invested in Government securities. Nor do the banks willingly accept the fact that they must now hold an amount equal to 10 per cent of their longterm lialibities in public sector securities. We believe. Sir, that the Government is getting somewhat excessive in its demands on financial institutions to invest more and more in Government securities. Every few years the ante is raised, or new institutions are caught in the web. First it was the mutual funds. They had to invest 10 percent in Government stocks. This was subsequently increased to 15 per cent. Then there was the ill-fated attempt to include participating bonds in this scheme, that the participating bonds should make their contribution to Government funds. This was quite impractical and it had to be discarded before it was implemented. Now we have the banks coming into the picture. There is obviously something wrong when the Government cannot fund its capital requirements through normal borrowing and has to resort to compulsion on an ever increasing scale.

I believe that when the Government unfreezes interest rates, which it has again frozen, when it gets inflation under control and when it removes some of the other controls which are distorting the entire capital market, it will be able to get sufficient funds for its needs. But, of course, it is much easier to go to the insurance companies and the banks and the pension funds and to say: “Give, give me some more, give me some more.” This is much easier than really getting down to the task of putting your own house in order. This is what we are faced with. I believe that we have reached the limit in so far as this is concerned. We are not going to oppose these provisions because they have already been accepted by the institutions, but I think that what we want from the hon. the Deputy Minister is an undertaking or an assurance that this is the last demand that the Government will make upon these institutions to hand their funds over to the Government.

The proposed amendments to the Banks Act are very far-reaching and very technical. We subscribe, as is well known in this House, to the point of view that the present method of control by means of a credit ceiling on banks is completely unsatisfactory and it is certainly, as the hon. the Deputy Minister has said, very unpopular indeed and has been since it was originally imposed. We, as we have often said before, prefer the cash and liquid asset control method which is now being revised in the Bill before us.

I should like to hear from the hon. the Deputy Minister this evening that he will give an undertaking that the ceiling is now about to be removed. We do not want to find that we are now going to have two controls instead of one—ceiling control and liquid asset ratio control. I think the banks would want to know from the hon. the Minister when he is likely to introduce this change, because these are institutions which have to organize their own businesses to make provision for the change from the one system of control to the other. It will be extremely helpful if the hon. the Deputy Minister can give some indication.

It is quite clear from the interim or first report of the Technical Committee on Banking and Building Society Legislation that there were wide differences of opinion in regard to some of the details of the proposals made in this Bill. There is certainly no unanimity on what should be regarded as liquid assets. The banks have one view and the Government has an entirely opposite view. There is no provision in the Bill to provide for payment of interest on supplementary cash reserves, although this was a recommendation of the technical committee. We understand that the Reserve Bank Act is going to be amended to make it possible for the Reserve Bank to pay interest on these deposits with it. which is not possible today. We also understand that until this has been done, supplementary cash reserves can be invested with the National Finance Corporation and that these will be interest bearing. We should like confirmation of this from the hon. the Minister.

The right to change the basic cash and liquid asset ratios is acceptable, but it is felt by the banks that there should be consultation with them first before these changes are made. There are many other changes to the Banks Act but in the main they are acceptable. However, there are two matters which give rise to some concern. The one is that Land Bank debentures and Industrial Development Corporation shortterm export debentures will continue to be treated as liquid assets. The Technical Committee in their report recommended that the Treasury should appoint a committee, representative of all the parties concerned, to determine the best way of financing these two sectors, because it is quite clear that short-term borrowing for a longterm investment is undesirable and usually ends up in trouble. Yet both the Land Bank and the Industrial Development Corporation short-term export debentures are providing essential financial services in two vital areas: farmers need money which they get from the Land Bank and exporters also need money which they are getting from the Industrial Development Corporation. We hope that the hon. the Minister will set up this investigating committee very soon and that satisfactory methods will be found of financing both the farmer and the exporter because these are the two cardinal factors in long-term planning in this country.

A second problem is the provisions of the proposed new section 17 (2) (b) (ii) in clause 14 on page 33 of the Bill, which reads—

Notwithstanding anything contained in this section the Reserve Bank may …

and “may” is the operative word—

… whenever supplementary liquid assets are required to be maintained in terms of a determination under this subsection, further determine that acceptances, bills or promissory notes of the kind referred to in subparagraph (i), shall not rank as supplementary liquid assets for the purposes of such determination.

