Mr. Speaker, I move—

The amending Bill provides for the amendment of the Provincial Finance and Audit Act, 1972, in order to simplify the general financial administration of the provinces in the light of new developments and to rationalize the budgeting procedures. The Bill has been drafted at the request of and after consultation with all four provinces and meets with their approval.

Most of the amendments are being proposed on the analogy of provisions of the Exchequer and Audit Act, 1975. They do not amend or disturb in any way the existing principles or practices applied by the State. These amendments relate to the unitary budgeting system and to certain budgeting procedures. Furthermore, they are concerned with the granting of authority by an administrator for the utilization of provincial money under certain circumstances, as well as for the utilization of savings. The amendments are also concerned with unauthorized expenditure, with the recovery of losses and damage caused by people who are or have been employed by a province and with certain additional duties and powers to be entrusted to a provincial auditor.

Another amendment which is being proposed is that loans granted to provinces from the State Revenue Fund in terms of section 9 of the Financial Relations Act, 1976, be replaced by non-interest-bearing capital grants. The redemption of and interest on these loans are paid by the provinces from subsidies likewise received from the State Revenue Fund. Therefore the provinces make no contribution from their own funds. The existing procedure requires unnecessary administrative work, and causes the budget figures to be inflated in a completely meaningless way. Hon. members will recall that I raised this matter in my budget speech last year and that the Finance Act of 1977 provides for loans granted to the provinces up to 31 March 1978 to be deemed capital grants. The proposed amendment now rectifies the position in respect of the future.

These and a few other amendments also necessitate certain consequential amendments to the said Financial Relations Act, 1976, and these consequential amendments are likewise contained in the amending Bill.

Finally, I should like to indicate to hon. members that I shall move an amendment in the Committee Stage with regard to the duties of a provincial auditor in connection with reporting on accounts. The provision concerned can be regarded as somewhat repetitive, and after the Treasury had initially been advised that its omission would not leave any void with regard to the specific duties of a provincial auditor, it was not included. However, the Exchequer and Audit Act, 1975, contains such a provision, and since it is the intention, where administrative procedure and systems allow this, to keep the wording of the said Act and of the Provincial Finance and Audit Act, 1972, as similar as possible with regard to the corresponding provisions, I have decided, after reconsidering the matter, to include the provision after all.

Mr. Speaker, we in these benches support this measure. Therefore I will not delay the House unduly. However, there are a number of matters which, I believe, have to be referred to. The first of these is the fact that this puts into legislation, in so far as provincial accounting is concerned, the issue which the hon. the Minister referred to, i.e. that there will be no further loans and that there will be grants in the future. I think one should bear that in mind. One should also bear in mind that there are very substantial other subsidies being given to the province. One has no quarrel with the logic of that, but when one gives to a province a subsidy in order to repay a loan which one has made to it, there is no logic in making that loan. Logically it should be a grant.

What we do have something to say about, is the fact that if this House is responsible for voting what amounts to most of the moneys which provinces are able to spend, then—on the old principle that he who pays the piper is entitled to at least call a part of the tune—it seems that this House may well have to consider at some stage that, whereas provincial autonomy is accepted as a reality of life, when money is spent in such a manner, priorities that we ourselves in this House would not like to see observed, are in fact observed by a province, and where the priorities which we consider to be in the national interest are not observed, it may well be necessary for this House to take some action.

Let me give the hon. the Minister an example. If we look at the amount of building activities that provincial administrations have indulged in—if we look here in Cape Town and in other parts of the country—one has to ask in all fairness whether the priorities which are in the national interest have always been observed in that buildings have been allowed to be erected by the provinces, buildings which could well have been delayed or not built at all. Perhaps the classic example is the Opera House in the Transvaal. How can anyone justify that expenditure? When this project was first announced, it was estimated that it was only going to cost a few million rand. It is now estimated that the final cost, at the time of completion, will be in the vicinity of R46 million. This is money which was voted by this House in the main. That question, as to whether it is justified, is one which has to be asked, because the responsibility is as much ours as it is that of the provinces if we allow the provinces to have priorities which we ourselves do not approve of. The national interest, when it comes to these matters, obviously has to be considered and in such circumstances provincial autonomy must, as the Government has itself often said, take second place to the national interest. I ask the hon. the Minister what his approach is to this matter.

Sir, I should like to comment briefly on some of the provisions which we debated, I think in similar form, in two debates relatively recently. Last year we debated amendments to the Railway Financing Act and the year before we debated our own Exchequer and Audit Act. I do not want to repeat what has already been substantially debated in this House, but I would, for example, like to refer to the question of special warrants. I should like to ask the hon. the Minister whether, in the case of the retention of special warrants, which is something which we support in the circumstances, he does not think that the percentage, i.e. 2%, is somewhat high for the provinces. I wonder whether he will not reconsider this matter. I know that this is a measure which has been agreed to by the various provincial administrations and therefore the hon. the Minister may feel embarrassed at having to accept an amendment in this House now, but I do feel that he should give further consideration to this matter before it is debated in the Other Place, particularly since provincial budgets are now very substantial, and that amount may well be too high in the circumstances.

The second matter I should like to deal with is the question of unauthorized expenditure. As we have said in previous debates, we feel that the legislature must keep control over the funds that are to be spent. By allowing this substantial transfer of savings from one subhead of a Vote to the defrayment of excess expenditure under other subheads, we have to some extent created a situation in which the legislature loses control. That situation exists here. It exists in the Railways and no doubt it will exist in the provinces, because that appears to be a policy issue. In our view, however, this points to a lack of the control which a legislature should have.

A matter which I feel deserves comment is that, in terms of clause 12 of the Bill, the detailed variations between the actual accounts and the estimates need not be specified if the difference is not more than 2%. I wonder whether that is appropriate, bearing in mind that while a difference of 2% in the case of a very small Vote will represent a minimal sum of money, the same difference in respect of a large Vote will represent a very large sum. I wonder whether, in respect of the provinces, the hon. the Minister should not consider stipulating a figure of, for instance, R50 000 or 2%, whichever is the lower. There would then be adequate control in respect of the explanations which are put before the legislature.

Then, Sir, I should like to touch on the responsibility of the accounting officer in respect of unauthorized expenditure, and the question of the validation of unauthorized expenditure. The proposed new section 15A(2) reads as follows—

It may well be that the accounting officer is quite willing, but in fact unable, because of his negligent conduct, to do so. On the other hand, it may well be that the entity to which the money has been advanced, is unable to repay it. It seems as if the question of unwillingness in itself is inadequate to protect the exchequer, and it therefore appears to me that the provisions should apply if he should be unwilling to recover the money or the relevant person be unable to repay it. Quite clearly there could be recklessly unauthorized expenditure if he decides to recover the money when it can quite obviously never be recovered under the circumstances.

My next comment involves the proposed new section 15B. Here I am a little concerned about the provision which states—

1. (a) failed to collect provincial moneys for the collection of which he is or was responsible …

There is a question which must consequently be posed to the hon. the Minister. How does he construe the word “failed”? Is it not really that the person concerned has “neglected” to collect the provincial moneys for the collection of which he is responsible? The mere “failure” to collect may, in fact, be due to circumstances for which he is not responsible, whereas the “neglect” to collect it will quite obviously indicate that there is a degree of fault involved.

There is another aspect that I must draw attention to. Here one has a situation in which there is great responsibility imposed upon the accounting officer. One has to ask oneself, however, whether in fact that responsibility should not be shared by the accounting officer and the executive committee member who is responsible. In other words, it should perhaps not only be the accounting officer, but also the executive committee as such, which in these circumstances really administers the province, which should have a greater degree of responsibility when it itself is a party to the situation which has arisen. That is not covered in these circumstances at all.

As we see the Bill as a whole, it is an improvement which brings the control of provincial finances into line with the more stringent and acceptable provisions which now apply to both the State and the S.A. Railways, and for these reasons, bearing in mind that we have offered our suggestions in a constructive spirit, we shall support the Second Reading of this Bill.

Mr. Speaker, judging by previous debates on the same subject, we were expecting the Official Opposition to support this legislation. I have no intention at all of replying to the many technical suggestions which the hon. member for Yeoville made. I am sure that the hon. the Minister will deal with those aspects.

I want, however, to make a few remarks in connection with the hon. member’s reference to the powers of the Administrator, powers which are being provided for in this measure. I am referring to the fact that the Administrator is being given greater mobility when it comes to the application of funds. The fact that the Administrator may apply savings in order to supplement deficits in other posts is subject to the proviso that he keeps to the same post, that the application is in the public interest and the supplementation in question cannot be postponed any longer, and are, in my opinion, sufficient to give this House the necessary assurance. Surely one can also expect the type of responsibility from an Administrator which will not cause things to go wrong. In my opinion one may readily give him that responsibility. In any event, in terms of clause 8, he is required to obtain authorization for such expenditure during the next ensuing session of the Provincial Council. I therefore feel that I cannot share the concern of the hon. member for Yeoville in regard to that aspect.

As far as the responsibility of an accounting officer is concerned, the clause is in fact very clear. It only concerns cases where it would in fact have been within the power of an officer to recover moneys and he chose of his own free will not to do so, that he will be personally responsible. That is why “shall” and not “may” is expressly stated in the clause. It is only in the case where he does not want to, that he will be responsible. That is why I cannot share the hon. member’s concern in that respect either.

I think that this is good legislation. Provinces are now able to share in the special advantages which flow from unit budgeting. They can also reap the benefits of a system which has already been in use in the central Government for some time. In my opinion the powers which are also being granted to the provincial auditors in terms of this legislation, are a very good thing. In the times in which we are living, it is easy to make certain amounts disappear in a sophisticated manner, for example by means of electronic systems. I think that provincial auditors must be able to use all possible instruments in order to investigate possible misappropriations on the one hand and on the other hand to make a report at the earliest possible opportunity.

I have already referred to the fact that the Administrator retains certain powers which are being very clearly spelled out and defined for him in this measure. It will empower him to make certain changes in the appropriated amounts in the public interest. Especially if one takes into consideration the fact that the provincial councils do not sit all that regularly and that things can crop up in the meantime for which money may urgently be required, I think it is necessary to give the Administrator these powers.

A final important matter is the question of capital grants. As the hon. the Minister said, it is unnecessary to inflate the estimates by granting subsidies to Provinces in order to enable them to pay interest to the central Governments. In this time of economies, the streamlining of systems and saving on staff, I think it is a step forward and that it will greatly facilitate the financial affairs of the provinces.

I am grateful that the hon. members on the other side support the Bill, and I myself am also pleased to support it.

Mr. Speaker, I first want to react to several things the hon. member for Yeoville said. However, before I do so, I want to assure the hon. the Minister that we on these benches will also support this Bill. I think the hon. member for Yeoville did particularly well in regard to this particular Bill, especially when one considers that he does not have the advantage we on these benches enjoy of having our Party in power in one of the provinces. However, I do want to react to one of his comments which was to the effect that whoever pays the piper calls the tune.

Partly.

Yes, perhaps part of the tune. In other words, what he is advocating is more control over provincial councils by the State. We in these benches cannot agree with this principle in any shape or form. It is most definitely our policy that local and provincial authorities should in fact be able to govern themselves to the largest possible degree. In furtherance of that, we believe the provinces should not actually have to wait for handouts from the central Government. A different taxation system should be introduced to give them their own taxing rights whereby, of course, the State taxing rights would be reduced. I am not suggesting that we should place a further load on the already overburdened taxpayer. If the provinces themselves were given more taxing rights, they certainly would have more autonomy instead of having to see the power of the provincial councils wasting away over the years.

Are you in favour of provincial taxation?

I want to get on to more of the details involved in the Bill. I should like to point out to the House one or two aspects of the Bill. First of all, clause 8 of the Bill contains the principle that—

This in fact breaks new ground to a certain extent. I merely want to point that out—I do not necessarily object to it. In the past the particular requisition had to be signed by the administrator and by the provincial auditor. This now imposes, I believe, on the administrator a greater degree of responsibility and strain, which perhaps he will welcome but, on the other hand, perhaps not. Further down in the same clause one finds—the hon. member for Yeoville has mentioned this in regard to another clause—that the amounts that can be granted in terms of this clause may not exceed an amount equal to 2%. Once again this is a new principle in the Bill because in the past the relevant legislation mentioned a figure of 1%. We are therefore doubling the amount concerned. Once again we do not object to this, but I believe it should be pointed out to this House.

At the bottom of page 9 there is a further clause I would like to mention. I would like to read the proposed section 8(2) to this House and suggest a set of circumstances to the hon. Minister of Finance on which I would be interested to have his reaction. This particular subsection provides—

This is quite clear. The administrator may issue a special warrant. He may spend moneys up to a maximum of 2% and then has to get it approved through an appropriation at the following session. One could encounter the situation that between the time he issued this warrant and the time the council next sat in order to approve the additional appropriation, there could have been a change in the constitution of that council. There could have been an intervening general election and it could happen that that particular council had a new party in government who would not be prepared to pass this particular appropriation. In this case I believe the Administrator could find himself in a certain amount of difficulty. I therefore commend this to the attention of the hon. Minister of Finance.

Are you worried about Natal?

No, I am not worried about Natal.

You must be worried about the Progs there.

Certainly, Mr. Speaker, we are not worried about the PFP in this regard.

We will be moving an amendment during the Committee Stage to amend clause 9 on page 11. Again I believe the intention of the hon. the Minister is quite clear. However, I believe the way in which the proposed section 8A(1) is worded, could create a measure of confusion in the mind of anyone who had to adjudicate thereon. The proposed subsection reads as follows—

If one looks at this in terms of knowledge of the English language, what this in fact means is that he can spend that amount on another subhead of a different vote. The subhead of the same vote only qualifies the expenditure under a new subhead and not under another subhead. However, I will motivate this further in the Committee Stage when I will be moving an amendment.

I also want to react to the amendment which the hon. Minister of Finance will be proposing. We believe that this is a good amendment and it accomplishes an improvement in the situation. We will accordingly be supporting it.

Finally, I would like to comment on the item which the hon. member for Yeoville commented on, viz. the proposed section 15A(2) which reads as follows—

The problem that I have with this clause differs from that which the hon. member for Yeoville has. My problem is this: It might be that the accounting officer concerned is very willing ab initio to try to recover the money, but when he goes into circumstances, he finds that there are extreme extenuating circumstances which then causes him to be unwilling to try and recover the moneys concerned. The way this provision is worded leaves the Executive Committee of the province ho option but to recover the money from him. He might go to them and say that the person from whom he has to recover the money is a widow with six starving children and to try to recover R200 from her would cause great hardship. In such circumstances the Executive Committee have—in terms of this clause—to recover the money from the accounting officer. I believe that perhaps one should give them the right to adjudicate the matter themselves and instead of having “shall” I would think that perhaps the word “may” might be better in that in the event of its patently being the fault of the accounting officer, they certainly will recover the money from him. Sheer unwillingness to recover it I believe should not force them to recover the money from the accounting officer concerned. I leave these thoughts for the hon. the Minister to comment on. We in these benches will support the Bill.

Mr. Speaker, this afternoon the hon. member for Yeoville spoke rather angrily about the opera house in Pretoria which supposedly cost too much money.

Tackle him!

No, I do not want to tackle him. I just want to tell him that he knows as well as I do that we could not have obviated prices increasing to such an extent and the opera house now costing so much. The hon. member cannot successfully maintain to any reasonable person that we wanted the prices to rise like that and that that is the reason for the increase in the cost of the opera house. The hon. member knows as well as I do that there are specific reasons for the increase in the ultimate price.

The hon. member for East London North said that he and his party supported the Bill, and we are grateful for that. But in the same breath—this is what I cannot understand about them—he said that they were not in favour of stricter control over the provinces. Over the years that party has been trying to run with the hare and hunt with the hounds and it has always come a cropper. The hon. member had a problem with the provision contained in clause 8 of the legislation in terms of which the Administrator—if I understood him correctly—is being authorized to do certain things. The hon. member also foresaw problems with regard to the provisions of clause 9, which inserts a new section 8A. I think the hon. member is reading the clause incorrectly. I do not want to go into it any further now; we can discuss it further during the Committee Stage. If the hon. member reads the clause correctly, however, he will see that the provision is perfectly in order.

