Mr Speaker, during the second reading speech on the Income Tax Bill of 1987 little prominence was given to the report of the Margo Commission. For the most part the emphasis fell on tax avoidance. In contrast, the Income Tax Bill of 1988 emphasises certain decisions embodied in the White Paper on the Margo Report. The issue of tax avoidance has not been overlooked, of course, but at this stage it is of secondary importance.

Hon members are aware that the Margo Commission made more than 300 different recommendations, some of which will bring about drastic changes to our tax system. For reasons repeated on various occasions it was impossible for the Government to accept the main recommendation that a general new tax, known as the comprehensive tax, be introduced. Accordingly it was decided to accept the alternative recommendation, namely that the existing general sales tax be replaced by the European type of invoice taxation on added value.

The rejection of the comprehensive business tax means that it is impossible to proceed with other proposals made by the commission, particularly the overall separation, for tax purposes, of the incomes of husbands and wives and the significant reduction in tariffs on individual and company tax. Although this is disappointing, it is nevertheless possible to proceed with certain other important recommendations of the commission. I shall now deal with these aspects as briefly as possible.

In the first instance there is the standard income tax on employees, widely known as the SITE. Hon members will recall that with a view to relieving taxpayers in the lower income groups from the requirement of submitting an annual income tax return, the final deduction system was introduced several years ago. This system had the effect that many taxpayers disappeared from the register and that the number of new names added to the register every year was limited. In this way the burden on the limited staff available to Inland Revenue was to some extent alleviated.

The final deduction system did have shortcomings, however, and these were considered in Chapter 8 of the commission’s report. Although the retention and the refinement of the final deduction system has been recommended by the commission, the commission recommended that consideration be given to the introduction of a non-repayable standard tax on employees. This recommendation was examined in detail in the White Paper, and in section 5.7 of part 1 the Government’s intention of introducing SITE in the current bookyear was announced.

The SITE System affords the individual manifold benefits, most important of which is the elimination of the additional amount which is so often payable on assessment. For employers the system will be somewhat more difficult to apply, but comprehensive tables have been provided to them which will facilitate their task a great deal. It will also mean that tax deduction from the majority of the employees will today be determined by way of computer programmes. I wish to place on record my appreciation and thanks to the various computer bureaus that have provided Inland Revenue with valuable assistance in the solution of various problems that have cropped up. The SITE System is set out in detail in the explanatory memorandum made available to hon members.

Another Margo proposal that has been accepted is that a capital transfer tax be introduced instead of the existing estate duty and donations tax. As an interim measure, significant amendments to the existing legislation are being effected. The majority of these amendments are to be found in the Tax Laws Amendment Bill. The introduction of the uniform tariff of 15% on donations instead of the present scale with the maximum of 25% represents a significant concession.

It will be recalled that in Chapter 9 of its report the Margo Commission deals with the issue of writing off various types of expenditure and recommends, in general, that in the case of several assets the existing allowances, of whatever nature, be replaced by a uniform formula whereby the asset can be written off over three years, on the basis of 50% in the first year, 30% in the second year and 20% in the third year.

The Government cannot accept this recommendation unconditionally and has accordingly decided to limit the 50:30:20 rule to industrial and agricultural installations and machinery. Since the White Paper was tabled on 16 March it has been decided to extend the rule to certain installations and equipment used by co-operatives and to hotel installations and equipment. The Bill provides for all these changes which, in general, will be of great benefit to taxpayers.

Hon members will note that the commission’s recommendation that the cost of industrial, hotel and residential buildings be written off at the rate of 10% per annum has been rejected by the Government—see section 7.7, part 1 of the White Paper. Since then the matter has been given further consideration, and on 3 June the hon the Minister issued a Press statement in which it was announced that the allowance with regard to industrial buildings, storage places used by co-operatives and hotel buildings was limited to 2% per annum. In view of the urgent appeals received since 3 June, it has been decided to permit a more liberal allowance, namely 5% per annum, in these cases. Therefore it will now be possible to write off a hotel over a period of 20 years. Full details are to be found in the Press statement that has already been issued.

†In chapter 13 of its report the Margo Commission devoted considerable space to the problem of the valuation of livestock. Both the disadvantages of the present system as well as the problems of moving to some other system were examined. The solution put forward by the commission was, in effect, that a farmer’s livestock account be ring-fenced, in other words, that losses on his livestock account be available for set-off only against farming income. This solution will eliminate most, if not all, of the abuses that have been taking place over the past year or two through the purchase by wealthy taxpayers of an interest in expensive animals, but will not have an adverse effect on persons who are engaged in the genuine business of farming.

In paragraph 8.1.1 of Part 1 of the White Paper the Government accepted these recommendations, and provisions in the Bill will translate this decision into law.

I come now to the minimum tax on companies, or MTC. In Chapters 5 and 10 of its report the Margo Commission discussed the merits of such a tax but did not make a firm recommendation. When the Budget for 1988-89 was being prepared, the need to generate some additional cash flow for the Treasury made it necessary to reexamine the principle, and it was decided that in view of the small contribution which some prosperous companies were making to the fiscus, it would not be unrealistic to impose a simplified form of MTC based on dividends declared. The rate of the tax would be only 25%, as opposed to the 50% contemplated by the commission.

Since the announcement on 16 March, there has been considerable criticism of the principle of an MTC, and a number of representations have been received by the Department of Finance. All these representations have been taken into account in the drafting of the legislation, but it is clearly not possible to meet every case of real or alleged hardship. Hon members should note, however, that MTC is not and was never intended to be a final charge. It can be set off by the payer against any future liability for normal tax or provisional tax, and it will be refundable to the extent that it has not been utilised by 30 September 1991.

During the past three months assurances have been asked for that the MTC will not be reimposed. No Minister of Finance can give such an assurance, of course, but what has been said is that the tax will not again be imposed in its present simplified form. [Interjections.]

Hon members will be aware, however, from the announcement made in the Budget Speech and the provisions which appear in the 1988 Taxation Laws Amendment Bill that companies are to be allowed a period of one year in which to rationalise their group structures without incurring liability for transfer duty or stamp duty, and without any income tax implications.

Clearly the imposition of an MTC on dividends which are paid in the course of the rationalisation process would mean that no group could go ahead with plans in that connection and that the purpose of the moratorium would be frustrated. In order to remove all uncertainty in the matter, I therefore give the assurance that the MTC will not be imposed in any form whatever in respect of dividends declared during the moratorium period, that is from 17 June 1988 to 30 June 1989.

And after that?

I will deal with that.

I come now to the two changes arising out of decisions announced in the Budget Speech. The most important of these is the decision to retain the 45% rate of tax as the maximum rate applicable to individuals, but at the same time to provide for that rate to be reached at an income of R80 000 instead of the present R60 000. While this does not provide full relief from the effects of inflation, it will nevertheless provide a meaningful reduction in the amount of tax payable at any given level of income.

Next is the matter of the long-term insurers. In line with the announcement made on 16 March, the Bill provides for the factor used in computing taxable income to be increased from 40% to 70% of the insurer’s investment income. The method of determining the taxable income of long-term insurers is now being examined by a committee under the chairmanship of the Director-General of Finance. The committee has already had one meeting with the Life Offices’ Association, which represents the long-term insurance industry, and the next meeting is due to take place towards the end of July. At this stage it is impossible to predict when an acceptable solution to the problem will by found, and it must therefore be assumed that the new factor of 70% will stay in place in the meantime.

Clause 16(1)(c) of the Bill introduces an amendment which represents a valuable concession to married women pensioners, in that the special deduction of the greater of R2 250 or 22,5% of a married woman’s earnings is now extended to apply to a pension fund.

This deduction previously applied only to trade income derived by a married woman. It was never intended that it should apply to a pension, and since the introduction of the section in 1969 it has been accepted that it did not so apply.

Hon members may, however, have noticed the report in a local newspaper a few days ago of a case recently heard by the Natal Income Tax Special Court, in which it was held that section 20A in its present form does in fact apply to a married woman’s pension. The court’s reasons for coming to this conclusion are not yet available, and it is consequently not possible at this stage for the Commissioner for Inland Revenue to decide whether to take the case on appeal. Such an appeal would probably take some years to reach finality, and the intervening uncertainty would hamper tax administration considerably. The definition of “earnings” has accordingly been further amended, with retrospective effect, so as to confirm a long-standing practice of the Commissioner which has hitherto been accepted as having been based on a correct interpretation of the law.

Then there is the matter of tax avoidance which, as stated earlier, has not been overlooked. Announcements in connection with measures to combat tax avoidance have been made from time to time and the provisions necessary to translate the measures so announced into law will be found in the Bill. Clause 19, for example, introduces amendments to section 24F of the principal Act, which section lays down rules for the determination of the taxable income of film owners. Clause 8(1)(a) amends section 11(bB) of the Act so as to neutralise the effect of schemes under which the purchase price of livestock is artificially inflated by the inclusion of finance charges.

In recent months the tax planners have ruthlessly exploited another well-intentioned provision in the Act, namely section 11(gA) in terms of which the cost of, for example, a copyright or patent may be written off over a certain number of years. By means of sales of copyrights or patents within a group of companies large amounts of tax have been avoided. Clause 8(1)(c) introduces an amendment which will limit the deduction to arm’s length transactions.

Hon members are also referred to clause 21 of the Bill which is designed to limit the misuse of certain types of partnerships. These partnerships have been structured in such a way that the participants have claimed tax deductions in excess of the amount which they have at risk. In future the deductions allowed to any partner will be limited to the amount contributed by him to the partnership and any income actually derived by him from the partnership.

As stated in the Budget Speech, tax avoidance is a continuing cause for concern and we are determined to combat it with all the means at our disposal. Should any new scheme come to light between now and next March, an announcement in regard to the matter will be made, and the necessary amending legislation will be introduced as soon as possible and will apply as from the date of the announcement.

In conclusion, the Bill contains provisions which are needed for the carrying out of decisions taken by the Government and for the better administration of the Income Tax Act.

Mr Speaker, in the short time at my disposal I shall probably come back to some of the aspects which the hon the Deputy Minister touched upon in his introductory speech. However, please allow me to extend my sincere thanks to the hon the Minister for having arranged for us to have the printed edition of the Bill at 10 o’clock this morning. I think that is an all-time record since I first came to the House of Assembly. At the same time I must mention that a short while ago—not all that long ago—we were given the draft Bill with a very informative explanatory memorandum, and I want to thank the officials for that.

Thank the hon the Minister!

The hon member says I must thank the hon the Minister. I feel sorry for the officials, which is why I thank them!

Allow me, however, to make a few general remarks about the Bill. I also want to refer to a question which virtually comes up year after year, namely that of retrospective legislation. Let me say right at the outset that we are, in principle, opposed to retrospective legislation, except in very exceptional cases. It is therefore necessary for legislation to be framed as carefully as possible to give practical effect to its actual objective.

Let me give hon members two examples. In 1984 important amendments to section 22 of the Income Tax Act relating to trade supplies were introduced. However, there were shortcomings in the formulation of that section. The Receiver of Revenue later tried, through interpretation, to “force” the correct interpretation to be adopted, and in 1985 issued Practice Note No 3 to try to force private institutions to apply the provisions in accordance with his interpretation. It then became necessary, in 1986, for us to introduce corrective legislation, with retrospective effect to 1984, in order to comply with the meaning which the Receiver of Revenue apparently wanted to attach to the legislation, but which was not embodied in the wording of the legislation in its original form.

Last year, in 1987, we were asked to pass a new section 24F of the Income Tax Act. This referred to the film industry, and I think the hon the Deputy Minister has already referred to this. Now, within a year, we are again being asked to pass a new section 24F with retrospective effect to 7 April 1987, or 23 February 1988, depending on the particular circumstances. Today we again have to pass legislation with retrospective effect. The reason given for this in the Explanatory Memorandum is that section 24F is not clearly worded in some respects, and in other respects, according to the Commissioner for Inland Revenue, has not had the desired effect of curbing the rise of excessive marketing costs. That is another case of legislation with retrospective effect.

I also want to point out that the Explanatory Memorandum and the draft legislation were given to us very recently, and we have to take a final decision on it today, having only this morning received the final printed edition of the Bill. Such a situation is not conducive to proper consideration of the quality of legislation, nor can it lead to adequate debate of the legislation and ensure the best possible formulation.

For this reason I have a request to make of the hon the Deputy Minister. Could we not amend the procedure so that mistakes can be avoided? For instance, as a first step, could we not make it a practice that draft legislation will be available in draft form in this House at least six weeks before it is finally dealt with so that all interested parties, including private enterprise, will have the opportunity to make their contributions in the interests of important legislation?

The officials are overworked. With few exceptions, contributions to the present system are made by the officials. They are, after all, only human. If mistakes occur, and if the provisions of the legislation, as passed, do not make the real meaning clear, they are blamed.

With reference to this, I want to express a few thoughts on the question of obtaining legal certainty in these matters. It is absolutely essential to have legal certainty and a clearly defined relationship between the Receiver of Revenue and the taxpayer. Allied to this we now have the practical problem that the system has developed to such a degree over the years that, firstly, we have legislation which has been passed by Parliament and is of legal force and effect, but with the new methods which have unfortunately become a necessary evil, we now have legislation by way of Press statements by the hon the Minister in which he announces that as from today this or that will apply, and that he will rectify this later by legislation with retrospective effect to the day he made the announcement.

The Margo Commission referred to this, and I quote paragraph 27.51(d):

There is no fault to be found with this, because as I have already said, it is a necessary evil, and large-scale tax avoidance must be stopped in good time. For practical reasons this can only be done if the Minister issues a Press statement and tells the public at large that at the next parliamentary session he intends to introduce corrective legislation with retrospective effect to the day on which he made the announcement.

The most important component of the recommendation of the Margo Commission, however, is that the Minister’s announcement must not indicate vaguely that he intends introducing legislation, but must contain the precise provision which will ultimately be incorporated in the legislation. If this recommendation were to be accepted unconditionally and implemented by the Government, it would effectively contribute to a greater degree of legal certainty. Unfortunately, the reaction apparent from the White Paper on the Margo Commission was, shall I say, somewhat lukewarm. The White Paper explains that it is not always possible to frame legislation precisely each time an announcement is made. But the White Paper does accept that it should be done.

The Government’s reaction, as set out in the White Paper, is not wholly acceptable to us. Every piece of amending legislation relating to taxation, in fact every amending Bill to on any subject, should be formulated precisely and submitted to Parliament.

Why can it not be done in each case? Apart from exceptional cases, why can this not be done in any event each time the Minister makes a Press statement to the effect that he will submit proposals at a later stage? This would mean that the public would be given timely notice, through the Press statement, of exactly what to expect, and all uncertainty as to what was intended would be removed. It would also mean that the taxpayer would be in a position to work out his possible tax liability in advance. That is absolutely essential for proper tax planning, which is of the utmost importance in the business world today. The fact that the Government is not in a position, or is possibly not prepared—I do not know which—to accept Mr Justice Margo’s recommendation in its actual form, gives rise to uncertainty. I am referring, in particular, to the minimum taxation on companies announced in the Budget Speech of the hon the Minister, numerous questions having arisen about its implementation and how exactly it is going to work. I shall come back to that again.

I briefly want to refer to the standard income tax for employees, or SITE. I do not know how one would pronounce that abbreviation in Afrikaans. I think we shall just have to use the English “SITE”, because one can at least pronounce it. We know that the introduction of this legislation has been discussed by the Receiver with certain sections of the private sector. We think this is a good thing and a step in the right direction. I do, however, want to repeat that if draft legislation could be published in good time for public notification and discussion, it could only lead to better legislation which would eliminate the need for subsequent corrective measures by way of retrospective legislation.

I also want to refer to the minimum tax on companies. The Margo Commission recommended, as I understand it, that the possibility of a minimum tax on companies should be further investigated. The Margo Commission did not recommend that that taxation should be introduced because it, too, found that there was not sufficient time for them to examine this aspect properly. I think perhaps it is fair comment to say that there is no real indication that the introduction of this tax was properly examined before it was announced that the tax would be introduced. We should like to know from the hon the Minister whether this is the case.

One gains the much stronger impression, however, that the hon the Minister of Finance will have cash-flow problems in the present tax year and that a method must urgently be devised for finding the few extra cents. My experience as an MP has taught me that when a farmer comes to me and tells me he has cash-flow problems, I know he is as close to the insolvency court as he can get. I do not know what the Government’s position is. [Interjections.]

But what is the effect of this new minimum tax on companies? The Bill describes it as a tax, but in reality it is not a tax. In reality it is an interest-free loan which the Government is negotiating with the relevant taxpayers. The effect of this is that there is discrimination in its application to companies which have not transgressed any tax law, but have made legal use of concessions granted to them in existing tax legislation. In spite of this we are now expected, by artificial means, to compel those companies which in the normal course would only have become liable for taxation at some later stage, to pay in advance.

The hon the Minister explained to us this morning—this is in the Bill—that if a portion of that money which has to be paid before 30 September, has not been used by as late as 1 October or 30 September 1991, the balance will be repaid to the taxpayer. However, nowhere in the Bill do I see provision being made for the State to pay interest to the taxpayer on the over-payment. It is therefore nothing but an acceleration of actual tax liability which might come into operation later.

I read the following comment in Finansies en Tegniek by someone who is apparently an accountant. He said:

That sounds like Jan van Zyl!

I wish the hon member for Umlazi had the intelligence of Jan van Zyl. [Interjections.]

What is the net effect of this? The introduction of this so-called minimum tax on companies which, as I have already said, is not a tax, but an interest-free loan to the State, might assist the hon the Minister this year to bridge his cash-flow problems, but because the advance payment of this money may be written off this year—I do not know if I am using the right words—against the tax liability of the company next year, it will of necessity mean that the income of the Treasury for the next financial year will be smaller by an amount equivalent to the advance payment.

I seem to remember having heard it said that it will be a one-off exercise, but experience has taught us that a one-off exercise by the tax collector becomes standard practice for the future. Unless this tax now being introduced becomes standard practice for the future, in all probability it will inevitably result in the hon the Minister having possibly greater financial problems next year than he has this year.

We are satisfied that the necessary measures are being adopted—some of them have been comprehensively dealt with in this legislation—as far as tax avoidance is concerned. There has been an enormous amount of tax avoidance by way of livestock purchase schemes—hon members all know this—and this is really nothing short of tax evasion.

I want to repeat, however, that we are of the opinion that existing legislation must be examined forthwith and made available for general information as soon as possible so that the private sector, which is willing and able to do so, can assist the department with the formulation of policy to achieve the required objectives.

I make an earnest appeal to the hon the Minister to do everything possible to implement better procedures in future.

Mr Chairman, the hon member for Barberton will forgive me if, before I come to him, I very sincerely congratulate the hon the Deputy Minister who is a newcomer to this post. I must tell the House that the hon the Deputy Minister was greatly honoured by the joint committee which complimented him on his approachability and knowledge of his subject. It is not often that that can be said of a Minister who takes over a new post.

Hear, hear!

I agree with the hon member for Barberton that it is extremely inconvenient to receive legislation at so late a stage, and that this greatly limits the positive contributions. At the same time, however, I should like to say a special word of thanks to Mr Kingon and other officials of the Department of Finance for their guidance on this very complicated piece of legislation and for their readiness to explain what it is all about to people who, like myself, know nothing about this subject. One only needs to see the documents they drew up for us to be able to appreciate this. The hon member for Yeoville is sitting over there with a grimace on his face. He is welcome to do that, Sir, but we shall carry on regardless; perhaps we will be like him one day. [Interjections.]

I hope not.

Well, he did get a very nice award!

I want to come back to the hon member for Barberton. He made the typical CP mistake today of propounding two directly opposing ideas at the same time, trying to play both ends against the middle and then expecting us to believe him. He complained in the first place that we had not received the legislation in good time and could therefore not make a meaningful contribution, and in this connection I agree with him.

A little later, however, the hon member said the Minister should make an announcement when he realised there was a problem. He maintains that the Minister should say precisely what the remedy would be when he makes the announcement. In other words, the Minister must say precisely what statutory amendments he is going to introduce. If that were done, it would emasculate the joint committee; then the joint committee would have no further contribution to make, because at that stage the Minister would have finally said what changes he would be introducing. It is as simple as that.

I want to come to the following point. Most people who fought the previous election with me will know that the CP won a lot of votes because they pointed out the extent to which company tax contributions to State revenue had decreased from 1981 up to the present, and that the burden of taxation fell very heavily on the individual. They placed great emphasis on this to the detriment of Government policy. The Government has now taken the remedial steps which are necessary to distribute tax more evenly, to tax companies and, in so doing, to grant a rebate of R1,2 billion to the benefit of the private taxpayer. Now the CP is complaining about this, Mr Chairman. That is really not fair!

The hon member said further that the Act should not be made retrospective, because the businessman must know where he stands. However, the point of departure of the Margo Commission was that no Act should put any person in the position of being able to decide what business he will conduct on any basis other than a business one. What it amounts to is that when someone decides he is going to enter into a certain transaction, his point of departure must not be that the other taxpayers are going to help him pay for it. Nor must his point of departure be to find and exploit loopholes in taxation legislation.

At whom are these amendments in this measure aimed? Why is the proposed section 12B being inserted in the Act by clause 11? Do hon members know at whom it is aimed? It is aimed at those who take the small entrepreneur for a ride; at those who deliberately take a chance when they find a loophole. I refer again to the example I quoted here a few months ago. It concerned the sale of a horse—a horse worth R65 000. In the end that horse realised an overall amount of R1,4 million for the people involved in the scheme. Most of the money they put into their own pockets was the proceeds of tax evasion. Those are the people we must guard against.

In these circumstances it is not wrong to have retrospective legislation to deal with such individuals. In fact, it is the only way we can succeed in re-instilling honesty into our people in regard to tax liability. People must learn that they cannot go on doing things which are prohibited. When it is decided to put a stop to this, it must be stopped. People must not think that they can evade responsibility for the wrong they have done in the past.

In the time still left to me I should like to raise a few matters relating to the advantage the present legislation will have for the agricultural sector. In the first place, I should like to refer to clause 11, in terms of which a new section 12B is being inserted in the principal Act, and also to clause 39, in terms of which paragraph 12 of the First Schedule to the principal Act is being amended. This brings farmers’ deductions for the purchase of equipment to the same level as that which applied with regard to mining, agricultural cooperatives and other manufacturers. This could generate a cash-flow problem in the agricultural sector. In the past 100% of the purchase price of equipment could be written off in the first year, but this has now been changed to only 50% in the first year, 30% in the second year and 20% in the third year.

The 100% deduction in the first year after purchase of equipment was one of the contributory factors which led to farmers spending money too quickly as a hedge against inflation, thus landing themselves in financial difficulties. Unfortunately our other plea, namely to be allowed to invest money interest-free with the Land Bank, money which would only become taxable on demand, did not materialise, in conjunction with this reduction, which we regarded as essential.

A further point in this connection is that the hon the Deputy Minister, by way of the present wording of clauses 11 and 22, has ensured that there will be an end to anomalies such as the writing off of high costs outside agriculture for tax purposes. I think the hon the Deputy Minister said in this connection that he had “fenced off’ the relevant expenditure.

What this amounts to is that in the past a parttime farmer could, for example, write off a loss on the purchase of livestock—say, for instance, the loss amounted to R100 000—against some other income of R100 000. By so doing he paid no tax at the end of the year. Specifically owing to the case of the racehorse, to which I referred earlier, this change has been brought about. This matter has now been rectified. A farmer will now only be able to write off his losses on livestock, for instance, against other farming income.

I think this is a very important aspect, and I want to tell the hon the Deputy Minister that as farmers we have absolutely no quarrel with him on that score. To tell the truth, we as farmers are very grateful that the Government has now restricted those outside agriculture who have abused agricultural concessions which were intended to keep farmers on their farms. It is this sort of behaviour which gives farmers a bad name. This applies equally to diesel. The hon the Deputy Minister will know what I am referring to.

I have an idea I shall have to talk very quickly if I want to indicate what else the farmers are grateful for. I am referring to the fact that the deduction which is allowed on grain silos for income tax purpose has been raised from 2% to 5% per annum. I think this is a far more realistic value. In the times in which we live, in which co-operatives are also going to be taxable, it will prove to be of great benefit to our co-operatives.

I have pleasure in supporting the legislation under discussion.

Mr Chairman, the hon member for Heilbron is somewhat modest in regard to his knowledge of the law relating to income tax. However, I think it is fair to say of him that he is not only a trier, a bulldog who never lets go once he has his teeth into something, but in my view he is also going to turn out in this House to be the tax champion of the farmers. Whenever we deal with any measure which relates to tax, his first question is: How does this matter affect the farmers? [Interjections.] There is no doubt in my mind that should the hon member for Heilbron cease to be a member of Parliament there is a good future awaiting him as a tax adviser to farmers because he will be well qualified on that issue in the future.

