House of Assembly: Vol74 - MONDAY 12 JUNE 1978
Mr. Speaker, I move—
Agreed to.
, as Chairman, presented the Third Report of the Select Committee on Public Accounts.
Report, proceedings and evidence to be printed and considered.
Bill read a First Time.
Mr. Speaker, I move—
Mr. Speaker, the Third Reading stage of this Bill reflects the final phase of what has, I believe, been a most revealing debate. It has been a debate which has been governed, in our view, by the ascendancy of convenience and expediency over principle. We have dealt with a Bill the contents of which have been dictated by the wishes of the party bosses acting in concert. It has been dictated by the exigencies of the party machines, co-operating to preserve the over-lordship of that which has always been their domain.
The four main disputed clauses in the Bill—clauses 8, 9, 39 and 45—clearly reflect the somewhat dubious agreement which was arrived at some years ago. The alliance between the Government and the UP—then the Official Opposition—relating to these clauses is easy to discern from the report of the Select Committee. Clauses 8 and 9, for instance, reflect the requirements of the Government in order to curtail the activities of the Herstigte Nasionale Party, and to curtail the activities of those parties which I would call nuisance value parties, parties which present nuisance value challenges …
That is the Progs!
… and to curtail the challenges of independents and the challenges posed by smaller groups and by smaller parties. The UP, in those days, was some 40 members or more strong. However, at that time that party was under pressure from the Progressives, and because of that they supported that very concept, the concept of party registration, the concept of requiring 300 signatures to sponsor the nomination of a candidate, believing, no doubt, that this provision would assist them in warding off the challenge against the UP of those days.
Except for the dissenting vote of the then hon. member for Sea Point, the recommendations as embodied in the Bill before us were in fact unanimous in that Select Committee.
That is not true and you ought to know that.
There was, of course, a quid pro quo.
Why do you not read the report?
That quid pro quo is to be found in the recommendations which gave rise to clauses 39 and 45. The UP who, over the years, had lost its propensity and its potential for raising funds, was, as its public support dwindled, in severe and serious financial difficulties. It was living on its capital, so to speak, and this was by no means an inexhaustible source. On the other hand, as the scale of popular Opposition support tipped towards the PRP at that time, the campaign funds which had hitherto found their way into the Official Opposition’s coffers were finding their way into the election funds of the much smaller party. The UP, sensing impending disaster and realizing that its sources of election funds were drying up, sought as a counter-measure to inhibit, at election times, the spending by those parties who were still in a position to collect funds. So it was that clause 39 was drafted.
Clause 45 has a similar history. Ever since the Pegasus poll of 1974 at the general election, and afterwards at Pinelands, and even later at Durban North, UP members of that time were paranoiac about this phenomenon. There has never been a complaint about the polls being inaccurate; rather that they far too clearly and too accurately forecast the signs of the decline and fall of that party. It was upon their suggestion that the Select Committee recommended this prohibition.
In all these matters that I have mentioned principles were never the issue. The balance of party political convenience was, I believe, the criterion. The statement of belief contained in paragraph 29(2) of the Select Committee’s recommendations reads as follows—
That statement fools nobody. It is nothing more than a rationalization or some form of motivation to justify the end purpose. Both the Government and the Official Opposition, I believe, played along in that Select Committee to bring about the Bill which is before us. But, Sir, that was not the end of the story. Since the drafting of this Select Committee report, and before the publication of the Bill, a general election has been held. The United Party is no longer the Official Opposition, and its puny successor is confined almost exclusively to the beaches, the fun places and the canefields of Natal. It is a sad, claustrophobic reversal. In countenancing and accepting this new and somewhat undignified circumstance, the ragged remnants of the United Party were, in the cause of their own survival, suddenly faced with a new and different set of priorities and requirements. The 300-signatures clause, designed to curb and inhibit the challenge by smaller parties, now came under real fire. It presented at last a real danger to them in their recently achieved unhappy position.