In addition to the beneficial effects we have already heard about, the bringing into line of the provincial finances and audit measures with the provisions contained in the central Treasury and Audit legislation, will, inter alia, have the effect of extending the powers of a provincial auditor as well. These provisions we find, inter alia, in clauses 14 to 18. I shall refer only to the most important aspects in this regard, and these are to be found in the proposed new section 19(b)(iii). It provides that the auditor “shall have the right to investigate whether any moneys in question have been spent in an advantageous and efficient manner”. In terms of sub-paragraph (iv) he similarly obtains the right to “ … investigate and to inquire into any matter, including the efficiency of internal control measures …”. The hon. member for Yeoville pointed out quite rightly that the provinces dealt with the taxpayers’ money as well and that it was therefore no more than fair and right for there to be proper and efficient control measures in this regard. Clause 17 provides that the provincial auditor may present a report on any matter connected with his duties to the Provincial Council and to the Administrator.

In conclusion I just want to point out that these amendments were framed and thrashed out in co-operation with the provinces and that they are satisfied with them. Sir, this legislation is good and just legislation and it is in the interest of good administration. That is why we are pleased to support it.

Mr. Speaker, provincial autonomy is not an issue in the Bill. But some of the speakers before me raised it as an issue, so I merely want to state very briefly that we in the SAP favour maximum provincial autonomy and decentralization of powers to the provinces.

I want to tell the hon. the Minister of Finance at the outset that we are happy with the amendment which he has placed on the Order Paper; in fact, he could have read our thoughts in that regard. We do not oppose this measure because we believe it is an improvement, particularly the change in the accounting procedure. I do not intend delaying the House at any length and would like to make only a very brief appeal to the hon. the Minister.

We heard from the hon. member for Yeoville about the excessive expenditure in the Transvaal. That may well be so; the hon. member is probably correct in this regard. But then he mentioned excessive expenditure also in the Cape Province. I feel I must say to the hon. Minister that I do not want him to be led by the hon. member for Yeoville in regard to expenditure in the Cape. I cannot speak for the other provinces, but in considering the capital requirements of the Cape Province I would like the hon. the Minister to consider additional relief, because of the large size of the Cape Province and the necessity for essential services, spread over the vast province, to ensure the well-being in some cases of small populated towns scattered all over the province. There is a vast backlog of capital works in the towns and cities of the Cape Province and these towns and cities very urgently need a boost. I want to suggest to the hon. the Minister that there should be a slight easing of the central Government’s purse-strings in regard to the essential services required in the Cape Province, and I hope that in the next budget we shall see visible evidence of the hon. the Minister easing the purse-strings. We support the Bill.

Mr. Speaker, I want to thank hon. members of all parties for their support of the measure. We appreciate it, because we have only the best intentions. As I have said, we should like, by means of this measure, to streamline the financial and audit affairs of the provinces by modernizing and rationalizing their system, and introducing the corresponding measures as far as possible, as was done about a year ago by means of the Exchequer and Audit Act.

†The hon. member for Yeoville raised the question of the central Government really being the chief source of finance for the provinces—which is quite correct—and that therefore it would be a case, to some at least, of he who plays the pipe calls the tune. This is so. We cannot get away from it. One has that consideration and of course one has to temper that or balance it against the much-prized autonomy of the provinces, their right to discretion over their own affairs, as far as that can be done practically and effectively in our system. We constantly try to maintain that balance. It is really for that reason that when we bring a measure like this before the House, we go to considerable trouble to consult the provinces and to obtain their views on any proposed amendments. In this particular case that was done in detail and, as I mentioned in my Second Reading speech, we have the full agreement and support of the provinces for the measure.

There were also some questions raised concerning special warrants. The percentage of 2% was previously 1%, as the hon. member for East London North pointed out. We think that in the light of experience, that is probably as good a figure as one can put here. To some extent it is arbitrary. Someone has to judge the matter in the light of requirements. But we are satisfied, and the provinces are satisfied, that under prevailing conditions 2% is a better figure than 1%. I think that under those circumstances we ought to go ahead with it. I just want to mention that that is in fact the same figure we have in the Exchequer and Audit Act, which was passed in 1975. I mention it for what it is worth.

I now want to refer to the question of the subhead in clause 9. I do not know whether the hon. member for East London North would prefer me to deal with it when he puts his amendment. I think we can in fact handle that matter quite conveniently in the Committee Stage. I have a suggestion to make which might relieve him of the difficulty he has with that particular wording.

The hon. member for Yeoville referred to clause 12, concerning the difference of 2%. He suggested we might state an actual amount of so many thousand rand, or 2%. I should like an opportunity to look at that more closely because, as I have said, this measure has been agreed upon with the provincial administrations and I am reluctant simply to change a measure like that without very careful further thought. However, the hon. member may rest assured that I shall give further thought to that to see whether that is perhaps an improvement.

Clause 13 of the Bill proposes the insertion of section 15A after section 15 of the principal Act. It deals with the matter of unauthorized expenditure. I quote from the proposed section 15A(2)—

At least two hon. speakers in this debate have raised a point in this regard. I think the point to bear in mind here is that in the general course of events, as a normal procedure, such amounts do become authorized. They are in fact authorized eventually. However, in the exceptional case where that might not be done and if the accounting officer is, as is stated in subsection (2), unwilling to do anything about it, it is felt that there ought to be an effective power to deal with it under those circumstances. Again I can say that this is in fact on a par with the corresponding provision of the Exchequer and Audit Act, and so we are rather reluctant to change it and have a difference in the treatment of that sort of situation, which I think would in practice be an exceptional situation, between the two systems. However, I am prepared to look at it again and take it up with the provincial administrations. If it is found to be necessary and if the arguments are then found to be really persuasive, I shall be prepared to handle the matter in the Other Place. I should like to be allowed some time to take that up.

There are certain other matters to which I want to refer. Perhaps I shall not be able to discuss every single one. The hon. member for East London North pointed out with regard to the Administrator’s power to authorize expenditure, as is stipulated in clause 8, that previously the provincial auditor would also have had to sign in such a case and not just the Administrator. That is another matter to which one could give attention. However, I must say that this is an agreed measure with the provincial administrations and once again I should not like simply to change it without having had some opportunity to study the implication.

The hon. member for East London North and I will both be putting forward an amendment with which I shall deal in the Committee Stage.

*Once again I want to thank hon. members very much for their support, because I think that this Bill improves the situation. I also want to thank the hon. member for Walmer for his support. He spoke of a backlog in capital, especially in the Cape Province.

†The hon. member spoke about a backlog of capital. I think the hon. member referred particularly to some of the smaller towns or villages in the Cape Province in this respect. I am aware that under present conditions of inflation it is so that a number of municipalities and local authorities are encountering quite serious financial problems. Indeed, that is not confined to small ones; some of the larger ones are also in some trouble, or are having problems at any rate. I am very much looking forward to the report of the interdepartmental committee which we appointed a while ago under the chairmanship of the previous Secretary for Finance, Mr. Browne. They are hard at work. I believe they have made considerable progress and I hope we shall be able to have their report fairly soon. One would hope to look at that problem in the light of what I think is a very close examination of the whole issue. The hon. member and I can certainly discuss that again, particularly in the light of any recommendations which might emanate from that expert body.

I propose that I leave the matter there. Perhaps if the House will allow me to take the Committee Stage, we can deal with the one or two outstanding matters then.

Question agreed to.

Bill read a Second Time.

Committee Stage

Clause 1:

Mr. Chairman, in the proposed new definition of “revenue”, capital grants are specifically referred to. I should like to ask the hon. the Minister whether, in respect of the embarking by a province on a major capital project, e.g. the Pretoria Opera House, there is not consultation with the Minister or the Treasury in order to ascertain whether this is a project which would have the Minister’s blessing in the long term. Quite obviously, if one takes the Opera House as an example, one finds that it is a project that starts in one year and can take very many years to be completed. There is then an on-going commitment in respect of this money. Is there in respect of such a major capital project any degree of consultation between the provinces and the Treasury?

Mr. Chairman, I regret that I did not comment on the more general point which the hon. member for Yeoville raised in the Second Reading in connection with the need for some possible control, or an opportunity for the central authority to have some say over provincial finances, because most of the finance comes from the central authority. In that connection I wanted to say that there is in fact a very careful procedure laid down as to how we proceed, which I shall come to now. I would also like to refer to the principal Act, i.e. the Provincial Finance and Audit Act, 1972, where the hon. member will see that in the side-note to section 21 it states—

Then there are certain provisions.

That is after the event. I am speaking about before.

That is correct. But I think that bears on the general point which the hon. member made, viz. that that report would be tabled in this House. As to the other point, the practical issue of how we have to proceed, I want to state that in the Treasury we have at least two senior officials who specialize in provincial finance and in the procedures involved there. They do this in very close co-operation and close consultation with the provinces. In this way we have built up, I believe, a very healthy system of co-operation. The officials are working very closely together, something which is to the benefit of the provinces and certainly also to that of the central Government. They have there what we call a formula, a formula which is carefully defined, neatly drawn up and agreed to by the provinces. According to that formula one determines the annual amount which the central Government will pay to each province. It covers a whole number of items. It lays down an agreed procedure which enables one to arrive at a figure for the province as a whole.

Then there is a capital account too. It has been found not quite as easy there to arrive at a final formula on which to base the calculation of the capital amount in an as objective a way as possible. The reason for the idea of a formula is to try to be objective. Hon. members will understand that one has all sorts of pressures. One province has problems with roads, while another claims to have a bigger problem with education, or hospitals, etc. Somehow one has to obtain some consistency. This has been very substantially achieved in the current account procedures, if not quite as easily on the capital account. The sort of item to which the hon. member referred, namely the Opera House, is something on which it is difficult for me to comment. That is a matter which came up for discussion before I was Minister of Finance. There was a good deal of discussion at the time and various agreements were reached.

In general, I would say that we are looking very closely indeed at that type of expenditure at present, so much so that we have—for about 18 months to two years already—a Building Norms Committee under the chairmanship of the Secretary of the Treasury. I believe that is an extremely competent committee, consisting not only of top officials, but also of experts outside the civil service, experts who look at various plans for the construction of public buildings in general, for example hospitals, universities, roads and all sorts of other buildings. Under present conditions, if any project of that kind came up, I would certainly have a very close look at two aspects. The first is that the section of the Treasury which specializes in provincial expenditures and has acquired a good deal of expertise, should look at it very closely in conjunction with the province concerned, as well as with the other provinces. We do things like this in conjunction with the other provinces as well. Secondly, I would refer the matter quite independently to the Building Norms Committee and ask their expert view on precisely that particular building, the need for it and whether the standards are too luxurious or not. I would get all the technical information to put me in a position to say whether the need therefore is great enough, whether the particular building should fall under priority 15 instead of priority 1, for instance, or whether it is on too big or too small a scale to be really useful. At least we would be able to get an objective view of a project which could be rather capital intensive under present conditions. As I say, it is very difficult to express an opinion in connection with the opera-house, because certain decisions were taken earlier, I believe responsibly and in good faith. Since then there has been a tremendous escalation of costs, and they find themselves in the position of having a much more costly project than they could ever have anticipated when they began with what I believe was completely responsible planning. I would like the hon. member to appreciate how it is done at this moment. I think a great deal of attention is given to this issue. I may say, Sir, that the provinces have really played the game. We have had to cut back the allocations to the provinces very substantially. During the last few years they have really had to come under the hammer on a number of things, and they have taken it very well indeed. I think the House should know that I have not noticed any inclination on their part to be wasteful. On the contrary, I really think that they are showing great responsibility in the effort to economize. I hope that will satisfy the hon. member.

Clause agreed to.

Clause 4:

Mr. Chairman, I should like to ask the hon. the Minister whether there is any specific motive which requires provinces to bank with the Reserve Bank only. Is that a deliberate policy?

As far as I am aware, that is the system. I think it is a pretty good system. I think the Reserve Bank is a good bank.

I hope so, for all our sakes.

I think I am correct in saying that the provinces do all keep an account with the Reserve Bank, as set out here. Whether that means that the provinces cannot under any conditions open an account with another bank, I am not quite sure at the moment. Nevertheless, I think the system is as laid down here.

Clause agreed to.

Clause 8:

Mr. Chairman, I should like to repeat the question which I put to the hon. the Minister at an earlier stage. The question relates to the proposed new section 8(2), in terms of which it states that steps shall be taken during the next ensuing session of a provincial council for the appropriation of any amounts in respect of which authority has been granted by an Administrator by special warrant. What would happen in the event of expenditure authorized by an Administrator by special warrant not being approved by a council during its next session?

I must say that I am somewhat intrigued as to the reason underlying this interesting question. We in Natal are not in all that much of a hurry to take over, although we have some designs in this regard. Whether that is what is worrying the hon. member, I am not quite sure. One would obviously expect that what was done in good faith by an Administrator would be approved by the next ensuing provincial council, provided that that was done responsibly, as it must be. If it is not, it simply means that it is not approved. I must say that if my party took over the provincial council in Natal, I would still be prepared to accept that what had previously been done, was done responsibly under the previous régime. I am sure we would approve it. I think that is the spirit in which it would be done. I find it very difficult to contemplate any other position in practice. I do not think I can go further than that.

Mr. Chairman, I should like to come back to the question of the 2% and the increase to it. There is something worrying me and I should like to put it to the hon. the Minister. What I am thinking of is the fact that we have an increasing budget. I think the hon. the Minister will appreciate the fact that the Transvaal’s budget is probably the biggest of the four provinces at the moment. At present it is in excess of R900 million.

Harry, you are very calm today!

That hon. member will have me in a different mood just now. When one has a sum of money approaching the R1 000 million mark, one is dealing with an amount of R20 million. It seems to me that that figure is a very substantial one indeed for the Administrator to be given not only the right but also the responsibility of dealing with. I feel, with respect, quite strongly that the figure of 2% is too high. I indicated in the Second Reading debate that I do not intend to move any amendments because I know the hon. the Minister has a problem. When one has agreed upon a measure with the provinces, I think it may be said to be an act of bad faith to make changes without consulting them first. That is why I suggested that he should hold consultations before the legislation goes to the Other Place. I should like him to consider whether these very large sums of money should be allowed to be dealt with by way of special warrant. I ask him earnestly to consider that before this measure goes to the Other Place.

Mr. Chairman, I take the point. I am certainly prepared to look at this matter again with my senior officials and the provinces. We shall bear in mind the point the hon. member has raised.

Clause agreed to.

Clause 9:

Mr. Chairman, I move the amendment printed in my name on the Order Paper, as follows—

I do this only in the interests of clarity. There is no principle involved here. I know that the hon. the Minister’s intention is quite clear and that this should refer to another subhead of the same vote, but I do not believe that that clarity comes across in the clause as it stands. For example, if one were to put a comma after “new subhead”, then “of the same vote” would qualify both “another subhead” and “a new subhead”. With the punctuation in the clause as it stands, however, “of the same vote” only qualifies “expenditure under a new subhead” and does not qualify “expenditure under another subhead”. I therefore have proposed the amendment standing in my name purely in the interests of clarity. I wish to have it made perfectly clear to anyone who has to adjudicate on this clause that the intention is clearly to refer also to “another subhead” of the same vote.

Mr. Chairman, the hon. member has stolen my thunder. I was going to suggest that this might be resolved by inserting a comma after the words “new subhead”.

I accept that.

I have put the matter to a person who has more knowledge, I think, of the niceties of the English language than I have and this seemed to be thoroughly acceptable there. If it is acceptable to the hon. member, then perhaps we have resolved the issue. We shall insert a comma after “a new subhead”.

Mr. Chairman, in that event, with the permission of the House, I should like to withdraw the amendment I have moved.

Amendment, with leave, withdrawn.

Clause agreed to.

Clause 12:

Mr. Chairman, I indicated in the Second Reading that I believe an amendment should be effected to this clause in order to deal with the particular problem that both small Votes and large Votes are involved. The hon. the Minister has said he will consider this aspect before the Bill goes to the Other Place. I am indebted to him for that and I hope he will see his way clear to amend the clause accordingly. However, for the reasons I have given, I do not propose to move a formal amendment.

Clause agreed to.

Clause 13:

Mr. Chairman, I want to come back to the two points I made earlier and which I think the hon. the Minister omitted to deal with specifically. The first point relates to the word “unwilling” in the proposed new section 15A(2), in line 15 on page 13 of the Bill. I indicated to the hon. the Minister that a man may be perfectly willing to recover the amount concerned while, because of his neglect, he is unable to do so, and that therefore the inability to recover it is the material factor. That is something I ask the hon. the Minister to consider.