Does the hon member want to be my electoral agent? [Interjections.]

I am not sure that that will help him in an election!

As far as this Bill is concerned, I propose to deal broadly with two aspects. In the first instance, I want to deal with the Bill as such and its implications and, secondly, I want to respond to what is actually an invitation on the part of the hon the Deputy Minister to debate some of the provisions of the Margo Report which are not only relevant to the Bill but which I also think it is important for us to debate.

Before dealing with this matter, I want to say that both the hon member for Barberton and the hon member for Heilbron discussed the question of tax evasion. I am on record in this House not once but many times as saying that if some people abuse the tax system, other people have to pay more, and therefore one has to take steps to ensure not only that those who transgress the law are punished but that loopholes are also closed. However, we have to be careful to draw a very clear distinction between evasion of the law on the one hand, and the legitimate use of the law as it stands, which is sometimes referred to as avoidance, on the other. In the third instance there is also the right of the fiscus to deal with an avoidance provision and to close such a loophole where it is regarded as being socially and economically undesirable for that loophole to remain.

I have no problem in regard to the question of evasion where the firmest possible action is taken. I have no problem with the fiscus closing an undesirable loophole. However, I do have very grave reservations in regard to a situation where what a taxpayer does is perfectly legal when he does it, when he goes to court to establish the legality of what he has done, and then, pending an appeal, a provision is brought into the law in order to negate that legal action at the time on the part of the taxpayer and turn it into something illegal.

What makes the situation even worse is that, until this morning just before lunchtime, we did not even know that that provision was in the Bill. When the joint committee considered the provisions of this Bill and received certain explanations, this provision was not there. [Interjections.] We were given an indication that because of the Natal judgement there might be some legislation in this regard. However, until we looked at the Bill this morning the question of retrospectivity in regard to married women and the pension provisions had never arisen. If hon members will consult the roneoed pages we were given—I think it is page 33—they will see that that provision is not there. The clause has been renumbered so it is quite easy to verify this fact. What is now happening in regard to this particular provision is that it is being made retrospective to 28 February 1969.

When someone has gone to court and won a case in a legal fashion, it is not proper for a legislature to change the law retrospectively while there is an appeal pending. When one closes a loophole, one does so in order to make sure that people cannot use it in future, but I submit with all due respect that one cannot interfere with litigation so as to make one win a case which one should actually have lost in terms of the law as it stood. I think the hon the Deputy Minister will agree with me that that is not the moral way in which we should behave. If we criticise the taxpayer who is immoral, we have to be careful that we pass the same test of morality. I would ask the hon the Deputy Minister to reconsider this matter.

While we are on the subject of what we were given before and what took place at the briefing—I do not want to go into the problems of having received this Bill in printed form only at 10h00 or 11h00 today—let me say firstly that I think the Rules should be changed so that the joint committee can deal with taxation legislation properly. At the moment the Rules are of such a nature that this cannot be done; on the contrary, it is an act of grace on the part of the hon the Deputy Minister and the officials that they explain the Bill to the joint committee. I would like to express my thanks to them for the trouble they took, not only in coming to the committee and offering explanations, but also in producing copies of the Bill in a roneoed form, even at a very late stage on Friday and in amended form.

However, allow me at this point also to voice some criticism of our committee. Ours is a good committee, but I think most of its members had a nerve not to bother to turn up when the Commissioner for Inland Revenue and his staff gave up their valuable time in order to explain a tax measure to us.

Who was late?

Yes, I was late, but I came and was there long after everybody else had gone. Other people did not come at all. [Interjections.] That hon member was late.

No, I was on time!

I was a little late. [Interjections.] I am not criticising those who were late. What I am criticising is the fact that those people spent hours there—I spent hours with them—and yet, in the end, hardly anybody was there. [Interjections.] Their time is as valuable as anybody else’s, so when we thank the officials, we need to bear in mind that we cannot abuse their time, and that their time is valuable too.

This is of course the first true post-Margo tax Bill, and its provisions have to be considered together with the Government’s White Paper, as well as the report itself. In regard to the implementation of those parts of the report that have been accepted, it appears that the authorities have decided on some priorities.

The first priority that has become apparent is that they want to tighten up the collection mechanism. That has been done to a considerable extent, but has not yet been done completely, as I see it.

Secondly, the switch from GST to VAT is intended at least partly as an implementation of this tightening-up. One of the reasons why we are getting VAT is in order to tighten up collection procedures. I think SITE also falls into this category, because it actually tightens up procedures. It makes sure that while one is being amenable to the taxpayer, one is also making sure that one gets one’s tax. All of this is really part of a tightening-up mechanism. In other words, it is designed to make sure that the fiscus gets the money due to it.

The second priority appears to be a question of the phasing out of allowances. In other words, we are phasing out allowances so that we will have a degree of tax neutrality. This is being accompanied by some minor concessions such as, for example, the benefits for working wives having increased and a degree, which I must call a relatively small degree when one looks at the absolute figures, of relief from bracket creep.

The criticism of what the Government has done in regard to its priorities, however, is that, while it has tightened the tax laws, while it has removed the allowances, the spirit of the Margo Commission was that these measures would go hand in hand with tax reduction. Those tax reductions have not been given in correct and full measure. For example, when one takes the question of tax on dividends, one sees that it still exists in the same form as it was. In fact, the level of company tax has remain unchanged too. The reduction in personal income tax is an inadequate measure in order to compensate for what has taken place in regard to the other measures taken by the Government.

From that point of view, therefore, it is quite clear that what should have gone hand in hand has not gone hand in hand. The fiscus has decided to get as much as it can in the first instance, and then it will consider what can be dished out to the taxpayer in the future. In addition to that, I think the Government has blemished its tax reform measures with the ill-conceived proposals of MTC, and has also failed to address major problems in tax such as the question of certainty in regard to dealing in shares and property.

To my mind tax has to fit into an overall economic scene. One cannot take taxation as being isolated from the whole economic scene. Fiscal policy is to be used in order to achieve economic objectives. South Africa is a prisoner of its balance of payments which inhibits economic growth, it has a chronic unemployment problem which threatens stability, and it has a maldistribution of wealth which is rooted in its history.

When this measure is tested against these problems, I venture to suggest that the Bill has not achieved much in dealing with these particular problems. Firstly, it does very little, if anything, to encourage investment; on the contrary, with the abolition of some allowances and without adequate compensation on the other side, it could be regarded as discouraging in certain of its aspects; secondly, it does very little to encourage savings, and there is a serious problem in relation to savings. If I have time, I will come back to that; thirdly, it offers virtually no incentives for job creation; fourthly, it does very little in regard to the question of exports; fifthly, it does nothing in regard to the encouragement of import substitution; and lastly, it does nothing in regard to the process of redistribution which could be achieved through greater share ownership.

The Government’s own White Paper has said that it, for one, wants to encourage it and, insofar as fringe benefits tax is concerned, for instance, it wishes to exclude share incentive schemes from this. However, there is still insufficient incentive to encourage share ownership by the worker in South Africa. There needs to be greater incentive. I have previously given examples from other countries where this is being done. As far as these things are concerned, there is therefore a gap in the whole of the underlying philosophy which should be involved in this Bill.

In regard to the MTC about which the hon member for Barberton has spoken and about which we have also spoken in previous debates— and will speak about in an even greater measure in the future—the Bill does not address itself to two very real problems. One is the question of disinvestment which is a threat to us in South Africa, and where, in fact, this tax encourages rather than discourages.

It does nothing to help exports, something which could be of great consequence in dealing with the balance of payments problem, if there were greater encouragement in that field.

One of the things which are really not understood about the whole concept behind this is, if the fiscus agrees to give allowances, if it agrees to allow people to reduce their taxable income, because that is part of their policy, and as a result of that their taxable income is reduced because they legitimately use, for example, export allowances which are granted to them, how there can be complaints that those particular taxpayers are not paying the tax. They are doing the very thing which they are encouraged and asked to do. It is utterly illogical to say to them then that because they have done what they were required to do they are going to be taxed. It is ridiculous in the extreme and it is illogical to do it retrospectively.

To my mind the whole question of allowances should be far better planned. It should not suddenly be announced that certain concessions are being done away with, as happened with the hotel industry, for example. There the announcement in the Press had to be changed. There should be a proper programme in order to deal with this. It is also clear, on the other hand, that whereas suddenly these legitimate allowances are done away with, schemes which are clearly socially unacceptable, as with the examples of the bloodstock scheme to which the hon member for Heilbron referred, and the film scheme, are allowed to run for years and years before any action is actually taken. Therefore, on the one hand the hon the Deputy Minister acts precipitately and on the other hand, not at all for a very long period of time.

I would also like to deal with what I call “taxation by announcement”. The question of the hotel industry is a classic example. In that case there was an announcement made, but the hotel industry did not even know about it for days. One does not know where to find the announcement, and the hon the Deputy Minister fell into the same trap when he said during his speech introducing the First Reading that further details of this could be seen from the Press announcement. Where is the Press announcement? We do not know what is in it. We do not know whether the Press is reporting it accurately. When it comes to the question of accuracy in the Press I would imagine that hon members on that side of the House are their greatest critics. Yet they rely upon the Press as a means of communication of important tax changes to the public. This cannot be the way in which laws relating to tax are made. One cannot have taxation by Press announcement. It is not the best way to do it, and it is certainly not acceptable.

Let me deal with the question of the insurance industry. The whole issue of dealing with insurance taxation received considerable attention in the Margo Commission Report. Certain recommendations and comments are made in the White Paper, but we are still as much in the dark as ever in regard to the taxation of the insurance industry. One of the problems which arise is that of uncertainty. Let me put a point to the hon the Deputy Minister which to my mind appears to be fundamental to the whole issue. Is the issue of insurance one relating to the ability of the individual to protect himself against certain contingencies, the worst of which of course is death, or is it to be a method of investment? That distinction needs to be drawn clearly. As I understood it, insurance was originally intended to be a method of protection. One protects oneself as a young married man in case one dies and leaves a wife and children. One protects oneself to make sure that if something goes wrong in one’s life those dependent on one are cared for. The concept of insurance as an investment is a relatively recent innovation in our community. This is not only the case in South Africa, but world wide.

In this respect we find, for instance, that in the UK people also complain that insurance companies pay lower tax than any other company. They do indeed pay lower tax because they are allowed to deduct the full costs involved in acquiring new business. Therefore, the faster one grows and the bigger one becomes in the UK, the less tax one pays. That is not the situation here. However, what is now happening in the UK, is that it has been decided that something had to be done about that tax, and a working paper has been produced—which I suggest should also be studied—in which three alternatives are set out. Firstly, the paper states that the policyholders should be taxed directly each year on the income on their investment. I must say I think that is ludicrous. This alternative is unrelated to reality, and anyone who wanted to introduce it, considering the administrative problems—let alone the tax problems—would be foolish to do so.

The second alternative is to tax companies on the change in their reserves each year. Again, this seems an illogical basis of taxation. It is true that the reserves will go up as greater profits are made, but the question arises whether those reserves come about as a result of capital gains or as a result of income. So in the UK a situation exists where income and capital gains are virtually equated. However, we are not in that situation.

The third alternative deals with the question of restricting the extent to which any expenses can be deducted—which is what we are already doing at the moment in South Africa.

It is clear therefore that they do not have the answer at all. So my plea is that, irrespective of what answers may or may not be available, we have to deal with this matter quickly. Uncertainty will do tremendous harm to the financial sector in South Africa, so I ask that we remove that uncertainty.

The same comment applies to retirement benefits. I think we have to remove that uncertainty in this respect, and we have to make it absolutely clear where people stand, also in respect of the distinction between the retirement benefits in the private and public sectors. I wonder how many hon members of this House have actually read the report of the Margo Commission as to what may or not happen to their own retirement benefits. I advise them to read it.

We have to remove the difference between the private and public sectors. Even more important is that we have to remove the uncertainty that is hovering over the whole question of insurance benefits and matters of that sort so that people will know what is going to happen to them and can plan accordingly.

I want to come back to the MTC issue for a moment and the announcement of the hon the Deputy Minister when he gave an assurance that he would not impose MTC during the period in which the re-organisation of companies in regard to their exemption from stamp duty was taking place. No assurance for the period beyond that was given. That is significant. He only gave an assurance in regard to that period. What is so illogical, is that the re-organisation may take place only during a particular year. Therefore, if one is going to re-organise companies, it is logical to allow those companies to re-organise as and when the occasion arises. Merely to have that moratorium in respect of stamp duty for a year, is to my mind utterly illogical. We are also perpetuating that illogicality by saying that there is going to be no MTC during that period. So now there is another sword of Damocles hanging over everyone’s head.

What I find remarkable about this whole issue of the MTC is that if one takes the trouble to read the White Paper, one finds on page 13 the following recommendation in regard to MTC:

However, one should not read this White Paper at length.

When one reads page 58 of the Government’s White Paper dealing with MTC, one sees that it states:

Which part of this White Paper am I supposed to believe? Which part is correct? In reality what has happened, is that the Government has a schizophrenic policy on MTC and then it decides, for cash flow reasons, to introduce what I regard as an illogical tax. This is a tax which, if anything, is harmful to what we seek to do in regard to such matters as discouraging disinvestment and encouraging exports.

When one analyses the proposals in this regard, for instance the provision that if one has disposed of one’s shares before 24 June of this year one is not subject to this tax, it certainly helps insofar as where people have bought in the case of disinvestment. However, it also helps everybody else who decided to do that after the announcement of the tax. It then states that if one winds up one’s company by 30 September, one does not have to pay the tax. It is now 27 June so people still have time to decide to avoid this tax if they want to wind up a company by 30 September. One can wind up a company and do a reconstruction scheme to have the whole business in another company. We will then have to come back with retrospective legislation, if we think that is wrong. That again would not be the correct step to take, because people are quite obviously entitled to take what is now stated in this Bill at its face value.

I also want to deal with the question of deductions for educational purposes. We are entering a new era in regard to education in South Africa where parents will have to pay more out of their own pockets for the education of their children. That will certainly be the case in the White community. In those circumstances, is it not logical that expenditure which is incurred by parents on the education of their children should, within certain prescribed limits, be deductible for tax purposes? If one wants to build for the future one should invest in the education of young South Africans. I would like to commend to the hon the Deputy Minister that that should not only be considered but that we should also have legislation in order to deal with it. I think it is important that something is be done in that direction. There can be no better investment than to allow that to take place. We give many incentives for many things. We give incentives to buy machinery, we give incentives for people to make films, we give incentives for all sorts of things. I can think of no better incentive than, to educate the children of South Africa.

Let me also, if I may, just touch on the question of medical expenses. We have changed the law here and one can now only claim either if one is over 65 or, alternatively, if the amount is more than R1 000 or 5% of one’s income. I must tell hon members that I believe this is hitting at the middle class. The middle class is the one that is hurt the most in most of the taxation measures. I would ask that, insofar as the retrogressive step that has been taken in regard to the deduction of medical expenses is concerned, that this should be reviewed and changed.

I want to touch on a couple of other subjects, including toll roads. I want to make a forecast to the hon the Deputy Minister. Toll roads are going to become a tax shelter. The hon the Deputy Minister will have to introduce legislation to deal with it. It has not been phrased in a satisfactory way in this Bill. It is creating new tax shelters which will result in problems in future. I am not a soothsayer—the Bible says to be a soothsayer is actually a sin—but I want to be just a forecaster. I do not like toll roads at all, but now I will have a toll road tax shelter which I will like even less. I think, that should be done away with.

Harry the sinner!

We are all sinners but some of us repent and others commit more sins, so it does not really help.

There are still many things that we can talk about in regard to the report of the Margo Commission. The question of group taxation has been rejected by the Government but I think it should be reconsidered. We are giving a concession to companies in regard to reorganisation and stamp duties. A good case can be made out for group taxation as it exists elsewhere. [Time expired.]

Mr Chairman, it is a privilege indeed to speak after the hon member for Yeoville, and it is also a privilege to serve with him on the Joint Committees on Finance and Public Accounts. The hon member for Yeoville is an example of the fact that a member of the opposition is still, through the medium of constructive criticism and positive suggestions, able to make a contribution to assist in placing more effective legislation on the Statute Book. It is instructive for a young member to serve with him on these committees and to note his contributions there. I thank him for that.

There is, however, something about the hon member for Yeoville that one finds very difficult to understand—I should like him to explain it to me one day—and that is how he succeeds in remaining a member of such a dying and struggling party.

Oh, rubbish! [Interjections.]

This year’s parliamentary session will, inter alia, be remembered for the important economic policy guidelines that have been spelt out. While the Opening Address of the hon the State President and the later Budget Speech set out ideals and policy covering a wide spectrum, the annual debate on the Income Tax Bill is an important occasion to give practical form to a large part of the fiscal policy of the Government. The policy goals in the Opening Address and in the Budget Speech find expression in this Bill in quantifiable rules and tables. While to the uninformed reader taxation legislation may appear to contain lofty and incomprehensible fiscal concepts, these are in effect practical provisions which directly affect the lives of all of us in some way or other. They affect a person’s pocket or purse. They make a person’s purse thinner or thicker and influence one’s way of life.

One of the most topical and controversial aspects of income tax is the position of the married woman and the way in which she and her spouse are taxed. I should like to make certain remarks in this regard, particularly in the light of the influence of this year’s Income Tax Bill. It is true that in the past there has been a regular chorus of criticism levelled against the taxation position of the married woman, but I am convinced of the fact that we are giving too little attention to the particular way in which married women have been assisted this year in the Income Tax Bill. The Government and the Commissioner deserve great credit for this. The way in which the position of married women is being improved by this Bill is far more than simply a gesture of goodwill; it is, in fact, a substantial concession. It is estimated that the total amount which the Exchequer will forfeit as a result of this concession is about R500 million. Hon members will agree that it is far more than just a gesture when married women are assisted in this way.

The savings applicable to married women are effected by means of a few provisions, the most important of which is that the income of a wife earning no more than R20 000 per annum will not be added to that of her husband but that her tax will be determined according to the new scales and the new so-called SITE system to which the hon member for Wynberg will perhaps refer more fully at a later stage.

When hon members take into account that more than 83% of all working married women earn less than R20 000 per annum, they will realise that this measure contains a real benefit for many people. Critics may be able to say that this still does not amount to the completely separate taxation of married men and women. However, the fact remains that absolutely separate taxation will entail an estimated loss of R3 billion per annum to the Exchequer, which cannot be justified.

This loss would then, of necessity, have to be made good elsewhere. It is interesting that of all working women, only 38% are married. While it is they who sometimes complain, completely separate taxation would result in 62% of unmarried, working women definitely having to pay higher taxes. Mr Chairman, every sensible man will be able to say that it is safer to listen to 38% of complaining women than to 62% of complaining women. [Interjections.] Nor must we forget that, as I have already mentioned, 83% of the women out of the group of 38% of married women will benefit from the new SITE system. I may also just mention that the disadvantage of separate taxation does not simply lie in the loss which the Exchequer will have to make good elsewhere, but also in the fact that it will bring with it unending administrative problems. The handling of child abatements and their distribution between spouses, unending cross-references and cross-controls, are all matters which aggravate this aspect.

In conclusion, I just want to mention that there are also other provisions in the Income Tax Bill which benefit the position of the married woman directly or indirectly. Lower scales of taxation, as well as the higher maximum tax bracket of R80 000 per annum, also benefit the position of the married woman indirectly. Furthermore it is true that where a wife’s earnings are added to those of her husband, in the small percentage of cases in which this will still happen, a deduction of 22,5% or R2 250 can still be made. The position of the wife is also being improved in that an annuity which a married woman receives from a pension fund or a retirement annuity fund will also now qualify for this deduction.

Mr Chairman, I want to conclude by saying that this side of the House has been the friend of the woman for many years now, and with this Income Tax Bill we can now also certainly lay claim to being called the friend of the married woman.

Hear, hear!

Mr Chairman, in following on the hon member for Rissik, I too would like to make some comments on the position of the married wife, but before doing so … [Interjections.] I apologise for the Freudian slip, Mr Chairman, but I think my intention is clear …

That makes it even worse! [Interjections.]

I am not going to get over that one! [Interjections.]

Mr Chairman, let me start again. [Interjections.]

It has been said before that in the Margo Commission’s report there is a wealth of information relating to tax and economic matters. I believe that this information will serve as a text on these subjects for many years to come and, although it has been said before, I would like to re-emphasise our thanks to the people who served on that commission for the very valuable work that they have done. I mention this because the Bill we are discussing today deals with many aspects flowing from the Margo Report. One of these is the recommendation not to tax married couples jointly, but as individuals, a recommendation which the Government was regrettably unable to accept in toto. As has been said, much allowance has been made under the proposed SITE method of collecting tax and we accept that as being an improvement. The commission has recommended that the individual replace the couple as the taxing unit, and one only has to read Chapter 7 of the report to appreciate the enormous amount of research, including comparisons between various countries, which has led to this conclusion.

The commission recognised that such a change would involve a significant loss in State revenue but believed at that time that the proposed comprehensive business tax would compensate for this. The CBT—as we now know—was not accepted and therefore it is not possible to accept the full proposal to change the unit of taxation from the married couple to the individual.

We have no argument with this decision under the present circumstances. What we believe is important is the acceptance of a principle, for which there are compelling reasons, and for which this party has fought for many years. The fact is that South Africa is a developing nation, with a grossly inadequate growth rate and a drastic shortage of skilled personnel. Better utilisation of women in skilled work would alleviate this shortage but the present system of joint taxation has been a discouragement to them. The report finds, and I quote:

The report provides ample evidence of their findings that married women should be separately taxed. We therefore regret that this recommendation could not be fully implemented. The arguments are convincing and we believe that the Government, having now accepted the principle of separate taxation, should continue to strive to meet this objective. This concerns women who provide very necessary skills, and who, if they are of a professional nature, would tend to be earning in excess of R20 000, especially if they are university graduates. Therefore, although the SITE recommendation is certainly an improvement on the situation it does not deal with women in the higher-earning categories.

In the light of that we fully support the formation of a permanent Tax Advisory Committee, and believe one of its prime objectives must be to examine how this recommendation can by more fully implemented.

Despite rejection by ourselves and criticism from many quarters—both the hon member for Yeoville and the hon member for Barberton have taken issue with the question of minimum tax on companies as an income-generating cash-flow measure—this tax is anticipated to raise some R350 million by March 1989, and we still believe it is a mistake. The Government could have raised this money in some other way.

In what was at that time the Second Reading debate on the Appropriation Bill I argued that the introduction of this tax was retrospective, that it conflicted with undistributed profits tax, that it would tax capital gains, that it was highly selective and violated the principle of neutrality, and that it penalised companies which effectively made use of available tax concessions. I think the hon member for Yeoville made this point particularly clearly just a few minutes ago. These objections remain, and we are therefore opposed to this Bill.

We welcome the concession which this Bill now contains that the balance of the tax which has not been set off against normal tax payable, will be refunded by 1 October 1991.

The third subject I want to touch on concerns the hotel industry, where there has been much concern following the withdrawal of the grading and investment allowances in respect of hotel buildings. Also the allowances for hotel equipment under section 12A of the Act are to be replaced by the proposed Margo write-offs of 50%, 30% and 20% over three years.

The problem arises where in the past selective incentives were introduced into our tax system to promote specified industries. To understand these changes which are now being made one has to refer again to the detailed text of the Margo Commission report. The problem is that incentives are by their very nature selective. Paragraph 18.93 of the report summarises the position and states that there is almost no activity carried on which cannot be shown to benefit from a reduction in taxation. However, if one activity is relieved of its share of tax then other sectors must bear a correspondingly high share or public services must be reduced. The commission concluded that it generally did not favour tax-based incentives, except in very special circumstances.

It recognises that certain sectors may require additional encouragement for strategic reasons, but says these should be by way of special subsidy schemes allocated and administered by departments or authorities closely involved with those sectors. In this way the tax system is kept pure and the cost of incentives is highlighted. We support this principle.

The proposed changes to hotel tax allowances merely follow the implementation of these recommendations, and we support what has been done. It is nevertheless cause for concern that hotels presently on the drawing board may now possibly be shelved. Whereas the tax incentives have been removed, on the one hand, the question of additional direct subsidies to the hotel industry has not yet been resolved, and we believe this has to be done as a matter of urgency.

We understand this is being examined sympathetically, as is the cut-off date for the withdrawal of these tax incentives. I urge the responsible hon Minister to act swiftly in order to avoid disruption of the vital and strategic role of the hotel and tourism industries.