So, Sir, in making a principle of necessity, they have reversed their stance. They have reversed their stance in their general attitude towards this Bill and in their general attitude towards this legislation. For reasons not unrelated to the force of public opinion, the hon. member for Durban Point performed what I would regard as an equally spectacular and, if I may say so, surprisingly athletic somersault when the ban on public opinion polls was discussed. This display of gyrating gymnastics did not come free of charge. It did not, but it was the NRP and not the spectators who paid the price, for the Government, reacting swiftly, dropped the one clause which the NRP wanted, namely clause 39 relating to the expenditure of election funds. At the same time the hon. the Minister has pressed ahead with the other measures which he and his side require. I believe that there is a lesson to be learnt in this, a lesson which I hope the NRP have learnt.
I want to say that the hon. the Minister and the NP Government have not come out of this debate lily-white and pure. They, too, have certainly blotted their copy-book in this regard. I want to say, however, that they have at least achieved one thing which the NRP has not; they have achieved what I would term consistency. It has always been their objective to move to curb the election activities of smaller parties. This Bill achieves that end. In fact, it makes it considerably more difficult to form new parties. It makes it difficult to challenge vested interests. It makes it difficult to place minority viewpoints before the electorate. All these arguments, which have preceded this Third Reading debate today, have not in fact been refuted— far from it; the argument in itself has been a principal objective of the Government in this legislation. Our opposition to this Bill has in fact been consistent. We believe that the democratic electoral process should allow of challenges by independents. We believe that candidates should, without hindrance, be allowed to enter elections. We believe that the electoral laws should not curb or inhibit the capability of interest groups canvassing their viewpoints through the ballot box. We oppose this new inroad into the right of individuals to play a part in parliamentary affairs. The Government frowns, and has frowned for years, on what it terms “extra-parliamentary activities”, and yet it is trying to close the door to those newcomers who wish to bring their ideas, their viewpoints into public prominence in the one way which remains open to them and which remains acceptable to the Government, i.e. by putting up candidates at election time.
That can still be done.
This debate has also been revealing in so far as the attitude of the hon. the Minister is concerned. He was not a party to this Select Committee. I do not believe that he was even the Minister of the Interior at the time the Select Committee met or deliberated. Nor, Sir, was he party to the original drafting of this legislation. He was landed with this Bill. As they say, “hy het dit geërf”. He correctly took it over as a measure of the Government, and true to the standpoint of Government members and his colleagues, he stood fast during the Second Reading and the Committee Stage, in the face of argument, in retaining the provisions contained in clauses 8 and 9. That relates to the registration of political parties, the nomination of candidates and the 300 signatures clause. In retaliation for the hon. member for Durban Point reneging on his earlier standpoints, the hon. the Minister dropped the clause which the Government never really wanted in the first place, i.e. clause 39, relating to election expenditure. This, at least, is logical. To us this is understandable. We can, at least, understand the hon. the Minister’s viewpoint. But it is on clause 45, relating to public opinion polls, that I believe the hon. the Minister has lost the force of reason in the face of logic. He has been confronted by solid arguments. Let me mention one or two of the arguments with which he has been confronted. Perhaps the SAP with its three members wants this Bill, but neither the NRP, the Official Opposition or the members of the hon. the Minister’s Government want this Bill. The hon. the Minister stands alone, in splendid isolation and obstinacy, in trying to retain the provisions relating to the prohibition of public opinion polls. Secondly, several speakers have proved, during the debates in past days, without any counterarguments being offered, that public opinion polls do not affect election results and that a bandwagon effect, which has been mentioned as being the effect of public opinion polls, belongs in the realms of conjecture and not in the realms of fact. Thirdly, we know, as has been stated in this House, that scientific and educated advice on public opinion polls, and on this issue, has not been canvassed or considered. We are legislating to prohibit public opinion polls in a self-created vacuum of ignorance. That is what is happening. At second reading, and even later, only two arguments, if we can accord them that status, were offered by that side of the House in support of this provision. Firstly the hon. the Minister and other Government members were of the view that public opinion polls should not be published so close to an election as to render it impossible for political parties to comment on them. We moved to meet this argument