The second point I made relates to the word “failed” in the proposed new section 15B(1)(a), in line 22 on page 13 of the Bill. That word appears to me to be inappropriate because one can fail to collect provincial moneys due to no fault of one’s own. One can try to collect them but not succeed in doing so because of the departure of the person involved or for a variety of other reasons. As a result one fails to collect those moneys. However, if one neglects to collect such moneys, it is an act on one’s own part that will create that situation. That is why I ask the hon. the Minister to consider using the word “neglected” instead of “failed”. I think that the word used in the Afrikaans version, viz. “versuim”, is much more meaningful in this context than the English word “failed”. I think that the meaning “neglect” is the one the hon. the Minister himself would seek to apply to that particular provision.

Mr. Chairman, as regards the first point, which relates to unauthorized expenditure, I should like to point out that that of course refers to unauthorized expenditure which has been incurred, and having been considered by the provincial council, has been rejected, and for very good reasons, I imagine. If the accounting officer is then unwilling to do something about recouping it, it is felt that this is a serious matter and that a very strong authority should be given for such recovery. The same approach was adopted in the main Act. However, again I am quite prepared to raise this matter with the provinces, with whom we have on-going consultations, and also with the Treasury. However, as I have said, this wording has been well considered and has been in use for a long time.

As regards the word “failed” in the proposed new section 15B(1)(a), in respect of which the hon. member suggested that we might for example use the word “neglected”, I should like an opportunity to go into that, if I may. I should also like to point out that that proposed section provides that—

1. (e) due to an omission to carry out his duties, is or was responsible for a claim against the province,

the accounting officer concerned shall determine the amount of such loss or damage, and he may order, by notice in writing …

that certain things be done. It is therefore permissive. He “may” do so under certain circumstances. I think that qualifies the understanding of the whole clause but I will look into the question of the word “failed”. We also need to have the confirmation of the Chief Law Adviser, but if it is an improvement we will put it in.

Mr. Chairman, I am indebted to the hon. the Minister. I think he might find, as I am advised, that the word “versuim” translated actually means “neglect” whereas it does not mean “fail” in that sense. It may be a translation problem but it depends on the language in which the Act eventually comes to be signed.

There is just one matter I would like to add. If an accounting officer is unwilling to recover an amount, one can always get someone else to recover it. In other words, if an accounting officer is not prepared to do something, the Government is then not completely frustrated because it can get someone else to seek to recover the money. If he is, however, unable to recover the money, a different set of circumstances arises. One cannot then get someone else to do it. In other words, if the debtor does not have the money, there is nothing anyone can do about it. Therefore one has a different set of circumstances and that is why I want to stress to the hon. the Minister that the word “unwilling” by itself is not adequate in this context.

Mr. Chairman, I want to point out that the title “accounting officer” or “rekenpligtigeamptenaar” means that that person is responsible and that he is being held accountable. I think one has to bear that in mind too. I am not quite sure in what context the hon. member is saying that one can get someone else to do it if such a person does not do what he is appointed to do as the accounting officer. He has to be held to account for certain things which he is bound to do. However, Mr. Speaker, I do not want to go into the semantics of the matter. These points will be carefully noted and they will be looked at. If we find that these are improvements we will certainly make use of them.

Clause agreed to.

Clause 18:

Mr. Chairman, I move the amendment standing in my name on the Order Paper, as follows—

1. (c) by the insertion after the said paragraph (b) of the following paragraph:

I do not think it is necessary to give a long motivation for the amendment. It is something which was unfortunately omitted at an earlier stage of the printing of the Bill. I think it is very clearly an improvement. In fact, I think it is such an important clause that I should very much like to have it in the Bill even though there may be a feeling that it is perhaps a bit repetitive. I nevertheless feel that it is better to have it in the Bill than not to include it.

Amendment agreed to.

Clause, as amended, agreed to.

House Resumed:

Bill reported with an amendment.

Bill read a Third Time.

Mr. Speaker, I move—

This Bill is the forerunner to the legislation which I shall propose later during this session to give effect to the introduction of a point-of-final-sale sales tax which I foreshadowed in my budget speech last year.

The sole purpose of the Bill is to provide for the registration by the Secretary for Inland Revenue of persons carrying on certain enterprises in the Republic. Hon. members may have found it strange that nowhere in the Bill is mention made of the purpose of the register which the secretary will compile. The reason for this is that it is customary not to anticipate in a Bill legislation which has as yet not been introduced or enacted.

The Department of Inland Revenue has, flowing from its study of a system of sales tax, translated its findings into a draft bill which will be published in the Gazette within the next fortnight or so for comment. It is regarded as essential that the public at large, but particularly the business community who will be directly concerned with the sales tax, be given the opportunity to comment finally on the proposals before they are presented to the Government for final approval and presentation to this House for consideration.

I would at this point like to record my appreciation and that of my department for the wholehearted co-operation given by organized commerce, industry and agriculture, in shaping the form of the tax and I am sure that the time they spent in discussions with the department will prove to have been time well spent by ensuring a practical and easily administered system.

The role of the vendor, i.e. the person who is required to be registered in terms of the Bill under consideration, is of such importance to the sales tax system that I would like, with permission, to inform members more fully thereon so that the purpose of the Bill may emerge more clearly.

The vendor, who is a person carrying on an enterprise of the nature contemplated in clause 2 of the Bill, will be required to pay the sales tax on all taxable sales and recover it from the purchasers by adding the tax to the selling price he would ordinarily have charged. This applies equally to lease instalments and receipts for board and lodging or for certain accommodation.

The register to be compiled by the secretary in terms of clause 1 of the Bill is therefore necessary as a control measure to ensure that each vendor pays the tax when due.

*The registration of vendors has another, equally important role, however, which is that it will form the basis for the issue of registration certificates to registered vendors which will constitute the authority to purchase commercial stocks intended for re-sale, or raw materials and basic materials intended for re-sale in processed form, or certain mining, fishing and agricultural inputs, free of taxation in order to eliminate an escalation of the tax.

I am not, at this point, mentioning these two functions in order to provoke a general discussion of the particulars of the envisaged system, for there will be other opportunities to do so and this Bill is not primarily concerned with the sales tax as such. I am mentioning it to elucidate the purpose of the registration.

Hon. members may well ask why the Bill is being introduced at this juncture, and why the entire matter is not dealt with when the sales tax proposals are subsequently submitted to this House in the form of a Bill.

The reason is that it must be made possible for my department to compile the register now so that it will be prepared, if the introduction of the tax is accepted by Parliament, to start implementing it at once. The compiling of the register and the preparation of the certificates take time, and the certificates are required to be in the hands of the vendors before the date of commencement of the tax so that they are not obstructed in the purchase of stocks, etc., which will have a disruptive effect on their enterprises.

Finally, Mr. Speaker, the Bill has been comprehensively framed to obtain as complete a registration as possible at this stage. Exemptions and exceptions will subsequently be specified in the sales tax legislation and even further additions or omissions may be allowed after hearing representations following the publication of the draft Bill I mentioned earlier.

Hon. members will note from clause 2 that persons are expected to furnish declarations for the purposes of registration not later than 31 March 1978 or within a further period which the secretary may allow, and it is therefore essential that the Bill be placed on the Statute Book as soon as possible to allow the business community and my department, which already finds itself under tremendous pressure, as much time as possible to get their organizations ready.

The provisions in the Bill are reasonably self-explanatory and I am therefore convinced that hon. members will not require any further elucidation.

Mr. Speaker, one would imagine that the hon. the Minister believes that this is just a technical piece of legislation which should have no difficulty in passing through the House because, after all, all it seeks to do, is to register people, to cause them to fill in a form. It is not really anything else. However, with great respect to the hon. the Minister, he himself has said that this measure is the fore-runner of far greater or worse things to come. He has also told us what the purpose of this piece of legislation is. What is quite remarkable, is that the hon. the Minister does not come to the House with a package for the House to consider. He does not tell the House that he wants us to know what it is all about, and that he wants us, when we vote for the first step, to know what it is all about and where we are leading ourselves to. It is like the opera house we spoke about in the previous debate. One starts with a little bit, with a couple of million rand, and before one knows where one is, one has R46 million. This is exactly the same. It is a tiny little harmless measure which is the tip of the iceberg on which the economic ship can be wrecked if it is not steered correctly. We find it very difficult to understand why the hon. the Minister says today that in two weeks’ time he is going to publish in the Government Gazette some further legislation for our consideration. However, he has not shown to the House that he will take us into his confidence. The further legislation should have been published before we debated this Bill. We are expected to give the hon. the Minister the key to the door so that the door can be opened. Sir, life is not quite as easy as that.

Let us look at the situation. If we go back a little bit in history, we find that in the 1952-’53 budget debate the then Minister of Finance said—

How prophetic the then Minister of Finance was in regard to the extravagant manner in which the affairs of this country would be conducted by the Government, because that is the situation we arrived at some time ago in regard to sales tax and now we have come to the issue of purchase tax. We have to ask the hon. the Minister: Why does he want to have a turnover tax? What is the reason for it? Is the reason that it is administratively more convenient? Is it that it is easier to collect? Is it that it is something which is going to benefit the consumers of South Africa? Or is it something which will enable the hon. the Minister to get his hands on more of the money of the citizens of South Africa and in particular to use much of what he takes for ideological expenditure? [Interjections.] They tell an apocryphal story of the hon. the Deputy Minister of Education and Training. He came into a meeting at which the hon. the Minister of Finance was present and said: “Gentlemen, I want to tax your memories.” The hon. the Minister of Finance then said: “My goodness, I have never thought of that. I must write it down quickly!” That is what the hon. the Minister is after. This hon. Minister is determined to tax whatever he can lay his hands on. That is his approach. If we are to consider this matter on its merits, I want to remind the hon. the Minister of some of the things which have happened. In his 1976 budget speech the hon. the Minister said—

Well, he has seen the report of the Standing Commission of Inquiry into Taxation Policy, but this House has not seen that report. I understand that a feasibility study has been done by the Department of Finance as well as by the Department of Customs and Excise.

He is aware of that. We do not know the facts; we have not been told them to this day. Yet, he expects us to give him the key to the door today.

Order! The hon. member is going too wide now.

With respect, Mr. Speaker, I am merely dealing with what the hon. the Minister has said. He has told us that we are going to have a point of sales turnover tax and I am debating what he has said.

The Bill does not refer to that.

I do not think the hon. member for Von Brandis knows anything about what he talks about at any time. So he must not interject and make such a noise.

I now want to deal specifically with the Bill. I want to ask the hon. Minister why it is necessary to now cause people to fill in more forms and to create a new register, whereas I would have assumed that the Department of Inland Revenue would know every single taxpayer in South Africa and to have the name of everybody who, in terms of the definition clause, sell goods, render services, is an auctioneer, gives board and lodging, manufacturers, farms, fishes and mines. If they do not have that information, somebody is not paying his tax. Surely that must be on the computer? It should be able to be categorized by the computer into the necessary lists that are required. Is it now necessary for us to have another bureaucratic thing instead of it all being able to be fitted into the same structure? Is it not possible to do that? We have been told that the computerization of the department is extremely effective. I think it is, because most people seem to receive their taxation assessment much earlier than they did before. The information must therefore be in there, and if it is not in there, we should like to know why not, because the name of any person, company or firm who trade or engage in gainful activity in South Africa should be on that computer. The computer should be capable of being programmed to do that.

I want to deal with another aspect. Does the hon. the Minister seek to convey to the public—I do not believe he does—that the people mentioned in the definition are all going to be subject to this tax? I think it is important and in the public interest that we should know at the earliest opportunity from which people the turn-over tax is going to be extracted and which of the people will merely be registered so that there can be exemptions and so that they can be put into the different categories. I do not believe that there should be confusion in the public’s mind as to what is involved.

Allow me to deal with a third matter, namely the date, 31 March. I believe, with respect, that that date is one which the hon. the Minister is going to have to come to this House and ask to have extended, unless he is going to be forced into giving other extensions or prosecuting. 31 March is almost on us. To expect this from the commercial community when to my knowledge people have not yet received the forms is a bit much. I may be wrong; perhaps some have, but those I know have not got any forms. I do not know whether these forms have been printed and whether there are people waiting with bated breath to issue them the moment the Bill becomes law, but I certainly believe that 31 March is not a suitable date and that it should be extended. While dealing with dates, the most important part of this change-over procedure is what is going to happen with regard to sales duty in the interim. We know and everybody who is concerned with sales duty knows that when one adds sales duty imposed on certain articles it is going to take a long time before those articles are sold. For months and months ahead one is going to be selling articles on which sales duty has already been paid. Therefore if one does not have a system in terms of which there is a change-over period and at the end of that period have a tax holiday, one will end up with double taxation.

Do you want a tax holiday?

I want a tax holiday. Does the hon. the Minister agree with a tax holiday? The hon. the Minister is not saying a word!

I shall answer just now.

The hon. the Minister is not saying a word. I want a tax holiday, but let there be no misunderstanding between the hon. the Minister and me; in the first instance I want a run-down period during which there will be a phase-out of goods so that there is no double taxation. At the end of that run-down period I am asking the hon. the Minister for a tax-free period, a tax holiday. And the hon. the Minister knows why I am asking for it.

I am asking for it for two reasons. The first is that double taxation in these circumstances would be wicked, and I am sure the hon. the Minister would never consciously indulge in wicked activities. The second is that I believe that we need to do something in South Africa to induce confidence in the consumer so that there is consumer demand, particularly in the case of those industries where there is unutilized capacity, so that those industries can have a shot in the arm. That is why the time limits within which this is going to be done become absolutely vital, and the first of these time limits is the one with which we are dealing today. We must know how this system is going to operate. I think it is fair to say that the hon. the Minister’s department has been conducting a fair amount of consultation. I want to pay tribute to the officials who have been involved in this because they have conducted that consultation in a most reasonable manner, in a manner which I think the commercial and industrial community has appreciated and I would like to thank them for that. While the business community has been consulted, as far as this House is concerned it has been kept in the dark. The facts have not been told to us. There is a long list of things we need to ask.

Let me start off in respect of this particular matter and the registration, because that is the beginning of it. What is the cost of administration of this new scheme going to be? How many extra members of staff are we going to have to employ? On a previous occasion the hon. the Minister estimated that figure at 400. I wonder whether that estimate is still right. Then, if we bear in mind the question of the extra expenditure with regard to the administration, how much extra revenue is going to be brought in over and above the sales tax, taking a hypothetical percentage figure of turnover tax?

Order! I wonder whether the discussion cannot be handled on the basis that hon. members stick to the principle and do not discuss the details, which will be discussed at a later stage.

Mr. Speaker, with respect, I shall abide by your ruling, but a registration system is to be started and I would like to know what that registration system is going to cost the country. I would also like to know the cost benefit that comes about as a result of the introduction of this system. We are firstly going to have to decide whether to vote for this Bill and, secondly, we are going to have to decide what the consequences of this Bill are on a cost-benefit basis to the country as such. That is really what I ask the hon. the Minister to tell us. I think these are vital things which need to be told.

While we are dealing with this—because it becomes material in regard to the cost of administration as well as the ancillary matters of taxing the public—one has to ask what portions of sales tax are going to be retained and how sales tax is going to be phased out. Is it going to be phased out in toto? How are the parts going to be phased out which are eventually going to disappear? We need to know that. I have a document here, the Franzsen Commission Report, which told us once upon a time, almost like in a fairy-tale, that direct taxation in South Africa should be limited to a maximum of not more than 60% and that if we had indirect taxation we would find ourselves being able to reduce the maximum rate of taxation and adjust it as we went along. The hon. the Minister will remember that at that stage the figure at which the maximum was introduced was increased from R18 000 to R28 000 as a result of the commission’s recommendation. It seems to me that we are now creating another instrument in terms of which there will be more indirect taxation, but that the direct taxation or the top level will certainly not be reduced.

There is a very big difference between the 73% that is being paid and the 60% that some of us remember from the 1968 report of the Franzsen Commission which appealed so much to the hon. the Minister in his earlier days.

However, let us deal with another matter. We are dealing here with the registration. Can the hon. the Minister tell us how this is going to affect our relationship with, firstly, the LBS territories, and, secondly, the independent homelands? If we refer to the report of the Franzsen Commission once again, we find that it states (First Report, paragraph 220, page 47)—

That was presumably done in respect of sales tax. What is going to be done in respect of this turnover tax? How is it going to be affected by this? There are strings of other questions which I can ask, questions dealing with all these matters. They all relate to a very simple situation, namely that we would expect that the hon. the Minister would present us with a package, that he would tell us what we are going to get and what is involved. He can keep the rate of taxation to the budget. That is a different matter. That is a fiscal matter. However, there are a myriad of things which have to be dealt with.