Mr Chairman, the hon member for Pinelands started his speech today with one or two Freudian slips. He spoke about the fact that he was a student of the position of the married wife and said that his intentions were quite clear. This makes me think that at times the hon member not only reads Keynes but Kinsey as well!

This Bill contains 46 clauses covering some 63 pages together with an explanatory memorandum of some 50 pages. The officials who are responsible for this documentation are to be congratulated on their hard work and also for their evidence before the joint committee which was most valuable, together with their personal assistance in explaining certain aspects of the Bill which was also most appreciated.

Many of the clauses in this Bill are of a textual or consequential nature, and the general thrust of the Bill is towards tax reform following upon the work of the Margo Commission and the subsequent White Paper.

It must be pointed out that effective rates of tax have been reduced for individuals yet again despite certain pre-election predictions on the part of certain parties that they would increase. On the question of taxation it is often quoted that in this world nothing can be said to be certain except death and taxes. However, many of us are inclined to forget who originally made this observation. It was Benjamin Franklin. In his turn, Adam Smith had this to say:

A Frenchman, Jean-Baptiste Colbert stated that—

It was Mark Twain who asked this question:

The answer is: That a taxidermist takes only your skin!

I thought that today the hon member for Yeoville would arrive here with a double-barrelled shotgun loaded for boar; that one cartridge would have written on it MTC and the other TILT, the taxable income of long-term insurers. Those of us on this side of the House appreciate the way in which he went about discussing this Bill—with constructive criticism.

*I found it interesting that the hon member for Barberton did not mention the issue of tax on life insurers.

†I do not want to become involved in the argument that is going on both inside and outside this House on the question of long-term insurers except to say that in certain quarters the matter is becoming emotionalised in that the impression is being given that the evil taxman is unfairly dipping his fingers into the savings purses of lots of little old ladies.

I think that the principle of the matter is equity in taxation. At present the roles of banks, building societies, insurance companies and other institutions are overlapping, and tax advantages enjoyed by one group over others should not be allowed to distort the market place.

Two important innovations in this Bill are the introduction of SITE and its application to the remuneration of married women. My colleague, the hon member for Rissik, has dealt adequately with the question of married women. I believe that SITE is designed to induce savings in the administration of the Receiver. It is true that this administrative burden will be taken over by the employer, but this relief will enable the scarce manpower resources in the Receiver’s office to be put to more efficient use catching those who are escaping with millions as opposed to sorting out claims for trivial amounts.

The Commissioner and his officials are to be congratulated on the original thinking that went into the introduction of SITE. I believe it is a world first for South Africa, and those responsible for its conception are to be highly commended.

It is difficult to quantify the savings in administration that SITE will realise, but the guesstimate is that something like 830 000 returns will no longer be processed by the Receiver. This does not mean that SITE will not be policed; on the contrary, effective control will be a priority.

At present the Receiver has to process 200 000 refunds annually and, at times, 25 000 manual refunds are undertaken per month. There were occasions on which up to 1 500 individuals descended on a single office in one day, and that certainly reminded me of a scene from Tom Wolfe’s story Mau-Mauing the Flak Catchers.

The cost of tax collection in South Africa at present is, at 0,3%, one of the lowest in the world. In other words, it costs only R150 million to collect something like R40 000 million. Whether this is a good thing or not is a matter for debate, and in certain circles the advice is that we should possibly spend more in order not only to receive more, but also to introduce greater equity by eliminating the tax evaders.

I do not intend to go into the detail of SITE’S operation, as that is more than adequately explained in the memorandum. However, I do want to emphasise the good news, namely the general reduction in income tax rates, which means to individual taxpayers a saving of something like R1 500 million.

It is my pleasure to support this Bill.

Mr Chairman, we heard complaints here today and also in previous debates about the fact that the Bill reached hon members so late. I agree. I also do not like making documents available to hon members at such a late stage. We went out of our way—and, in fact, with the co-operation of Mr McKinnon and his people—to make the roneoed Bill available to hon members in the meantime. McKinnon’s staff were also available to discuss the Bill with hon members.

However, when I listen to hon members on the other side it appears to me as though I hear nothing about the Margo report which was dealt with in a question of a little more than two years I hear nothing about the Stals Committee which, with the assistance of the officials—those officials were also involved with the Margo report—drew up a White Paper during the holiday period, that is to say, in December over the Christmas period, in a matter of five months. When I listen I hear nothing about the officials who sat down and drew up the Bills flowing from the Margo report, once again over a matter of two or three months.

We can be proud of what we have been able to achieve over a period of about three years. We can be proud of the fact that by means of this legislation we are giving effect to the first implementation of the recommendations of the Margo report. The hon members for Heilbron, Rissik and Wynberg, and to some extent the hon member for Pinelands, mentioned the fact that the positive aspects of the Margo report have already been embodied in the legislation before us.

I must agree with the hon member for Barberton; I also like the word SITE better. The Afrikaans acronym SIBW is a little heavy on the tongue. We are among the first in the Western World to implement this simple system. It is not only a question of simplification.

†I should like to point out to the hon member for Yeoville that it is going to cost us R500 million or R600 million, because at the same time it is also a system of taxing husband and wife separately. Mr Lawson in the UK is still figuring out schemes on how to tax husband and wife separately while we have a Bill to that effect before us after two and a half years.

*The hon member for Heilbron pointed out what we have done for the farmers. I can also think of other aspects such as the tax situation of the divorced woman, the married woman receiving a pension, the unmarried woman with a child …

It seems to me you are thinking of all the women!

Well, I have to listen to the intentions of the married wife of the hon member for Pinelands! [Interjections.]

*The maximum taxation ceiling has been raised from R60 000 to R80 000. This means that since the Budget we have given away more that a billion rand.

You have taken a billion less too!

We collect a billion less. [Interjections.] The hon member’s calculations are correct.

This means that in this short period we have laid the foundations, not only for the simplification of our tax system, but also for a very efficient new tax system.

The Margo report recommends that we move away from direct taxation towards indirect taxation. We expect to publish the Bill dealing with VAT in August so that it will be available to the business world.

The ideal is to reduce the taxation of the individual and company tax. Therefore, I do not agree with the hon member for Yeoville. We still have to balance our books.

†There is a very important aspect I want to emphasize today that was mentioned by the hon member for Yeoville and the hon member for Barberton.

*Both of them attacked the minimum tax on companies. We have to ask ourselves whether we need all these tax concessions. It is very important that that question be answered.

†The reason why I am saying this is because the Margo Report recommends that we remove tax expenditure in our tax system and then we can bring down taxes.

The two go together.

When one analyses the tax expenses in regard to exports, marketing costs, decentralisation of industries and training, one sees why the tax base is being eroded.

*After all, the hon member for Yeoville knows that the tax revenue from the business world decreases by 0,6% for every 1% increase in the country’s GDP, while it increases by almost 1,8% in the case of the individual.

Why is this so? It is because—and the hon member knows it—we have made provision for more concessions over the years.

†The hon member recommended new concessions here today. It is not that I have anything against that; I am also a supporter of tax allowances when it comes to education. I was involved in education for 19 years, and I know how I fought with Mickie van der Walt to get concessions for my business school. Therefore I support the hon member in that connection. However, we are asking for more concessions, and we know there are brilliant accountants—there the hon member for Barberton will support me—who are experts at artificially inflating those concessions. We know it. We know that these concessions are much larger today than originally intended.

*We know that our tax base is being eroded and, until we have solved that problem, we are not going to have the funds to enable us to reduce taxation any further.

I want to emphasise this point because this is where the minimum tax on companies comes into the picture. It has been stated in the Press and also here that minimum tax on companies is levied on an ad hoc basis.

†It was said they were concessions granted out of the blue and that they were never really analysed. That, however, is not true. We discussed the minimum tax before the Margo Report was even tabled. More than a year ago I discussed the possibility of a minimum tax at our committee meetings.

The White Paper is against it.

Yes, I shall come to that, too.

*It is because we have realised that particularly as a result of these tax concessions our tax base has been totally eroded. When the Margo report appeared, it was felt at one stage that we should perhaps not introduce the ordinary minimum taxation, as introduced in the USA, because if we succeed in phasing out these tax benefits over two or three years, the need for a minimum tax would no longer exist. The reason for that is that one would have removed the tax benefits. That was why we felt as we did at the time. This is an involved tax. The American government is still struggling with their its minimum tax. It is complicated.

†Where one has so many tax concessions built into one’s tax structure one has to look at the possibilities for getting a fair deal for the Government.

*Let us be fair. Who does this minimum tax affect? It affects the people who can pay it.

†The companies with the ability to pay are the ones involved.

*I want to come to that hon member. I remember that his party in this House attacked the Pick ’n Pays which do not pay tax. Am I remembering correctly? Was it not stated that Pick ’n Pay finances Sappi or Mondi or one of those companies? Through the medium of their Press, that party attacked companies which did not pay tax as a result of tax concessions.

Now we come to light with minimum tax. Let us not say that this is something we just sucked out of our thumb. When we were dealing with the Margo report we began to realise, as early as in August of last year, that it was not going to be possible to introduce the comprehensive business tax.

†We knew it. The moment we discovered that it was not possible to implement the recommendation with regard to the comprehensive business tax we knew we were going to have problems to finance some of the recommendations in the Margo Report. We started looking around for possible sources of income. That was in August or September of last year already.

Soft targets!

The hon member mentions soft targets. I can mention to the hon member a number of those soft targets. One is the increased price of petrol. Another one is the withholding tax on interest and dividends.

You support it.

I worked on it; he knows it. We worked on a tax on undistributed reserves of companies. A well-known economist even recommended that we consider a turnover tax in addition to the levies of the regional services councils. So we are already investigating a number of possibilities to assist us in implementing SITE, for example—a very important possibility—and to increase the amount for maximum taxation from R60 000 to R80 000. I think hon members will agree with me that the salesmanship of the Margo Commission was so good that we have no choice in this regard.

*It may perhaps be a good thing if we decide to go ahead and to seek a possible source of financing. In any case, the minimum tax is correct; it is actually not a tax but a “withholding tax”. I want to tell the hon member for Barberton that one does not pay interest on “withholding tax”. The hon member said that if we took it away, it would be money that we were taking before the time and that next year or the year thereafter we would again have to find other sources. However, we have to consider a minimum tax or a “withholding tax” together with the removal of tax concessions because, as we remove them, the effective company revenue will increase considerably, except for the role which VAT is going to play. Therefore, I am not worried that we are going to experience a problem in the future. I want to conclude on this point. I do not think that this minimum company tax is a monstrosity, as it is made out to be, because it is going to be phased out completely within three years. The period of three years is very interesting, because that is the period in which we are going to try to phase all of these concessions out of our system.

I want to come to the question of taxation by Press releases. I do not always understand things so well. One day we are told that we do not communicate. The next day we are told that we make too many Press releases. It is not our fault that the Press do not publish important aspects. All we hope is that they do understand sometimes, and in fact, sometimes they understand very well. There is a very interesting point that I want to mention in this respect. It has been my experience over the past eight weeks—let us say three months—that when we make something of this nature known it takes the groups affected a little time to realise what is going on. I want to tell hon members an interesting story. A group that has been hit fairly hard by the recommendations we have accepted in the White Paper sent representatives to my office on Friday morning who told me that we just could not do it. At that stage they had still heard nothing about a Margo report with recommendations, a White Paper, a Budget and an Income Tax Act. Very well, I agree, it may have been made known at too late a stage. However, I want to mention the example of people who come to see us, people in the hotel industry, who really put a good case to us. People from the film industry have also come to see us and have asked us to adapt and change because they are being exploited. We have given attention to that matter. I think it is important to mention the fact that we listened to the people who came to see me, the hon the Minister and Mr McKinnon and his people. Our doors were not closed to them. Many of the Press statements emanated from very profitable discussions with these people, and in this connection I once again want to mention the request of the hotel group. We listened to them and made changes.

I want to take another example mentioned by the hon member for Yeoville, namely the decision in regard to fixed interest. We acted in this regard even before the interest groups came to see us. Where I do agree with both hon members is that one must act as carefully as possible so that there is no need to backtrack. That creates uncertainty. However, let us be honest. We are in the process of introducing a completely new tax system in South Africa. Surely then it is understandable if there is a certain amount of uncertainty. There can be no argument on that score at all.

The hon member for Yeoville gave a very interesting exposition of the effect on the balance of payments and on the rendering of services.

†However, let us be honest. The only way in which one can assist in effecting savings, improving the balance of payments and combating inflation is to bring down Government spending and to have a neutral tax system. However, it is too much to expect the tax structure to assist in fighting inflation or changing the balance of payments situation. There are indirect effects, and that is what the Margo Commission actually stated in their report. It is not easy to use the tax system to influence the general economic structure.

Concerning the court case in Natal which took place last week and which the hon member for Yeoville mentioned, the problem is that we had to introduce the change now. Thousands of people accepted our interpretation, which proves that it was a matter of urgency to introduce the change and adjustments now, otherwise we would have had to wait another year.

You are going back to 1969!

I think I have answered most of the hon member for Yeoville’s questions. If I have enough time, I would like to go into more detail on some of the Margo Commission’s recommendations on insurance. The hon member for Yeoville read from the London Financial Times. In the UK they also agreed that insurance companies are not effectively paying a very high tax. They are investigating the possibility of increasing that effective rate. The hon member pointed out that this is an extremely difficult matter and I support him in that we cannot wait for two years to solve it. I hope that under the chairmanship of Dr Stals the committee will be able to come up with some solution early next year. I do not think we can really solve the problem, but we hope to come up with some solution.

*I could still go on, but basically I think my time has expired. I want to thank all the speakers for the interesting debate and I also want to agree that we could perhaps do with a day or two longer in order to discuss a Bill of this nature. If I am still occupying this post, I promise hon members that I shall try to arrange things in such a way that we do not have to discuss this Bill next year at such a late stage in the session.

Mr Chairman, there are a number of things that I think need to be dealt with particularly which have been raised by the hon the Deputy Minister. I will try to deal with them briefly.

The first matter is the question of taxation by Press release. Surely there needs to be some degree of certainty in relation to this. Is it not possible that at the same time as the Press releases are made, arrangements are, for example, made that those statements appear in the next issue of the Government Gazette so that there is some degree of accessibility and certainty and so that one will know that exactly what one wants to be published, is published? I would ask the hon the Deputy Minister to consider that any statement on tax which affects the taxpayer should immediately be published in the following Government Gazette.

Secondly, some interesting things came out of the reply of the hon the Deputy Minister, mainly that it is the Government’s intention to implement a programme to phase out all tax expenditures within a period of three years. I do not believe the Government is going to be able to phase out every tax expenditure. There is no way one will be able to do that and one will be left with some. To my mind the fundamental issue is that the phasing out of tax expenditures must go hand in hand with reductions in the rate of tax. They must go together, otherwise it is an unacceptable situation. It will just be regarded as another way in which the fiscus is going to get more money. In other words, we are going to lose the tax expenditure, but we are still going to have high rates of taxation. That would be quite an unacceptable situation.

With great respect, the hon the Deputy Minister did not answer one particular question with regard to minimum company tax. As a matter of fact, he got himself into deeper water as a result of his explanation because he told us how long it was that they had already been playing with the idea of minimum company tax. However, he did not say why, when they were already toying with the idea of imposing minimum company tax, they simultaneously published a White Paper which stated in so many words that they did not agree with the idea of minimum company tax. Therefore the greatest witness that I can call that minimum company tax is undesirable and bad and should not be introduced, is the hon the Deputy Minister and his Government themselves. They are against minimum company tax and they are the ones who said that it was not considered advisable to introduce it. Therefore I do not have to have better testimony than a confession from the hon the Deputy Minister himself. To my mind therefore the case for minimum company tax is an extremely weak one. The hon the Deputy Minister said they were looking for companies with an ability to pay. They are taxing companies which previously did not have to pay taxes because they had incurred losses. These companies now happen to have made a profit and have perhaps for the first time in many years in all innocence paid a small dividend to shareholders without knowing that a minimum company tax was going to be imposed on them. They are now going to be taxed and to my mind that does not mean that people with an ability to pay are being taxed. It cannot be logical.

The other thing which I found fascinating was all the investigations as to the soft targets which are taking place not only in the mind of the hon the Deputy Minister, whose fertile mind I respect, but also in the minds of others who are looking for things to tax. I must warn my colleague the hon member for Pinelands that even his intentions may well be subject to taxation one day if the hon the Deputy Minister has his way because that taxation is unlikely to be a disincentive to the activities to which the hon member for Pinelands referred. We really need to be very careful about this fertile mind when it comes to looking for soft targets for taxation.

If we are going to start taxing the reserves of companies, we shall create the situation where once that becomes a factor, everyone will capitalise reserves. We shall do away with reserves, as no one will keep reserves because they will have at the back of their minds that when the hon the Deputy Minister sees something which is taxable, he will tax it. A nice guy like this hon Deputy Minister should not acquire that kind of reputation and I think he should seek to avoid it.

One last thing I would like to deal with—the hon the Deputy Minister touched on it—is that we are only really dealing with interest that should be taxed at source. It is to my mind logical that we should do that. If we do away with dividends and make dividends tax-free, as is the intention, we are left with interest, and interest is taxed at source. One will have a much better cash flow situation; one will have much less tax evasion; and one can in fact meet the case of the people who would not be paying tax, and there are examples in the UK as to how one does that. I would like to see that done at the earliest opportunity.

The last issue I would like to touch on is this whole question that we are going to have more indirect taxation and less direct taxation. I am a champion of that but I have a difficulty in regard to what appears to be an approach which is developing, and I would therefore like to raise it with the hon the Deputy Minister so that we can get it out of the way. We have had the phasing out of the debtors’ allowances in respect of GST, and one of the reasons given is that under VAT there will be no debtors’ allowances. Will we, however, have a situation under VAT in terms of which one will be taxed on a cash receipt basis as opposed to an accrual basis, because it is argued that nowhere where there is VAT is there a debtor’s allowance. In many cases where there is VAT, however, there is a taxation on a cash receipt basis, and I can give examples. Even in the UK one does have taxation on a cash receipt basis— one has that alternative. One finds it in Austria, in Italy, in Ireland and I think in Luxembourg as well so that the cash receipt basis is one that has to be considered because it becomes a tremendous hardship in a situation where 36 months’ credit is given and one has to pay the VAT on the added value at that moment in time. I would therefore like to get some reaction as to whether in fact it is contemplated that there will at least be an option in respect of a cash receipt basis so that that problem can be taken out of the way.

Mr Chairman, I would like to react to the hon member for Yeoville’s recommendation regarding the publishing of tax changes in the Government Gazette. Yes, I support that. I think it is a very good idea and if we can start tomorrow, we will start tomorrow; it depends on the question of administration.

*As regards the phasing out over a three-year period, this refers in particular to most leasing systems which were stopped some time ago and will finally expire in 1991.

†In view of the effect on industry we will have to consider some other options. One cannot just switch water and lights off. I think we shall have to phase it out gradually. I think it is possible that in three years’ time we would have phased out, I hope, most of the tax expenditures.

*The hon member also said that my argument concerning minimum company tax—that persons who would be most heavily taxed would be those receiving most tax benefits—was not well-founded. Sir, I still maintain that the effective rate of a high percentage of our companies is very low.

†I would also like to point out to the hon member that the Receiver of Revenue investigated most of the genuine cases and we believe that with the proposed adjustments in the Bill we accommodate 90% of these cases. The hon member for Yeoville knows, however, that it is impossible to have a tax that is without teeth.

*A person feels any tax he pays. One cannot explain that away. I do not agree with the hon member for Yeoville, however, that we shall be faced with so many companies which are really “hard-luck cases”, as he put it. I think there will be a minimum of these.

†Be that as it may, it is still possible for them to appeal. Then, in 1991, it will be the end of the system. With provisional tax being payable it is still possible for them in October to begin to use the credits they earn in September.

*A company which will therefore not pay tax until 1991, does not lack liquidity and is not insolvent has really got away with murder. It can honestly be said that it has got away with murder, †In reply to the hon member’s last question in relation to the cash-receipt basis, yes, we consider it. We are investigating all possibilities. There are also recommendations received from the IMF, as well as information we have collected ourselves.

[Inaudible.]

We have to, Sir. The hon member is quite correct. The cash-receipt basis is the best one. Then, however, one has to look closely at all the factors involved. It is very dangerous to accept a specific element of a particular recommendation. We must first wait and see what we get before we work out a system.

When do you anticipate publishing the draft Bill?

By the end of August.

Mr Chairman, when this Bill was discussed here at the beginning of this month, we on this side of the House said that we welcomed the amendment to expedite the appointment of conciliation boards. We then received a rather comical reply in which the hon the Minister contended that we had apparently said that his desk was a maternity ward. [Interjections.] He said his desk was not a maternity ward and added that conciliation boards were disposed of expeditiously.

The proof of the fact that his office is, in fact, a maternity ward can be found in the Citizen of 17 June of this year. This also proves that his desk is, in fact, the childbed. [Interjections.]

Arrie, please just don’t give birth yourself!

Mr Chairman, I quote from the Citizen of 17 June:

The Director-General of Manpower, Mr Piet van der Merwe, goes on to say:

Mr Chairman, the point that I want to make is the following: If these conciliation boards had in fact been approved immediately, De Beers would not have lost money over a period of some days and neither would the State. Fortunately, it was a short strike.

I cannot accept what the Director-General is trying to suggest here—that there were certain technical and legal problems and that these were solved after the strike ballot. This is further proof that there certainly was a delay and that it was due to the fact that conciliation boards were not approved in good time.

When we look at the amendments that are to be effected to this Bill, we see that they are not major amendments. For example, certain words are to be inserted and certain clauses are to be renumbered. As we have stated previously we are, however, also aware of the fact that during the hearing of evidence before the joint committee, various legal representatives and even the industrial court made it clear to us that this was the most inferior legislation that they had ever seen. They actually made an appeal to the joint committee to appoint a committee consisting of legal representatives in order to draw up this legislation properly. If that had been done, these little amendments would not have been necessary. Very many more major amendments will still have to be effected in the future.

Certain amendments were proposed and discussed at the time, but I gained the impression that once the NP had decided which amendments to accept, one could go on talking until one was blue in the face, without any success, because a decision had already been made. [Interjections.]

That is how consensus operates!

As the hon member says, that is consensus, and we also know how consensus is achieved.

There is, however, one good amendment that I should like to mention, and that is contained in clause 5(m). This deals with the case in which a certain person or body lodges an appeal against the judgment of the industrial court. If a fair amount of time elapses before the Appeal Court can decide in regard to such a matter, the person or body which received judgment in its favour can, in fact, go to the industrial court and ask that to have that judgment upheld until the Appeal Court has arrived at a decision. This is going to mean a great deal to a workman who is dependent upon his daily or monthly wage. If he is dismissed and the court reinstates him and he has to be compensated, it may happen that an appeal is lodged and his remuneration is suspended. Now, if the court deems fit, that person’s remuneration will continue until the Appeal Court has passed judgment. [Interjections.]

Mr Chairman, I wish that cat that is kicking up such a racket would go and have its kitten somewhere else. [Interjections.]

This then is going to help that person to receive his salary until the Appeal Court has arrived at a decision. If the Appeal Court’s decision then goes against him, that money can then be recovered from that person in conformity with certain guidelines laid down in the legislation. [Interjections.]

I should just like to dwell for a moment on another amendment that was proposed. This is in connection with the definition of “unfair labour practice”, which is now being embodied in the legislation by way of a code. We asked on the committee that it should not be included in the legislation itself, but that it should rather be attached as a guideline, but once again we were unsuccessful.

In this connection I should also just like to refer to a reply of the hon the Minister on 1 June of this year.

He then went on to say that he could understand why I had left trade unionism in order to enter politics. In having to deal with the hon the Minister I often wondered why he had entered politics, but after having read this, it was quite clear to me why he had done so at such an early age. [Interjections.]

Let us see why this was said. This side of the House objected to the fact that persons who had participated in a strike could strike again within twelve months. I used the example of workers striking because someone—one of their friends— was dismissed, but was re-employed after the strike, with a similar strike taking place after six months. Is that forbidden by this legislation?

My words were recorded in Hansard. Apparently the hon the Minister did not even take the trouble to read them. However, he gives this House replies of this nature to create the impression that this side of the House does not know what it is talking about. [Interjections.] The whole argument revolves around the question of who will decide whether such a strike is essentially the same or not. I said that the court was the only body capable of deciding whether the second strike, in the example that I mentioned, was essentially the same as the first one or not. We shall support these amendments that have been effected to the Labour Relations Act, but we once again want to express our dissatisfaction in that the joint committee did not see its way clear to making provision for them as guidelines instead of as part of the legislation.