by proposing, in the Committee Stage, that the polls be prohibited only for the limited period of 14 days prior to election day. Although the amendment adequately met the argument advanced by the other side of the House, it was rejected, and a ban for an inexplicably much longer period has been retained in the Bill. Logic and reasoned argument, I believe, were rejected without cause—but, on second thoughts, perhaps not entirely without cause because the hon. the Minister did state one reason for clause 45 being retained. The reason was that he had already made several other major concessions, as he put it. He said that he had made a major concession on this particular clause by conceding that public opinion polls might be conducted and published up to nomination day. Because he had made that concession he therefore felt that he could not go any further. Was this, however, really a concession? I think not because recommendation 29.1 of the report reads as follows—
In other words, the original recommendation made it plain that polls were to be prohibited only after nomination day. The original provisions of the Bill should never have been in the Bill in the first place. They were not what the Committee recommended at all. The removal of the prohibition until nomination day, far from being a concession, was in fact no more than bringing the provisions of the Bill into line with the Select Committee recommendations. So much, therefore, for that spurious argument relating to so-called concessions. To cap it all, as a sort of cherry on the top for the Bill the hon. the Minister, having banned the publication of scientifically and objectively compiled information for reasons not disclosed to this House, none the less persists in his resolve to allow the public to be disinformed by party-political canvassing figures, which would clearly be geared to influencing an election result on election day. That is the very thing the hon. the Minister was opposed to in the first place.
That is what politics is all about.
The hon. the Minister’s reply is most revealing. One can look at the matter in another way. The hon. the Minister’s attitude would be totally strange, inexplicable and incomprehensible if we did not come back to what I said at the very outset and to what the hon. the Minister has revealed now by his remarks, i.e. that this Bill and the debate are governed not by democratic principles, but rather by political convenience and expediency. Accordingly, we can do no less than to continue in our opposition to the Bill and therefore we shall vote against it.
Mr. Speaker, we have now reached the Third Reading stage of the Bill and of course it goes without saying that it is a privilege for me to support the Third Reading on behalf of this side of the House. The Select Committee that was appointed to investigate the whole question of our electoral laws, received memoranda from political parties and from witnesses, and representations from the department itself. I think that in the first place the point of departure of the Select Committee was to amend the electoral laws in such a way as to make it as easy as possible for the voter to cast his vote and to test the national will as efficiently as possible. The Bill that is before the House, also contains the recommendations that emanated from the evidence presented to the committee. The electoral laws establish the mechanism according to which the national will is tested and I think that the Select Committee was largely successful in its task. Firstly, when the national will is tested, one should like to do so in as unhampered a way as possible and create the least possible confusion amongst the voters. Then one also wants to create such a mechanism that, once the voter has cast his vote, it will not be rejected for any trifling reason. If we look at the contents of the Bill before us, we see that the Select Committee succeeded pre-eminently in its purpose with the recommendations for drawing up this Bill.
Mr. Speaker, you will allow me at this stage, as a member of the Select Committee, to express my sincere thanks and appreciation to the chairman of the Select Committee, the hon. member for Parow, who could not be present this afternoon. He has served on several Select Committees that were involved with our electoral laws. It was also my privilege to serve on such a Select Committee with him on a previous occasion. I want to make it very clear to the House today that I think the invisible stamp of Mr. “Pen” Kotzé has been impressed upon the electoral laws of our country. With the practical experience that the hon. member gained over the years of the management and holding of elections, with the intense study that he made of the electoral laws and the holding of elections and with the experience on which we could draw and the guidance that he was able to give us as the chairman of various Select Committees, I think that we are creating model legislation as far as the electoral laws of our country are concerned. I should like to pay tribute to him, because I think that he has largely succeeded in his attempt. When doing so, I do not want to do it only on behalf of hon. members on this side of the House. I am sure that I am expressing the appreciation of every voter in the Republic of South Africa I referred to the mechanism that is being created. I want to refer, inter alia, to a few of the most important clauses in this Bill.