The problem here is the phrase “may determine”. This is going to cause a great deal of difficulty to the banks, as I think the hon. the Deputy Minister will appreciate. How do they operate under this clause? There is no certainty as to what is going to be required of them. I should like the hon. the Deputy Minister to give some consideration to this aspect of the Bill.

We welcome the hon. the Minister’s fast reaction to the situation disclosed by the Sidarel fiasco which we raised in the House earlier this year; this is clause 12 (c) of the Bill. The Banks Act, as most of us know, at the moment prevents anybody other than a bank from holding deposits from more than 20 people or in an amount exceeding R500 000. To avoid being brought within the control of the Banks Act and its provisions and as a consequence becoming subject to the scrutiny of the Registrar of Financial Institutions, what Sidarel did was very simple; they set up a series of companies. According to a report that appeared in the Financial Mail about a week ago, they set up some 70 companies. Each company then took deposits from the public, but never in any case from more than 20 people or in an amount of more than R500 000. Therefore they were free of the restrictions and the control of the Banks Act. This new provision which will stop this is commendable because a person and a company or companies are now treated as one unit and the overall blanket proviso of 20 people or R500 000 will apply to the person plus the company or the person plus the companies. I have no doubt that some enterprising gentlemen in, I hope, the far distant future, but sometime in the future, will once again find some loophole in this Act. But certainly the amendments we have in the Bill are certainly going to make it more difficult for him, and I think this is the objective. It has been said in this House before, and I reiterate it again, that legislation will never stop a fool and his money from being parted. The hon. the Minister has warned and we have warned that, when exceptionally high rates of interest are offered, people must be cautious and wary, because they are probably going to be taken for the proverbial ride.

We welcome the amendments to the Building Societies Act. The right given to building societies to accept so-called key deposits from limited companies is long overdue. Most blocks of flats are company-owned and we have two conflicting requirements. one in the Rents Act and one in the Building Societies Act, which are quite ridiculous. The position was that the Rents Act provided that the key money, the deposit made to the landlord had to be put in a building society. Most of the flats were owned by companies, but the Building Societies Act prohibited companies from putting deposits in building societies. Now, at last, after two years this has been rectified. We warned the hon. the Minister of Community Development of the problem when he introduced that proviso. We go along with the raising of individual deposits from R3 500 and R10 000 to R5 000 and R15 000 respectively. What I want to ask the hon. the Deputy Minister is when the Building Societies Act is going to be amended to allow companies to invest in building societies. I know the theory behind the provision precluding businesses in the form of companies from investing in building societies. It is this question of short-term borrowing and long-term lending. I am against anybody who wants to borrow short and lend long. But what happens in practice? In practice you find that companies will invest short, it is true, but you get a pool of money forming; one company will take it out and another company will put it in. The building societies have millions of rands of short-term money on daily deposit. This money is lent on bonds, on longterm bonds of 15, 20 and 25 years, because the building society knows that as Mr. A. withdraws his money, Mr. B. will make a deposit. The same theory applies as far as businesses are concerned. If the hon. the Deputy Minister, and particularly the Minister of Finance, want to help the building societies, they should allow limited companies to make their deposits with building societies. I am not altogether happy about the provision in the Bill which says that the hon. the Minister may now exempt permanent building societies from their obligation in terms of the Act to maintain prescribed investments of 10 per cent to cover their liabilities to the public. A couple of years ago building societies had to maintain a reserve, also with the Government. Now that has been done away with to help building societies. Now we are taking away the last direct line of security from the public by saying that the Minister may, if he so wishes, remove the obligation of a building society to deposit 10 per cent of its funds with the Government. Our building societies are very powerful and very reputable, they are among the best run of all our institutions in this country, but, as we know, sometimes you get a black sheep, in so far as building society funds are concerned I don’t believe that we must ever lose sight of the fact that security is essential for the little man who uses the building society to keep his money.

Now I come to participation mortgage bonds. Here it seems that for some unknown reason the Government has decided that now it does not like participation mortgage bonds. First we had the interest squeeze which limited the amount of interest chargeable by a participation mortgage bond to 8½ per cent net. This step, this limiting of interest, has just about put the participation mortgage bond organizations out of business. They cannot get any money and the developers can’t get any bonds. I am told that there is practically no money today flowing to participation bonds. Now it is proposed that there should be a minimum investment of R1 000 and a minimum term of 5 years for any investment in a participation bond. We do not agree with either of these proposals and we are going to vote against clause 9 of this Bill in the Committee Stage. We do not believe that the R1 000 minimum is necessary. In any case, there are very, very few deposits in participation bonds of less than R1 000. We do not believe it is necessary to increase the term from 3 to 5 years. The hon. the Minister says that participating bonds have been brought into line with comparable investments with other institutions and he quotes as an example a bank’s subsidiary debentures. This may well be true, but then he must also have a look at building societies. What is the position with regard to participation bonds and building societies today? A participating bond gives a person who invests in it 8½ per cent yield subject to tax. That is all he can get today. That is the maximum allowed by law. What happens with the building societies today? I have here a little advertisement by one of the building societies. It reads—

How much tax do you pay on your interest?