Mr Chairman, as I understand the new Rules of the House, we should actually only discuss the report and the concomitant amendments that are before the House. [Interjections.]

Order! It is the practice on such occasions to allow the main speaker of each party a certain amount of latitude. That is what I have done in this case.

Many thanks, Mr Chairman. I shall also make use of this opportunity then.

The hon member referred here to conciliation boards and, although it does not form part of the amendments, I just want to direct the hon member’s attention to the fact that the whole idea of the amendments is, after all, to expedite conciliation board mechanisms. This is apparent from the Bill. If those hon members read the Bill, they will realise that the new amendments are intended to expedite the activities of a conciliation board as far as possible, and precisely with a view to solving labour disputes as swiftly as possible.

The hon member for Carletonville just makes the airy statement that this legislation will have to be amended often in future. Any legislation on the Statute Book is surely living legislation. Legislation is surely not a dead thing which, once it has been passed by Parliament, will never be amended. If a law is amended, it is proof positive of the fact that there are good and fruitful ideas in regard to legislation. After all, one does give thought to these matters and amendments do have to be effected.

I want to say one thing to the hon member. I think the hon member for Brakpan also said “hear, hear” when the hon member for Carletonville intimated that the NP had actually arranged matters in some way or other in order to have this Bill accepted by the joint committee. However, we reached consensus on this legislation. Nobody was forced to accept it. Consensus was reached. If either of the other two Houses had wanted to vote against this Bill, it had the inherent right to do so. We did not force them. We did not hold a pistol to anybody’s head.

I want to say that we do not think those people are untouchables, and neither are we ashamed to sit together with them around a table and discuss legislation. If those hon members want the support of the other two Houses in order to have legislation rejected by Parliament, they must also try to reach consensus with those two Houses. [Interjections.]

Order!

They do not even want to talk to these people. How do they think they are going to be able to persuade them to their way of thinking?

When NP members of my committee sit and chat with the other hon members of the other Houses and can make them see that the road we are taking is the right and proper one, the opposition must not take exception to that fact in this House. After all, it is their inherent right to do precisely the same, or else to demonstrate to those hon members that the road we wish to take is the wrong one and that the other two Houses should vote against the Bill. It is very interesting to see the support that we received from the other two Houses for this particular Bill.

There were really only two amendments about which the whole question revolved. The one was proposed by the hon member for Groote Schuur who recommended that we accept an amendment in terms of which we would revert to the old definition of “unfair labour practice”. However, we changed that old definition in this new amending Bill precisely because there was so much confusion and uncertainty in regard to that definition. It was an open definition, and every time something happened the matter had to be referred to the industrial court. The industrial court gave decisions in regard to unfair labour practices and, what we have done now, is to embody those decisions in this legislation on the strength of what the industrial court had decided. That is why we have this definition of “unfair labour practice” in this legislation.

The second amendment was proposed by the hon member for Durban Central. As the hon member for Carletonville has said, he wanted us to delete the definitions of what were unfair labour practices and add a code to the legislation. However, he went further and said that the industrial court could refer to the code, but that code would actually not have any substance. One could do absolutely nothing with that proposed code. We say that it is high time that we gave clarity to both employers and employees in about precisely what is meant by an unfair labour practice. That is what we have done in regard to these definitions.

We debated these amendments again in the joint committee. The interesting fact was that no new ideas were forthcoming to indicate to us in any way why they had moved these amendments. [Interjections.] That hon member asks what debate took place. That is very interesting, and I shall reply to him in that regard. I did not stop the debate. There was a motion from the House of Representatives that we had discussed this matter adequately and sufficiently, that no new facts had been submitted to the committee and that we should get away from that particular amendment. [Interjections.] Do hon members know who seconded that motion? It was not anybody in our House, or in this party, but the hon members of the House of Delegates. In terms of the rules of the joint committee, if such a motion is moved, it is laid upon the Table. This was done and all three Houses adopted the motion.

I do not know now what hon members on that side of the House are talking about. I want to repeat what I said. It was not hon members of the House of Assembly who moved the motion that we had heard adequate arguments; this came from the other two Houses. They seconded it, not we.

You are close to the truth!

That hon member can make as much noise as he pleases, but these are the facts, and he can go and consult the Minutes of the joint committee if he does not know what was happening while he was sitting there.

We have not heard any reason at all to indicate why we should accept these amendments. We on this side of the House support this report with the few accompanying consequential amendments.

Mr Chairman, hon members will recall that during the debate on the Second Reading of the Bill we welcomed the many substantial improvements, but at the same time we stressed that the thrust of the legislation was bad, and in our view the thrust still remains bad, after the matter has been referred back to the joint committee.

We did try to improve the legislation. We said at the time of the Second Reading that if we could improve the legislation by means of the amendments which had been placed on the Order Paper we would support this Bill. Unfortunately, this was not done, and the joint committee declined to amend the most important and controversial clauses in the Bill. I refer to the inclusion of sympathy strikes, intermittent strikes and product boycotts in the definition of unfair labour practice, and the presumption of vicarious liability which in terms of section 79 will now attach to unions.

Not only did the joint committee decline to amend the clauses, but under the guidance of the chairman of the joint committee, the hon member for Stilfontein who has just spoken, the committee also gave scant consideration to these most important clauses. From the outset it was made clear that the committee had no intention of discussing the proposed amendments in any detail whatsoever. There was a ruling by the chairman that the discussion had to be limited, and there was quite a lot of debate about that aspect. Finally, to give an indication of just how we were limited, I want to mention that after a few minutes, when we were half way through discussing some of the more important clauses, the chairman enquired of one of the members of the other Houses whether he wished to move a motion of closure. To my mind that was tantamount to the chairman himself asking for a motion of closure. [Interjections.]

I think the hon member for Stilfontein was incorrect when he said that no new thoughts were offered. New perspectives were indeed given on the proposed amendments which we had not previously raised, but because of the nature of the proceedings it turned out to be a complete farce, and there was no purpose whatsoever in even having this Bill referred back to the joint committee as far as the more important amendments were concerned. However, certain amendments were accepted, mainly in relation to procedural matters. The hon member for Carletonville has already dealt with one of the more important amendments moved by the PFP. He pointed out quite correctly the merits of that particular amendment.

While the sausage-machine approach which the joint committee adopted obviously reflects very poorly on Parliament as a just and fair lawmaker—this is obviously of concern to us—our main concern is that we are about to enact amendments to our labour relations legislation which will disrupt good labour relations, frustrate the process of collective bargaining and lead to increased uncertainty and consequent litigation. This is exactly the opposite of what the avowed intention of this Bill was. It was supposed to create certainty. The idea of including “unfair labour practice” in the definitions was purportedly to create certainty. However, despite evidence from a wide spectrum of people who are most affected by this legislation and who pointed out that it was going to have exactly the opposite effect, the Government went ahead and did this. Therefore we are not going to have certainty but rather more uncertainty as to what it is all about, and therefore we are going to have more litigation.

I believe the NP is concerned about trade union power and they quite rightly perceive that it will be used more and more to achieve political objectives and therefore affect their monopoly of power. Deprived of the vote, it is not only predictable but understandable that the Blacks in labour will use their bargaining power not only to achieve improvements in their pay-packets and working conditions, but also to achieve political objectives.

The evils in the Labour Relations Amendment Bill are nothing more than a manifestation of the Nats’ design to squash political opponents by prohibiting all strike action which could be used to exert political pressure. It was quite clear in the Second Reading debate that the outlawing of sympathy strikes, intermittent strikes, product boycotts and the vicarious liability imposed on unions was aimed at limiting the unions in their activity and limiting strike action of a political nature. However, by attempting to squash their political opponents, the Nats have done the classical overkill, and they are dislocating the whole labour relations system. They are throwing the baby out with the bathwater.

While I defend the right of the voteless to use alternative means and specifically to use labour and trade union power to influence Government, to address grievances and to improve their lot in society, all of us under normal circumstances—I am referring to a normal democratic system of government—would prefer to see labour power used only in the labour negotiating field. However, this cannot be under the present system we have in this country. By forbidding sympathy and similar strikes for purposes of political suppression, the Government has overlooked the fact that they are outlawing actions which may in many instances constitute a necessary and vital part of the process of collective bargaining. Government intervention in this way will upset the natural balance of power between capital and labour.

By outlawing legitimate strike action one invites the workers to resort to illegal action. There is no sense in using the labour relations channels created by Government if these channels are jammed by laws which favour capital and prohibit labour from using its strength in the bargaining process. It does not matter whether one calls a system legal or relegates a process to illegality. The workers will continue to use the processes which bring results and they will sidestep the formal channels created by Government if these lead nowhere.

I certainly do not believe that sympathy strikes, intermittent strikes and product boycotts are always legitimate bargaining tools. There will be many instances in which it would constitute an unfair labour practice to engage in such strikes and action. There will, however, likewise be many instances where, because of corporate linking between employers or where branches are structured so as to constitute separate legal entities, the supportive sympathy strike action can and will constitute a fair and legitimate labour practice. Our plea has at all times been not to put these actions which may or may not amount to an unfair labour practice into a straitjacket by including them in a watertight exclusive definition. Surely the industrial court and the new labour appeal court are far better placed to lay down guidelines, as they have done in the past, as to whether or not a particular strike, lock-out or boycott amounts to an unfair labour practice in the given circumstances. I want again to repeat that there is not a single legal system in the world that attempts for instance to define the phrase “reasonable conduct”. Reasonableness will depend on the circumstances of each particular case. How then can one attempt to define what is “fair” or “unfair”, a concept which depends entirely on what is reasonable in the given circumstances?

I want to suggest that as good labour relations are the product of negotiations and understanding between capital and labour, the law and the processes created to maintain good labour relations should likewise be the product of negotiations and understanding between capital and labour. I would therefore fully support the initiative taken by Cosatu and Saccola to have future labour relations legislation, preferably the whole of the existing Act, referred to arbitration so that the result will be the product of the people who are most affected by it.

Mr Chairman, I should like to thank those hon members who participated in the debate today and at the same time take the opportunity of thanking members of the joint committee for the many hours they devoted to this legislation and the very special consideration they gave to this particular problem. I also want to thank them for their very substantial contribution by way of amendments to the legislation. I also want to convey a special word of thanks to the hon member for Stilfontein, the chairman of the joint committee, for his contributions, his tact and his patience in bringing this legislation to this stage.

You only have one minute!

No, Koos, I have more than that.

Firstly I want to respond to the hon member for Carletonville who referred to the De Beers case and the 30 days that had expired after an application for a conciliation board, and he related this to my statement that conciliation board matters were not delayed because the documents lay around on my desk, but that procedural delays often did occur. The delay which occurred in the De Beers case definitely did not originate on my desk. The hon member knows that when there is an application for a conciliation board, especially on the grounds of an unfair labour practice, the other party must be given an opportunity to put his side of the case. It is often necessary, because of what the defendant said, to refer the matter back to the applicant for a conciliation board before one can come to a proper decision as to whether that conciliation board is really necessary and whether it should be appointed on the grounds of an unfair labour practice.

The hon member must bear in mind that when someone, for instance, applies for a practice to be declared an unfair labour practice and the Minister refuses this, the Minister can be asked to review the case. I am often taken to the Supreme Court by employers, and sometimes employees, to review a matter after an application for a conciliation board has been refused or granted, and it is therefore necessary for the Minister to have all the facts before him, to consider them and to come to a conclusion which any normal court, for instance, would come to.

Very often the delay is occasioned by those who should submit comments. One cannot take someone by the scruff of the neck and virtually force him to submit comments; it must be done by way of co-operation. That is why it sometimes takes as long as six or seven months before a conciliation board can be appointed. For that very reason this Bill provides that the appointment or otherwise of a conciliation board can now be dealt with at regional director level, the appointment of a conciliation board now actually being regarded as a right and not as something for which strong representations have to be made.

Mr Chairman, I should like to know from the hon the Minister how one applies for something to be declared an unfair labour practice. I was always under the impression that one contended that a certain incident was an unfair labour practice and then applied for it to be declared as such. A further question I want to put to the hon the Minister is how a conciliation board was approved immediately after the strike vote had been taken and how there were suddenly no longer any problems, as had been previously alleged?

But in an application for a conciliation board an unfair labour practice is implied. The hon member surely knows that the applicant implies that there has been an unfair labour practice. The conciliation board is then appointed and the wording indicates that there is an alleged unfair labour practice involving certain parties on a certain matter. That is surely not a problem on which the hon member has to put a question to me.

Often an employer, for instance, applies for a conciliation board. When he sees that agreement is not being reached and that the 30 days are on the point of expiring, he often phones the department and says that there is a threat to strike. We then make a concerted effort to get comment from the other party. If the other party fails to submit comment, especially when there are only a few days left, the Minister takes a decision on the grounds of the facts before him. If the other party has not submitted comments in time, the Minister cannot take that party into consideration and must base his decision on the facts which the applicant has supplied. When the question of the De Beers strike was therefore brought to our notice we took special steps to obtain those particulars.

However, the point this hon member does not appreciate is that last year this department dealt with 2 350 conciliation board matters. The previous year it was over a thousand. It doubles every year, and places an impossible burden on the relevant section of head office, and I greatly appreciate the special efforts those officials have made to bring conciliation board matters up to date. I think the hon member should really thank the department for the hours and hours of overtime they have worked, beyond the normal call of duty, to expedite the question of conciliation boards and to maintain industrial peace, instead of coming here with criticism about conciliation boards not having been established in time.

After all that overtime the conciliation boards are still not being approved in time.

For the information of the hon member I just want to say that in 1987 officials concerned with labour relations worked overtime without receiving one cent in return. They do it voluntarily.

The fault lies with the Minister!

They do it voluntarily, Sir, and so does the Minister. The hon member for Overvaal knows so little about labour matters that I do not know why he wants to get involved in this dispute. [Interjections.] I think he should rather stay out of this. [Interjections.]

Order! No, there are too many interruptions. The hon the Minister may proceed.

I now want to come to the hon member for Stilfontein, and I again want to thank the hon member for his contribution and for the lead he took in this regard. We have often leaned heavily on the hon member to expedite the legislation, and he and his committee acquitted themselves well of their task.

I now come to the hon member for Groote Schuur. That hon member alleged here today that we were on the point of passing legislation which would create legal uncertainty, which would create unrest, disorder and dissatisfaction in the labour sphere, and so on. I want to tell the hon member that I disagree totally and absolutely with every statement he made in that connection. That hon member tried to allege that there was more legal certainty and more clarity in the old definition of an unfair labour practice, which was a definition consisting of two paragraphs. Anybody who looks at the old definition, even a layman, and then looks at the new definition of an unfair labour practice, will see that this is a virtually complete definition of what an unfair labour practice is. The definition of an unfair labour practice occupies almost three pages in this Bill. It will be very, very clear to any layman what an unfair labour practice is, particularly what unfair dismissal is.

The fact of the matter is that almost 90% of the applications for conciliation boards relate to the question of unfair dismissal. Surely unfair dismissal is spelt out here very clearly and in great detail. Decisions of the industrial court have also been taken into account in this connection, and there is now greater legal certainty for everyone. Many of the trade unions and many employers, in fact all employers, support the extension of the definition of an unfair labour practice. The majority of the trade unions I have contacted support the extension of the definition of an unfair labour practice. This also gives greater clarity to the ordinary worker, who does not belong to a trade union, about what his rights are and what he may or may not do.

†The hon member for Groote Schuur says one is going to curb strikes. That is quite correct. We are indeed going to curb strikes, but the hon member did not point out what type of strikes we were going to curb. That is the point. We are going to curb illegal strikes, Mr Chairman …

Hear, hear!

… and I want to tell hon members that the moderate trade unions of this country and many of the mixed trade unions in this country support this legislation wholeheartedly.

Saccola, which is representative of the employers in this country, also supports this legislation wholeheartedly. That is why they went so far as to place huge advertisements in all the daily newspapers. We have to look at who the people are who complain about this legislation. Who are the people objecting to these curbs being placed on illegal strikes? [Interjections.] The people who are complaining about the curbs on strikes of this nature are the radical trade unions, which do not want to obey any rules or any law in this country. [Interjections.]

*Mr Chairman, we can just take a look at who these people are. They represent trade unions which use intimidation. They represent the trade unions which want to make the country ungovernable. They are the ones who want to politicise the whole labour field. They are the ones who want to bring the economy to a standstill. These are the ones—to use the words of Joe Slovo— “who want to make South Africa unprofitable”. They are the ones who are opposed to this legislation. [Interjections.]

The remedy in this legislation lies in the fact that a trade union can be held liable for compensation in the case of an illegal strike. Who in this House could be opposed to our regulating collective bargaining within the framework of the norms and procedures of conciliation laid down in terms of the Labour Relations Act? Surely we want to have this matter properly regulated. We surely do not want unnecessary disruption in the labour field.

Everybody wants that!

It is interesting, Sir. It is the delineated, spelt-out purpose underlying Oliver Tambo’s speech at the beginning of this year that the labour field must now be given preference. It is also interesting that they have transferred Joe Slovo from Umkontho we Sizwe to the labour field. It is also interesting that in their offshoots, down to grassroots level, they have the Comrades at the very bottom. The Comrades assist with intimidation in stay-away campaigns and strikes. Those are the very people we want to clamp down on. We want to clamp down on those who want to disrupt this country, who are not concerned with labour, but with politics. That is why there is such a lot of squawking in the hen-house. It is because we are cracking down on them. The Comrades are squawking about it.

But what do we find now in the House? If I were a Comrade, I would express my sincere thanks and appreciation to the hon member for Carletonville and the hon member for Groote Schuur, because they cause disruption from the top while the Comrades do so from the bottom. [Interjections.] That is precisely what is happening here. [Interjections.] The objectives are not very different.

I want to raise a further point. I do not want to allege today that this legislation is the last word in labour legislation. Definitely not! The labour field is a dynamic field. We have a new piece of legislation before us today. We shall see how it works out in practice. We shall see if this legislation enables us to meet new challenges, solve new problems, accommodate new trends and have a well-regulated system. The principle underlying this legislation, the basic point of departure, always remains one of fairness—the principle of the maintenance of a balance between the ability of labour to negotiate and that of capital. This is balanced legislation. It is in the interests of the labour set-up and the economy of the country.

Therefore, if there are certain aspects of this Bill which give rise to problematic situations, we shall reconsider them with an open mind. We shall come back to Parliament if we feel that there is substance in the objections to certain of the provisions under discussion.

I want to add that my door is open to every trade union and all individual workers who have problems in this regard. They can come and put their case and we shall deal with them with the necessary sympathy and appreciation for their problems.

I want to thank hon members on this side of the House for their support for the legislation before us. I also hope and trust that this amending legislation will greatly contribute to the establishment of more labour peace and better order in the labour dispensation in this country.

Debate concluded.

On Clause 1,

Amendments put, viz—

1. 1. On page 7, in line 18, to omit and” and to substitute:
   , and in accordance with any applicable agreement, wage regulating measure or contract of service; or
2. 2. On page 7, in line 19, after “(ii)” to insert “(aa)”.
3. 3. On page 7, in line 25, to omit “(iii)” and to substitute “(bb)”.
4. 4. On page 7, in line 30, to omit “(iv) it” and to substitute “(cc) such termination of employment”.
5. 5. On page 7, in line 32, to omit “or” and to substitute “and”.
6. 6. On page 7, in line 33, to omit “(v) it” and to substitute “(dd) such termination of employment”.

Amendments agreed to.

On Clause 5,

Amendments put, viz—

1. 1. On page 13, in line 15, to omit “pending an order” and to substitute “until an order is”.
2. 2. In the Afrikaans text, on page 12, in line 16, after “gemaak” to insert “word”.
3. 3. On page 15, after line 59, to insert:
   1. (b) Pending an appeal in terms of paragraph (a) the industrial court may on application make such interim order as it deems reasonable.

Amendments agreed to.

On Clause 11,

Amendment put, viz—

1. On page 27, in line 31, after “subsections” to insert “(4)bis, (4)ter,”.

Amendment agreed to.

Bill read a second time (Official Opposition and Progressive Federal Party dissenting).

Bill, as amended, accordingly agreed to.

Mr Chairman, the Local Government Training Amendment Bill is a very short Bill, consisting of only three clauses. The aim of the principal Act appears to be to make provision for promoting the training of staff for local government bodies. The purpose of the amending Bill is to amend this principal Act in three respects. Firstly, it effects an amendment of the definition in clause 1 of the principal Act to define the relevant local government body more closely; secondly, it makes the four provincial secretaries members of the Training Board, a body established in section 2 of the principal Act; and thirdly, it provides that certain moneys can only be utilised to defray the expenditure arising from the provision of training by the Training Board. The Official Opposition has no problem with the third aspect but I want to dwell briefly on the other two amendments in this Bill.

The first amendment, which seeks to further define the concept “local government” makes provision for the accommodation of certain changes in concept that have taken place, but also seeks to define the regional services councils, established in terms of section 3 of Act No 109 of 1985, as local government bodies for the purposes of this legislation.

Only last night SABC-TV saw fit to explain to the electorate how this highly complex governmental system in South Africa works. According to the information provided last night, it is evident that a local authority forms part of the own affairs concept, but that regional services councils form part of the general affairs concept. For the purposes of this legislation, however, regional services councils are now also regarded and defined as local government bodies and are involved in an own affairs concept. [Interjections.] Own affairs are not being extended in the process, and this is therefore unacceptable to the Official Opposition.

Secondly, while the provincial authorities are concerned with general affairs and there is considerable movement in that direction, at this stage we see no need for the four provincial secretaries to have official representation on the Training Board. In this way the provincial authorities, which deal with general affairs, are now also being involved in the policy-making function in terms of the own affairs concept. The Official Opposition finds this unacceptable, and we shall therefore not support this legislation.

Mr Chairman, what we have here is indeed a minor technical amendment of an Act dealing with the training of people in order to place local government on a sound footing.

I do not understand what is going on with the Official Opposition.

We have read the Bill.

And they do not understand it; that is very clear.

Since the regional services councils do, in fact, deal with matters such as hard-core services, etc, they do render a service to local governments. What objection can there be to officials being trained to help perform these functions?

Moreover, as regards the objections in respect of the provincial secretaries, it is surely common knowledge that local governments fall directly under the provincial administrations. Provincial authorities have to provide an important service and perform a co-ordinating function. If they have to perform that function and assist in the training, what objections can there be to their being involved in the Training Board?

After all, it is the policy of each of the parties in this House, including that of the CP—if one can believe their programme of principles and their manifesto for the local government elections—that there are going to be Black local governments and authorities for each of the communities.

For the majority of communities of people of colour, and in particular the Black communities, local government is a new experience and therefore there must be trainees from among their own people. This legislation merely streamlines that training to ensure that meaningful administration takes place.

Therefore we really cannot understand the problem of the CP, and it is a pleasure for this side of the House to support the legislation.

Mr Chairman, this is a short Bill with just three clauses. The first clause provides that the provincial secretary of every province will be a member of the Training Board. We think this is a good idea and support that concept.

The second is that provision will be made that certain moneys may only be utilised to defray expenditure arising from the provision of training approved by the Training Board, rather than just for training courses. We think that is a good idea, too, and we support the concept.

The third clause provides for a definition or an amendment to the definition of “local governing body”. As I have said, it is a short Bill and it is necessary. We therefore support the Bill.

Mr Chairman, last Friday, in a debate on a different Bill, we argued about this same matter of the level of government at which regional services councils are involved. It appears that the hon member for Randfontein was not in the House. Accordingly I shall sketch the situation again very briefly.

A level of government and an institution at that level of government are clearly not the same thing. Therefore, if we say that regional services councils function at the local government level, that does not mean that they are the only institutions at that level of government. In other words, the fact is that local government bodies for the various population groups are own affairs institutions of those particular population groups. Consequently there are White local governments, Brown local governments, Black local governments, etc.

If those governments co-operate in the regional services council at local government level, surely that does not mean that it is assumed that local government institutions for the various groups thereby become a matter of general interest or general affairs. I think it is of the utmost importance that the hon members have clarity about that because then they will not make such ridiculous statements as the hon member did here.

The fact is that a regional services council serves at the local government level. If not there, then the valid question is whether one is then dealing with a new level of government. Surely that is not true. A regional services council functions at the local government level. That is the point at issue here, and for that reason provision has indeed been made in this Bill for justice to be done as regards representation for regional services councils as institutions functioning at local government level.