Let us take a passage from the hon. the Minister’s Second Reading speech. There he says—

I do not know whether I understood the hon. the Minister correctly or whether I misunderstood him. However, let me ask him two simple questions. Does this mean that he has elected to choose the add on system or does it mean that he has elected to choose the add in system? It says in so many words that he will be required to pay it on all taxable sales and recover it from the purchaser by adding the tax. Does it mean that he has elected to take the add on system? If he does, I hope he will tell us.

The second question is: Does it mean that he is including, as he said there, all vendors? There are very real difficulties of which the hon. the Minister is aware in respect of the very small vendors. The example can be given that in Ireland where it has been demonstrated that one cannot include the small vendors, one finds a different system in terms of which the tax is paid on the sales to the small vendors since one cannot really enforce it otherwise. Does it mean that the hon. the Minister has rejected that? He has said that it applies equally to lease instalments and receipts for board and lodging on certain accommodation. As I read the definition in clause 2(1)(d), I understand that it does not apply to ordinary contracts of letting and hiring; in other words, that one is not going to pay it on one’s rent, but that one is only going to pay it in a case where the contract is for a period not exceeding 45 days. It therefore seems that the hon. the Minister is seeking to cover the short-term occupant of the foodless hotel, the hotel, the boarding house and that type of accommodation. If I am wrong, I hope the hon. the Minister will correct us right away so that there should be no misunderstanding.

Does the hon. the Minister by referring to lease instalment mean that one is going to have a retail turnover tax payable not only on the capital amount which is involved, but also on finance charges where it is a lease in respect of movables? Is that going to be the situation, because what he has said …

Order! I think the hon. member is now really going beyond the registration aspect for which the Bill makes provision.

I am dealing with the statement which the hon. the Minister made and which says—

I am asking him to explain what he has said because I must tell you that in the eyes of the public this is going to create a great amount of confusion. He also said that it was going to be payable on all sales. Does this mean—I hope the hon. the Minister will give an answer to this when he replies to the debate— that in so far as this is concerned, it will apply on the full amount of the purchase price where the sale is on credit? Will it be the position that the turnover tax must be paid on the whole of that amount and not merely on the cash amount received?

I raise these points because I think that the public—I am not talking now of those whom he has consulted on a confidential basis, but of John Citizen, the man in the street—wants to know whether its food, its ordinary essential requirements are now going to be subject to another tax. Since the hon. the Minister has not told us this, has not given us a complete package and has not taken the public into his confidence, we shall vote against this measure.

Mr. Speaker, there is a proverb which says that a leopard does not change its spots. The hon. member for Yeoville began today by giving us the impression that he would discuss these financial matters calmly and in an academic and professional way, but when we came to the second Bill, he changed his style. I think it is a great pity that the hon. member advanced his tortuous arguments in such a way as to create confusion among the public. The hon. the Minister does not stand to gain anything by keeping the public in suspense about such an important matter as taxation for longer than is necessary. Why else than for very good administrative and other reasons would he refrain from furnishing the full details to this House? Unfortunately, he could give only a few details, and this gave the hon. member the chance to create confusion. The hon. member has done this House and the public outside a disservice, because the matter under consideration cannot now be discussed on this level as to clear up immediately the confusion he has created. This presents us with a very difficult task, and I believe that by having anticipated the matter by making newspaper statements, amongst other things, the hon. member is to a large extent to blame for any premature questions which may now be asked by the public.

†Why say there may be even worse things to come? Why use a term like “worse”? I cannot understand why the hon. member for Yeoville should in such terms refer to the remarkable occurrence of the hon. the Minister not giving us the full packaged details today. If he would only exercise a little more patience! In two weeks’ time he will have all the information at hand. Does he not regard it as prudent of the hon. the Minister to start collecting the necessary information at this particular point in time, when he is administratively geared to do so? Is it not also prudent of him to wait another two weeks, until he is ready to publish the information for public comment? I do not think, however, that the hon. member should have abused the situation by speculation and the use of terms such as “there may be even worse to come”.

To my mind this envisaged form of taxation will be to the benefit of the consumer in the long term. Have we not debated, on numerous occasions in this House, the principle of establishing, in South Africa, a broader base for taxation? Can one imagine a broader base for taxation than the principle underlying the kind of taxation referred to today?

To further compound the confusion he has created, the hon. member referred to previous sales duties, tax holidays, etc. I think that is irresponsible and premature. It will certainly not redound to his honour when he reads his Hansard one day when all the facts of the matter have come to hand.

He also referred to ideological expenditure. It is not the business of this Government to exploit our taxpayers at every possible level of taxation for such purposes or in order to build up massive reserves. [Interjections.] This hon. Minister has but one objective. I think he has shown himself, over the years, to be a man of conservative actions, a man of conservative budgeting. He has but one objective and that is to balance the budget of this country. Consequently he will surely not exploit the consumer in the fashion hinted at by that hon. member here today.

I should like to ask him a further question. Is he really seriously inferring that it would be possible to create a further source of taxation without any additional administrative burdens and expenditure?

Why do you not tell us what they are?

It is easy for him to say that the information exists and that it is easy to programme. I should, however, like to teach him a little lesson in computer programming today. One can write the most beautiful programmes in the world, but if one does not have the necessary information to process, all one’s efforts will be of no avail whatsoever. The kind of information that will be required to compile the register referred to in the Bill before us is very specific information. It is not information normally gathered by way of ordinary taxation procedures or any other information-gathering processes by the authorities.

What is the information?

The information will also have to contain information on certain aspects of business which will enable the authorities to draw very subtle distinctions between people qualifying for registration and those not qualifying for registration.

For example?

I cannot quote any examples because we are not discussing those details now. Did the hon. member not read the Bill? Did the hon. member not understand that all the people who will be required to submit information, in terms of the Bill before the House, will be “considered”? They will not automatically be included in the register. It is stated in clearly understandable language, and yet in the course of the hon. member’s argument, he made the inference that everyone would be included in the register. I think it is prudent of the hon. the Minister to have come to the House today and to have asked for permission to start gathering the relevant information. Whether it is going to be used for this purpose only, or also for other purposes, this information is particularly handy in the kind of situation which we find ourselves in. Only after having received this information can we start programming and extracting the necessary facts to compile the required register.

Also, as regards the date, I think the hon. the Minister has set the date as an objective to the advantage of all concerned. Now, at least, the public and all the people in commerce and industry will know that the Government seriously intends instituting this taxation and that it will be done in the short term and that everyone will have to do his utmost to get the required information back to the relevant authorities in good time. If it should not be possible, so what? In that case it can be extended. Why attach so much importance to a date and criticize the hon. the Minister even on a petty little detail such as the date that has been set, viz. 31 March? I think it is not befitting for the hon. member, who calls himself in the newspapers “a responsible financial spokesman”, to criticize the hon. the Minister on such a petty thing in the House.

Then, referring to the very difficult situation we are faced with of having to phase in new taxation and phase out old taxation, the hon. member wanted to advocate a Utopia by suggesting a tax holiday. I am not saying that all dealers are to be mistrusted, but is the hon. member really so naïve that he thinks that, if all of a sudden there were to be no tax, all dealers would adjust the prices of those units on which accordingly no tax had been paid? Sir, I think it is unnecessary and premature at this particular point in time to anticipate the actions of dealers on the shop floors, dealers who have their own problems. A lot of detail will have to be worked out in order to meet the particular administrative difficulties when we phase out one system and phase in another.

In addition, does the hon. member, by referring to a tax holiday, really wish to imply that the original sales duty will be abolished completely? I can only think that I misheard him, because to my mind it will never be possible to abolish all sales duty. Surely, there are certain luxury items which for years to come will still have to bear an additional sales duty …

Now it has come out: It is double taxation!

… in order to regulate the demand for those items. Surely, a man who calls himself a responsible financial spokesman will understand that that is one of the instruments …

It is double taxation.

I am not saying that it is going to happen. I am not a confidant of the hon. the Minister; I am not involved in that part of it. Therefore I am in the fortunate position that I am free to speculate. To my mind it is obvious that a fiscal instrument of that kind must be retained. I think that a responsible financial spokesman should give his support to the retention of this kind of instrument.

It is a case of political expediency!

The hon. member, referring to indirect and direct taxation, came with lengthy quotations, but does he not think that this is a good time to increase indirect taxation in South Africa? Does he not think that, if the time should come when it would be possible to reduce the revenue of the Government, certain other adjustments could then be made? Why speak of adjusting other methods of taxation at this point in time? I think it is prudent for any responsible Minister of Finance first to evaluate the potential of a new tax instrument such as the one we are dealing with, and only then to start pruning in other spheres of taxation. That is prudence, that is good management and that is the kind of good business sense I would have expected today from a person who calls himself a responsible financial spokesman.

*This legislation is a wise step in order to get the necessary administrative machinery into gear—and that is all it is. I do not think that in essence it affects the principle of any present or future legislation. Nor does it compromise present or future legislation. However, the hon. the Minister has been kind enough to inform the House of what it would involve, but in my opinion this has not created any obligation for those categories referred to in the Bill to be included in or excluded from the legislation which may come. It has absolutely nothing to do with it. When we get to the principal legislation eventually, it is the prerogative of this House and the hon. the Minister to propose to us that certain of these categories may not be used at all or that others may be added. That, I should say, is good administration. Furthermore, is it not a fair gesture towards commerce and industry to say at an early stage: “This is what we require of you to begin with. Come on, do what is required of you. We do not want to disturb your normal operations by eventually expecting you to register at short notice.” I think this is fair and it also arises from the skilled negotiations which have taken place over a long period between the officials of the hon. the Minister’s department and organized commerce and industry.

It is a well-considered step.

It is indeed a well-considered step, as my hon. friend says. It is also proof of the responsible way in which this matter is being handled by the hon. the Minister and of the thorough study which has been made of this matter by himself as well as his officials. There will most probably be shortcomings, because it is an entirely new undertaking. However, I am convinced that the first step we take today will start us on a road which will be of benefit to the Republic and all its people.

Mr. Speaker, the hon. member for Yeoville has put the attitude of this side of the House very clearly. What we are dealing with here is really the cart being placed before the horse. With the greatest respect, I think it is unfair for the hon. the Minister of Finance to present to us with a new piece of legislation today, a piece of legislation which, on the face of it, provides for the registration of those in the categories set out in clause 2. Inherent in the principle is the question—as he himself has referred to it in his speech—that the vendor is the person carrying on the enterprise of the nature contemplated and that he will be required to pay the sales tax on all taxable sales and recover it from the purchaser by adding it to the price.

Then the hon. member for Florida embellished the argument by pointing out two further things which are startling to this House: Firstly, that the aim of the measure is to broaden the basis of taxation and, secondly, that it will be an increased form of tax. With your permission, Sir, I want to deal with those aspects.

It is also an additional form of tax.

It is an additional form of taxation. What we are really presented with here is a seemingly innocent and innocuous Bill. Yet it has far-reaching implications upon the entire economy of this country and upon each and every individual in this country who either sells or purchases.

Order! I am allowing hon. members ample scope to say why they are against the Bill. One of the reasons why they are against the Bill may be because they are against the turnover tax, but then the hon. member must confine himself to that point of argument.

Mr. Speaker, I am indebted to you for your guidance. I intend to do just that. I am saying that we are against the imposition of a register because the register is going to impose a tax. We are against it for the very reason that in broadening the base by adding a new form of taxation for South Africa, we are going to touch every individual and in touching every individual and spreading the burden we are creating a new principle of taxation. It is customary—perhaps we are old-fashioned enough to believe this—that it is the rich that must be taxed for the poor. Now we are, in fact, going to tax the poor man. It is the poor man who is accordingly going to suffer as a result. Therefore we are against the measure. For example, in clause 2 of the Bill there are items such as the definition of “goods”, meaning corporeal Goods. Then there are newspapers. Are we going to tax every person that sells a newspaper and are we going to have pay tax on a newspaper? Is tax going to be paid for on items of a small nature? What is going to happen, in any event, is that the consumer, the man in the street, is going to have to pay more. This is an additional and broadened form of tax, because the sales tax payable on certain items is going to remain. We object to the Bill for the following reasons: If one thinks of the salary man whose salary is pegged; of the pensioner who receives R79 a month or the non-White who receives R21 a month; of the high cost of living; of the cost of bread that has gone up; of sugar that has gone up; of butter that has gone up; of motor-cars that have gone up; of repairs that have gone up; of petrol that has gone up …

Order! When the relevant Bill comes before the House, I shall allow all these arguments. The hon. member must not go into such detail now.

We will object most strongly, because what is happening here, is that we have entered into, on a broad principle, the basis of a Rich-Man-Poor-Man kind of drama. With great respect to the hon. the Minister of Finance, he has emerged as the Falconetti of the salaried man and the poor man in the street. I think it is our duty to protect them. I am amazed to find that we have the situation with this Bill that a party who, over the 30 years they have been in Government, has now reached the stage where they are non-attentive of the needs of the man in the street and non-attentive of his requirements.

They are complacent and stand indifferent to the needs of those who are facing escalating and spiralling costs and a high cost of living. I think one must accept basically that the moment the man in the street has to pay more for the goods he consumes, he experiences a spiralling effect. Firstly, the prices of the retailer will be put up. Secondly, there is the question of the salary on which he cannot make ends meet. He has to meet the higher demands of a higher cost of living and because of that he requires salary increases. All around there are demands for increases salaries. Why are there demands for salary increases in so many organizations and local authorities at this stage in our economy?

Order! The hon. member must now come back to the provisions of the Bill.

It is quite clear from the broad definition of the register that practically every sale is going to be affected. Unless we are told at this stage by the hon. the Minister what will not be included and unless we can be persuaded as to why we should support the measure, there is in fact no reason why we should support it.

The hon. member for Florida mentioned the question of 31 March and I fully want to support the hon. member for Yeoville in this regard, because in the light of all the staff that is going to be needed and the hundreds and thousands of traders who are going to be affected by this, there is going to be a mountain of administrative work and a mountain of paper work that will have to be handled. How on earth, in the very short time until 31 March, can the register be drawn up and how can everyone register? When it does take place, it is certainly going to take an awful long time for the hon. the Minister to do so.

In these circumstances I want to state very clearly, in support of the hon. member for Yeoville, that we cannot support the legislation that is before us, because we are not being given the full facts, we are not being given the package deal. We are being asked to commit ourselves and the administration to legislation which is premature to say the least of it.

Mr. Speaker, I feel that the hon. the Minister has done himself a disservice today by introducing into the House a Bill which, on the face of it, one is inclined to support. The mere fact that people should be registered for the purpose of allowing a point-of-sale tax to be imposed, is something for which we have pleaded for many years. However, the hon. the Minister has come before the House with a Bill which tells us absolutely nothing and he himself has told us absolutely nothing. All we know is that the hon. the Minister is going to set up a register which is going to require certain information from people for a purpose about which we are totally in the dark. We do know there is going to be a tax, but it is apparent that the hon. the Minister cannot tell us today the details of the tax which will be imposed. Had it been competent for us we would have moved an amendment to omit the word “now” and substitute the words “15 June 1978”. In that case we would have been debating this issue in the light of the knowledge that the hon. the Minister will then be in a position to supply to the House the details of the tax concerned. But now no hon. member sitting in the House knows what the nature of the tax will be and no one knows at what level the tax will be imposed. [Interjections.]

We are discussing the register.

Precisely, we are discussing the register. We are going to register people for a purpose and that purpose is a tax which is going to be imposed by the hon. the Minister. We are being asked to approve of the register for the purpose of a tax about which we know nothing.

I am a historian, and let me say that the pages of history are littered with cases of Ministers who have drawn up registers, have applied taxes and have done all sorts of things.

It is in the nature of the “tax man”, after he has a register which has been drawn up for a particular purpose, always to find one or two other little purposes for which the register can be used. We are by nature suspicious of powers which are given in the hands of the hon. the Minister—the “tax man”—because these powers can be used for other purposes and not only for the purpose the hon. the Minister is claiming they will be used. We are reminded by history of the case of Mortan’s fork. It goes back to the days of the good old King Henry VII. At the end of his life King Henry VII became exceedingly avaricious. Mortan was, one can almost say, the Minister of Finance in those days and he had the unpleasant habit of incarcerating prominent members of the public in the Tower of London where he tortured them. They were tortured, either because they were so rich that they could afford to give the King a substantial present to be set free, or because they were so poor that they could not afford to give the King a substantial present to be set free. So I think one is entitled to be exceedingly suspicious of any kind of legislation such as this coming as it does before the House without any real motivation. I think that is the main problem we have with the measure. The question of a register for a certain purpose one might be able to understand and support if it was merely something in vacuo. But the hon. the Minister is asking us to give him a pig in a poke, a blank cheque, a free hand, without telling us any of the details. It would have been far more appropriate had this Bill come after the details of the tax had been discussed.