Firstly, I want to dwell on the provisions that require a candidate’s political connection to appear on the ballot paper, the desirability of which was debated at length. I think that the right decision was taken when it was recommended that a candidate’s political connection should appear on the ballot paper in future in order to eliminate any confusion that may arise. I want to quote an example of what happened in the past. Quite by chance it happened to me. At the time I was fighting an election. When my canvassers went to the voters in order to ask them for whom they would vote, they said that they were going to vote for the other candidate because they did not want to vote for a Jew (Jood). “Jood” is my nickname. After they had been properly informed they of course voted for me. If the candidate’s party connection had appeared on the ballot paper in those days, that confusion would not easily have arisen. I think the hon. member for Johannesburg North in particular, former judge Kowie Marais, will welcome this clause, particularly since he represents a constituency such as Johannesburg North. I think his “Boer” name “Kowie” embarrasses him a little. In general conversation with people one no longer hears about former judge Kowie Marais, but about Kouwie Marais. [Interjections.] We do not want to embarrass that hon. member—nor myself— any further. He can remain former judge Kowie Marais, for in future we shall simply place the words “Progressive Federal Party” below his name on the ballot paper to eliminate confusion. It will also mean that confusion will also be eliminated when there are two candidates with the same surname standing against one another in a constituency. We have often had such cases in the past, and one sometimes does not know whether such candidates were nominated just to cause confusion. In 1970 two candidates, both with the surname of De Villiers stood against one another in the Von Brandis constituency. They were Messrs. I. F. A. de Villiers and J. de Villiers. One of the two is representing the Constantia constituency in this House at the moment. During a by-election that took place in Kroonstad in 1955, two Van der Merwes stood against one another. The hon. the Minister will know that they were Mr. J. A. van der Merwe and Mr. L. M. van der Merwe. Obviously this caused tremendous problems and confusion. This measure will eliminate that type of confusion. It will also be a great help to the voters in our urban areas. For instance, if a voter lives on the outskirts of Johannesburg or Pretoria and has to travel to his place of employment every day, which may be on the other side of the city, it means that during elections he has to travel through five or six constituencies. If hon. members bear in mind that during that period there is hardly a lamppost that is not adorned with the face of a candidate, they will probably realize what confusion it may create amongst the voters. For instance if one travels through the Bryanston constituency, one will possibly observe that the candidate for the PFP is a Van Rensburg. However, one will also observe that a Van Rensburg is the candidate in the Rosettenville constituency, but the difference is that he is an NP candidate. Voters usually decide for which party they want to vote and that is why this measure will eliminate any confusion which may arise in the future. If such a voter arrives at the polling station and knows for whom he wants to vote, it will be very easy to do so because the party connection will be indicated on the ballot paper. Therefore I believe that we will also have fewer spoilt ballot papers in future. If a voter realizes that he has voted incorrectly, he deletes that name. After that he makes a second cross, and this means that his vote is discarded. I feel that this measure will eliminate any confusion that may arise.
The second important aspect to which I should like to refer briefly, is the question of the registration of political parties, which the hon. member for Sandton feels rather unhappy about. I still cannot see why one should feel unhappy about registering one’s political party.