It is because the principal Act makes provision for training in regard to the local government level that regional services councils are involved. It is as simple as that, and the hon member for Randfontein should really just try to understand what is at issue here when we say that there are own affairs institutions with regard to the various population groups at local government level and a general institution in which the various authorities are indeed represented. That is the explanation in that regard.

I want to thank the hon member for Springs for his support of the Bill and his relevant explanation and the hon member for Johannesburg North for his support.

We are dealing here with the Bill amending the National States Constitution Act, Act No 21 of 1971. The Bill is even briefer than the previous one and contains only one clause, providing that the legislative assemblies of self-governing territories are authorised to appropriate money from their revenue fund for use outside their territories in the RSA in regard to projects approved by the Minister of Education and Development Aid.

The Official Opposition will support this Bill.

Mr Chairman, the hon member for Randfontein outlined the details of this legislation. The Bill was unanimously supported in the joint committee. The principle of the legislation has been agreed to with all six of the selfgoverning states. If we intend to develop the autonomy of self-governing territories in South Africa, I think that this Bill is an eloquent example of that. We on this side of the House take pleasure in supporting the Bill.

Mr Chairman, as has been mentioned, this is a one-clause Bill which provides for any legislative assembly to appropriate money from its revenue fund for use outside the boundaries of that self-governing state. Insofar as it allows for the provision of reintegration into the South African economy we welcome that. We shall support the Bill.

Mr Chairman, it seems to me that the hon members of this House are in a very good mood at present. I do not think it is necessary for me to prolong the proceedings of this House.

I should just like to thank hon members for their support of this measure. We could emphasise that this is an occasion on which an essential power is being granted to the various self-governing territories to enable them to carry out their task. It is undoubtedly a measure which will also afford greater legal certainty in that regard.

Mr Chairman, I move without notice:

Agreed to.

Mr Chairman, as you are aware, the Second Reading debate on the Labour Relations Amendment Bill was concluded with this House expressing its unanimous approval of the Bill. As a matter of fact, this was also the case in the other two Houses.

However, the Bill was recommitted to the joint committee mainly because of amendments submitted by the PFP. The most important amendment considered by the committee was a proposal by the PFP that the definition of an unfair labour practice be removed from the Bill, the intention being that a code of unfair labour practices should revert to a schedule which would merely act as a guideline.

The standing committee had previously spent a considerable amount of time on this issue and had found very valid reasons for codifying unfair labour practices and defining them in legislation. Some of the reasons are that the code is largely based on precedents set by the industrial court and that it provides clarity as to what is and what is not an unfair labour practice, thus saving the parties involved considerable expense and time. Should there be doubt, there is nothing to preclude any party from testing the matter in the industrial court.

Because the proposers could not provide any new arguments, the standing committee did not approve of the amendment. Other amendments were withdrawn by the PFP representatives after discussion, and one wonders whether it was not just a frivolous attempt to delay the acceptance of the Bill.

In this morning’s Cape Times it is reported that Cosatu has complained to the International Labour Organisation that the amendments interfere with the right to strike. I want to make it perfectly clear that that is just not true. As a matter of fact, the right of workers to strike legally as a last resort was not addressed at all by the amendments. I want to repeat that there is nothing in this Bill to prevent any trade union which follows the right procedures from reverting to strike action as a last resort; on the contrary, the amendments speed up the settling of disputes by expediting the establishment of conciliation boards and the establishment of a special labour court.

The other amendments considered by the committee provide more clarity without changing any principles and therefore meet with our approval.

Mr Chairman, first of all I want to thank hon members of this House for the valuable contribution they made in the standing committee when they dealt with this legislation. I want to thank the hon member for Eldorado Park, the deputy chairman of the standing committee, for his contribution. I also want to extend a special word of thanks to the hon member for Belhar who made an exceptional contribution towards this legislation. He is one of the most up-to-date members of Parliament when it comes to this legislation. He made a very valuable contribution and I want to thank him for that. I also want to thank other hon members once again for their contributions.

I want to associate myself with what the hon member for Belhar said about interference with the right to strike. It has been alleged that this legislation is interfering with the right to strike. I want to say categorically and unconditionally, however, that there is no way in which this legislation interferes with a legal strike or the right of workers to strike legally. It is not to the benefit of our labour legislation and nor is it fair to the good name of the country, as far as labour matters are concerned, to make the allegation that this legislation is interfering with any right of a worker. As a matter of fact there are many clauses in this Bill—for instance the provision which makes discrimination on the basis of race, sex or creed an unfair labour practice—which do just the contrary.

I therefore want to thank this House for its support of this legislation. I hope that the legislation will bring about labour peace in South Africa and that it will be to the benefit of all the workers of our country.

Debate concluded.

On Clause 1,

Amendments put, viz—

1. 1. On page 7, in line 18, to omit and” and to substitute:
   , and in accordance with any applicable agreement, wage regulating measure or contract of service; or
2. 2. On page 7, in line 19, after “(ii)” to insert “(aa)”.
3. 3. On page 7, in line 25, to omit “(iii)” and to substitute “(bb)”.
4. 4. On page 7, in line 30, to omit “(iv) it” and to substitute “(cc) such termination of employment”.
5. 5. On page 7, in line 32, to omit “or” and to substitute “and”.
6. 6. On page 7, in line 33, to omit “(v) it” and to substitute “(dd) such termination of employment”.

Amendments agreed to.

On Clause 5,

Amendments put, viz—

1. 1. On page 13, in line 15, to omit “pending an order” and to substitute “until an order is”.
2. 2. In the Afrikaans text, on page 12, in line 16, after “gemaak” to insert “word”.
3. 3. On page 15, after line 59, to insert:
   1. (b) Pending an appeal in terms of paragraph (a) the industrial court may on application make such interim order as it deems reasonable.

Amendments agreed to.

On Clause 11,

Amendment put, viz—

1. On page 27, in line 31, after “subsections” to insert “(4)bis, (4)ter),”.

Amendment agreed to.

Bill read a second time.

Bill, as amended, accordingly agreed to.

Mr Chairman, it is common knowledge that the local government sector, just like all the other sectors in our country, is struggling because of a shortage of trained manpower.

This is a problem in respect of the rural and developing local government bodies in particular, since trained and experienced staff are not readily available. The financial position of these local authorities is such that they do not always have funds available for training. Knowledgeable and competent staff are of cardinal importance for the effective and efficient functioning of local government in the Republic of South Africa. Essential services have to be rendered and expensive infrastructure has to be maintained.

Only if a local authority can meet its community’s needs effectively and purposefully, will the community be prepared to take part in this important form of government.

For these reasons the Local Government Training Act, No 41 of 1985, was promulgated in order to improve the expertise of local government staff to the advantage of the communities that they have to serve.

The principal Act provides for the establishment of a training board which will administer a training fund. The fund will be utilised in defraying the training costs of local government staff and the cost of counselling council members.

Since the implementation of the principal Act approximately three years ago, local authorities have realised to a great extent the value training has for them. The financial benefits provided by the principal Act are therefore being utilised to an increasing extent.

Local authorities take part actively in the activities of the regional and subregional training committees which were established to promote and co-ordinate training.

Of the 86 courses which have been approved by the training board so far, most have been developed by local authorities themselves. They are made available to the training board free of charge. Apart from the training given to their staff by local authorities, 25 299 officials and council members were trained during 1 507 training sessions up to 31 March this year.

It is clear that the training board, with the National Co-ordinating Committee of the Council for the Co-ordination of Local Government Affairs, performs an enormous task in the interests of local government training.

†The training board is a statutory body which determines and lays down the policy for local government training for the whole country. Local government institutions and representatives of central government departments involved in training, such as the Department of Manpower and the Commission for Administration, are already represented on the training board.

The provincial administrations, which are directly involved in the effective functioning of local authorities are, however, not represented on the training board. To date they have only observer status. It was felt that the provincial administrations should not only be involved in the executive functions, as set out in the principal Act, but that they should also have full representation, through the training board, in a policymaking body. Clause 2 of the Bill therefore makes provision for the provincial secretaries to be represented on the training board.

In terms of section 8 of the principal Act the training board may allocate money from the training fund to defray costs incurred for training only if such training is provided in terms of an approved course. All training cannot be presented by way of courses, however. Sometimes it is necessary for an official of one local authority to give an official of a neighbouring local authority practical, individual training in order to equip it to perform a specific task.

Skills such as the laying of pipes, the patching of tarred roads, and tractor maintenance, must also be taught through practical application. In such cases courses are not necessarily applicable. For this reason clause 3 of the Bill amends section 8 of the principal Act so that the training board may allocate money from the training fund for training approved by the board.

The amendments contained in clause 1 only update the definition of a “local government body”.

The Bill was accepted by the Joint Committee on Constitutional Development without any amendments, and will enable the training board to continue its important task with the full support of the provincial administrations and with legal certainty as to the advantage of local government bodies and the communities they serve.

Mr Chairman, I am speaking in support of the Local Government Training Amendment Bill.

In terms of the Local Government Training Act, No 41 of 1985, the four provincial secretaries are not official members of the training board at present. They only have non-official observer status. In terms of the amending Bill before us today, however, as members of this board they will now have a share in the policy-making functions of the board.

Secondly, the concept of “local authorities” is defined more closely. Coloured and Indian management committees, and those management boards to which reference is made in section 1 of the Rural Areas Act, are included in this as well. In future these members will benefit by this change in the Act.

Clause 3 provides that money that is allocated may be utilised only to defray the expenditure arising from the provision of training approved by the training board. The hon the Minister said, however, that certain functions were taught by means of in-service training. He mentioned the example of a case in which a treasurer can assist a neighbouring local authority’s accountant by informing him about the state of affairs and describing how the accountant should perform certain tasks. This is an important change contained in the Bill.

The training board may also place a levy on local authorities in order to defray its expenditure. It is also provided, however, that the State will defray 50% of such expenditure. The other 50% will be contributed by means of the levy collected from local authorities. The Government is not solely responsible, therefore, because local authorities do contribute to the defraying of expenditure.

With these few words I should like to support this Bill.

Mr Chairman, I rise merely to express my appreciation to the hon member for Grassy Park and other hon members who support the legislation.

I merely want to make a general comment. When we agree with one another for the sake of effective government, effective rendering of service to communities and the promotion of the constitutional development of the country, it does not imply that one party is going to become the lackey of the other, but that we are placing a higher priority on the country’s interests than on our specific groups and our own standpoints.

Mr Chairman, the Bill before us today is short, but very important.

What makes the Bill important is that the initiative and request for the amendment of the Act came from the governments of the self-governing territories. In this regard repeated requests were received from KwaZulu, KaNgwane and Qwaqwa, amongst others, to be allowed to utilise funds outside their territories for the benefit of their own communities.

This Bill gives effect thereto and grants increased powers to the governments of self-governing territories to utilise funds outside their area of jurisdiction in respect of approved projects. In this process greater legal certainty is created in regard to the spending of money from the revenue fund. At present the spending of money from the revenue fund is limited to within the physical borders of a self-governing territory, but as hon members are aware, the government and economic activities of the seven self-governing territories have expanded considerably, to such a comprehensive and sophisticated degree that it is impossible to limit this to their own territories alone.

In support of my argument I would like to give hon members some examples.

*Among the Government activities are the appointment of representatives and assistant representatives in the RSA in terms of section 4 of the Representation between the Republic of South Africa and Self-governing Territories Act, Act No 46 of 1959.

If there is to be effective representation, it is necessary that offices and homes be purchased, erected and maintained for the representatives and their staff. Self-governing territories control their own development corporations. Some of the corporations run transport undertakings which operate countrywide. Because of the nature of their activities, they need depots or facilities for passengers. The informal sector needs sales points, markets and even farm stalls for the distribution and sale of produce. Consequently it is not unusual for the development corporations to tackle projects in respect of employment creation and housing which will be to the advantage of the citizens of the country who do not live within the country’s boundaries.

In addition I want to mention that in terms of the Government’s decentralisation policy, industrial growth points, of which some are situated in the self-governing territories and others outside these territories, are being developed. Among the industrial areas which are situated physically outside a self-governing territory, there are industrial development points which fall within the immediate demographic sphere of influence of the self-governing territories.

In fact, Mr Chairman, in terms of item 15(a) of Schedule I to the National States Constitution Act, Act 21 of 1971, the self-governing territories have had the authority to levy taxes on the citizens of those territories who are resident outside the boundaries of the territories in question for many years.

Finally, the fact that self-governing territories may spend money outside their territories with the approval of the hon the Minister of Education and Development Aid does not mean that they are being granted extraterritorial powers. Any expenditure of any funds outside the boundaries of a self-governing territory, just like the expenditure of funds in the self-governing territory, is subject to budgetary control and auditing by the Auditor-General.

In addition the expenditure is restricted to that which has reference to matters over which selfgoverning territories have authority as stated in Schedule I of the National States Constitution Act, which is transferred to the self-governing territories.

Mr Chairman, as the hon the Minister said, this amending Bill will really only be to the advantage of the self-governing states. I should like to support it, since it will grant self-governing states the right to extend their economic activities outside their own boundaries in future.

Upon inquiry I was told that this amending Bill was a direct consequence of requests from the governments of KwaZulu, KaNgwane and Qwaqwa. In due course the other states promised that they would support this. The self-governing states have lively governments which are obtaining extraterritorial powers by means of this amendment to launch projects in other states, including South Africa. When one looks at Schedule I of the principal Act, one realises that items 6, 14, 19 and 31D in particular will be the order of the day.

Item 6 of Schedule I reads:

Item 14 reads:

Item 19 deals with intoxicating liquor, and in this connection I think particularly of sorghum beer which can be transported over the borders.

Item 31D deals with tourism. Some of the most beautiful parts of South Africa are situated in these areas.

†Mr Chairman, the self-governing territories were established in terms of the National States Constitution Act, No 21 of 1971. At first they were purely ethnic bodies, viz for the Zulus, Sothos, Pedis and Tswanas. The Government, however, now regards them as regional governments, something tantamount to provinces, and, I think, eventually as autonomous states within a non-racial geographic federation.

These self-governing states have over the years developed into dynamic bodies. They not only conduct business and government affairs on a regional basis, but each of these states has its own development corporation. These governments have been granted a wide variety of functions which can generally be divided into three categories, namely welfare functions such as social pensions and child care, law and order functions such as police and courts and thirdly, economic functions such as trading and commercial undertakings.

As their activities increased over the years, some of these self-governing states, so to speak, spilled over into adjacent territories. For instance, goods manufactured within a homeland are sold elsewhere. Bus services run across the borders, right into cities such as Pretoria, Johannesburg, Bloemfontein and Cape Town. To enable these states to do this sort of thing, they obviously have to spend money outside their territories from time to time. As these self-governing states are so-called “creatures of statute” it was doubtful whether they could legally spend money outside their territories, hence this Bill. The Department of Constitutional Development and Planning wants to ensure, by way of this Bill, that these governments do not fall foul of the law by spending money outside their areas.

On the one hand it is a mere technical correction, while on the other hand an important principle is involved. Parliament gave birth to these selfgoverning territories and the Bill before us now extends their scope. By formally granting them the right to spend money outside the homelands, we are also signifying that these states are part and parcel of the South African scene. They are an integral part of South Africa’s political, economic and social system. They may by all means be regional governments, but I would hate to think of these states as isolated tribal entities.

*Sir, during the joint debate last week we dealt circuitously with the Promotion of Constitutional Development Bill. In this Bill provision is made inter alia for these states to obtain representation on the National Council in due course. We should like to support the measure, because we should like these states to be included in what we believe to be the solution for South Africa, viz a nonracial geographic federation. These states must not be included as banana republics, however, but as economically viable states.

Mr Chairman, I should like to thank the hon member Mr Douw for his support of the Bill before the House. I do not intend to disturb the peace that is prevailing here with political arguments. I merely want to make a few comments in this connection.

I do not know whether or not hon members who are sitting here really experience things in the same way as I do, but after last week’s joint debate the communities at large are looking forward much more eagerly to what can happen in our country. Even if such a National Council should not be established, we shall not be able to destroy the atmosphere created by that sitting. People who try to do so will definitely be doing South Africa a disservice.

With regard to the Bill in question, an important fact has been acknowledged, viz the interdependence of the economic activities of the various regions of the country that make up South Africa. Since this can lead to more efficient management and development of the self-governing territories, I am grateful that it is supported by all hon members. We must sit down one day and talk calmly about South Africa, because somewhere along the way we shall have to learn that we need not be ashamed of what we are and that we must not be superior in respect of that which is different.

I think the mosaic which makes up the population of this country lends itself to positive utilisation. If in the past certain communities experienced the acknowledgement and definition of race and ethnicity as injustice, let us rectify matters. Let us use that which we are, however, to fulfil the ideals of our people in their communities and in our common fatherland. Then we shall be making progress. To tell the truth, I think we have made a great deal of progress already.

Mr Chairman, I move:

1. (1) Constitution Second Amendment Bill [B 100— 88 (GA)];
2. (2) Constitution Third Amendment Bill [B 101— 88 (GA)]; and
3. (3) Constitutional Laws Second Amendment Bill [B 105—88 (GA)].

Agreed to.

Mr Chairman, the Bill before us today is short but very important. What makes the Bill important is that the initiative and request for the amendment of the Act came from the Governments of the self-governing territories. In this regard repeated requests were received from KwaZulu, KaNgwane and QwaQwa, amongst others, to be allowed to utilise funds outside their territories. This Bill gives effect thereto and grants increased powers to the Governments of self-governing territories to utilise funds outside their areas of jurisdiction in respect of approved projects.

In the process, greater legal certainty is created regarding the spending of money from the Revenue Fund. Presently the spending of money from the Revenue Fund is limited to within the borders of the self-governing territories, but as hon members are aware the government and the economic activities of the self-governing territories have expanded considerably, to such a comprehensive and sophisticated degree that it is impossible to limit this to their territories alone.

In support of my argument I should like to give hon members some examples. Government activities include the appointment of representatives in the Republic of South Africa in accordance with section 4 of the Representation between the Republic of South Africa and Self-governing Territories Act, Act No 46 of 1959. For the representation to be effective, it is necessary that offices and homes for the representatives and their personnel be bought, erected and maintained.

Self-governing territories control their own development corporations. Some of these corporations manage transport enterprises which operate country-wide. Due to the nature of their activities, depots and facilities for passengers are needed. For the distribution and sale of products, marketing points, markets and even roadside stalls for the informal sector are needed. It is therefore not unusual for the Development Corporation to undertake job creation and housing projects which will be to the advantage of the citizens of those countries.

Furthermore, I would like to mention that in accordance with the Government’s policy of decentralisation, industrial growth points are being developed, some of which are situated in the self-governing territories. Among the industrial areas which are physically situated outside a self-governing territory are some industrial growth points which will fall within the immediate demographic sphere of influence of the selfgoverning territories. For that matter, the selfgoverning territories have for many years already had the power in terms of item 15(a) of schedule 1 of the National States Constitution Act of 1971 to levy taxes on the citizens of those territories living outside the borders of the territories concerned.

Finally, the fact that the self-governing territories will be allowed to spend money outside their territories with the approval of the Minister of Education and Development Aid does not mean that they are receiving extra-territorial powers. The spending of any funds outside the borders of a self-governing territory is, just as in the case of the spending of funds within the self-governing territory, subject to budget control and auditing by the Auditor-General. The utilisation of funds is limited further to that which relates to matters referred to in Schedule 1 of the National States Constitution Act over which self-governing territories have legislative competence, and which have been transferred to the self-governing territories. For that reason I propose that this Bill be read a second time.

Mr Chairman, this Bill deals with instances where the national states have to spend money outside their territories. The national states, as we know, have certain limited powers and their funds can only be spent, as the hon the Deputy Minister has explained to us, within their own territory. However, they sometimes require funds to be spent outside their territories. Say, for argument sake, that they have urban representatives in the various states. In order to find accommodation or to build houses for these urban representatives, this Bill will give them the power to spend such money.

If, for argument’s sake, Lebowa wants to hire a stand at the Rand Easter Show to market its products, it does not have the authority in terms of the present legislation to spend money on such a project. However, this amendment will enable them to spend money and to market their products outside their territories.

Hon members will know that Lebowa sells a lot of oranges. If they want to sell their oranges to Pietersburg, for argument sake, they have to hire a place to store their products. In terms of the present legislation they do not have the authority to do this, but with this Amendment Bill they will have the power to spend the money to make such provision.

We must remember, however, that this Bill gives them the power to spend money outside their territories but only within the Republic of South Africa. If they want to spend money outside the Republic of South Africa they have to get the sanction of the Department of Foreign Affairs. If the Department of Foreign Affairs approves, they can spend money outside the RSA. This Bill only makes provision for the spending of money outside their area of jurisdiction but still within the RSA.

I think it is quite right that they should be given this opportunity because, after all, a national state is a state which governs its own territory and which has a certain jurisdiction. I think it must be given the power to spend money outside its area to fulfil its aims and to undertake certain projects. For that reason I think this Bill is very appropriate.

Mr Chairman, the hon the Deputy Minister of Constitutional Development and Planning mentioned the importance of this Bill with regard to self-governing states. Self-governing states collect taxes from their citizens. The self-governing states of QwaQwa, Lebowa and KaNgwane, requested permission to spend money outside their territories.

The Department of Constitutional Development and Planning tried to grant authority through a proclamation by the hon the State President. This could not be done, because it was outside the ambit of the Act. This could only be done by means of legislation. The self-governing territories are not allowed to spend money on projects outside their areas. These territories cannot spend money outside their borders, such as in Pietermaritzburg, Welkom and so forth. They cannot purchase any properties or office blocks for their representatives, but will be allowed to pay rentals for such premises.

The KaNgwane Development Corporation required certain properties, but was unable to obtain them as it could not spend money outside that area. QwaQwa provides the bus service to Harrismith. In view of the Act, this territory cannot provide bus services for its citizens, as the hon member for Actonville has mentioned. It is therefore necessary to introduce the Bill so that the self-governing territories will be able to pay for the needs of their citizens, thereby enabling them to spend money outside their borders, provided it is still within the Republic of South Africa. In this regard I have pleasure in supportin g the Bill.

Mr Chairman …

Welcome to the new party! I wish you a long life!

Mr Chairman, I have no problem in supporting this Bill. As was said by previous speakers …

You will have a very short shelf life!

Mr Chairman, is the hon the Chairman of the Ministers’ Council delivering his own speech?

I am congratulating you! You should be happy!

Order! The hon member for Camperdown must proceed. He must not allow himself to be distracted.

Sir, I do not like unnecessary disturbances. As I said, I have no problem in supporting this Bill. I want to agree with what the hon member for Actonville said. He was followed by the hon the Minister of Local Government and Agriculture. Both of them said this was an enabling Bill, and I therefore support it.

Mr Chairman, this Bill is aimed at rectifying a mistake which was evidently made in 1971. Unfortunately we were not here at that time. Had we been here, it is within the bounds of possibility that the mistake may have been spotted in the standing committee and the blunder would not have occurred. After all, when the national states—or homeland governments, as they were called in those days— were created, there should have been the foresight to appreciate that members of the national states or their employees may have to function outside the borders of those states.

It is typical of the present time. Parliament has under consideration the creation of either a national council, or a national forum, or a “groot indaba”—an indabankulu. [Interjections.] The Chief Ministers of the national states will be entitled to be members of that forum which is about to be created. It is unthinkable that a Chief Minister of a national state would come to Cape Town or go to Pretoria without a reasonable entourage of advisors, officials and secretaries. Clearly Parliament is not going to vote funds specially for the members of the entourage. Obviously the national state will have to bear the expenses of hotel costs and so on.

Of course, we know that none of the Chief Ministers of the various national states are wrigglers. They do not try to wriggle or juggle their way out of any tight corner in which they may find themselves. They face problems fair and square. They are honourable men and women. If they find that their constituents have no confidence in them, they will resign their seats. If they hold the office of Chief Minister or Minister, and their legislative assembly calls upon them to resign, as honourable people they will do the honourable thing. Of course, they will not utilise funds for a purpose for which the funds were not voted by the assembly of the national state. Not one of the Chief Ministers or Ministers in any of the legislative assemblies has committed contempt of Parliament. In spite of the fact that they are new to the parliamentary situation, they honour the traditions and conventions of Parliament. We treat the Ministers of the national states with far greater respect than certain persons who have displayed a complete lack of integrity.

There is another reason why we cannot say that funds should not be made available to the Ministers of the national states, namely that many of the national states advertise the industrial development areas within their borders. Necessarily they have to advertise those on television or in newspapers which have their head offices in Johannesburg or Cape Town. The money remitted for advertising expenses is money advisedly spent, because they are thereby able to attract industrialists to their areas in order to provide jobs for the people in the national states.