We in these benches will vote against the motion before the House.

Mr. Speaker, it is a long time since I have seen as much naïveté and lack of knowledge in this House as has been revealed by the two Opposition Parties. The hon. member for Mooi River, as well as the hon. member for Yeoville, wanted to make out that they have no knowledge of the envisaged sales tax. I do not want to hold against the hon. member for Hillbrow, because he was not in the House during the budget debate last year. In any event, I do not think that he will even understand what it is about in the future. However, I expected more from the hon. members for Mooi River and Yeoville. I should like to quote from Hansard of 30 March 1977, col. 4677, where the hon. the Minister of Finance said the following in his budget speech with reference to the sales tax—

The hon. the Minister continued in that vein. As long ago as last year it was stated very clearly in the House that the sales tax was going to be introduced. Hon. members now want to make a major issue out of the matter by saying that it is very strange and unreasonable of the hon. the Minister to introduce this legislation without having spelled out the particulars of the sales tax beforehand.

This Bill is a preparatory measure and an obvious necessity. The registration of vendors became necessary as a result of a new system of sales tax which is going to be put into operation. It is therefore essential for registration to be effected before the implementation of that system. The requirement or obligation to register, does not necessarily make such a person or company a collector of the tax in question. This Bill must not, therefore, be considered as something which determines who is going to pay tax, but—and this is very important—who is going to be responsible for collecting the levy in question. Basically, three bodies are affected by this Bill. These are bodies or groups who are going to be involved in the collection, viz. firstly, the dealer who sells or hires goods; secondly, the bodies or persons who render certain services to the consumer for reward; and thirdly, the bodies which provide short-term accommodation, i.e. holiday accommodation bodies like hotels, holiday resorts, etc.

I should just like to refer briefly to these groups. In the first place, as far as the dealer is concerned I want to point out that such people who register will be provided with a certificate or document—the hon. the Minister pointed this out during his Second Reading speech—which will authorize them not only to collect tax, but also to make purchases for resale without being taxed. What I want to illustrate here, is that the dealer, specifically the retail dealer, will have to register. He sells to the public and he will necessarily have to collect money. I assume that control will be exercised over what he collects. I want to link up with that and also refer immediately to clause 2(1)(e) which concerns the registration of the manufacturer. An important principle is at stake here, namely the elimination of double levies. The manufacturer will be exempted from tax on raw materials and inputs. It can therefore be accepted that the purchases of the dealer will also be exempt from taxation. What bothers me, however, is that the distribution link has shrunk a lot these days. Nowadays, the consumer can make contact directly with the manufacturer and they can find one another easily. The retailer and wholesaler are ignored in certain cases in this distribution process. I think it will be necessary to determine the extent of this sales tax and to determine whether it is of any real importance. If this is in fact the case, the manufacturer will have to be expected to register as a vendor.

I am still concerned about the so-called “door-to-door agents” or “hawkers” who sell for commission on behalf of the manufacturers and can make direct contact with the consumer. Is he subject to clause 2(1)(a); in other words, will he have to register? The same is also true of another popular sales custom: the so-called home sales which are supposedly arranged by chance in order to sell goods on behalf of an organization, for example cosmetics, certain containers, etc.—I do not want to mention trade names here now—or is this going to be considered insignificant in this set-up and not dealt with any longer? Will registration also have to take place in this case? As far as persons who provide certain services are concerned, it is clear that the Bill does not include professional services and therefore registration is not necessary in their case.

In the third place, the renting of flats, houses, etc. is excluded and is not, therefore, among the components subject to registration. It is therefore clear from the Bill that the cost of permanent accommodation is not going to be taxed. Moreover, the registration of groups mentioned in clause 2(1)(e) to (h) does not necessarily mean that they are going to fall into the collection category either. On the contrary, I believe that the aim is to register them in order to obtain exemption from collection, for instance in the case of the manufacturer, which I have already referred to. I do not think the idea is for him to pay for his manufacturing raw materials. Tax will be collected on the completed article at the point of sale. For instance, the farmer will not be taxed on the purchase of his cattle at the market, but he will have to pay for his consumption. The same is true of the fishing industry in terms of clause 2(1)(g) and the mining industry in terms of clause 2(1)(h).

This system of tax collection originated chiefly in America and Canada. In America in particular, problems began to arise due to exceptions made as far as certain goods were concerned, the so-called “seed, feed, fuel and fertilizer” exceptions. Since we are now going to start registering sellers, the idea must not be propagated and, perhaps, established that exceptions will be made lightly. In my modest opinion this would be wrong and would give rise to an incorrect interpretation of this arrangement. The Bill constitutes a good start to a sound arrangement which is to feature in our finances. From this side of the House we should like to give the Bill our full support.

Mr. Speaker, I listened very carefully to the speech made by the hon. member for Gezina, and after listening to him, I have come to the conclusion that he is as much in the dark about what is going to happen after this Bill becomes an Act of Parliament as this side of the House is. The Bill has been presented before the House like greased lightning as clause 2 envisages an operative date as from 1 March 1978. In order to ensure the smooth operation, the hon. the Minister will have his work cut out to have this Bill converted into an Act timeously. In fact, the hon. member for Hillbrow made a reference to Falconetti in relation to the hon. the Minister, but I think that that was a wrong reference. I would have preferred it if he had made a reference to Speedy Gonzales, because, that is what is going to have to happen to this Bill if it is to be operative from 1 March.

I was hoping that perhaps the late introduction of the Bill was due to the hon. the Minister having second thoughts about the Bill. But it is obvious that he is not having second thoughts. This particular Bill sets up massive machinery of collection points which will obviously act as agents of the Government in collecting the new tax. There are in fact approximately 180 000 farmers and traders who will have to be registered in terms of this legislation. From our side, obviously, there is no objection to the method which is proposed. If it is the most effective and the most economic method. However, for reasons I will advance later, we are also opposed to this particular measure.

However, despite our opposition to the Bill, it is obviously in the interests of the farmers and the traders to register as soon as possible, and we would urge them to register as soon as possible. In fact, I would like to ask the hon. the Minister whether he is going to make use of the television services, the radio and the Press. In addition to that, of course, I presume forms will be sent to all people he has on record already. I believe it is very urgent that people should register. That is why we on this side of the House urge them to register as soon as possible. The reason why we are actually urging them to register before the operative date is that if the American system is imposed, someone who registers will have to advance good reasons for registering. Firstly, a registered trader or farmer under the American system can then buy stock free of sales tax from the manufacturer or the wholesaler. In other words, tax is not levied between the manufacturer or wholesaler and the retailer. Sales tax is only levied on the sale of goods for consumption.

Obviously, the retailer and the farmer will be required to prove to the manufacturer that they are registered. If they cannot prove that they are registered they will be liable for tax. That is why it is in the interest of farmers and traders to make sure that they are registered. That is how the American system works according to explanations given to me. In other words, the input of the traders or the farmers is exempt but the output to the public will be taxed. I would be very pleased if the hon. the Minister would tell me whether I understand the American system correctly and if that is what he has in mind. The farmers may be even keener to register should the hon. the Minister apply the American system further, because in the American system it is said that farmers can buy free of sales tax seed, feed, fuel and fertilizer.

As I have said, approximately 180 000 farmers and traders will have to be registered in terms of the Bill, and I assume that they will have to register as soon as possible so that they can be identifiable. After the introduction of the sales tax they will presumably be points of collection. That is why the matter is so urgent. From what I have said so far I have not been critical of the mechanics of the Bill. Our experience with this particular Government department is that they act very responsibly in regard to their legislation. I am fully convinced, therefore, that they must have studied all the other systems in all the other countries and that they must have come forward with the best possible system for South Africa. I have no doubt that the mechanics they have built into this Bill create the best possible system.

Why do you not support the Bill?

Mr. Speaker, the hon. member for Worcester says in that case I should support the Bill. I am talking about the mechanics. However, I want to tell the hon. member for Worcester very briefly why we are opposing the Bill. I do not want to rehash arguments that have been used by other hon. members.

This Bill is merely, as the hon. the Minister has indicated, a vehicle for this new tax to be imposed. In a sense, however, the hon. the Minister is asking us for a blank cheque, and obviously we cannot agree to it because we do not know what is going to happen after this Bill becomes law. The hon. the Minister cannot tell us at this point in time what is going to happen to this Bill after it becomes law. Therefore, the hon. the Minister has only one course of action open to him. He should actually have introduced this Bill at a time when he could have made a full disclosure to us. At this point in time I can understand the hon. the Minister’s dilemma. He cannot make a full disclosure. I sincerely believe that if he had come to us at a time when he could have made a full disclosure, he would not have had the difficulties that he is having today in connection with this particular Bill. I believe that at least some Opposition members are genuinely in the dark as to the eventual effects and outcome of this particular legislation.

I am pleased to see from the Bill that certain of the professions are not included, e.g. the doctors, the lawyers, the accountants, and of course the people associated with the building trade, like architects, quantity surveyors and consulting engineers.

I wonder if I may ask the hon. the Minister a question in a lighter vein? I know I could have asked it in the Committee Stage, but I should like him to explain just as a point of interest and because I am curious what is meant by the term “provider of blueprint services” in line 26 of page 5. Although the hon. the Minister can give us his explanation during the Committee Stage, I am asking the question at this stage to allow him the opportunity of giving us a considered opinion. I am therefore giving him advance notice of the question.

The legislation may well be necessary in the future, but it will be wrong to make it effective now whilst hon. members and the public are not aware of what the outcome is going to be of what they are agreeing to. The hon. the Minister could meet the situation by telling us that we should pass the legislation today and that he would postpone the introduction of the point of sales tax until we have debated that particular issue. He could very well make the legislation effective from a date after we have debated the other issue and after he has made us aware of the implications of the other issue. I have no doubt, however, that the hon. the Minister is not going to follow the course that I have suggested and because he is not going to follow that course, we on this side of the House are going to oppose the Bill too.

Mr. Speaker, this afternoon the hon. member for Mooi River asked what the hon. the Minister could do to us if the powers proposed in the legislation are granted to the taxman. I want to point out to him that as I understand and read the legislation—perhaps we can read it together—all that is being done is that provision is being made for drawing up a register of people who are vendors etc. There is no way in which the hon. the Minister and his department can make anyone pay tax in terms of the provisions of this measure. Perhaps I am reading the legislation differently, but nevertheless the hon. member does not have to be at all concerned.

I am very pleased to note that the hon. member for Yeoville is back in the House, because we still have a word or two to say to one another. Earlier this afternoon, he said— and it was a fairly snide remark—that the hon. the Minister was going to use this additional tax which we are going to collect for our ideological purposes. I think that this remark was completely unjustified as well as unfair. It is quite uncalled for. The hon. member is not an unpatriotic hon. member and if he did this accidentally, I shall accept his apology. However, the effect of his remark is that South Africa may be harmed. I shall illustrate my statement further. The proposed sales tax will affect everyone in South Africa—White, Coloured and Black— but the hon. member tells the world and these people that the revenue from the tax will be used for our ideological purposes. I think this is aimed at creating discord among the races in South Africa, and to make South Africa’s path abroad not easier, but even more difficult. Let us take it, for argument’s sake, that we did want to use it for ideological purposes.

Why then does the American Government also have a system like this? Do they also use it for ideological purposes? Why does Britain have it? Why do the Western European countries have it? We are practically the last of the Western countries to introduce a system like this. I really do not think it was fair of the hon. member to make a remark like this. I think he must apologize for doing so during the Committee Stage.

I am convinced that the measure is fair towards everyone in South Africa and that one can support it without hesitation. However, we heard something amazing here in this House this afternoon. In the years in which I have sat in this House, I have heard hon. members on both sides of the House asking that we should broaden the basis of taxation in South Africa. I do not know if anyone wants to argue with me about it now, but this is how I understood the matter. They have been doing so for years. However, today the hon. the Minister introduces a measure which is aimed at broadening the basis of taxation in South Africa, but now we have opposition from that side of the House.

Do you want the poor to pay?

I cannot understand it. To me, all that the principle that the basis of taxation must be broadened amounts to, is that more people pay less. Is this what those hon. members are opposed to?

And what about the poor?

Then the PFP, the NRP and the other hon. members must say that fewer people must pay more. That is the other side of the matter. [Interjections.] I really think that the hon. Opposition owes us a reply in regard to this matter this afternoon. This is essentially an administrative measure which was introduced by the hon. the Minister, as he told us this afternoon, as a forerunner of measures which will be introduced later this year. As such it does not affect the principle of legislation which is still to be introduced. That is why I think it is outrageous for the Opposition to attack the sales tax as such this afternoon and to make a fuss about it. They do not even know what the provisions of that legislation are going to be. None of us do. Now we have had a lot of unnecessary fuss about it, but I think that we must look at what this legislation is going to mean to each one of us in practice.

In this legislation we see that the names of people will be included on the register after it is “considered” whether such people will be included. If one has filled in the form, that does not necessarily mean that one’s name will appear on the register. I want to emphasize that it will first be considered. It will not take place automatically. Therefore we must not take fright immediately. However, it is being said that the public must take fright because a terrible thing is on the way. Surely this is not the case. It can also be to one’s advantage if one’s name appears on the register. Other hon. members have already referred to this.

The hon. the Minister referred to the registration certificate which is to be issued. That registration certificate will be such as to enable a person to use it as proof, under certain circumstances, that he is not a consumer. It will therefore be to his advantage if he can use that certificate.

Let us, however, take a closer look at the provisions of the legislation. The issue here is only the person who carries on an “enterprise”. The word “enterprise” is used in the English text. I do not know if the word “onderneming” might not have been better than “bedryf” in the Afrikaans text, but whatever the case, one must run a business before one has to register and pay. One must do business. One must sell something or publish a newspaper. The ordinary man who wants to sell his car or anything else without carrying on an enterprise, does not have to register. He is not affected by this. Even more important, the registration in terms of this legislation only applies to moveable property. Immovable property is excluded completely.

I also want to point out that the services referred to, amongst others, are not included. People who provide services do not have to register. Therefore it does not apply to professional health services, for instance, those of doctors or dentists. Nor will it apply to architects, quantity surveyors, engineers, lawyers or attorneys. It will not affect them at all. They do not have to register at all.

It was also asked why this must be done urgently and why we cannot wait longer. Some of my colleagues have already referred to this. It is important, however. This measure is in the interests of the business community. We are dealing specifically with businessmen in this registration. We want to enable them as soon as we can to take the necessary steps so that they may be ready if or when the hon. the Minister introduces the consumer or sales tax. One can foresee that linking up this sales tax which the hon. the Minister referred to our present taxation system, will definitely not be easy. In this regard the hon. member for Yeoville proposed in a newspaper that we should give the people a tax holiday. I think he did this in order to be popular. It is all too easy to be popular and play Santa Clause if one does not have to take the responsibilities in this regard upon oneself. However, the Government needs the funds and if we give people tax holidays, where will we find the necessary funds? I do not know if the hon. member can give us another source, but this source is the one which we believe should be utilized more so that, together with what we have, the burden on our people may be alleviated if at all possible, in the interests of all the inhabitants of South Africa. As far as reconciling the present system with the proposed system is concerned, it seems obvious to me that it should take place over a long period. We must phase it out over a long period so that they can become reconciled. I concede— the hon. member for Walmer also referred to this—that approximately 180 000 people will have to be registered and that this will entail a great deal of work and money. I concede that the department will have to work very hard. However, if we weigh this up against the obvious advantages which the new system entails, I think that hon. members of the Opposition will concede that it is a small price to pay for it.

Mr. Speaker, this is a positive measure in the interests of all in South Africa and that is why I am pleased to support it.

Mr. Speaker, the hon. member for Verwoerdburg calls this positive legislation. He says it will be in the interests of South Africa. However, prior to that even he said that nobody except the hon. the Minister knew what was in fact going to happen in the next few weeks. The argument we on this side of the House have with this piece of legislation is that we in fact do not know what is going to happen. What the hon. the Minister is asking us to do is to give him a whip and then saying: “We shall discuss later just how hard we are going to beat you with that whip.”

You can trust the Minister.

On this basis we do not believe we can trust the Minister. I would suggest to the hon. the Minister that the sort of unpopularity he is likely to have as a result of this Bill can be measured by the support this side of the House is getting from the SAP. Surely, it is a fairly unusual occurrence to have them supporting us.