Surely we are not ashamed of our political parties and each one of us wants to have a name for his party. We cannot allow every Dick, Harry and Enthoven to decide what each one wants to have appear on the ballot papers. No. At least the name of the political party should appear on it. The names of the political parties may also cause confusion. In this regard I am thinking specifically of the Herstigte National Party. I believe that when most people decided on a name for their party, they reasoned that, in view of the existence of the Herenigde National Party in earlier days, they would gain the sympathy of ex-Nationalists if their party was known as the Herstigte National Party, abbreviated to HNP, as the NP was formerly known for many years. They therefore wanted to create confusion. But let us be practical in our approach. In this regard I also want to refer to the New Republic Party. I think they made a mistake by adopting that name. If they had remained the UP, they would definitely have been the Official Opposition today. One can understand, however, that to be in the running, they had to include the concept of a republic somewhere: Consequently they decided to adopt the name New Republic Party. In this way they are trying to win the sympathy of the voters. Today I should like to give those hon. members this good advice: There is an old saying that the leopard cannot change its spots. Nor can a peacock parade about in crow’s feathers. If the hon. members had wanted to identify themselves to the voters, they should have called themselves the “Natal Resistance Party”. In fact, they sit there as nine Natalians and only one cohort from East London City. They therefore caused a great deal of confusion and I feel they would have eliminated a great deal of confusion if they had adopted this name. It is therefore absolutely essential for political parties to register and have unambiguous names.
I also want to refer to a third very important clause of the legislation, the one that deals in particular with the additional requirements that are being laid down for when a candidate is going to be nominated in future. If such a candidate’s party does not have a member of the House of Assembly or provincial councillor or if he is an independent member, this clause provides that he must submit 300 identifiable signatures to the electoral officer five days before nomination day. The hon. member for Sandton’s reaction to this was to throw his hands in the air and say that the NP was so afraid of the HNP that we were coming forward with such legislation. I have never heard a bigger load of rubbish in my life. All of us are in favour of democracy, and this side of the House would be the last to want to violate democracy. In fact, I want to prove the opposite. We on this side of the House are in fact the people who extended the franchise in South Africa. Who gave the franchise to the eighteen-year-old White boy and girl in South Africa? It was the NP, whilst that side of the House opposed the principle.
We also gave it to women.
Yes. Who gave women the franchise in South Africa? It was the NP, and now we are being considered as the people who are opposed to democracy. Who gave the Coloured woman in South Africa the franchise, the franchise that that side of the House deprived her of? It was the NP. Who recently introduced legislation that led to the Coloured franchise being extended to eighteen-year-olds? It was the NP. Is this a party that is afraid of democracy? [Interjections.] No. A party that is afraid of democracy does not act like this. Its past and its actions prove that it is a democratic party.
In 1952 there was a by-election in Wakkerstroom. The hon. member for Durban Point and the hon. member for Musgrave ought to remember it. Two Martins stood there for the NP on that day, one for the House of Assembly and one for the provincial council. If I remember correctly, it was one of the first elections where two members were voted for on the same day. It was still during the days when the Torch Commando pitched tents outside Volksrust in order to help the UP. An independent candidate stood there at the time, a man called Terblanche. We went to help at that by-election, and all that one saw of that independent candidate, was a table measuring approximately two foot by one foot and a voter’s roll which the wind was riffling through. Is it a violation of democracy to deprive that man of his right to nominate himself as a candidate?
In 1953 independent candidates stood in the Lichtenburg, Koedoespoort and Pretoria Central constituencies. One candidate polled 24 votes; the other, 39 and the third, 51. This is making a mockery of democracy. In these constituencies there were triangular contests and elections had to be held in any event. In 1958, however, we had the case that in the South Coast constituency in Natal, the redoubtable Douglas Mitchell was involved in a duel with a certain Mr. Hulley. Mr. Douglas Mitchell was involved in a duel with a certain Mr. Hulley. Mr. Douglas Mitchell polled 6 666 votes and Mr. Hulley only 292. This is making a mockery of democracy.
I want to quote further examples in this regard. In 1966 Prof. C. F. van der Merwe declared himself a political leader in the Transvaal, and a number of candidates, known as the Van der Merwe group, contested seats in the election. Five candidates were nominated in five constituencies, including one in my constituency. How many votes did the candidates of the Van der Merwe group receive in their duels with the NP? Their votes varied from 500 to 1 000. We can argue that if someone polls at least 1 000 votes, he is entitled to participate in an election. Nor did they attract those votes of their own accord. I can well remember that in 1966 the UP canvassers rushed about in Vanderbijlpark as if they had been stung by bees just to encourage people to vote against the NP. These figures therefore are not indicative of full support for the Van der Merwe group. This same party put up another 14 candidates in constituencies where they were involved in triangular contests, another 12 in the Transvaal and two in Natal. The votes that they polled in these constituencies varied from 85 to 360.