We can be reasonably certain that when the Ministers of the national states enter into contracts, whether building contracts or any other land transactions, or when they spend money on advertising in newspapers, they do not use sticky fingers. None of the money sticks to their own hands. They pay the money directly to the advertisers or contractors without any kickback or commission or anything like that. When they necessarily spend money for the advancement of the national states, they should have the authority to do so. We therefore support this Bill.

Mr Chairman, I am somewhat surprised that so many years after the first legislation was passed through Parliament, it is now necessary to make adjustments. My concern is the same as that of the hon member for Reservoir Hills. We are all aware that the self-governing states have to engage architects, land surveyors, quantity surveyors and engineers. They have to purchase many of their requirements in machinery and other road building equipment from companies outside their own territories. One wonders how they have done all of this since 1971.

As the hon member for Reservoir Hills said, many of these homelands are engaged in a campaign, both locally and overseas, to attract foreign investment so as to develop their industrial infrastructure, growth and development. For these reasons alone, I really cannot understand how such a situation existed in the past and how these governments overcame this inhibition which must have caused quite a crisis in their administrations.

On the basis of the explanation tendered by the hon the Deputy Minister, and sentiments echoed by other hon members of this House, I support the measures which are being introduced to amend the Bill.

Mr Chairman, I thank hon members for their support. I should like to add nothing, except to emphasise what the hon member for Actonville and others have indicated, namely that there will be sufficient control over this spending in that the Auditor-General will take the necessary control measures.

Regarding the remarks of the hon the Leader of the Official Opposition, what he said is correct in certain ways. However, I believe what is important—and I said so in my introductory speech—is that this measure actually provides for greater legal certainty regarding this spending. I think it is true that in the past this might not have been so, because it is clear that those activities were going on. In the sense that we are now making provision, greater legal certainty is created.

I think it is also part of natural development and not necessarily a mistake of 1971 that is being rectified, as the hon member for Reservoir Hills said. It is a natural development that took place over the years which we now have to provide for. That is the reason for this Bill.

Mr Chairman, it is a generally accepted fact that the local government sector, just like other sectors in the country, is labouring under a shortage of trained manpower. Especially the rural and developing local authorities are beset with this problem, as trained and experienced personnel are not readily available. The financial situation of these local authorities is also such that they do not always have funds available for training. Knowledgeable and experienced personnel are of paramount importance for local government in the Republic of South Africa to function efficiently and effectively. Necessary services must be rendered and costly infrastructure has to be maintained. Only if a local authority can purposefully and effectively satisfy its community’s needs, will that community be prepared to participate in this form of government. For these reasons the Local Government Training Act of 1985, hereinafter referred to as the principal Act, was promulgated in order to increase the knowledge of the local government personnel to the benefit of the communities they serve.

The principal Act provides for the establishment of a Training Board which administers a Training Fund. This fund is utilised to assist in defraying the cost of training local government personnel and giving guidance to councillors. Since the implementation of the principal Act approximately three years ago, local authorities have increasingly realised the value of training and the financial advantages thereof to them by the principal Act being increasingly utilised. Local authorities participate actively in the regional and subregional training committees, established to propagate and co-ordinate training. Most of the 86 courses which have already been approved by the Training Board were developed by local authorities themselves and are made available to the Training Board at no charge. In addition to the training which local authorities provide their personnel with, some 25 299 officials and councillors have been trained during 1 507 training sessions as at 31 March 1988.

It is apparent that the Training Board, together with the National Co-ordinating Training Committee of the Council for the Co-ordination of Local Government Affairs, performs a gigantic task in the interests of local government. The Training Board is a statutory body which determines and lays down the policy for local government training for the whole country. Local government institutions and representatives of central government departments involved in training—such as the Department of Manpower and the Commission for Administration—are represented on the Training Board. The Provincial Administration, which is directly involved in the effective functioning of local authorities is, however, not represented on a Training Board. To date they only have observer status on a Training Board. It is felt that the Provincial Administrations should not only be involved in the executive functions of the principal Act, but that they should also have full representation in the policymaking body, that is the Training Board itself. Clause 2 of the Bill therefore makes provision for the provincial secretaries to be represented on the Training Board.

In terms of section 8 of the principal Act, the Training Board may allocate money from the Training Fund to defray costs incurred for training only if such training is provided in terms of an approved course. All training can, however, not be presented by means of a course. Sometimes it is necessary for an official of one local authority to give an official of a neighbouring local authority practical and individual training to perform a specific task. Skills such as the laying of pipes, patching of tarred roads and tractor maintenance must also be taught through practical application and a course is not necessarily applicable. For this reason, clause 3 of the Bill amends section 8 of the principal Act so that the Training Board may allocate money from the Training Fund for training approved by the Board. The amendments contained in clause 1 merely update the definition of a local government body.

This Bill was accepted by the Joint Committee on Constitutional Development without any amendments and will enable the Training Board to continue its important task with the full support and co-operation of the provincial administrations, and with legal certainty, to the advantage of local government bodies and the communities they serve.

Mr Chairman, the Bill introduced by the hon the Deputy Minister, namely the Local Government Training Amendment Bill, is a very interesting one. It actually updates the principal Act by introducing certain amendments.

The Provincial Administration in each province would appear to be the effective body in so far as the control over local authorities is concerned. Therefore the provincial secretaries of each of the provinces will become members of a Training Board for employees of local authorities. Previously the provincial secretaries were not members of the Training Board.

The function of the Training Board is very important. It creates an opportunity for municipal employees to receive their training in various areas. In so far as training is concerned in certain municipalities, qualified city treasurers even offer in-service training to neighbouring local authorities in order to improve the service rendered by their employees. The Bill also makes provision for a fund called the Training Fund, which will be controlled by the Training Board. The fund will be utilised for the effective training of municipal employees.

This is a very important Bill in so far as local authorities are concerned. The power is being conferred upon the provincial administrations, and more particularly, upon the provincial secretaries. It is an improvement and it represents a step in the right direction in so far as the training of employees is concerned.

I do not want to be misunderstood on the issue of autonomous local authorities. Those nonWhites, such as Blacks, Indians and Coloureds, who are presently serving on local authorities will be given an opportunity to be trained. By receiving this training, those employees will be able to rise to top positions as city treasurers, accountants, town clerks and the like. My party fully supports this Bill in so far as the Training Board is concerned.

Mr Chairman, hon members will recall that when the Local Government Training Act of 1985 was piloted through this House, the House supported it without compromising the issue of separate local government bodies because for many years those hon members who had experience in local government matters had been crying out for the training of people of colour. We felt at the time that this legislation was overdue and in fact, when it was introduced and passed we supported it and we felt that it would assist in the training of individuals.

The other day the committee learnt through the officials that training was taking place in accordance with what was envisaged. In fact, we were very pleased to learn that when the State gave a quarter of a million rand, which was their part of the contribution, an amount of R250 000 was also made up by the local authorities. This money is being used in addition to the R8 million which was granted by the State as a one-time grant. This therefore means that a lot of money is being invested, and I believe that there is a need to ensure that the provincial secretaries also become part of the team so that they will have the rights as envisaged in the amendment.

Furthermore, we were advised that the reason for the amendment was that money could be allocated outside the board’s training programme because they use large local authorities. If one takes Durban as an example, it receives members of staff from the other small local authorities. Therefore in such cases money can be made available, providing it is for an approved training course by the Training Board. We were worried about that, but the officials assured us that it was the intention of this amendment that all these training programmes had to be approved by the Training Board. I believe that these are good amendments in order to make the board work expeditiously and also to ensure that training takes place to the fullest extent by using money outside their own programme. In fact, they will be doing this by paying larger local authorities which will provide training for officials of smaller local authorities. For that reason we support the Bill and we do so hoping that the board will ensure that the objectives, as discussed when the Bill was piloted through, will be achieved to the maximum so that we will have better local government officials at the lower level.

We saw a Bill passed in this House the other day—the Town Clerks Amendment Bill—which also ensured that these people would have better qualifications to serve their council. It was also to ensure that the best service was given by our officials. We therefore support this Bill.

Mr Chairman, although this Bill deals with the lower government structures, which do not satisfy our political and ideological requirements, nevertheless it takes into consideration the real and historical situation that local authorities of various race groups exist in South Africa. They need staff to be trained from those sections of the South African population that were denied the opportunity of employment and of being trained to satisfy the manpower requirements in existing as well as new local authority areas.

Last week we dealt with another Bill which took changing circumstances into consideration and also dealt with clauses relating to definitions of local government bodies. Here too, in addition to bringing the provincial secretaries into the board as members and also dealing with the appropriation of funds for the Training Board, this particular Bill also further extends the definition of certain local government bodies. It takes into consideration the fact that the regional services councils are being established in various parts of South Africa.

I want to place on record that it is our wish to ensure that people of colour are not only trained but are also offered employment opportunities not only in local government institutions serving their own communities, but in local government institutions serving other communities as well. When we had this problem with the question of remuneration of town clerks we found that one could have a very highly qualified town clerk yet because he was a member of the Indian race group he might not have the opportunity of being employed in larger local authorities such as Johannesburg, Pietermaritzburg, Cape Town and Durban.

I want to say that the Local Government Training Act of 1985 was a significant piece of legislation passed by the tricameral Parliament. I want to give reasons for this. Those of us who have served on local affairs committees and in other local authority institutions will know how difficult it is and has been to find highly qualified and trained personnel from members of the Indian community to man these posts. Even in our own administration—in our Department of Local Government, Housing and Agriculture—we find it extremely difficult to get qualified and experienced Indian personnel to man top jobs. I therefore wish to remind my colleague, the hon the Deputy Minister of Constitutional Development and Planning, that this is not only a problem in the rural areas. It is the result of a lack of opportunities and a lack of training, as well as discrimination on the part of these larger local authorities that failed to train people who are not White. They did not offer them the opportunity to get trained, nor did they offer them the opportunity to be employed even after they were trained. As a result of this lack of opportunities it is not only in the rural areas that we have these problems; we also have them in the urban areas.

I therefore wish to say that as far as this training is concerned priority must not be given to smaller local authority areas or rural areas; it must be accorded in the larger areas as well. Take for example local authorities such as Verulam, Umzinto North, Marburg, etc—one finds it very difficult to find a single qualified engineer from the Indian community. One cannot find a suitably qualified, experienced and able town clerk from amongst the Indian community to occupy the many vacancies that exist in the so-called Indian local authority areas.

I therefore believe that in addition to the passing of the Local Government Training Act in 1985, this is a progressive measure in spite of the fact that it deals with local authorities that have a racial character. In spite of these deficiencies we support the Bill.

Mr Chairman, it is unfortunate that the entire structure is racial and that apartheid continues. That is a sad reality. Unfortunately it is also true that affirmative action takes many forms, and there is a great philosophical debate about the validity of affirmative action. As regards the training of those who will provide the manpower for local authorities, we of the PFP are not so racist as to only talk about Indian local authorities; we talk about the whole of South Africa—there are not only Black areas, there are also little platteland villages where they need town clerks and town engineers or town treasurers. This training body will provide training for all South Africans who need that training for the purposes of administering local authorities, regardless of race or colour. For that reason I want to say the following:

*We as members of the PFP have no problem with this amending Bill. [Interjections ]

Hear, hear!

Mr Chairman, this Bill is indeed a hallmark of the very important and historic debate that took place jointly last week. Indeed, this is intended to widen the circle of provincial council officials. Furthermore, mention has been made of the affirmative action by the hon member for Reservoir Hills. There is an advancement in this particular field, therefore consideration should be given to the aspect of advancement when it comes to local government. Local government is one of the most important government structures where in actual fact your bread-and-butter issues are involved.

Over the years, as a result of various pieces of legislation, the Indian community was not given an opportunity to participate in many of these structures. As a result—as in agriculture—it is very difficult to find the personnel with the required qualifications to man our departments. With the introduction of these Bills we must take advantage of them and support these measures. With the passing of the Local Government Training Act in 1985 the local authorities have taken a giant step, since this allows the training of staff to be planned and organised in a co-ordinated manner. The larger councils can be built up and can maintain their training sections but the majority of local authorities have been at a disadvantage in the past. Accordingly, the need for training has been the greatest among these local authorities.

The amendment has become necessary as a result of the application in practice of the provisions of the Act. The four provincial administrations are still directly involved with and responsible for local government within each province. It follows therefore that the provincial secretaries should be allowed as official members of the Training Board. It is unthinkable that responsible officials like the secretary of the provincial administration should not become a part of the exercise but are only there with observer status. This does not serve a very useful purpose.

The wording of the existing section 8(3) of the principal Act is too restrictive as it provides for expenditure to be incurred on the training force only. This is of course not the only way in which training can be given. As a matter of fact, the holding of workshops and seminars can be a very effective way of training when experts in the field are used to impart knowledge to the staff of local authorities. [Interjections.] At the moment this cannot be done as such workshops or seminars cannot be regarded as falling within the meaning of “approved training courses” as presently stipulated in the Act. By changing the purpose for which funds may be used for the provision of training, the scope will be increased considerably and I am sure that the task of the Training Board will be facilitated.

In view of the above it is imperative that this Bill be supported. I am encouraged this afternoon that the hon member for Reservoir Hills has realised that he must know other languages too. [Interjections.] He realises the need for other languages, so he can start training now. Equally, the training of provincial secretaries becomes important. [Interjections.] I am surprised that the hon members of the PFP refer to speaking in one tongue. We will carry out a political analysis one day and history will record who speaks with how many tongues. [Interjections.] With this I want to support this Bill fully, because it places strong emphasis on the importance of establishing and restructuring local government.

Mr Chairman, clause 1 of the Bill before the House deletes certain outdated references in the definition of local governments and inserts an appropriate definition which includes a Coloured and Indian consultative, local affairs and management committee, and any other local government body established by virtue of the provisions of the Black Administration Act, 1927 (Act No 38 of 1927). It also includes the regional services council and a local authority as defined in the Black Local Authorities Act of 1982, and bodies or institutions declared a local government body under that Act. So much for Clause 1 of the Bill.

Clause 2 provides for a Training Board for local government bodies. The Training Board will consist of a director-general, who will also be the chairman of the Training Board. The board comprises the three Directors-General of the Administration: House of Assembly; the Administration: House of Delegates and the Administration: House of Representatives, an officer of the Department of Finance appointed by the hon the Minister of Finance, and an officer of the Department of Manpower, designated by the hon the Minister of Manpower.

The Training Board also includes the Director of Civil Service Training in the office of the Commission for Administration, the Director of Local Government, appointed in terms of section 3(1) of the Black Local Authorities Act of 1982, the Chairman of the Training Committee of the Co-ordinating Council and seven other members who are in the service of local government bodies. The appointment of all these members is specified in the principal Act, Act 41 of 1985. For some reason the provincial secretaries are excluded from the composition of members of the Training Board for local government bodies. Although the provincial secretaries are not officials of Training Boards, they nevertheless are unofficial observers in the Training Boards.

In terms of section 9 of the Local Government Training Act of 1985, Act 41 of 1985, the Training Board determines and approves a training course, as it deals with the nature, duration and standard of the course. The effective functioning of local authorities is the responsibility of the provincial administrations of the four provinces. Provincial administrations are directly involved in the work of the training programmes.

Clause 2 of this Bill amends section 2 of the principal Act and makes provision for the inclusion of provincial secretaries to be involved in the policy-making and executive function of the Training Board. Certain professions cannot be trained by means of an approved training course. It is sometimes necessary for an official to be trained by an officer of a neighbouring local authority by means of in-service training.

Naturally the Training Board, as it stands, is not authorised to allocate funds to these neighbouring local authorities for services rendered to an individual trainee. Clause 3 of the Bill therefore envisages amendments to authorise a Training Board to allocate funds to defray expenses incurred in such in-service training of an official or officer of an adjacent local authority. I therefore support this Bill.

Mr Chairman, I again want to thank hon members for their support of this measure. I think all hon members who participated emphasised the importance of training in general.

If one looks at what has been done in terms of training, one will see that more than 25 000 officials and councillors have been trained in more than 1 500 courses up to the end of March 1988. It is actually a gigantic task that has been completed. That is why it is important that we enable this process to proceed. We must make sure that it is done in the best possible way. The fact is that only a trained person can fulfil his task in the most effective and efficient way.

Only a trained person can actually aspire to promotion. That is why it is very important that through training of this nature people can be considered for promotion in their various capacities. I would like to add to what the hon the Chairman of the Ministers’ Council has said in this regard, namely that through training, opportunities can be developed for people to be promoted in their work situation.

I also want to confirm what the hon the Chairman of the Ministers’ Council has said regarding the necessity to train people to fill all the vacancies which exist in South Africa, not only in the public sector, but also in the private sector. Through training we can actually develop the management skills that we need in terms of our present day requirements in South Africa. It is therefore very necessary that we promote the training opportunities in all sectors, but especially at local government level.

In that regard, it is important also to take note of the point the hon the Chairman of the Ministers’ Council made in connection with regional services councils and the work that has to be done in that regard. Of course regional services councils are part and parcel of local government today. If we use the opportunity to train officials at local government level, we can make it possible for them to play their important role in regional services councils. Regional services councils are actually fulfilling a need in South Africa today and the hon the Chairman of the Ministers’ Council again made this point here this afternoon, as he has done in the past. I think his emphasis in this regard is very important.

*Perhaps I should say the following in Afrikaans. The hon member for Reservoir Hills surprised all of us here this afternoon by supporting the Bill in Afrikaans.

†If the hon member for Reservoir Hills would in future support all measures in Afrikaans, it would go very quickly. For that reason I would like to invite him to continue to support measures which come before the House in Afrikaans, because it will make our task much easier. I must tell the hon member in a good spirit that I sometimes have the feeling that when he does support a measure, he at least tries to find a reason why he should not have supported it. It seems to me that if he would do that in Afrikaans, we could be assured that it would be very short and effective.

I thank the hon member for his support and the fact that he expressed it in the way he did. As far as his remarks regarding separate local authorities are concerned, this is not really the matter before the House at this stage, in terms of this Bill, but we took note of his point in that regard. It is a well-known point of his. Mr Chairman, I have nothing more to add. I again thank hon members for their support.

Mr Chairman, I am sure all hon members of this House are aware that the Labour Relations Amendment Bill before us was passed by the other two Houses. When it came to the House of Delegates, the Bill was recommitted to the standing committee in order that new amendments which were proposed could be dealt with.

I want to deal with the amendments to clauses 1, 5, 8, 11, 26 and 28. In clause 1 there were 12 proposed amendments, seven of which were agreed to. One was withdrawn and four were reinstated.

[Inaudible.]

This Bill was recommitted to the standing committee to look at the amendments to the Bill. In clause 5 there were six proposed amendments and three were agreed to. The one proposed amendment to clause 8 was withdrawn.

What are the amendments? Read out the amendments.

The amendments are here and I do not want to elaborate on them, but they are very technical and very small, with words being inserted and deleted here and there.

Changing “he” or “she”.

I believe the hon member for Camperdown is very involved with the new party which he has just …

I am not damn stupid.

He may not be damn stupid, but …

Order! Did the hon member for Camperdown say that he is not damn stupid?

Yes, Sir.

Order! The hon member must withdraw that.

I withdraw it, Sir.

Order! The hon member for Mariannhill may proceed.

In clause 8 there was one proposed amendment which was withdrawn and in clause 11 there were two proposed amendments of which one was withdrawn and the other agreed to.

So what if it was withdrawn?

In clause 26, it was agreed that subsection (2) be retained. This was done by the very people who submitted the amendments as members of the standing committee. In discussions with them and by going through this with a fine-tooth comb, as it were, this was the result of the proposed amendments. Therefore I would like to report this to the House.

In clause 28 there were two proposed amendments which fell away. We were asked to look at the Schedule as it concerned section 16 and it was agreed that this Schedule should remain as a part of the Bill. Therefore I take great pleasure in supporting this Bill without much ado, because we have discussed this matter in detail in a previous debate.

Mr Chairman, the provisions and the requirements of the Bill today address the issues of labour in this country. We find that the provisions of the Bill have now accommodated the situation of the employer vis-á-vis the employee.

That is rubbish! That is quite untrue.

However much the hon member for Reservoir Hills may interject, I believe I have the right to say what I want to.

You may utter any “twak” you like.

I would not disturb him when he speaks, Mr Chairman. However, I want to say that the situation in relation to trade unions and the employers today is such that one has the establishment of new trade unions which themselves vie and compete with one another for recognition by the employers. The result is that the employer finds himself in a very difficult situation. The provisions of this Bill accommodate such a situation where the trade unions will have a legitimate right to do all that is legally possible for the benefit of the employee. On the other hand the employer, too, is now being afforded some safeguards where unnecessary advantage is taken by trade unions and employees in relation to their work situation. I speak with some measure of knowledge when …

Capitalistic junk!

It is not capitalistic junk; on the contrary, if there is no capitalist there will not be an employee. Therefore, I want to say that there is no doubt about the fact that there has been …

Mr Chairman, on a point of order: May I obtain a ruling from the Chair on whether the hon the Minister of the Budget is, in fact, debating the Bill, because the issue before this House concerns the amendments to the Bill itself. I do not know whether this is relevant. [Interjections.]

Order! The hon the Minister of the Budget may proceed.

Thank you, Mr Chairman. We are dealing with the consideration of the report and the Bill itself. [Interjections.] I want to say that we on this side of the House have given the necessary attention to both the report and the Bill. We find that the Bill addresses the situation in relation to labour in South Africa as it is today.

There is no denying the fact that there is more to the trade unions than we ourselves see on the surface. I want to quote hon members some recent incidents where employers have had difficulty with trade unions, and so on. Where the work force in a particular factory or a particular establishment is divided on the issue of whether or not to stay away from work, in that two unions have employee membership in that establishment, the result is that harassment, misleading and misinformation occur on the part of one trade union official against the other trade union official. This Bill now provides that there should not be misinformation and that there should not be a misleading of the work force.

Therefore, when I speak as I do, I am not at variance with the demand of the worker in relation to his wanting to be in the labour market to his best advantage. We are not denying that desire, that requirement of the worker. He should be treated in the best possible way because he is the most important lever that contributes towards the economy of the country. Therefore, he needs all the protection. The employee needs all the protection and this Bill gives that protection to the employee, as it does to the employer wherever employers are exploited unnecessarily in relation to demands that cannot be met. I want to say that the largest employers in this country view this Bill as one of the best that could have been introduced in this country. These are very large employers. [Time expired.]

Mr Chairman, I regret that the hon the Minister of the Budget felt that the requirements of labour had been accommodated in this Bill. I should like to ask the hon the Minister of the Budget to take the opportunity of speaking to Cosatu, for instance, or Saccola. Then he would know whether organised labour has, in fact, supported this Bill.

[Inaudible.]

No, I think the hon the Minister of the Budget said quite clearly in this House about three minutes ago—and I have written it down—that the requirements of labour have been accommodated. Mr Chairman, that is twaddle.

Hon members will recall that when the Labour Relations Amendment Bill was first debated in this Chamber on 6 June 1988, we in the PFP spoke very extensively on the contents of the Bill and we articulated our opposition to it. However, we followed the plea made by the hon the Leader of the Official Opposition that this Bill be recommitted to the standing committee, as he put it:

I should just like to tell this House that all the committee did was to discuss and to vote on the amendments which were placed on the Order Paper firstly, I believe, by the hon the Minister and secondly, by my colleague the hon member for Groote Schuur on behalf of the PFP. I should like it to be recorded that with the exception of ourselves, that is the PFP, all the parties in this House supported the amendments put forward by the hon the Minister. It rejected all save one amendment put forward by the PFP. That amendment was accepted by the hon the Minister and his department as well.

I should also like it to be recorded that no new submissions, as indicated by the Leader of the Official Opposition, were ever discussed or canvassed, let alone voted upon. Let it also be recorded that we are very pleased that the hon the Minister supported the amendment put forward by the PFP relating to the vesting of the discretion in the Appeal Court either to implement or suspend a decision that was made and this, as I said, was accepted by the committee. We are grateful for this. We are sorry that no party supported the other amendments put forward by us because in our opinion if they had been adopted the Bill would have been improved upon, and I dare say found more acceptable by the people most affected by it.

We put forward our objection to this Bill in the belief that the main thrust of this legislation remained bad and that the dangers created by it as well as the anomalies in ill-considered provisions far outweighed the benefits that would flow from the amending legislation. We believe that the Bill will disrupt—as it indeed has begun to do—the progressive development of labour relations since the Wiehahn Commission.