They then proceed to tell you that if your income is R5 000 and you invest in tax-free bonds, your income will be 7,8 per cent net. If your income is R8 000, your return is 8,6 per cent and you are already above the interest earned on a participation bond. If your income is R12 000, you can earn 9,8 per cent, on an income of R18 000 you can earn 12,5 per cent on R24 000 you can earn 17,3 per cent. The participation bonds can only give you 8½ per cent less tax. The same thing applies to 7¾ per cent paid-up shares, here the dividends are now subject to normal dividend tax. It also applies to the 8 per cent paid-up shares. So in every category of these building society investments, the participation bond is at a disadvantage. What concerns us is that we will almost see the end of participation bonds. When the rollover time comes for the present investors in participation bonds, they will withdraw their money and they will probably go into the Stock Exchange, which is beginning to tempt people again. The potential for investment for developing flats and buildings and what have you, will be very seriously hindered.

We will support this Bill, because although we do not agree with some of the details, in the main we accept the underlying principles. Before I sit down, I want to thank the hon. the Deputy Minister for having made available to our finance group the presence of the Deputy Governor of the Reserve Bank and the Registrar of Financial Institutions, who came from Pretoria to go through this Bill with us because it is very very highly technical in many aspects.

*Mr. P. H. MEYER:

Mr. Speaker, the hon. member for Parktown made a few remarks here about provisions in this Bill with which they do not agree. In the first place, he mentioned the question of prescribed investments with pension funds, insurance companies and banking institutions. He virtually intimated that the Opposition did not at all agree with the principle that there should be prescribed investments. In addition he made the statement that he expected that the Government should borrow money for its capital needs in the normal way. If the Government did not lay down prescribed assets requirements in the case of banks, pension funds and insurance companies, it would simply mean that the State would have to go and borrow money on the open market at a much higher interest rate. It would simply mean that the taxpayer, who must pay for that interest ultimately, would have to pay more in the long run, while the question of prescribed assets is something which is almost generally accepted. It is generally accepted that institutions which receive long-term funds from the public should make a contribution towards expanding the infrastructure of the country. Therefore they should invest to a certain extent in Government stock. For the information of that hon. member, I want to mention a few figures to indicate the position in regard to investments by banking institutions in those countries which are comparable to South Africa. In the case of South Africa, the position at the end of December, 1971, was that commercial banks had invested a total of 17½ per cent of their deposit commitments in Treasury bills, short-term Government stock, advances to and bills of the Land Bank, I.D.C. export debentures, plus all the prescribed investments according to its proposed new definition. On the same date the percentage thus invested by merchant banks was only 4,4 per cent. In the case of other monetary banking institutions it was 19,9 per cent and in the case of other banks 9 per cent. The total for all banks in this respect was 16,8 per cent. At the end of March, 1972, the position was that the total for all banks decreased somewhat, namely from 16,8 per cent to 16,6 per cent. If one compares this with, for example, the position in the United States of America, one will see that the position for all deposit-secured commercial banks at the end of July, 1971, was that they held 27 per cent of their total deposit commitments in securities of the United States Treasury and in Government local authority securities. This is approximately 11 per cent higher than in the case of South Africa. In the case of Canada the position at the end of December, 1971, was that the so-called chartered banks holding of Treasury bills. Government and Government-guaranteed securities amounted to 20,5 per cent of their total deposit commitments. Here again it is approximately 4 per cent higher than in the case of South Africa. In the case of the main commercial banks of Australia the position at the end of December, 1971, was that the percentage invested in their so-called commonwealth, their local authority and semi-Government securities, was 24,5 per cent of the total deposit commitment. This is 8 per cent higher than in the case of South Africa. In the case of savings banks in Australia the proportion was 55,6 per cent on the same date. I therefore want to suggest that our banking sector has invested relatively little in Government securities in comparison with the position in other countries. Hon. members may perhaps argue now that we do not have the same market in Government securities which certain other countries, especially the United States, have. Hon. members may also argue that the interest rate which other Governments pay on Government securities is relatively higher when their general interest rate pattern is compared with that of South Africa. The fact of the matter is that when the Government on occasion used reserves it had and surpluses which existed, for the Loan Account, there was severe criticism from the Opposition. When it was proposed that loan levies should be imposed, there was severe criticism from the Opposition. The question now simply is where the Government in South Africa should obtain its loan funds. We should not forget that these institutions which accept the long-term deposits of the public, take two of the most important sources of long-term savings of the public. A recent survey taken in South Africa indicated that the ordinary public in South Africa saved mainly in three ways. One is by purchasing land, particularly houses; the second is by contributions made to pension funds; the third is longterm insurance such as life insurance. These three methods of saving predominate in South Africa. This means that these institutions, the pension funds and the longterm insurers already exhaust two of the most important sources of public savings. The finding of institutions such as the Handelsinstituut was, for example, that it would not pay to discourage people from building expensive houses in South Africa, because this would merely mean that the saving they would then make on houses by paying less for them, would simply be spent on consumer goods. I therefore want to suggest that these two institutions, the long-term insurer and the pension funds, in fact take up the cream of the long-term savings of the South African public. Especially since these two institutions do not pay taxation either, it is therefore only right that they should also make a contribution in this way to the development of the infrastructure of South Africa. Furthermore, we should remember that it is not only the case that the pension fund pays no taxation on its investments, but that the person contributing towards the pension fund may also subtract those contributions for income tax purposes. A virtually similar position prevails in respect of long-term insurance. We therefore have the position that these institutions are already exempted from taxation, and that, on the other hand, they virtually monopolize the long-term savings of the public today. Therefore I think we may rightly ask that they should make a larger percentage contribution by investing more in Government securities, in order to approximate to the figure in other comparable Western countries.