In 1970 the Herstigtes put up candidates in the constituencies of Beaufort West, George and Parow. The votes that they polled varied from 315 to 562. I feel this is making a mockery of democracy. The hon. member for Klip River indicated by means of figures for the 1978 election how ridiculous and ludicrous it is. [Interjections.] These figures indicate how ridiculously far one can go if one wants to hold up democracy as an example. I feel it is time we stopped allowing such candidates to stand in elections unless they give sufficient proof of the fact that they do in fact have support in a constituency. They can therefore still stand. All they have to do is submit the necessary number of signatures. I cannnot agree with the statement that one is violating democracy if one does not want to allow an independent candidate who can only attract 280 votes, to be nominated on the same grounds as a candidate from an old, established political party.
I am of the opinion that the amendments that have been proposed in connection with absent voters are a great improvement on the present legislation.
The first aspect that I want to mention in this regard is voting by absent voters. In the past every voter who applied for a postal vote had to initial the reason for his application. Literally thousands of miles have been travelled unnecessarily in order to get applicants to initial the reason where it had been left out or to re-initial it when it had been initialed in capital letters while the signature of the applicant was in writing. When the application reaches the presiding officer, he throws it out in any event. The Bill is therefore a great improvement because it is everyone’s right to cast his vote as he wishes.
Another improvement is the provision that the elderly and the sick no longer have to furnish the reason for their application for a postal vote, i.e. the nature of their illness. In the old days when one still had to spell it out specifically there was a list of medical terms in many electoral offices that were used so that an old man or woman had “chollitis”, “babalitis”, or something of that nature. If the old person had some or other “itis”, the presiding officer was quite satisfied to issue a postal vote to him and the political opponent did not object. I therefore believe it is right for us to simplify the electoral laws so that everyone is given the right to cast his democratic vote. We are making a great improvement here now in the sense that people who look after elderly or ill people and consequently cannot get to the polls on election day, may also vote as special or absent voters in future. We are also making a great improvement to our electoral laws by providing for the identification of applicants for special votes and postal votes and even of voters at the polls on election day.
Requests were also received from the Council for the Blind in South Africa that a blind person may take a friend along in order to vote on his behalf at the polls so that the presiding officer does not necessarily have to do so.
I think this Bill brings about a streamlining of our existing electoral laws. It will enable us to succeed in our objective of preserving democracy in an unemcumbered, better way in the future. It is therefore a privilege for me to support the Third Reading of this Bill.
Mr. Speaker, the hon. member for Vanderbijlpark spoke about a peacock who cannot parade about in crow’s feathers. I think it will be a very stupid peacock who tries to do that, because surely a peacock’s feathers are much prettier than a crow’s. However, I am glad that he thinks that the name of our party, the NRP, is such a fine name that it reminds him of peacocks’ feathers. I want to tell him that it will be of no avail to be jealous. We have the most beautiful and meaningful name of all political parties. The hon. member for Bezuidenhout will also admit that the name New Republic Party is, in fact, a very good name. [Interjections.]
Mr. Speaker, I should like to know how many members of the NRP voted for the Republic in 1960. [Interjections.]
Everyone in the NRP is a democrat and a democrat accepts the democratic result of a referendum in the country. [Interjections.] We are not going to fight about what happened in 1960.