In spite of the workings of that committee we are still of the opinion that the Bill will undermine collective bargaining and will therefore increase rather than regulate industrial unrest in this country. As all hon members in this House will understand, this is the last thing that we need in this country at the present time, more particularly when we consider that due to the lack of adequate political representation in the structures that count, Black trade unions are in fact politicising their forum. I can understand this although I do not agree with it. Nevertheless that is a reality and we must understand that. In that regard I want to say that it is sad that the economy of this country …

Mr Chairman, on a point of order: I am constrained respectfully to bring to your attention that the debate on this Vote is restricted purely to the amendments.

That is what he is talking about, chum. Sit down!

Order! I think by and large the hon member for Springfield has been confining his remarks to the amendments, but I should like him to come a little closer to the amendments. The hon member may proceed.

Mr Chairman, I am pleased that you have indicated to this House that I was confining my remarks to the amendments as I am indeed doing so because my remarks pertain to the consequences of the amendments which are before the House at present.

Might I just say that I am sorry that the economy of this country had to lose something like R500 million due to the recent stayaway as a result of the provisions of this Bill and the politicisation process that has taken place on account of the lack of what I believe is adequate political representation in the structures that count in this country. This took place at a time when not only workers could least afford it, but when this economy and this country could least afford it.

There is no doubt about it that this Bill and the amendments that we are discussing have generated fierce controversy between employers who generally welcome it and trade unions. I want to remind the hon members …

Mr Chairman, could the hon member indicate to me whether, if this amendment that was proposed when this Bill was recommitted to the standing committee was accepted—which of course was done with consent—he would then have accepted the Bill?

Have you no ears? He said that. Are you deaf?

Mr Chairman, I regret to inform the hon member that he should have listened to me when I started speaking. More particularly he should have listened to the speech I made in this House when the Bill was first debated here. For his benefit I want to repeat what I said in that debate, namely that if the amendments that the PFP—my party—had put forward were acceptable, we believe that we would most certainly have supported the Bill.

Mr Chairman, may I ask the hon member another question?

Mr Chairman, that hon gentleman must not waste my time. As the hon the Leader of the House the hon member must realise … [Interjections.]

Order! The hon member for Mariannhill must resume his seat. The hon member for Springfield has already indicated that he is not prepared to take a further question. The hon member for Springfield may proceed.

Mr Chairman, I am indebted to you for that ruling. The only reason why I am refusing to take a question from that hon member is that he, as the Leader of this House, should appreciate that my time is limited, and once that time runs out I will not be afforded another opportunity of speaking on this particular matter. If he wishes to address me outside this Chamber I shall be only too pleased to discuss the matter with him.

Thank you.

I was merely making the point, when I was rudely interrupted by that hon member, that this Bill has generated fierce controversy within this country between employers on the one hand and trade unions on the other. I dare say, for the benefit of the hon the Minister of the Budget, that generally speaking trade unions see this as a blow to their rights. Let us also not forget that some very substantial employers have also regarded this amending Bill as retrograde. Let me remind the hon the Minister of the Budget that it was Mr John Wilson, the chief executive of Shell, who voiced his objections to this Bill in very lucid terms. Let me remind that hon gentleman that Mr Tony Bloom did the same.

Order! I wish to interrupt the hon member, but not so rudely! The hon member’s time has expired.

Mr Chairman, I abide by that ruling, but in view of the fact that the hon member wasted my time …

Order! The hon member must resume his seat.

Mr Chairman, when the Bill came to this House for Second Reading, the Official Opposition—that is Solidarity—made a contribution to the fact that the Bill should be recommitted to the joint committee, in view of the fact this particular Bill had also been recommitted to the joint committee in the House of Assembly.

It was therefore the view of my party that there could be further evidence insofar as unfair labour practices were concerned. After this call was made by the PFP in the House of Assembly we felt that in view of this, the Bill should be given a further chance. When the joint committee met to deliberate on and discuss this Bill on a number of occasions, there were people in favour of certain clauses, and of course there were certain clauses that all of us objected to. May I mention, however, that when this Bill was recommitted to the joint committee, no fresh argument at all was put forward by either the PFP or the National Democratic Movement. It was the status quo that had to be discussed over and over again. I also want to mention …

Will the hon member for Havenside concede that the purpose of that committee was merely to re-examine amendments which were placed on the Order Paper, firstly by the hon the Minister and secondly by hon members of the PFP?

Mr Chairman, I just wish to bring to the notice of the hon member for Springfield that when the amendments were submitted by the hon the Minister, most of them were consequential, and every one of those amendments was accepted by the joint committee.

[Inaudible.]

In addition, there were submissions made by the PFP concerning the few consequential amendments; those, too, were accepted. However, what the United Democratic Movement wanted, was a code of practice instead of the unfair labour practice becoming part of the Act.

Order! Can the hon member for Havenside tell me who the United Democratic Movement is?

I may be confused about the name of the United Democratic Movement. It was Mr Peter Gastrow, the MP …

Order! He is a member of the National Democratic Movement.

Yes. I beg your pardon, Sir. He became a real problem in the joint committee because half the time, as far as I was concerned, he did not even know what he was talking about. Perhaps he was briefed by Cosatu. I do not blame him for having prepared a case on behalf of Cosatu. On the other hand, we must also appreciate the fact that well over 100 organisations had made written submissions to the standing committee. The standing committee was very fair in that we allowed 20 organisations, academics, trade unions, industry and commerce to lead oral evidence. This Bill has been continuing since last year.

I would like to ask the two hon PFP members here if they had the courage of their convictions to come and observe what was going on in the standing committee. They opposed the Bill in this very Chamber during the Second Reading debate. However, when it was recommitted to the standing committee, did they have the courage of their convictions to come and sit in the standing committee to see what was going on?

Mr Chairman, will the hon member take a question?

I am not taking any questions. [Interjections.] We do not want to score any points. [Interjections.] I may be stupid, yes, but I think that hon member is even worse than I am, because if one has the interests of the poor people at heart, the ordinary workers and the labourers …

Order! Did the hon member for Reservoir Hills say that the hon member for Havenside was stupid?

No, Sir. I will repeat my exact words. I did not make a statement—I asked him a question. I said: “Aren’t you aware that we also attend joint committee meetings, or are you too stupid to know that?” I did not say that he was stupid. I put the question as to whether he was too stupid to understand that we also attended joint committee meetings.

Order! I think in the context in which the hon member put it, he must withdraw it.

In that case, Sir, I withdraw it.

We have two adopted members of the PFP. They are still trying to find their way at the moment. By their actions one could come to the very good conclusion that they do not even know what they are doing at the moment. I think it will take them some time before they know exactly where they are.

You do not even know what you are saying!

If the two hon members had the time and if they were so concerned about the Bill they would have been at the joint committee as observers.

That is an absurd argument!

What they have done is to bring into this Chamber documents prepared by the PFP. These are not factual but distorted.

You are now being puerile.

I want to say on behalf of my party that this Bill is streamlined and is able to enhance the functions and operations of the industrial relations system.

Does your party support it?

Yes, we support the Bill. The Bill is in the interests of both the employer and the employee. We have had the industrial courts in the past which today have the status. There is an ever-increasing call for them to hear cases. This is done very speedily and at the lowest possible cost. We also have the conciliation boards which have played an important role. The new Bill will most certainly enhance the labour force together with the employer. We on this side support the Bill.

Mr Chairman, first of all I want to thank hon members who took part in these discussions. I also want to thank some of them for their contributions made during the course of events in bringing this Bill to this House. I especially want to thank the hon member for Mariannhill for his support of the Bill.

The hon the Minister of the Budget is an employer and I also wish to extend my thanks and my appreciation to him for his support of this Bill. He made a very valid point by saying that in essence this Bill protects both the employer and the employee, and that is to the benefit of the country.

I now come to the hon member for Springfield. He said that Saccola and some of the trade unions oppose the Bill, if I heard him correctly. However, exactly the opposite is true as far as Saccola is concerned because Saccola supported this Bill unanimously by spending hundreds of thousands of rand to put advertisements in the papers, expressing unanimous support for this Bill.

Maybe the hon member was not reading the papers at the time. However, I will give him copies of Sacolla’s support of this Bill. I want to say something else. There are quite a substantial number of trade unions who are supporting this Bill wholeheartedly. Interestingly enough, it is the more mature and responsible trade unions who are supporting this Bill.

The White trade unions!

No, please do not be so racist. Honestly, the hon member must try and get away from that racist attitude.

Nactu and Cosatu both oppose it.

There are quite a number of Black and mixed trade unions who support this Bill wholeheartedly, because they want order in the labour field. They want to combat intimidation. They want to combat disinformation. I want to disclose today in this House—and I am not going to mention any trade union by name—that a decision was taken in favour of a three day stay-away. It was recommended to all employees in the country to stay away from work for three days as an act of protest against the adoption of this Bill in Parliament.

However, at that point the joint committee was still discussing the Bill. They were still amending the Bill. They were still hearing evidence on the Bill, but what did some of the trade unions do? They called a stay-away on account of the Bill which was published by the department and which was submitted to the Joint committee. The committee eventually made some 113 amendments to the Bill. In other words, the trade unions misinformed the workers. They called a stay-away on the strength of the wrong Bill, the unamended Bill!

I am sure that if they had had the final Bill that was submitted to Parliament by the joint committee, they might not have taken the decision to stay away. Those trade unions also made representations to the joint committee. Moreover, many of their amendments and suggestions were accepted by the joint committee. At that point I was on record as saying—and my track record proves this—that my door is open to any trade union and every individual who is working in this country.

It was not necessary for them to call a stay-away, because it only caused hardship to the workers of this country. Why must the workers in this country always pay for the political ambitions of some power-drunk trade union leaders? Why did they misinform the workers on what this Bill was actually all about? They should have waited until the joint committee submitted this Bill to Parliament. Then they could have taken a decision whether to call a stay-away or not. Who is paying the price? The ordinary worker and his family are paying the price!

Do those workers have a vote?

It is not the well-paid trade union officials who are paying the price. In many instances they are subsidised with money from abroad. The hon member mentioned the opposition of Mr Tony Bloom to this Bill. Honestly, if he had supported this Bill, I would have been very worried, because I would have known that I had made a mistake somewhere. [Interjections.] Where is Mr Tony Bloom now?

In Canada!

Yes, he is abroad. First he criticised the acts of this country, and then he ran away. His opposition to this Bill is not even worth mentioning in this House today. The hon member for Springfield said that this Bill would disrupt the progressive labour development that has taken place since Wiehahn. He said this would result in inhibited collective bargaining and cause labour unrest.

I am telling hon members that the exact opposite will be true, because in many instances this Bill gives greater security to the work-force in this country. I cannot understand why the PFP is not supporting this Bill. According to the definition of an unfair labour practice, it makes no discrimination on account of race, creed or sex. Therefore the PFP should support such enlightened legislation. This is the most enlightened legislation in this country and yet they oppose it. What is more amazing is that the parties opposing this Bill are the CP and the PFP. Therefore I know this Bill is correct, because I have both of them against me. That is the real test of whether one is right or wrong in this country.

It was said that people stayed away and opposed this Bill on account of the lack of political structures for the Black people in this country. I want to deal with this here today. As I have said, my door—and my track record proves it—is always open to any trade union which wants to see me, and even to individual workers who want to see me.

What is the history of these amendments? These amendments originated from a report of the National Manpower Commission. There are Blacks serving on that National Manpower Commission. That is the point. The Bill emanated from a report of the National Manpower Commission where people of colour are represented. The National Manpower Commission published certain aspects of the report and asked for comments. About 32 trade unions did offer comments. Then they wrote the final report and submitted it to the department.

The department published a draft Bill in December 1986 and gave ample time for people to comment thereon. We received no fewer than 150 representations and amendments to that draft Bill. These were representations from Black, White and open trade unions. The department then had discussions with them. They included many of the recommendations and suggestions from the trade unions, employers and academics. I was asked to extend the time for comments. I extended it by another three or four months and more representations were made to the department. Many of these were included. Then, the department tabled this Bill. After the Bill was tabled and submitted to the joint committee, people again had the opportunity to testify before the joint committee. Nowhere along the road were there any restrictions on anyone to prevent them making an input to this legislation on account of the colour of their skin. Nobody was prevented. Therefore I say that this is not at all the ideal situation, but to say that Blacks were not in a position to make inputs and to be part of the process of creating this legislation is simply not true.

I want to thank the hon member for Havenside for his support of this Bill. I also want to thank him for his support in the joint committee. He really made a study of this Bill and I think he made a great contribution. I also want to thank all other hon members of this House serving on the joint committee for the contributions they made to this Bill before the House today. I want to thank this House for its support.

I want to conclude by saying that this is not the last word in labour legislation. The labour scene is a dynamic and changing one and along the road we shall have to amend our legislation to face and address the new problems that may arise in the future. What I want to stress is that the basis of our labour legislation is equity, fairness and reasonableness. There must also be a balance between capital and labour, because if the balance of power is in favour of one of these two one gets disruptions. This results in disorder and labour unrest. Therefore one must be very careful to maintain a balance between the negotiation power of labour and of capital.

I want to say that my door is still open for any trade union, whoever it may be, to have discussions with me and the National Manpower Commission as my main advisory body concerning legislation. I want to stress the fact that after this Bill has been adopted by Parliament my door is still open if people want to discuss this Bill with me with a view to amending it next year. Therefore nobody need strike and nobody need stay away. There is no need to do so, because channels are open. I put the National Manpower Commission at the disposal of any trade union if they want to interview them to discuss this Bill. That includes me as well. With that I want to thank the hon members for this opportunity.

On Clause 1,

Amendments put, viz—

1. 1. On page 7, in line 18, to omit and” and to substitute:
   , and in accordance with any applicable agreement, wage regulating measure or contract of service; or
2. 2. On page 7, in line 19, after “(ii)” to insert “(aa)”.
3. 3. On page 7, in line 25, to omit “(iii)” and to substitute “(bb)”.
4. 4. On page 7, in line 30, to omit “(iv) it” and to substitute “(cc) such termination of employment”.
5. 5. On page 7, in line 32, to omit “or” and to substitute “and”.
6. 6. On page 7, in line 33, to omit “(v) it” and to substitute “(dd) such termination of employment”.

Amendments agreed to.

On Clause 5,

Amendments put, viz—

1. 1. On page 13, in line 15, to omit “pending an order” and to substitute “until an order is”.
2. 2. In the Afrikaans text, on page 12, in line 16, after “gemaak” to insert “word”.
3. 3. On page 15, after line 59, to insert:
   1. (b) Pending an appeal in terms of paragraph (a) the industrial court may on application make such interim order as it deems reasonable.

Amendments agreed to.

On Clause 11,

Amendment put, viz—

1. 1. On page 27, in line 31, after “subsections” to insert “(4)bis, (4)ter,”.

Amendment agreed to.

Mr Chairman, I move:

Agreed to.

At the outset I want to bring two things to the notice of the hon the Deputy Minister. Firstly, the hon the Deputy Minister knows that the financial legislation with which we are going to deal this week is very important. We in the Joint Committee on Finance feel that this type of legislation should not be brought in at the tail end of the parliamentary session as we find it very difficult to call witnesses and to discuss it in depth.

Secondly, I want to take the opportunity of thanking the hon the Deputy Minister of Finance for his wisdom and the way in which he handles matters in the Joint Committee on Finance. We thank him for his assistance and also for the assistance of his department. I want to have it placed on record that the Joint Committee on Finance took a special decision to thank the hon the Deputy Minister for the new way in which matters are handled in the Joint Committee on Finance.

The Bill before us deals with many aspects of financial legislation. I am not going to refer to everything. It deals among other things with money which has to go back to the State Revenue Fund from the Black Transport Services Account and the Coloured Transport Account, as well as from the Special Defence Account. It also deals with the Land and Agricultural Bank of South Africa with relation to the raising of funds. It amends the South African Reserve Bank Act, 1944, and the Level Crossings Act, 1960. It deals with the Level Crossings Elimination Fund. It amends the South African Mint and Coinage Act, the Railways and Harbours Pensions for Non-Whites Act, etc. It is the type of legislation that appears at the end of every session so that we can legalise many of the things mentioned by the hon the Minister of Finance.

*The Standing Committee on the Provincial Affairs of the Transvaal and the Cape Province considered the Auditor-General’s report on provincial accounts in respect of unauthorized expenditure for the 1984-85 and 1985-86 financial years. It recommended that Parliament appropriate specific amounts. Although I support the clauses, I am concerned about the fact that there are separate parliamentary committees to deliberate on provincial accounts on the one hand and the State Revenue Account on the other hand.

†It worries me that we have many other committees apart from this committee that deal with legislation concerning the provincial finances.

*The expenditure involved here concerns general affairs in both instances. This system lends itself to the application of different norms, standards and interpretations when the Auditor-General’s report is considered and evidence is heard. Therefore, as far as State control over finance is concerned, this system will have to be monitored very closely.

†I am going to deal with a few clauses only. Clause 6 concerns the amendment of the Land Bank Act. This is the direct result of amendments to the Land Bank Act in 1985. At the time it was not foreseen that the amendments would restrict this institution which must finance our agricultural industry to the extent that it would be unable to obtain funds for its short-term obligations after 31 July 1988. It is therefore necessary to find a solution to this problem. Under the circumstances, I am willing to abide by the decision of the monitoring authorities in this regard.

However, what troubles me is the fact that the Land Bank will now be empowered to issue so-called other accessory credit instruments. What exactly these will be, or what their structure or status in the capital market will be, is not revealed. I think the House has a right to be informed by the hon the Deputy Minister of the details of this matter.

I now come to clauses 7, 9 and 10. This Bill furthermore provides for the transfer of the South African Mint with all its functions to the South African Reserve Bank. The minting of coins and medallions will thus be handled by the Bank. In principle I have no problem with the transfer, especially with regard to the minting of legal tender coins. However, the question arises as to why the hon the Deputy Minister has not considered leaving the striking of medallions for private parties in the hands of the private sector. The Government is, after all, committed to a policy of privatisation.

As far as clause 8 is concerned, I would like to express my gratitude towards to the hon the Deputy Minister for the extra money that is to be made available to eliminate the danger that level crossings pose. This particular matter was discussed during the Transport Vote, as well. Even now, while the hon the Minister of Finance is finding it difficult to balance the Budget, we must not forget that we have a responsibility towards the general public to safeguard them in this manner, too. As a matter of fact, it is not due to any direct action on their part that inflation has eroded the purchasing power of money to such an extent that the SATS is now finding it difficult to take the necessary steps in this regard.

*I now come to clauses 11 and 12. These clauses authorise the transfer of pension benefits of SA Transport Services staff working in SWA/Namibia to the new corporation’s pension fund without their having to resign and lose benefits. This is commendable. I want to congratulate the SA Transport Services on this effort. However, what is even more commendable is the fact that the new pension funds will not have a racial basis. In this regard SWA/Namibia is setting a good example to South Africa. However, a new pension fund should be started on a sound basis.

I wish to draw the hon the Deputy Minister’s attention to the rumours to the effect that the SA Transport Services’ pension funds are likely to show a deficit after the proposed transfer of funds. This matter will be investigated. If this is indeed the case, I should like to receive the assurance that moneys to be transferred to the National Transport Corporation will not show any deficit.

†In conclusion, I want to bring to the notice of the hon the Deputy Minister two matters that came to our attention very late after this matter was discussed in the standing committee. One dealt with the Transport Consultative Committee. They said the TCC debated the Bill at a meeting held on 21 June, and concern was expressed regarding the conditions of clause 1 whereby credit balances in the Black, Coloured and Indian Transport Services Accounts would be paid into the State Revenue Fund. The TCC submits that money which is already being collected from employees in respect of Black, Coloured and Indian employees in terms of the Black Transport Services Act of 1957, and the Transport Services for Coloured Persons and Indians Act, Act 27 of 1972, should continue to be used for subsidising passenger transport for these persons.

There is another one from the South African Bus Employees’ Association, also expressing the fear that this money will be lost to the Treasury. The Association of Chambers of Commerce and Industry also sent a last-minute telex to the committee. It reads, and I quote:

I hope that in his reply the hon the Deputy Minister will touch on these two points.

Mr Chairman, this Finance Bill is an omnibus Bill since it deals with various other Acts. However, before I come to the Bill, I would like to comment on the speech of the hon member for Laudium. He said that the Government should privatise and that the SA Mint should be privatised. I should like to tender for that.

Clause 1 of this Bill provides for the Administrator of a province to delimit regions and also to establish RSCs for each region. The transfer of funds from the Black, Coloured and Indian Transport Services Accounts in terms of each of the respective Acts concerns all of us, because there were credit balances in these funds and we want to know why it should be transferred to the State Revenue Fund. In reply to that, we received a reply from the Treasury that these funds could not be held in abeyance, because these transport levies were in any case heavily subsidised by the Treasury. Therefore these funds may be added to the State Revenue Fund, but a larger sum will have to be paid out again. That was the answer and we were satisfied with it. I want to agree with the hon member for Laudium that the hon the Minister should confirm that in order to allay any fears.

Clause 2 deals with the Defence Special Account Act, 1974. The hon the Minister of Finance approved an amount of R150 million to be used by the Special Defence Fund. Section 1(A) now seeks to comply with that provision. Clauses 3 and 4 deal with the devolution of standing committee and provincial affairs where the overexpenditure by the provinces was not approved by the Auditor-General. This is in keeping with approving unauthorised expenditures.

Regarding clause 7, the Cabinet Committee for Economic Affairs recommended that the Reserve Bank take control of the SA Mint as a wholly-owned subsidiary of the Reserve Bank. I think that is good, because after all the Reserve Bank is in charge of all the financial goings-on in this country. Clause 8 deals with the Level Crossings Act, Act No 41 of 1960. The amendment makes provision for additional funds to be provided to eliminate level crossing problems.

Clauses 11 and 12 amplify the definition of the Pension Fund of the South African Railways and Harbours so as to enable the transfer of these funds to the National Transport Corporation Ltd for those employees who will be employed under that Act. Clause 13 deals with the conversion of a loan of R442 million which was granted to the SATS to permanent capital.

Clause 14 brings the Auditor-General’s benefits and retirement requirements into line with those of the members of the Commission for Administration. Clause 15 deals with the provision of money which has to be put into a housing deposit fund. This was used to provide greater security to building societies. The State now issues guarantees to the societies and that Act is no longer necessary. I support the Bill.

Mr Chairman, I agree with the hon member for Southern Natal that this is an omnibus Bill. Various provisions of this Bill amend various financial Acts.

I also agree with the hon member for Laudium that the Department of Finance has developed a habit of bringing some very contentious Bills before the House towards the tail end of a Parliamentary session. However, I do not think we can lay the blame at the doorstep of this hon Deputy Minister whom I understand to be a very hard-working person who gets his Bills out as fast as he possibly can. [Interjections.] However, we also understand that there are problems within the department. We should be able to excuse them for that, but nevertheless some of these Bills should arrive in good time for the consideration of the various Houses.

As regards the Bill itself, it has certain far-reaching principles built into it. Clause 1 deals with the Administrator under provision of the Bill being called in to look at the delimitation of regional services council boundaries and similar matters. The other aspect provides for and deals with a question of levies. The RSCs will be allowed to collect certain levies and then the employers will have to contribute towards these levies, which will go towards the cost of the administration and the various functions of the RSC.

Another important provision is where clause 1 of this Bill repeals certain transport Acts. These Acts came into being when employers were required to make contributions towards a fund to subsidise travelling for the Black, the Coloured and the Indian people. Therefore all these moneys remained in a particular account which is now being transferred to the State Revenue Fund. This is also related to the functions of the RSC.

Clauses 3 and 4 deal with the question of unauthorised expenditure by the province. In the event of the Auditor-General coming across any unauthorised expenditure, the State Revenue Account is called upon to meet such expenditure.

Clause 5 and clause 6 deal with the Banking Act as well as with certain aspects of the Land Bank Act. The provisions empower the directors of the Land Bank to look into the question of their assets. I believe this to be a question of more finance and it is a case of one Act helping another Act. Therefore it is also a very important issue.

Clause 8 deals with the question of level crossings. It is an amendment to the Level Crossings Act. It was found that a large number of accidents were taking place at level crossings. They are now trying to build up reserves in order to meet the contributions towards this particular Act.

As pointed out earlier, the South African Reserve Bank is taking over the functions of the South African Mint. That would appear to be quite a reasonable type of function, because the Mint is part of the South African Reserve Bank. I think they want that to be a full subsidiary of the SA Reserve Bank. The SA Mint will therefore be part of the SA Reserve Bank.