The hon. member for Parktown also intimated that they would vote against the clauses on participation bonds. What is the position here? As recently as 1964 the total investment in participation bonds in South Africa was R150 million. That figure has increased rapidly, especially during the past two years, so that it amounts to approximately R700 million today. The only reason why they have been able to attain that high figure was that they took small amounts and could advertize on a tremendously large scale. The other reason is that they offered a very high interest rate as against the low interest rate which could be obtained on share investments. I want to make the statement that it is not a sound state of affairs that a scheme which was intended to be a substitute for ordinary investment in mortgage bonds, is used to accept short-term funds and smaller amounts from the public as savings. The position is that the participation bond was in fact intended to ensure that capital was available for larger bonds and that these combined savings of a larger number of people could be used to make those larger bonds available. But normally the ordinary member of the public would not have invested his money in bonds for a period shorter than five years. Therefore I think that the clause which provides that a restriction should be placed on investments in participation bonds, and that the minimum period should be five years, is justified. In the second place, normally a person would not have invested less than R1 000 in a bond. Therefore I also think that the provision now being inserted, i.e. that the minimum amount which may be invested in such a participation bond, is limited to R1 000, is justified in all respects.

Sir, I do not want to say much more about this Bill, except just to point out that this is perhaps a very historic occasion, in the sense that we shall now for the first time be able to get away from this direct control to a more flexible form of control over our credit institutions, and particularly the banks, and that we shall in fact virtually be able to fulfil that promise requested from the Opposition side, namely that credit ceilings should be abolished. The fact of the matter is that when abnormal conditions developed over the past few years, the Government was obliged to make use of powers derived from the Currency and Exchanges Act, which was passed as long ago as 1933. Although one should like to see the Act of 1933 being done away with upon the passing of this Bill, one must nevertheless foresee that this Act will perhaps still be needed in future, that we may perhaps still come up against abnormal conditions under certain circumstances, and that a direct form of control over banking institutions should remain in the hands of the Government. Therefore I think the Government will be able readily to give the Opposition the assurance that, when this new measure is passed, direct control measures, particularly the ceiling system, will be done away with.

Mr. Speaker, on the other hand, however, we must not forget that we have no fewer than 58 banking institutions of many different kinds in South Africa. It will be necessary to retain the present form of control for quite a while yet, so that the position of each of these banking institutions can first be analysed properly and so that it may be established how they can adjust to the new form of control.

Business interrupted in accordance with Standing Order No. 23 and debate adjourned.

The House adjourned at 10.30 p.m.

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