†Unfortunately I must now do something I have refrained from doing in this Chamber up to now and that is to spend some of my valuable time in order to put matters right, something which has come about as a result of what I can only describe as a most vicious, unfair and unfounded attack launched by the hon. member for Sandton on the old UP and the NRP. He spoke for 15 minutes, 10 minutes of which—I timed him—was devoted to that completely negative aspect of debating. Thereby he has forced me into the situation in which I must put a few matters right. I shall prove that his attack was completely unfounded and unfair. For example, he stated as a fact that the hon. member for Durban Point, and therefore the NRP, in the Select Committee supported the principle of the 300 signatures as part of the nomination procedure. He knows this is completely untrue. If he reads the Select Committee’s report, he will find that the hon. member for Durban Point proposed a reduction from 300 to 100. Furthermore, the hon. member for Durban Point—he has been present throughout the debate—voted for my amendment in terms of which I proposed to reduce the number from 300 to 50. I can therefore only repeat that that accusation is completely unfounded and unfair.
The hon. member for Sandton traced the history of this particular Bill and the principles involved in it, but he conveniently remained completely quiet about clause 40, the anti-treating clause, a clause which introduces a completely new principle. Just to prove how expedient a person can be, he said this Bill introduced only four new principles, viz. clause 8 concerning registration, clause 9
I said there were four I wanted to discuss.
I did not interrupt the hon. member; I listened quietly to him. He said that the registration of a political party, as referred to in clause 8, was a new principle. He said that the nomination procedure, as contained in clause 9, was a new principle and he also said that the question of expenditure as referred to in clause 39 was a new principle. He then jumped to clause 45 which refers to opinion polls. This was very convenient, very expedient, because by doing that he had to jump right across clause 40, which contains the anti-treating measures. Why did he remain quiet with regard to this specific issue? It was because he knew that once he started with this issue and put history into its true perspective he would have had to tell the hon. House that his own Chief Whip was one of the instigators of that provision when he was a defeated candidate in the election. Rightly or wrongly, he did play a direct part as far as that was concerned.
Not in this party. [Interjections.]
Now the hon. member says “not in this party”. The hon. member for Sandton was also not a member of that party in 1974; he was a member of the much-maligned old UP. I hate to say this, Mr. Speaker, but in the short period of 10 minutes he made all these unfounded and unfair attacks on this party. He also referred to the opinion polls, once again implying that the hon. member for Durban Point was in favour of the banning of opinion polls.
He said I introduced it.
Yes, he said that the hon. member for Durban Point had introduced it. It was a completely unfounded statement. There is nothing to that effect in the Select Committee’s report. In fact, there was no talk in the Select Committee about the complete banning of opinion polls, but there was talk to the effect that they should be banned during the last 10 days. Once again, we heard a completely unfounded statement. It is therefore with regret that I have had to speak for five or six minutes in replying to such an unfounded attack as we have had this afternoon.
I now return to what I intended to say at the beginning.
It has taken you 10 minutes to do so.
Well, I cannot help it. If the hon. member for Sandton made so many mistakes I had to put the record straight. However, I would like to say that for a piece of legislation which was first referred to a Select Committee we have had a record number of amendments, something like 20 if one counts the individual ones. I think this is something of a record, especially with regard to clause 9 where the hon. the Minister himself introduced three amendments. We of the NRP supported the Second Reading in principle because we were in favour of the measures which led to the limitation placed on election expenditure. However, during the Committee Stage the hon. the Minister withdrew that clause. The hon. member for Durban Point has already done so, but we once again want to express our disappointment that this should have happened. The Minister did, however, say that he would look at this again and that the matter was not finalized. On reflection, I must agree too that as the proposed clause 39 read originally it would have proved to be cumbersome administratively. I can also mention that there have been a number of technical improvements in respect of postal votes, special votes and also in respect of the procedure on polling day. One of the main improvements—I am glad the hon. member for Vanderbijlpark spent some time on this—is the fact that the names of political parties will now appear on the ballot paper. This can only be in the interests of the individual voters themselves.