Clauses 11 and 12 of the Bill deal with the question of pension benefits, in particular those of the National Transport Corporation of South West Africa. The National Transport Corporation of South West Africa will have control over the entire transport operation in South West Africa. There are certain problems insofar as the pension fund is concerned. I think these particular provisions rectify the entire issue of the pension fund insofar as employees of both the National Transport Corporation and the SATS are concerned. I think this particular provision has brought matters into line so that the employees will have no problem whatsoever in trying to obtain their pension fund.

Clause 14 also embodies a very important principle. At one stage the Auditor-General was the head of the finance division. I think the Auditor-General was the Director-General. Since the Auditor-General is now the head of a department, I think clause 14 makes adequate provision for the independent functioning of the Auditor-General’s department and the Directorate of Finance.

On the whole this is a very good Bill. It updates various financial Bills. I think the Department of Finance and the Treasury are looking forward to the adoption of this particular Bill by the various Houses. I think they have a right to do so. We on this side of the House have no objection whatsoever to lending approval to the Bill.

Mr Chairman, it is not my intention to cover the same terrain that has been covered by previous hon speakers in this debate. What each of the previous speakers basically did, was to attempt to explain to this House what the objects of this Bill were. I believe that the objects of this Bill are very amply and very nicely explained in the memorandum attached to this Bill and I do not believe it is my duty or the duty of any other hon member of this House to read from this memorandum and to bore hon members of this House.

I should merely like to refer to clause 8 of this Bill which, as all hon members know, refers to the elimination of level crossings. I should like the hon the Minister to know that I have requested from his colleague, the hon the Minister of Transport, certain statistics pertaining to the number of deaths that have occurred in recent years at these level crossings. Regrettably, these statistics have not yet come to hand, although I am assured that they will be forthcoming shortly. My concern nevertheless remains that in this day and age far too many deaths are occurring at level crossings. These normally occur in rural areas where people are not as literate or as educated as in the urban areas and I believe that it is particularly in those areas that we need to protect the people inhabiting the areas surrounding these level crossings.

I want to record my regret that we have not been able to find sufficient money to eliminate as many as possible, if not all of the level crossings that we do have. I appreciate the fact that this is an expensive proposition and that the money has to be found, but I should like to request the hon the Deputy Minister who is here with us this afternoon to list this as a high priority item on the agenda for expenditure insofar as the Department of Transport is concerned, which department I believe is responsible for the elimination of such level crossings.

With these few words I should like to assure the hon the Minister that we quite obviously support the Bill. We are ably represented on the standing committee by the hon member for Yeoville and he supported the Bill there. We take great pleasure in supporting the Bill here this afternoon.

Mr Chairman, first of all I should like to mention that the Joint Committee on Finance is a tough one to work with—not for the members, but for the hon the Minister and his staff. They go through a rough time. They rake over every Bill word for word, phrase for phrase, figure for figure. They cannot afford to put a full stop in the wrong place in the Bill. They are given a work-over by the committee which is composed of tough men.

At its last sitting the joint committee passed a resolution to commend the hon the Minister and his financial administration staff for their dedication, competence and the diligent manner in which they handled several problems that were thrown back at them. Sometimes when I went to the meetings I wondered if they did not have a man from outer space working for them quietly somewhere in their office because even those faults which had not been pinpointed by the members of the joint committee were picked up by the department and things were streamlined as is the case with the Bill before us today. It has been properly streamlined and nothing is missing. I went through the Bill to try to find some omission of words, or any unnecessary words, but I could not find any. However, more than anything else I must place on record our sincere thanks and appreciation to the hon the Deputy Minister and his good working team, the Finance administration staff at Parliament.

I do not want to dwell on details covered by previous speakers, but the Bill before us is one that comes before the joint committee of the House and is polished and painted, updated and streamlined with regard to the shortfalls that occurred in the previous 12 months of our financial year.

For the first time I should like to contradict the hon member for Springfield. I represent a rural constituency. He mentioned people in rural areas who, because of their lack of education, meet with more accidents at level crossings. I say he is absolutely wrong.

I accept that! [Interjections.]

It has been proved that it is in the urban or semi-urban areas that people have more vehicles, there is more haste and hurry and people are careless. They take chances and cross carelessly and are knocked down. They then meet with disaster.

I should like to make the comment that the level crossings were built at a time when one could count the number of self-propelled vehicles on the fingers of one hand. I recall that when I was still a boy I used to walk eight miles to school on the main road at Umzinto and if we found two motor cars a day passing us, we were lucky. If there were three we thought something was wrong and that someone must have died somewhere because three cars had passed us. However, in those days there were level crossings where it was safe to cross. Today there is more modern technology and fast-moving vehicles, and this makes unguarded level crossings and even guarded level crossings far more dangerous. The SATS, with the meagre allowance they receive, has up to now not been able to afford to eliminate all those dangerous level crossings within a short space of time. Therefore, this Bill provides that R10,5 million will be allocated to the SATS. They in turn can speed up the elimination of the most dangerous level crossings.

Several members spoke on clause 1 of this Bill, and I think everyone, that is to say, those who spoke on clause 1 of the Bill, missed the point here—that excludes the hon member for Springfield, who did not speak on that. The transfer of these transport funds to the State Revenue Account became necessary because of the imminent introduction of the regional services councils. In terms of the Regional Services Councils Bill— section 12 of the Regional Services Councils Act, Act 109 of 1985—the Administrators of the various provinces are empowered to delimit the entire province into regions and areas, and the regional services councils of those particular regions are empowered to levy funds from employers and commerce and industry to cover the services they will render. This includes the subsidy for transport for workers. This is at present covered by these three different Acts, the Black Transport Services Act, No 15 of 1957, the Transport Services for Coloured Persons Act, Act No 27 of 1972 and the Indian Act of 1972.

Therefore the RSCs will be responsible for that aspect of subsidising transport costs for workers, so that there is a duplication of services. It has therefore become necessary to take that money and put it in the State Revenue Account, although to date I am not convinced or satisfied in this regard, and I argued this point on the joint committees, and was talked into accepting it. I was not convinced because by far the majority of this bonsella being transferred to the State Revenue Fund, was contributed by employers—the private sector. However, I must accept the assurances of the administration’s staff that this money is being put in a kind of safekeeping until it is needed.

My own view was that these excess millions should have gone to the RSCs. The surprise in that regard was that in most areas where these transport Acts operate, the RSCs have not been established. That defeated my argument. Therefore I reluctantly accepted the provisions of clause 1, whereby all these credit balances will be transferred to the State Revenue Fund. I therefore have no qualms in supporting this Bill; I support it fully.

Mr Chairman, I wish to thank hon members for the contributions they made here today. It is always a pleasure to be in this House. I also appreciate the kind words to my staff and myself.

I am sorry that we are a little late this year, but as I explained an hour ago, we had the Margo Report, the White Paper and the Income Tax Bill, and we still have to send our Bills to the law advisors. I know that this specific Bill was there for five weeks before we got it back. However we hope to improve and to have it with you next year weeks before the closing date.

I should like to start with clause 1, which deals with the money that is still in the two funds. I think it is a question of transition. In the past one had levies on employees in specifically declared areas as well as contributions from the State. If one looks at the 1986-87 financial year one sees that the total amount earned in levies was R51 million and the State subsidy was R308 million. In the 1987-88 financial year the amount from the levies was R24 million and the subsidy R395 million.

One function of the new regional services councils is to take over the cost of subsidising transport. We are, however, in a transitional period. Accounts are closed at one point and the money is transferred to new accounts. One must remember that the one is a small declared area whereas the other is a big region within which there are many areas. It is therefore merely an accounting exercise because nothing will be taken away from subsidised transport. Actually, if one looks at the accounts, one will see that the State is giving more. We hope that in the near future the financing will be only from the regional services councils and not from the central budget.

The hon member for Laudium referred to the fact that the four provincial committees are looking at the accounts of the different provinces. In the end it was passed on to the Joint Committee on Finance to accept the recommendations made by the different committees. From the point of good management it is difficult to have to accept certain overspendings without having any control over them. I can see the frustration of this. There is a new committee, however, which consists of representatives of all four provinces and I think we have to give this new committee a chance. We have to look at the relationship between this new committee and the present Committee on Public Accounts which looks after the total Government spending.

I think it was also the hon member for Laudium who asked questions with regard to the Land Bank. Up to now we have promissory notes for the self-liquidating of debts. There is also of course debt in regard to processing costs and this is not self-liquidating. The Reserve Bank was worried that we used the same financial instruments to finance self-liquidating debts as well as debts which were not self-liquidating. The Reserve Bank wanted to solve the problem with this amendment.

Another very important aspect of this legislation is that the promissory notes of the self-liquidating debts are guaranteed by the Government. It is classified as “liquid assets” for the banks which buy it. We want to get away from these guaranteed instruments and we want them to go on to the open market. To summarise I can say that the Land Bank is now operating like a normal business, selling certain financial instruments which are not guaranteed by the Government.

With regard to the South African Mint, the hon member for Laudium discussed the problems of privatisation. The SA Mint is now transferred from the Government to the SA Reserve Bank. The Mint produces special medals etc and to privatise that is a problem. When one analyses these activities of the South African Mint, one finds that the medal business accounts for only 3% of the total activities. Of that 3%, 80% is for Government departments. The section which one can really privatise, is very small. It is actually not even worth it. I would like to point out that the South African Mint subcontracts many of its private contracts to the private sector. For example, I can think of Mr Pagliari from Cape Town and Mr T Saneen of Pretoria. There is some privatisation going on, but the South African Mint is concentrating on Government work.

I support the hon member for Springfield and the hon member for Camperdown, who spoke about level crossings. It is especially in the rural areas where we still have to spend a lot of money to solve the problem of dangerous level crossings. However, we have to compare the benefit analysis to the opportunity costs. There is a scarcity of money, but there are so many needs and demands. One will have to allocate one’s available resources to the best of one’s ability to satisfy all the different needs. One cannot satisfy everybody’s needs, but one can try to satisfy as many as possible by making a contribution to remove dangerous level crossings. I do not think one can ever solve this problem completely, because there are always new transport developments. However, one can try to remove the most dangerous level crossings in South Africa.

I think this covers most of the points mentioned by hon members today. I once again wish to thank them for their contributions today, and also the contributions that they made in the standing committee and the joint committee.

Mr Chairman, I move:

Agreed to.

Mr Chairman, as we all know, nobody is ever happy about paying income tax. Not even hon members of Parliament are happy about paying income tax, although we cannot do without income tax. We debated this Bill during September last year. Now we have to consider this particular Bill to bring into effect the new tax rates. It was during September last year that we had the report of the Margo Commission on this. The subject was considerable and many discussions took place in business circles. Much has happened since then.

First we had the hon the State President’s business conference in October 1987 which considered the report of the Margo Commission. Then we had the hon the State President’s announcement on 5 February 1988 that there would be a switch from general sales tax to value-added tax. On 16 March we received the White Paper on the Margo Report. As was to be expected, the Government could not accept all the recommendations of the Margo Report. It has wisely selected those which can most easily be applied in practice and which will represent a material improvement to our tax system.

The Bill before us deals with a number of matters referred to in the Margo Report. From the point of view of the man in the street the most important change is in the adoption of the SITE system, or the standard income tax on employees. We can find all the details of SITE in the memorandum on the Bill, and I will not touch on this. Nevertheless, there are a few points which I will make.

Firstly, it applies only to remuneration, which effectively means salaries or wages. When the remuneration is payable at a rate not exceeding R20 000 per annum in the case of a married woman or R12 000 per annum in other cases, SITE will apply. For the taxpayer falling under the SITE system, this means that his or her tax deductions will in most cases be final. Some 80% of all working wives will fall within the SITE system and this means that they will no longer be haunted by the fear of receiving a large income tax assessment.

There are also considerable advantages for the Government, because the amount of administrative work falling on Inland Revenue will be reduced and they will therefore be in a position to make the tax system more effective. We are aware that the hon the Minister of Finance has, during his term of office, improved the staff position at Inland Revenue, but with VAT just around the corner and experienced staff resigning in large numbers in order to join the private sector, every possible step must be taken to streamline the tax-collecting system.

Here I want to tell the hon the Deputy Minister that while normally this Bill would not come before the Joint Committee on Finance, we had discussions with his staff, especially the Commissioner for Inland Revenue, the Deputy Commissioner and his staff, and we want to thank them for briefing us and telling us everything about income tax which we did not know. I hope the hon the Deputy Minister will convey this to his staff.

Another recommendation of the Margo Commission which is also embodied here relates to the replacement of donation tax and estate duty by capital transfer tax, best known as CTT. Because CTT cannot be introduced immediately, some interim relief from the first-mentioned taxes is being granted. We in this House have already passed the Taxation Laws Amendment Bill which provides substantial relief from estate duty. The amendments to the donation tax provisions in the Income Tax Bill are also welcomed by us.

In its report the commission also paid attention to the writing off of the cost of various assets for income tax purposes. It recommended broadly that many types of movable assets be written off over three years on the basis of 50, 30 and 20. Quite understandably, the Government was unable to accept this recommendation without reservations but it decided to apply the 50, 30 and 20 bases to industrial plant and machinery, certain plant and machinery used by co-operators, and to hotel equipment. This is a valuable concession which will provide some compensation for the effects of inflation and could possibly stimulate investment in new plant and machinery.

The Margo Commission also recommended that taxpayers be permitted to write off the cost of industrial buildings, storage buildings used by co-operatives and hotel buildings at the very rapid rate of 10% per annum. Here again, the cost of granting the concessions would have been very prohibitive and the Government therefore announced on 2 June 1988 that new buildings would be written off at what has been the standard rate, namely 2% per annum. This decision has since been reconsidered and the Bill in fact makes provision for the cost of new buildings of the categories mentioned to be written off at the rate of 5% per annum. This is a very generous concession, which should give a boost to the economy and be acceptable to all except to the hotel industry, which will not be treated as well as at present. We see from newspaper reports that the hotel industry is not at all happy with the new system. They say that projects to the value of R750 million will be delayed because they have no clarity on this new system which has been accepted in the Income Tax Bill.

I come back to the minimum tax on companies— the MTC—which I have criticised a lot. I again want to mention the measure, which is not popular. We understand why the hon the Minister decided to introduce it. He mentioned it at the last meeting here and I am therefore prepared to support it, provided it is not made a permanent feature in our tax system. It is to be hoped that the various improvements we are making to the tax system, together with an upsurge in the economy, will make it unnecessary to resort to untried taxes which could have unexpected results.

In conclusion I would like to refer to the matter of tax avoidance. It is a great pity that in our country, which is struggling to uplift its people, so many intelligent persons should be devoting so much of their time to planning involved with and artificial schemes aimed at reducing the tax liability of their clients. We in South Africa cannot afford this sort of thing and we therefore support any steps which are taken to counter the effect of what may be regarded as unreasonable and unnatural schemes for the avoidance of tax.

Mr Chairman, the Income Tax Bill is consequential to the hon the Minister’s speech and certain of these amendments also have to be introduced so that this may be put into effect in order to collect our taxes.

I am very pleased that some of the Margo Commission’s recommendations have been accepted, especially the proposed replacement of the GST system by the VAT system. In that regard it becomes a self-policing entity because each one has to pay. If one wants to dodge, one loses one’s own money. Hence one actually saves by paying one’s taxes. Therefore I want to use the term self-policing enterprise. This does help us a lot and I am looking forward to the day when the rate is going to come down. If we can collect most of what we intend to collect, it is reasonable to assume that the rate would have to come down.

As the hon member for Laudium also mentioned, I do know that tax avoidance has become a big industry. We have a lot of people who are training especially to become professionals in tax avoidance. This is one area where something that is so controversial is least spoken about. I think one can put that down to how much we actually know about taxation legislation. This is a huge field and if one looks at amendments alone, one will not get anywhere. One should take the whole principal Act and read it which, I believe, may be a very onerous task. However, until one does that one cannot really speak authoritatively on any particular section. Therefore I agree with the hon member for Laudium that the 5% write-off on industrial and other buildings is most welcome. This may create job opportunities and capital investment will then come into play, which is what we need.

We also notice that at the moment we are in a situation of flux in so far as our taxation laws are concerned. That would be because we are soon to put into effect certain recommendations of the Margo Commission. I think that with the next bite we are going to take a bit more of these recommendations, so that we will slowly streamline our taxation laws. I believe we should look especially at the personal tax level, which is much too high. I believe that everybody will agree— including those who prepare these taxation laws or structures of taxation, as it also affects them. The personal tax level in this country is far too high and one should make the necessary adjustments across the board, so that it will automatically come down. We look forward to that day.

Mr Chairman, we need to thank the hon members for Laudium and Southern Natal for their elucidation of the Income Tax Bill. The PPSA has studied the Bill properly and we have no hesitation in supporting the Bill.

Mr Chairman, one’s initial reaction is very much like the reaction of the hon member for Laudium, namely that any income tax Bill is to be rejected. However, income tax is a necessary evil. Income tax exists and I think it is correct to say that we cannot avoid it. We obviously have to fall in line with it.

However, I am impressed by the new philosophy that appears to be gaining ground within the department, and that philosophy is to extend as widely as possible the base from which one is able to collect tax. That is a good thing, but there is an argument prevalent in certain quarters that only the Whites of this country contribute towards the income tax that is collected by the Commissioner for Inland Revenue. As the argument goes, because that is so, the other communities should not quibble about the allocations that are being made to them, particularly for their upliftment.

If one examines that argument firstly against the background of the philosophy that is now being followed in the department and one applies it against the background of the fact that such a vast amount of the tax that is collected by the Commissioner comes by way of indirect taxes, and if one also considers that the other population groups contribute not only towards the general fiscus by way of indirect tax but also towards the creation of the profits on which companies pay tax, then obviously such an argument must be rejected as spurious. It must, in fact, be rejected in very strong terms.

We in the PFP quite obviously accept the philosophy that is now being followed, namely that we should broaden this base, and we are very pleased that the department sees its way clear to implementing many of the recommendations embodied in the Margo Commission report as soon as possible. We would like to raise one point with the hon the Minister which he has not yet found acceptable because of a procedural and technical impracticability, and that relates to the joint taxation of married couples. I trust that that issue will be attended to without too much delay in the new year. With those words we obviously support the Bill.

Mr Chairman, as the hon the Minister indicated in his First Reading speech, this Income Tax Bill embodies several recommendations of the Margo Commission report. I agree with all the previous hon speakers. Someone mentioned that income tax was too high and that this was the result of a very narrow base of taxation. I welcome the abolition of GST and the replacement thereof with VAT, which will serve to broaden the base and lower the 12% GST by a substantial amount.

With regard to the recommendations of the Margo Commission and their adoption, I am dissatisfied with one particular aspect of the present Income Tax Bill. It was proved in this very House that despite the fact that millions and millions of rands are being spent every year in the form of subsidies and assistance to the agricultural industry of our country, that industry is still in trouble. Furthermore, it has been proved according to the statistics provided by the Department of Inland Revenue that 75% of South African farmers do not pay income tax.

That is worrying. Once again one finds that the reason for this is that businessmen parade as farmers. They use their profits in their businesses and show a loss or a bare minimum of profit which is below the taxable amount and thereby avoid paying tax. Bearing that in mind, I am concerned about the plight that the agricultural industry is being placed in. I am concerned every time the price of foodstuffs goes up. Every hon member in this House or the hon the Minister can afford the price of food.

Mr Chairman, is the hon member aware that bookkeeping demands that farming operations as against business operations are two separate entities?

That is an unwarranted question; I do not want to be rude to the hon the Minister. The fact of the matter is that 75% of the farmers in the last tax returns that came to us showed a loss and did not pay tax. That is very surprising. It has something to do with the bookkeeping and accounting—those farmers’ bookkeepers count on their fingers! [Interjections.]

I want to come to the point here: I am concerned that every time the price of foodstuffs increases, one thinks of the poor people. By and large the majority of our South African population—of all the races and groups—are poor people who cannot afford what they have to pay today. Not so long ago, when the present Government came into power, the price of white bread was 8c a loaf and today one pays almost R1 because we are ploughing money into an industry that is running at a loss. It is not an effective or genuine loss; it is an artificial loss and I can prove that. I have just said that rich businessmen buy farms and they deliberately run them at a loss. They are tax havens.

Bearing that in mind, I submitted a memorandum to the Margo Commission on that particular aspect. What should be done immediately is that no businessman should be allowed to write off the losses incurred in farming against his profits. That should be priority number one. What surprised me—I suppose because it came from a member of the House of Delegates—was that the Margo Commission took no notice of the system … [Time expired.]

Mr Chairman, I should like to begin with the hon member for Laudium with regard to the question of writing down the depreciation of hotels. The Margo Commission recommended a depreciation of 10% per annum. Then the White Paper recommended 2% and that was announced by the hon the Minister on 3 June. After representations from the hotel industry, we decided to increase it to 5%. That is with regard to buildings, but they also have the advantage now of depreciation of 50%, 30% or 20% on machinery and equipment. That is additional. I now believe that the 5% depreciation on buildings and the 50%, 30% and 20% depreciation on machinery and equipment should be of real assistance to the industry.

We must be careful not to change our tax structure in such a way that it affects economic decisions. Economic decisions in the business world must be based primarily on economic factors, not on what they are going to get out of the Receiver of Revenue.

The second point is that the Government was criticised because of the Minimum Company Tax. If one analyses the role played by tax allowances and expenditures in our company tax system or the contribution made by the private sector, one will discover that during the last ten years our tax base has in fact been eroded; I agree by legal means. However, with all the experts they have, they artificially inflate those tax allowances we give them for specific purposes to enable them to grow and develop.

If one analyses the contribution of company tax to our total tax income, for a 1% increase in Gross Domestic Product one has a 0,6% increase in tax income from companies, in comparison with a 1,8% increase in personal income tax. As far as tax is concerned we are seeing a movement away from companies towards the individual. I agree that legally they have the right to use these allowances. It is not tax evasion, but tax avoidance. We are now being criticised for trying to destroy the tax avoidance that they legally have the right to practise. However, if one has a weakness in one’s tax system, no Government can sit back and allow the tax base to be eroded. After all, there is also the spending side. When one analyses the minimum company tax, actually it is not a tax, but a withholding of tax. Moreover, when the tax is paid in September, those credits can already be used in one’s provisional tax in October. There is also a right of appeal. In addition, anyone who still has credits available after three years will be repaid by the Government.

The company that is not going to pay any tax till 1991 has a lot of tax allowances. One cannot get away from that. The Margo Report recommended that we remove tax expenses from our system. If we succeed in the next three to four years, we shall be in a position to bring down our company tax and our personal income tax. This is a policy based not only on the Margo Report, but also on what has been happening in New Zealand and the UK, as well as in the American system— namely the removal of tax expenditures. I want to conclude with this point, namely that most of these companies that are going to pay these additional taxes because of the MCT are companies that really utilise all the available tax expenditures in this country.

The hon member for Southern Natal made a very interesting point, and I agree with him. We are at this stage in a state of flux—let us be honest about it. We have the Margo Report, which was completed in two years. We have the Stals Committee; they finished their investigation in about five or six months. There was also the White Paper that was accepted by the Cabinet, and the Budget that was accepted by Government.

Now we are implementing the recommendations—we are not waiting another year. These recommendations that we are implementing now are costing us money. SITE, for example, is going to cost us about R600 million. We will be one of the first countries in the Western World with a SITE system. We can actually be proud of what we are doing. Increasing the amount for maximum taxation from R60 000 to R80 000 will also cost us money. We have a cash flow problem and we have therefore decided to use the minimum income tax.

The hon member for Springfield mentioned the fact that we are moving from direct to indirect tax. It has been proven that indirect tax is eventually more efficient, especially if one has a tax rate of 12% to 13%.

The hon member for Camperdown referred to the farmers. When one looks at the statistics in the Margo Report one sees that the farmers of South Africa are really making a good contribution to the total revenue of the Government. Some of them say that they are paying too much tax, especially the farmers from Paarl who are paying tax on brandy. They feel they are subsidising the maize farmers in the Northern Transvaal. We must remember, however, that our farmers in the summer rainfall areas went through a very difficult period over the past four or five years. If one destroys the farming community, one destroys the rural society and the small towns. We cannot all live in the big cities. By assisting a farmer one does not only help him but all of us. The external advantages that we get in assisting the rural areas are very important and it is a very necessary function of the Government.

I agree that food prices have increased a great deal over the past three or four years. There was a very interesting article in the Sunday Star. I do not know if hon members saw it. It referred to the increase in the price of foodstuffs but it also said that it was mostly the result of the price increase of processed foods and not an increase in the farmers’ income. The price increase is for special types of food like Weetbix and their special packaging. That is where costs are increasing.

I wish to conclude. I thank all hon members for their assistance and their contribution in the standing committee. They invited Mr Kingon to assist them which shows their personal interest in this very important Bill before us.