That is not true. We go on the merits of any particular case.

The hon. the Minister must realize that, if he has lost their support, he is clearly putting forward a Bill that has very little merit indeed.

Perhaps one could describe the Bill as a financial wolf in sheep’s clothing. The hon. member for Florida suggested that all that is intended is to provide administrative machinery. However, what is happening in fact is that we are being asked to provide this machinery without even being told what we are going to manufacture, what we are going to use the machinery for.

Do not be silly. You know what it is all about.

On top of that, we are being asked to provide machinery while we do not even know what that machinery is likely to cost. The point made in this regard by the hon. member for Yeoville is quite valid. How much is it going to cost? Are the benefits going to be worthwhile? I would suggest to the hon. the Minister that he owes it to South Africa at least to tell them at this stage how much exactly the machinery is going to cost which he intends setting up and whether he feels that eventually it will provide benefits.

Sir, we are against this Bill because it sets up machinery while we do not know what that machinery is going to do. It has been suggested to us by the hon. member for Florida that we are going to phase in certain taxation and that we are going to phase out certain other taxation. I think it is legitimate to ask the hon. the Minister whether this is going to be additional taxation or whether taxes are going to be substituted. I would say that, if this is indeed to be additional taxation and other taxation is not going to be phased out completely, the public has been grossly misled. This makes us even more reluctant to support this measure because we do not know whether we are going to be saddled with a double load of taxation.

Mr. Speaker, may the hon. member accuse the hon. the Minister of grossly misleading the public?

Order! The hon. member did not accuse the hon. the Minister of that. The hon. member was discussing the overall framework of the scheme. The hon. member may proceed.

Thank you, Mr. Speaker. It was suggested by the hon. the Minister that he was going to introduce a certain type of taxation which, obviously, will be spreading the tax load over a far greater section of the community. I would like to warn the hon. the Minister that this has inherent dangers. It sets up machinery to enable him to tax a far larger section of the community and specifically the poorer section of the community. I would not go so far as to suggest—because I hope it would be a misnomer—that this machinery could be set up to exploit the poor. One of the principles of our taxation has always been that the rich man must be taxed to a greater degree than the poor man. If we are going to change this we would like to know how this change is going to come about. We believe it would be very unfair to tax poor people on the same basis as rich people. Perhaps the hon. the Minister has devised a system where this does not happen. However, I would suggest that before the hon. the Minister puts this sort of legislation before us, he should tell us exactly what is going to happen. Mr. Speaker, we are being asked to vote in the dark. I do not believe that it is in any way not legitimate for us to ask, firstly: What are we going to produce with this machinery? We might not want this machinery at all. Secondly, we ask: What is the machinery going to cost? I have already said that the hon. the Minister was asking us to supply him with a whip, and that afterwards he was going to say how hard he was going to beat us. This, he said, was a matter for future discussion. Could I suggest to the hon. the Minister that we might not like to be beaten at all. Before we vote whether we should give him that whip or not, perhaps we should be told how we are going to be beaten, just how hard we are going to be beaten or whether we are going to be beaten at all.

Mr. Speaker, I must support my colleagues on these benches. We cannot support this measure and we are going to vote against it.

Mr. Speaker, when one saw this Bill for the first time, one naturally had to recall some of the literature which has appeared on the matter of indirect taxation over a period of time. One notable piece of literature which has appeared is the report of the Franzsen Commission. When one looks at literature of this kind one finds in most cases a discussion of various tax systems or alternative tax systems. Usually this literature looks at the matter from the point of view of whether one tax system would work better or would achieve its object better or would impose less burdens than another form of tax.

When one discusses the alternatives of sales tax and retail turnover tax, one has two alternatives and one looks at the merits and the demerits of both these alternatives. When we came to this House to discuss this matter we were under the impression that the hon. the Minister was, in fact, proposing a substitution, and that he was proposing machinery in this Bill which would serve as a basis on which he would substitute one tax for another. However, the hon. the Minister was not very well served by the help he has had from the benches behind him. He was, in fact, given away by the hon. member for Florida, who told us quite clearly that this was an additional tax.

I told you I was speculating.

Mr. Speaker, if I may correct what I have said, the hon. the Minister was not very well served by the speculations of the hon. member for Florida. These speculations indicate that we may be dealing with a form of tax which will be additional to the sales tax. We may then not only have a sales tax, we may also have the turnover tax.

We are asked to agree to a measure which will create a register which will serve to expedite the imposition of a form of tax which may be additional to or alternative to sales tax. When one looks at the Bill before us, one finds listed in clause 2 a number of services which, it is proposed, should be taxed. The innocent argument which was advanced earlier by some hon. members behind the hon. the Minister that this was merely a kind of speculative register not committing anybody to anything, but was just a list of people who might or who might not be taxed, was of course denied by other hon. members who stated quite clearly that the purpose of this register was to introduce new taxes. We are inclined to believe the second category of speakers who say that this register is not there for no purpose at all and that its purpose is, in fact, to pave the way to the imposition of a new tax. If one looks at the provisions of clause 2 of the Bill, one finds, listed there, a series of trades and services. The list is an interesting one and before I come to it, I would like to read briefly to the House what the Commission on Taxation in South Africa said on this very point. It said the following in discussing the basis of an indirect sales tax—

I hope the House is listening—

They then continue to deal with the percentage of income spent by the various population groups on these simple, bare, essentials. They indicate that the poorer classes of our population spend no less than 70% of their income—admittedly these figures are a little bit out of date—on these matters as against some 30% spent by the wealthier groups. These are the matters which were recommended should not be taxed for fear of injustice to the poorer people of the country.

Let us now return to the provisions of clause 2. We find that the services which are to be listed in the register are services which deal with matters such as repair, maintenance, restoration and alteration. These four words are the very elements of thrift. They are the watchwords of the poor; repair, maintenance, restoration and alteration. These are the last defences of the poor against inflation and they have now been singled out for taxation. If one looks at the other services, one finds that these too are services of repair, of maintenance, etc. Fumigation or pest control services are to be taxed, but there are many other services which are omitted. The list is very short, but it seems to concentrate on those services which are, in fact, so large a part of the budget of the poor, as the commission has pointed out. We might have been—in fact we still remain—open to persuasion that this kind of turnover tax is a form of indirect taxation which might be better, more efficient, cause less hardship and be less inflationary than the forms of direct and indirect taxation we now have. In the course of this debate, however, we have not yet discovered in what way it will be applied. We do not know whether this is additional to the other form of indirect taxation and we do not know to what extent it will impinge upon people. We do not ask the hon. the Minister to disclose the rate of tax now, because obviously he wants to wait until the budget debate, but we are being asked to open the door to a form of taxation in regard to which we are left entirely in the dark on many aspects. We have no knowledge of how, why, when or what the impact will be on the poorer class of the community. In these circumstances we would prefer to wait for details and more information before we agree to support a Bill such as this which, in fact, is designed to pave the way for a form of taxation about which we still know nothing and about which, in consequence of the debate today, we have even greater doubt than when we started.

Mr. Speaker, I believe if the Opposition has ever made a total and complete blunder about something, then it was with regard to this Bill this afternoon. All afternoon I sat listening to speeches on everything but this Bill. Let me start at the beginning, with the first speaker on the Opposition side, the hon. member for Yeoville. With all due respect, Sir, I do not think the hon. member was at his best when he dealt with this matter. What did he say? He said the Department of Inland Revenue already had all the information we wished to obtain by means of this Bill. How can such a statement ever be made here in this House? I wish to say with all courtesy: Surely that is nonsense. What other word can I use? Surely the Department of Inland Revenue does not have this information. Information concerning 110 000 dealers, 75 000 farmers and a few other people is at stake here. The hon. member said, however, that the Department of Inland Revenue already had this information at its disposal.

Do these people not pay taxes?

The hon. member added that I would definitely come back to this House to ask for an extension of time after 31 March. In my introductory speech I stated very clearly that the Secretary for Inland Revenue was being given the discretion to grant the necessary extension in the event of any problems occurring. So why should I come back to this House to ask for an extension?

The hon. member for Verwoerdburg was quite correct when he pointed out that quite a number of countries in the Western World had come up with something much worse than the tax we were going to introduce. The hon. member for Yeoville made the statement that we were introducing the new tax because Government expenditure was excessive.

†The hon. member referred to what an earlier Minister of Finance had said about Government extravagance, and suggested that that could be the reason for a new tax like this. What the previous Minister said was of course in a completely different context. Does the hon. member for Yeoville deny that for two years running we have held Government expenditure down to the level of inflation and even below it? Does he deny that there has been no increase in real terms, in Government expenditure for two years running? Yet the hon. member accuses us of extravagance. He went even further and said that this was because we want to finance ideological expenditure. The hon. member knows as well as anybody in the House that the world is such that we have to provide heavy amounts for defence, security and police. He knows that four years ago the amount for defence was R600 million per year and that today it is R1 600 to R1 700 million per year. We have no option in this matter. If anything, I wish I had more money to spend on our military preparedness.

Stop spending it on ideologies.

It is very easy to say that, but can the hon. member tell us where this expenditure on ideology takes place? [Interjections.]

Group areas!

We have to find more money for education, particularly for the education of Black people. Is that ideological expenditure? We have to find more money for housing, especially non-White housing. Is that ideological expenditure? We have to find more money for pensions, including pensions for a large number of Blacks, Indians and Coloureds. Is that ideological expenditure? One can go on giving examples like this. We have to find very big extra amounts under the conditions of capital inflation to provide an infrastructure for the country in order to develop our industries, our trade and our exports. Money has to be found for new ports, new railway extensions and communications, things which are extremely costly. Is that ideological expenditure? All that has to be proceeded with while we have to make this country militarily prepared in order to counter a situation which is none of our doing whatsoever. According to those hon. members that is ideological expenditure. One can see how we counter these arguments.

The hon. member then asked what the cost would be. We have a Department of Inland Revenue which is a very big department indeed, country-wide. The cost of that department is something like R16 million. By allocating the administration of this tax to the existing department we are going to have the benefit of considerable economies of scale. It is not a new department. It exists already. I wish some hon. members in the House would spend some time in that department to see the amount of work involved just in preparing the country for this tax. They are working day and night.

The hon. member asked why we should continue levying indirect taxes. Does he not know that we have a very bad imbalance between indirect taxes and direct taxes? In discussing these matters every competent observer and expert ask why we do not have a bigger income from indirect taxes in relation to direct taxes. This is, surely, one way of redressing that balance?

Will you reduce direct taxes?

The hon. member for Hillbrow and other hon. members ask why there is any hurry, why we do not simply take this in our stride as and when we come to it and why we have to make provision to register now. It is not that we are going to complete the register by 31 March. The Secretary for Inland Revenue has to be in a position that by the end of March he would have obtained all those declarations from thousands upon thousands of so-called vendors before he can even think of implementing the tax. This matter has been studied continuously since the time of the budget last year. It has been studied in this country in all its implications and in consultation with numerous bodies and people, and it has been studied outside this country in a number of other countries which have reasonably comparable systems of this kind of tax.

I think a few things have been said here rather prematurely. This tax, in all its detail, will be introduced in the House in the proper way in the form of a complete draft Bill. The Opposition and everybody else will then be able to discuss it fully on its merits. I say a few things have been said here prematurely. We shall remember them and weigh them up when we compare this tax with similar types of taxes in other countries. We have made a tremendous study of this particular kind of tax. It is not a question of putting the Secretary for Inland Revenue in a position to have a register at the end of March. He will then only have the declarations and will then still have to draw up a register of hundreds of thousands of names and other particulars.

I thought very seriously that the hon. member for Mooi River missed the point. He also made some reference to the purposes of the register. I do not know whether the hon. member has taken the trouble to read clause 7 of the Bill. It provides very clearly for secrecy, as is the case in regard to all our tax legislation. The register can only be used for taxation purposes, for the taxes administered by the Department of Inland Revenue.

The argument has been put in such a way that one would think it to be entirely new that there would have to be some sort of licensing or registration system.

*The hon. member for Gezina made it very clear today. He quoted from last year’s budget speech when I said that it would be essential to licence, and that there would have to be licencing. Surely that is registration. Now, all of a sudden, we hear that this is something altogether new. But the prospect of this was held out a year ago.

†Then the argument is put forward that this is simply going to be an additional tax to everything we already have. Whoever said that?

The hon. member for Florida.

With respect, Mr. Speaker, that is absolute nonsense. The hon. member for Florida did not say it was going to be an additional tax. I heard what the hon. member for Florida said and I would like to congratulate him on the realistic and factual way in which he dealt with this matter. What the hon. member said was that he could not and we could not at this stage say that this tax would be a substitute for all the other indirect taxes, particularly all the sales duties which existed today. We are not saying that it can be, and I said it in my budget speech last year. I said in my budget speech last year that we would have to carefully consider to what extent we could reduce or abolish existing sales duties if we could introduce this much more comprehensive general sales tax. That is what we are doing. Do hon. members think that if we can dispense with a tax when we introduce this new tax, we shall not do so? Of course we shall dispense with it. That is what the hon. member for Florida said, as I heard him. Suddenly we are told this is an additional tax to everything else. The hon. member for Yeoville is a master of the art of speculation. The less he has to speculate on, the wilder his speculation becomes. [Interjections.]

I really think that some very irresponsible speeches have been made today. The sort of thing that has been said is sheer speculation. This is a short Bill. Why did the hon. members who criticized without knowing the facts not stick to the Bill? This is a narrow issue. We do this merely in the interests of the efficiency of tax administration. We merely say that where this is an entirely new tax, where we are feeling our way forward, where there have to be consultations on a very wide, time-consuming basis, which are taking place still, certain technical things have to be done as early as possible. Everybody, and I shall put this to everybody who is prepared to think clearly on this issue, will immediately say: Of course, we have to start registering as soon as possible. If we put the provisions of this Bill into the comprehensive turnover-tax Bill, as some people are calling it—not quite correctly—we would hold up the implementation of this tax system for months.

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

Just a minute. I have listened to any number of speakers in this debate and I am just trying to put my case for the moment. In preparing a draft Bill dealing with so comprehensive a measure one requires a great deal of time. One requires a great deal of study here and also of comparable systems overseas. One requires to have very wide-ranging consultations. All these things are still being done. But given that position, we are trying to introduce this measure as soon as possible. When we had been studying these matters for some months, the first estimate—a very carefully motivated estimate—was that we would probably not be able to do this before September of this year. But, obviously, the sooner we can introduce the measure the better if for no other reason than the really purposeless speculation that goes on. We shall introduce it well before 30 September because of the immense efforts which our taxing departments have made to do so. But if we cannot take this administrative step now, we are going to delay the implementation of this tax by at least a couple of months. This is the position.

It is in that spirit and in that sense that we thought this was the constructive and responsible thing to do. There is no other motive whatsoever underlying the whole matter. It is perfectly idle to say this is going to be an all-embracing tax or that this is going to tax all rentals on accommodation—which it is not. Nor is it going to tax every single item one can think of. There will be provision for certain fair and reasonable exemptions. But when one makes provision for the registration of vendors, as we call them, one has to do it on a broad enough basis to at least be able to bring in all the people one finds one has to bring in. It does not mean to say that one is going to cover everybody who has been listed here.

Mr. Speaker, may I ask the hon. the Minister whether the inclusion of things like gymnasiums, health clinics and matters of that sort is not an indication that it is intended to tax that sort of service?

Mr. Speaker, the fact that certain things are listed here does not necessarily mean that they are going to be brought into the tax. Hon. members must just have a little patience. We are trying to be as reasonable as we can. However, I want to tax the hon. Opposition, and particularly the hon. member for Hillbrow, with one thing. The hon. member for Hillbrow, as I understood him, criticized us for bringing in a measure which broadens the tax base of this country. We have been criticized for years that our tax base is too narrow. It is too narrow. If ever a taxing measure will broaden the tax base it is this one.

You do not have to tax the poor!

Tax the poor?

Yes!

I heard a great deal from the hon. Opposition the other day, in the debate on the Part Appropriation Bill, that we must bring down the marginal rate at the top, on the highest income bracket, on the richest people in the country. How does that tie up with this pious talk today that we are now going to tax the poor? What absolute rubbish! What absolute rubbish to say that by introducing this tax we are seeking to tax the poor. [Interjections.] Why does the hon. member not think clearly on the facts? [Interjections.] Every man who buys goods has a discretion as to how much he is going to buy and what article he is going to buy. [Interjections.]

He will have to stop buying food! [Interjections.]

He can readjust his purchasing pattern to a fair extent.

And stop buying food?

But now, suddenly …

Order! When other hon. members spoke the hon. the Minister listened to all of them in silence. They must now show him the same courtesy.

Thank you, Mr. Speaker, but I can assure you I am not at all disconcerted by that type of interjection. I can assure hon. members that this is not a tax on the poor. That is a very serious thing to say and it is not true. I repeat that if that is the criticism, we had better have a look at some of the arguments used here the other day by the same hon. members when they were trying to bring down the tax in the highest tax brackets. [Interjections.]

I am certainly not expected today to handle details and the merits of a measure which is to come. That will come and there will be a full opportunity of discussing it. In fact, the Bill will be published and all interested parties will be given an opportunity—both inside and outside this House—of making representations, and those representations will have our full attention. We will study them and react as reasonably as we can.

I listened very carefully to the hon. member for Walmer. At one point I thought he was going to support the Bill. However, he then found, possibly because of his juxtaposition to the other hon. opposition parties, that he had better oppose the measure. Nevertheless, he asked me what we meant by “the provider of blueprint services”. I shall try to answer this straight away. I will not keep the hon. member in suspense until we reach the Committee Stage. That is an undertaking which makes copies of technical drawings such as building plans and engineering designs. In other words, it renders a service to the users of these things. It is definitely not the producer of blue films. [Laughter.]

As I say, this measure before the House was put here as a perfectly responsible measure in order to allow us to begin and to complete what is in the nature of things a time consuming operation, i.e. the registration of a couple of hundred thousand vendors at the least. We cannot complete the register even if we get all the declarations in by the end of March. We cannot complete the register then at all; it will take a considerable time. We must, however, have the register in order to introduce and implement the levying of this tax.

I believe that when we look objectively at the merits of this tax, we shall see that it is a productive tax. In relation to cost, it is going to be productive and I do not think that the incidence of the tax is going to be unfair at all. We have studied similar types of taxes in several countries and as a result of the problems which they experience, we have tried to learn how to avoid as far as possible any inequities.

Having said that, I am aware that every tax is, in fact, an imposition. You cannot escape it. I do not have to repeat what Burke said—

You cannot please everybody. Somebody said here today that if I were to go ahead with this tax, I would certainly be very unpopular. I can only say that if I have to be unpopular because I am trying to do the best for this country under fairly difficult financial circumstances, then I think if I were unpopular it might be a sign that I was doing the right thing.

I submit that we should be given the opportunity to go ahead with a technical operation immediately. It does not in the slightest degree commit this House. If we come with a Bill giving the full details of the tax, the House has every right to reject it and if the House rejects the Bill, this whole thing collapses. How are we committing the House by doing this? We are doing this to be prudent, as somebody has said. It is being prudent to take time by the forelock and to do things that have to be done in order to introduce what I believe, in all the circumstances, will be found to be a useful and a constructive tax. It will be to the benefit of the whole system of taxation and it will confer a benefit upon the whole body of taxpayers. Thank you.

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

No. The hon. the Minister has already resumed his seat.

Question put,

Upon which the House divided:

Ayes—94: Albertyn, J. T.; Badenhorst, P. J.; Ballot, G. C.; Bodenstein, P.; Botha, J. C. G.; Botha, P. W.; Botha, S. P.; Coetsee, H. J.; Coetzer, H. S.; Conradie, F. D.; Cronje, P.; De Beer, S. J.; De Jager, A. M. van A.; De Klerk, F. W.; De Villiers, D. J.; De Villiers, J. D.; De Wet, M. W.; Du Plessis, B. J.; Du Plessis, P. T. C.; Durr, K. D.; Durrant, R. B.; Du Toit, J. P.; Greeff, J. W.; Grobler, J. P.; Hartzenberg, F.; Hayward, S. A. S.; Henning, J. M.; Janson, J.; Janson, T. N. H.; Jordaan, J. H.; Koornhof, P. G. J.; Kotzé, G. J.; Kotzé, S. F.; Krijnauw, P. H. J.; Langley, T.; Le Roux, F. J. (Brakpan); Le Roux, F. J. (Hercules); Le Roux, Z. P.; Ligthelm, C. J.; Ligthelm, N. W.; Lloyd, J. J.; Louw, E.; Louw, E. van der M.; Malan, G. F.; Malan, J. J.; Marais, J. S.; Morrison, G. de V.; Mulder, C. R; Muller, S. L.; Myburgh, G. B.; Nel, D. J. L.; Niemann, J. J.; Olckers, R. de V.; Palm, P. D.; Potgieter, S. P.; Pretorius, N. J.; Rencken, C. R. E.; Rossouw, W. J. C.; Schlebusch, A. L.; Schutte, D. P. A.; Scott, D. B.; Simkin, C. H. W.; Smit, H. H.; Snyman, W. J.; Swanepoel, K. D.; Swiegers, J. G.; Tempel, H. J.; Terblanche, G. P. D.; Theunissen, L. M.; Treurnicht, A. P.; Ungerer, J. H. B.; Uys, C.; Van den Berg, J. C.; Van der Merwe, C. V.; Van der Merwe, H. D. K.; Van der Merwe, W. L.; Van der Watt, L.; Van der Westhuyzen, J. J. N.; Van Heerden, R. F.; Van Rensburg, H. M. J. (Rosettenville); Van Wyk, A. C.; Venter, A. A.; Viljoen, P. J. van B.; Vlok, A. J.; Vorster, B. J.; Vosloo, W. L.; Wessels, L.; Worrall, D. J.

Tellers: L. J. Botha, J. H. Hoon, J. P. A. Reyneke, N. F. Treurnicht, A. van Breda and J. A. van Tonder.

Noes—23: Aronson, T.; Bartlett, G. S.; Basson, J. D. du P.; Dalling, D. J.; De Villiers, I. F. A.; Eglin, C. W; Lorimer, R. J.; Malcomess, D. J. N.; Marais, J. F.; Miller, R. B.; Myburgh, P. A.; Pyper, P. A.; Raw, W. V.; Schwarz, H. H.; Slabbert, F. van Z.; Sutton, W. M.; Suzman, H.; Van der Merwe, S. S.; Van Rensburg, H. E. J.; Wiley, J. W. E.; Wood, N. B.

Tellers: B. R. Bamford and A. B. Widman.

Question agreed to.

Bill read a Second Time.

Mr. Chairman, I move that clause 6 be negatived. Since the Second Reading I have received representations requesting that the change should not be made at this juncture. I have consulted the Opposition Parties in this regard and we are agreed on this.

Clause negatived.

House Resumed:

Bill reported with an amendment.

Bill read a Third Time.

Mr. Speaker, on behalf of the hon. the Minister of Health I move—

Mr. Speaker, I have already taken the opportunity during the Second Reading debate to congratulate the Minister, his department and all the bodies and persons who had a part in drawing up this Bill, on this excellent legislation before the House.

Mr. Speaker, I am very pleased to see that the hon. the Minister of Health has rejoined us now for the discussion of the Third Reading of this Bill.

Wakey, wakey!

I have come from the Other Place.

As I said, I made use of the opportunity during the Second Reading debate to congratulate the Minister, his department and all the bodies or persons who contributed towards bringing this legislation before the House, on an excellent piece of legislation. I trust that this legislation will be supported and welcomed by the profession and all the persons and organizations who will have to deal with it.

I am sorry that the hon. the Minister did not see †It to accept any of the amendments which we moved, especially in view of the fact that those amendments came from the nursing profession and that they were well-thought-out amendments which, in their opinion, were very important for the effective implementation of this legislation. As I said, the hon. the Minister has unfortunately not accepted those amendments and they do not constitute part of the legislation at this stage.

On this occasion I just want to refer to one aspect of the legislation again. In this regard I am pleased to see that the hon. the Minister of Plural Relations and Development is present, for it is precisely due to the statement policy which he made in the House that the Minister of Health is now faced with a problem. I just want to state the problem to this House once again. The Minister of Plural Relations and Development said that when the NP’s policy has been fully implemented, there will not be a single Black person in South Africa who will be able to lay claim to South African citizenship. Therefore, it is a clear and decisive statement of the policy of the NP. However, in spite of that policy provision is being made in the Bill which is at present before this House for Black people to be nominated to the South African Nursing Council as representatives of the Black group in South Africa. However, there is the specific qualification that they may only be elected to the S.A. Nursing Council if they are South African citizens. This means that as soon as the NP has carried out its policy, if it is ever going to carry it out—and the hon. the Minister of Health had some doubt about whether that point would ever be reached—they are disqualifying all the Black members on that council and on any other statutory council in South Africa on which Black members are serving, if such members are required to be South African citizens. Therefore, those people are automatically disqualified as a result of the policy of the NP. This should be a great embarrassment for the Government. I think that it is a farce and that it is totally unfair to the Black people who are going to serve on these councils—and specifically on the council under discussion. It is unfair to appoint them in order to try and create the impression that a sincere attempt is being made here to give the Black people representation in the profession while the Government is at the same time stating clearly that when the policy of the NP is carried out to the full, those people will be disqualified and will not serve on that council.

In order to try and help the Government out of this embarrassing situation—because we help them from time to time when they are in an embarrassing position—I moved an amendment which would provide that homeland citizens who were previously citizens of South Africa but are permanent residents in South Africa, will not be disqualified. For some reason or other the hon. the Minister did not, however, find it possible to accept that amendment, and since he has not accepted that amendment, this legislation is going through the Third Reading stage today with that specific flaw in it. I nevertheless believe that it is unfortunate that this should be the case. I think it would have been much better if the hon. the Minister had accepted our amendment. However, practically all the legislation which the Government is piloting through the House must have flaws otherwise we would not have the task of rectifying them in future. The rest of the legislation, however, will be to the very great benefit of the population of South Africa which it has to serve, as well as to the benefit of the department and our health services.

Mr. Speaker, I must apologize for entering the House late, but I really did run as fast as I could from the Other Place. Sometimes one is sorry that one cannot be in two places at the same time. Nevertheless I offer my apologies if this caused embarrassment to any member of the Opposition.

I thank the hon. member for Bryanston for all his congratulations as far as this legislation is concerned. He is a little dissatisfied about the fact that I did not accede to certain things which he said the profession had asked for. Of course, he probably heard in a roundabout way what the profession had asked for. I do not know with whom he spoke in the profession, but he cannot represent the profession here because, as far as I am concerned, the profession has not appointed a representative here. However, I shall leave it at that. If he hears about matters which the profession wishes to propagate, the hon. member has every right to raise them here. I want to tell him, however, that the various aspects have been discussed with the profession and that in the end somebody has to take the decision. It is the Government who has to take the decision in this case. We did not simply decide blindly, however. We discussed the matter thoroughly with the profession and then came to the conclusion that this was the best way to do it. I am unaware of any agitation on the part of the profession against what we have provided in the legislation. This proves to me that they do in fact accept what is stated in the legislation.

As far as the third aspect which the hon. member raised is concerned, I want to tell him that the legislation and the fact that we are appointing three Bantu to the council in order to give Bantu citizens representation there, is not creating any embarrassment for us. The problem is that there are millions of Bantu who are South African citizens today. However, the hon. member foresees—as a result of a statement which was made in another debate, i.e. that one day there will be no Bantu citizens in South Africa, something which I do not wish to debate now—that the day will arrive when there will not be any Bantu. That is why he wanted to know why I am allowing Bantu representation. But surely the hon. member is not being consistent. The people are here; they may still be here for years; they have interests here and they are South African citizens. Do they not then have the right to have representation?

I just want you to accept my amendment.

The hon. member wants me to formulate my legislation in such a way that I compel another department to change its standpoint on a matter which we have settled in the House a long time ago. I am dealing here with the factual circumstances in which we in South Africa live, i.e. we have millions of Bantu citizens here who are entitled to representation and I am giving it to them for the first time in the history of the Nursing Council.

If there are perhaps no Bantu citizens in South Africa one day, they will not need the representation and the legislation can fall away. Surely it is not a law of the Medes and Persians.

But the Bantu do not disappear.

I listened to the hon. member in silence and I expect the same courtesy from him. We in South Africa set great store by the existence of sound co-operation between the territories which are becoming independent and the Republic. Although the tendency now exists—and the hon. member must listen carefully—and this intention has been intimated, for the independent states to establish their own councils, we are aware of the fact that certain circumstances may arise in which these people may feel that they wish to remain associated with us for a time. In a case like this mutual arrangements can be made whereby we will help them until such time as they can stand on their own two feet. The Nursing Council is a statutory council and citizens of a foreign country cannot be allowed to serve on a statutory council.

There is also another arrangement which is contained in other Bantu legislation. I do not know precisely what legislation, but I know that in the case of Bantu homelands which become independent, certain privileges have been reserved for them. Those privileges can be incorporated in such a way that those people can have effective representation on a council without obtaining legal rights on it. However, these are aspects which can be negotiated. The legal aspect is important here because this is what is laid down in the legislation, i.e. that only citizens of South Africa may serve on a statutory council.

I think that I have now explained the situation sufficiently. This legislation is a milestone. I incorrectly stated that the Nursing Council has already been in existence for 50 years. This is not the case. The council has been in existence for approximately 22 years. The legislation renews certain aspects and adapts them to new circumstances. The hon. member and other hon. members who participated in the debate, agree with me on this and I should like to convey my thanks to them. As far as this is concerned, too, I think that we have put some fine finishing touches to a restructuring where antiquated legislation is concerned.

Question agreed to.

Bill read a Third Time.

Mr. Chairman, in the course of his Second Reading speech the hon. the Deputy Minister expressed himself as follows (Hansard, 22 February 1978)—

In other words, the present legal position in the Cape Province is that the body corporate of the divisional council area or its group character of it, is determined by the inhabitants of the territory. In order to determine which group is in the majority in such an area, a census must be taken. Then, on the basis of the census it is determine which group is the majority group. The majority group in a divisional council area then determines the group character or the body corporate of the territory. This is the present legal position.

As far as the Cape Province is concerned, one can definitely state that in the vast majority of the divisional council areas, Coloureds are in the majority. Therefore, if the present legal position is applied, the group character or body corporate of most of the divisional council areas of the Cape Province would be Coloured and not White. Furthermore, one must take into consideration the fact that a whole series of rights depend on the group character or body corporate of the divisional council area.

These rights relate to the provisions of the Group Areas Act and are rights such as ownership of property and the occupation and renting of premises. The situation may arise in any divisional council area that a certain group may be found to be disqualified and defined as such. In terms of the present legal position, the Whites in the vast majority of divisional council territories in the Cape Province ought to be declared to be disqualified in terms of this legislation. In other words, they will then require permits in terms of the legislation to exercise certain rights. However, the hon. the Deputy Minister is now introducing legislation which, according to him does not affect the rights of any people; it is merely a technical rectification and nothing else. However, the legislation will have the practical result that the present legal position will be completely changed, for if the Bill is passed by the House, the position is going to arise where the group character or body corporate of the divisional council areas is no longer going to comprise of the inhabitants of the territory. Now, in order to determine what the group character or the body corporate of the territory is, the composition of the divisional council is going to be taken into consideration. The divisional councils of the Cape Province are of course all composed of Whites, with perhaps one or two exceptions which I do not know about. They are White councils which govern and have control over areas in which the majority of people are non-White. The amendment which is being effected by the Bill, can therefore be used to summarily remove the basic rights of the people in an area where the Coloureds are in the majority, and in terms of the present legislation should be the qualified people and automatically exercise all the rights without a permit system. The amendment will change the situation in such a way that the Coloureds will be deprived of those rights and the Whites will acquire them, since the whole basis according to which the group character or body corporate of an area is determined, is now being changed so that it is no longer determined by the inhabitants of the territory, but is based on the composition of the council.

Nevertheless, the hon. the Minister and other hon. members on that side of the House have the audacity to tell the House that nobody’s rights are being affected. Surely this is not the truth. Surely the opposite is true, viz. that there are many thousands of people—not Whites, but Coloureds and others—who live in divisional council areas and enjoy certain basic rights in terms of the present legal position, as far as occupying and renting of premises and property is concerned, and that they are going to be deprived of those rights as a result of the amendment contained in the Bill. This is the actual position, and it means that the amendment is not simply a technical rectification but in fact a further, cruel, harsh extension of the Group Areas Act. I say this because the Bill will mean that the cruel provisions of the Act will be applied to thousands of people who are not subject to these provisions at the moment. This is the truth and that is why the PFP will express its strongest protest against and opposition to the Bill by calling for a division.

Mr. Chairman, I rise at once to reply to the speech by the hon. member for Bryanston. I apologize in advance in case it should appear that I am wrong, but I do want to ask whether an hon. member has the right, with or without effrontery, to refer to the provisions of a law made by this House, as “cruel provisions”? I assume that he has that right, or else he would have been ruled out of order. But when it comes to effrontery, and even other terms are used, I leave it to the judgment of any right-minded person to decide who is presumptuous, who is rude and who is simply downright refractory in a manner which one does not expect of anyone outside or inside this House. However, I do not begrudge the hon. member his continuing with the conduct which he has displayed in the House. I shall treat him courteously as far as possible.

In the first place I want to reply to the hon. member for Durban Central. Yesterday he stated his case in a manner which, as usual, gave me the impression that he sees matters in a reasonable way, even though we may differ. I have therefore read his speech carefully and have also thoroughly discussed it with the officials. What was said by the hon. member for Bryanston today, was also said partly by the hon. member for Durban Central yesterday, in certain respects even more fully.

In the first place it was said that inhabitants of a particular area were being deprived of a right which had been given to them. The hon. member has said that the number of inhabitants, in accordance with the present set-up, must be counted and that that will determine the body corporate and the group character of the area. I conceded yesterday that the problem being experienced with the existing legislation is precisely the fact that we are virtually compelled to have a census. Now, if this were practicable—there is nothing to hide—then I would like to obtain the hon. member’s co-operation for that and I do not want to sow suspicion.

But in this specific Act or in the ordinance—there is an hon. member opposite who is connected with the Bench—is there a definition of the word “inhabitant”? What must the Registrar of Deeds now do in order to ascertain the group character of the particular area? There are those who say that “inhabitants” are those who pay tax and that after all, they are the people who should choose who must represent them in the House. On the other hand there are those who also regard everybody who live there temporarily—old, young, great and small—as “inhabitants” and want us to have a census of everybody there in order to ascertain which inhabitants are in the majority. Is a child of two years an inhabitant? That is a problem which people have seen in this set-up.

If, in the second place, it were possible to ascertain the position at any given moment, and seven days later there were again to be an application in connection with a property which had to be alienated, there is no provision in the Act which lays down, for example, that it must be done within a period of six months after a census. The legal advisers inform me that on a strict interpretation of the Act, a census will again have to be held on the day and date on which the transaction is carried through. Whom does one count, then? People have the right to conjure up spectres, but if one wants to approach this matter honestly and with an open mind, one would discover absolutely nothing in the legislation of what the hon. member for Bryanston hinted at yesterday.

The hon. member also said that people were now automatically being deprived of their basic rights. What is the present position? I also want to refer again to the speech by the hon. member for Durban Central, who, basically, has expressed his misgivings about the possibility of people being deprived of their rights. I said yesterday that in the application of this Act, this problem had been brought to our notice by a legal firm which had experienced difficulty in getting properties registered. The legal position before 1976—the Group Areas Act had by then been in force a long time—was technically correct, as we want to make it now. In other words, between 1966, when the Group Areas Act was also made applicable to divisional councils, and 1976, no problems whatsoever were experienced. Specific rights and privileges existed. In 1976, the Cape Provincial Administration promulgated an ordinance which created a technical problem for the Registrar of Deeds in carrying out the duties imposed on him by the Act. To eliminate that technical problem, the position as it was before 1976, is now merely being clearly stated.

To that hon. member who is always making such a big fuss about the impairment of the rights of people, namely the Coloureds, and who tells the Black people about the bunch of “cruel people” who do this and about the foolhardy people who are capable of that, I want to quote from an interesting letter from a firm.

That does not justify the legislation at all.

I do not know what the hon. member wants to say now. If he wants to put a question, I shall sit down. I want to read to him from this letter so that he can see that he, as a White, and I, also as a White, have at least one thing in common, namely that we believe that all people, regardless of their colour or creed, must be treated fairly and honestly. But in addition to that, I believe that a White person must also be treated fairly and honestly. I read the letter yesterday, and I shall give it to the hon. member for perusal if he thinks that I omitted a word, or that I inserted one which was not in the letter.

†After setting out the difficulties which have been encountered in the office of the Registrar of Deeds, paragraph 6 of the letter reads—

It goes further—

The most interesting part of it reads—

Now there is all this shouting to high heavens about taking away rights of Coloureds, about harming them and about riding roughshod over them. Yet this letter came about because Whites falling under a divisional council in the Cape Province could not take transfer of their properties.

Is it in Atlantis?

Yes, in the industrial area. Since then amendments have been made to the Act. Hon. members will know that we are trying to build up an area to serve the Coloured community, as we should do and we are trying to do something positive in a very big way. But Whites, who are also keen to participate in the development of South Africa and in improving the conditions of the Coloureds in this country, encountered difficulties in that particular area. This has been brought out by this letter. It is as simple as that. Whites could not take transfer and they asked that the matter be rectified.

I think it is time that we should take note of what is stipulated in section 13 of the Act as amended in 1969. A lot has been said about section 13 and how we are now taking away rights. Section 13(2) of Act No. 36 of 1966 states—

It is specifically mentioned in the Act that the requirement to obtain a permit does not apply to State departments, including the one department which was mentioned yesterday by the hon. member for Durban Central—and I made a specific note of what he said at the time—namely the Group Areas Development Board. That is a State department and it is excluded in terms of section 13 of the Act. A local authority in the Cape Province, in terms of the Act, also includes the divisional councils. Is that not clear? Divisional councils are also in terms of the Act local authorities and they are treated as such. That is why this difficulty never cropped up in the rest of South Africa, in the other provinces. To put this right, the legal advisers told us that we could merely insert the words which have now been inserted in order to apply the Act in the same way that it was applied prior to 1976. By the mere insertion of these words, so that a local authority would include a municipality and a divisional council, the matter could be set right. And there the matter ends. There is no discrimination, no extension of rights as originally intended and applied over many years; none whatsoever.

Yesterday the hon. member for Durban Central said that there are neutral bodies. There are, but I have told him—and I am prepared to discuss the matter with him at any time—that those neutral bodies exclude, as he will notice from what I have read, local authorities, i.e. also divisional councils in the Cape. The Group Areas Development Board is therefore exempted from the provisions of section 13 of the Act, but not local authorities.

Lastly, does the hon. member for Bryanston realize, when he says that these people will now be subjected to the whole rigmarole of permits, that if any person in the Republic wants to acquire property, he is required to make an affidavit to the effect that he belongs to a particular group? It is there already.

Do you think that is good?

Yes, of course!

That is what is wrong with it. That is the whole problem.

I am quite prepared to reply to an hon. member if he puts a question to me and it is relevant to what we are discussing. I shall sit down and the hon. member can put his question to me.

Mr. Chairman, I shall put it with pleasure. Does the hon. the Deputy Minister think that it is desirable, looking at the picture of South Africa as a whole, that when one does a property transaction, the first thing that one has to do is to declare one’s race on oath?

For so many, many things in ordinary day to day life we are prepared to swear that “this is the truth and nothing but the truth”. We are prepared to put it on oath that we have not been bankrupt and that we are not bankrupt now. We are prepared to say so many things about our character. But when it comes to colour, then everybody in those benches sees this as discrimination against people who are not White. I say it is not so. I want to try to explain this before the hon. member for Houghton laughs her head off.

You are discriminating.

I have already read out to the hon. member what is stated in this letter. Can she understand the English in this letter, which says that Whites are required to have a permit? Where is the discrimination? Why was it called discrimination? Why was reference made to “riding roughshod” and all the other nonsensical things which were said by the hon. member for Bryanston, such as the bulldozing of shacks, etc? This applies to Whites too. It is utter, utter nonsense and it is about time that that hon. member started realizing, when he tells people that we are discriminating against Coloureds, that he must go and tell them that Whites have to sign a permit too. The Whites have to buy tickets when they go to a cinema and they have to buy many other things which they have to pay for in the same way. I as a White have to do things in terms of this Act which the Coloureds themselves are required to do, but as soon as it is asked of a Coloured, then it becomes discrimination.

Mr. Chairman, may I ask the hon. the Deputy Minister whether he will admit that Whites have far more facilities than Coloureds or African people have in this country?

I do not know where this debate is going to end. Therefore let me state clearly: The Whites have far more facilities, and to the best of my ability, where I am able to do anything for them to get better facilities, I shall do so. I shall do so without fear for all groups, for all the peoples in South Africa. I think my past history bears testimony to it. We did start a sports fund which never existed before. So let us stop that nonsense, please.

Scrap the Bill then.

This is a free country for all people, but there are rules. There are also rules in connection with the acquisition of property and I have to apply the rules. I want to enable those people who work with them to apply them, and that is the sole reason for inserting these words in the existing Act. We live in a free country. People, even members of Parliament, are free to make fools of themselves. If the hon. member for Bryanston wants to use that freedom he is most welcome to do so. I hope he will do it in a responsible way.

Mr. Chairman, I shall not repeat everything now which I said in the Second Reading debate yesterday. I am very pleased to hear that the hon. Deputy Minister says he has read my speech. I just want to indicate that our objection in this connection still stands. It concerns the controlled area in divisional council areas. This legislation is going to effect a return to the position as it was before 1976, in terms of which Coloureds and Black people were automatically disqualified from owning or acquiring ownership without obtaining a permit of authority in advance. That is the basic principle to which we objected in the Second Reading debate and to which we still object. I realize what technical problems the Deputy Minister has experienced. I do realize that there was a temptation for the legal advisors to return to the pre-1976 position. I feel, however, that we should move away in a greater measure from a system in which one must forever rely on the acquisition of a permit. If we had accepted the challenge presented to us by the definition of “body corporate” as contained in the ordinance of 1976, with all the accompanying problems such as ascertaining what the group character really is, we would have achieved a system under which a large percentage of people would have existed who would automatically no longer have been disqualified. Take, for example, the character of Atlantis. There are no problems. The existing group character is a Coloured group character. It is therefore not necessary to have a show of hands every time.

Here we had a case where the hon. Minister and his department, and all the people involved, had a problem in respect of exceptional cases, border-line cases. In order to handle those border-line cases, there has been a return to the old system which simply says that the only qualified persons are in fact the Whites. They are the only people who will then have a general exemption as regards the use, occupation, etc. of the properties of a divisional council. I think that we have perhaps failed to avail ourselves of the opportunity which we had to make progress.

†The hon. the Deputy Minister denied the existence of discrimination in this measure. He particularly referred to industrialists, White industrialists in the Atlantis area. I can see nothing wrong with the fact that a White industrialist has to obtain a permit to operate in an area similar to that of Atlantis. In this particular instance it was not going to delay the industrial development of the area. What actually happens now—and that is where I find it difficult to reconcile it with the statement that there is no discrimination in this measure—is that someone who will be legally exempted from obtaining a permit will be essentially White, while even in areas of a predominantly Coloured character, Coloureds will have to obtain permits. What, for instance, will the situation be in an area where there are picnic spots, if such an area is quite clearly of a Coloured character? I am sure that Coloured people will not be able to use that area without obtaining a permit should the provisions of this legislation be strictly enforced.

In spite of the fact that the hon. the Deputy Minister has considered our point of view, I just want to make it clear that we will be opposing this particular clause.

Mr. Chairman, the hon. the Deputy Minister is here faced with a problem which has arisen out of the promulgation of the Divisional Councils Ordinance of 1976. By way of illustration of his problem, the hon. the Deputy Minister has read to us from a letter which he received and from which it is clear that certain White industrialists are experiencing problems as regards the transfer of land ownership in the Atlantis area. It is ironical that the hon. the Deputy Minister now has to refer to a place like Atlantis where Whites cannot obtain transfer of ownership. Indeed, what the effect of this amendment of the Group Areas Act will amount to is that even Atlantis will now have a White group character.

The hon. the Deputy Minister has referred only to the industrial area. There is an industrial area as well as a residential area at Atlantis. Go and look for yourself tomorrow.

That does not matter!

That merely proves how ironical it will be that this new Coloured city—and it redounds to the credit of the Government that it initiated the development there especially for the Coloured—now has a problem which must be solved by giving a part of that Coloured city a White group character. That shows how ridiculous this situation has now become.

If we were to withdraw White capital there, how would the development then be continued?

Rather withdraw your laws! That is what we want! [Interjections.]

Mr. Chairman, I concede that one must perhaps have sympathy with the hon. the Deputy Minister. He has a problem. The situation creates a legal problem which can give rise to uncertainty in many instances. Problems are also being experienced in the application of the principal Act. But who is the culprit? What culprit created this problem in the first instance? It is the Group Areas Act.

Yes, of course! [Interjections.]

It is not the administration. It is not the Registrar of Deeds. It is not the Whites or the non-Whites. It is the Group Areas Act. If the hon. the Deputy Minister now experiences problems in the application of a law which is in the first place of a discriminating nature, a law which is ridiculous and which runs counter to the principles of the PFP, I regret having to say that the hon. the Deputy Minister must not try and rely on us for assistance in getting this legislation accepted and implemented. [Interjections.]

Our problem with this legislation remains that it also reflects the spirit of the principal Act. It is still the same thing. The principal Act is an Act which creates problems and which gives rise to discrimination. The only question now, is, whom we are going to shoulder with these problems. Are the problems created by the Group Areas Act, to be shifted onto the shoulders of the Whites or onto those of the non-Whites? All the effect of this amendment of the law amounts to is this; that as far as the divisional council areas in the Cape are concerned, the majority of the present problems are merely being removed from the shoulders of the Whites and shifted onto the shoulders of the non-Whites. Now they will just have to be the people subject to a system of permits. For that reason we do not see our way clear to supporting this legislation.

Clause put and the Committee divided:

Ayes—88: Albertyn, J. T.; Badenhorst, P. J.; Bodenstein, P.; Botha, J. C. G.; Botha, P. W.; Coetsee, H. J.; Coetzer, H. S.; Conradie, F. D.; Cronje, P.; De Beer, S. J.; De Jager, A. M. van A.; De Klerk, F. W.; De Villiers, D. J.; De Villiers, J. D.; De Wet, M. W.; Du Plessis, B. J.; Du Plessis, P. T. C.; Durrant, R. B.; Du Toit, J. P.; Greeff, J. W.; Grobler, J. P.; Hartzenberg, F.; Hayward, S. A. S.; Henning, J. M.; Janson, J.; Janson, T. N. H.; Jordaan, J. H.; Koornhof, P. G. J.; Kotzé, G. J.; Kotzé, S. F.; Krijnauw, P. H. J.; Langley, T.; Le Roux, F. J. (Brakpan); Le Roux, F. J. (Hercules); Le Roux, Z. P.; Ligthelm, C. J.; Ligthelm, N. W.; Lloyd, J. J.; Louw, E.; Louw, E. van der M.; Malan, G. F.; Malan, J. J.; Marais, J. S.; Morrison, G. de V.; Mulder, C. P.; Muller, S. L.; Myburgh, G. B.; Nel, D. J. L.; Niemann, J. J.; Olckers, R. de V.; Palm, P. D.; Potgieter, S. P.; Pretorius, N. J.; Rencken, C. R. E.; Rossouw, W. J. C.; Schlebusch, A. L.; Schutte, D. P. A.; Scott, D. B.; Smit, H. H.; Snyman, W. J.; Swanepoel, K. D.; Swiegers, J. G.; Terblanche, G. P. D.; Theunissen, L. M.; Treurnicht, A. P.; Ungerer, J. H. B.; Uys, C.; Van den Berg, J. C.; Van der Merwe, H. D. K.; Van der Merwe, W. L.; Van der Watt, L.; Van der Westhuyzen, J. J. N.; Van Heerden, R. F.; Van Rensburg, H. M. J. (Rosettenville); Van Wyk, A. C.; Venter, A. A.; Viljoen, P. J. van B.; Vlok, A. J.; Vorster, B. J.; Vosloo, W. L.; Wessels, L.; Worrall, D. J.

Tellers: L. J. Botha, J. H. Hoon, J. P. A. Reyneke, N. F. Treurnicht, A. van Breda and J. A. van Tonder.

Noes—18: Basson, J. D. du P.; Dalling, D. J.; De Villiers, I. F. A.; Eglin, C. W.; Lorimer, R. J.; Malcomess, D. J. N.; Marais, J. F.; Miller, R. B.; Pyper, P. A.; Raw, W. V.; Schwarz, H. H.; Sutton, W. M.; Suzman, H.; Van der Merwe, S. S.; Van Rensburg, H. E. J.; Wood, N. B.

Tellers: B. R. Bamford and A. B. Widman.

Clause agreed to.

House Resumed:

Bill reported without amendment.