It is no secret that we had difficulty with several of the clauses during the Committee Stage. We objected to certain of the provisions and as a result of our objections some improvements have been effected. Some of the detrimental effects have now been eliminated or have been reduced. Obviously we would have liked to see this being done to a greater extent and more of our amendments being accepted. Once again, referring to the matter of opinion polls, originally they were supposed to be banned altogether, not as a result of the proposals of the Select Committee, but in terms of the hon. the Minister’s proposals in the Bill. Now, of course, opinion polls will not be banned completely. The ban on opinion polls will only be imposed between nomination day and the day of the actual election. In other words, there has been some improvement in this respect.
The question of the nomination procedure was one that presented us with great difficulties. We have already indicated that neither our party nor the member of our party who served on the Select Committee—then as a member of the UP—at any stage accepted or supported the imposition of the principle of obtaining 300 signatures.
We regard the nomination procedure as extremely unfair. That I want to make clear to the hon. the Minister. I have listened attentively to the debate, but I really do not understand why the hon. the Minister has had to adopt such an unyielding, such an uncompromising—and in some respects, I believe— such a stubborn attitude towards this particular clause. He rejected our amendment in which we sought to reduce the number from 300 to 50.
In the interests of fair play, in the interests of the normal procedures of democracy, I still want to appeal to the hon. the Minister to reconsider the matter and to try to forgo his uncompromising attitude when he introduces this Bill in the Other Place. Should he feel that 50 signatures are too few, why does he not give consideration then to reducing it to 100, instead of 300? This has already been suggested by the hon. member for Durban North. However, the message I want to get across to the hon. the Minister today—even at this late stage—is that by insisting on 300, I believe he is being unreasonable. Whichever yardstick we apply, this remains unfair. Perhaps the hon. the Minister is under the impression that the provision, as it now stands, will discourage independent candidates from standing for election. I want to point out to him, however, that public sympathy works in various ways. Therefore, it could well happen—not that I would welcome or encourage such a thing—that an election takes place in which the recognized Opposition parties, as they sit here today, are not directly involved in certain specific constituencies. In the interests of democracy, some of their supporters might just be willing to come forward in support of some other candidate, feeling it is only just to give him the opportunity of putting his message across to the electorate. In such an event it may be found that this specific stipulation could be entirely counterproductive, since it may then defeat the aims which the hon. the Minister has intended it to serve.
In conclusion I just want to reiterate that we have made our position quite clear during Second Reading. We have indicated where we are in disagreement. The acceptance of the anti-treating measure, however, can only be, we believe, in the interests of the normal functioning of democracy. Therefore we will be supporting the Third Reading of this Bill.
Mr. Speaker, owing to the time factor I shall only give myself five minutes to complete my speech, and consequently I shall not react to what the hon. member for Durban Central had to say. Since we have now more or less disposed of the debate on this legislation, I want to refer very briefly, using last year’s elections as a basis, to the effect and advantages of this legislation as far as future elections are concerned. I refer specifically to the inconvenience to the State, the public and political parties, which will be largely eliminated in future once this legislation has come into operation. If the legislation had already been in operation during the election last year, then in the Transvaal alone I think there would have been 38 candidates who would definitely not have qualified as candidates. These 38 candidates in the Transvaal last year gained 1 000 votes or less. With the best will in the world I simply cannot see how a candidate who is unable to succeed in gaining 1 000 votes during an election in a constituency of 11 000 to 15 000 voters, will be able to succeed in terms of the proposed legislation in obtaining 300 signatures to confirm and promote his candidacy.
Last year there were six candidates in the Transvaal, whose total votes were equivalent to between 3% and 5% of the total votes of the winning candidates. There were 11 candidates whose total votes were equivalent to between 6% and 8% of the total votes of the winning candidate. There were seven candidates whose votes were equivalent to between 9% and 10% of the total votes of the winning candidate. Then there were 11 candidates whose total votes were equivalent to between 11% and 15% of the total votes of the winning candidates. If one processes these figures further, one finds that there were 35 candidates whose total votes were equivalent to between 3% and 15% of the total votes of the winning candidate. In Transvaal there were 10 candidates who gained fewer than 500 votes during the previous election. Here I could just point out in passing that the hon. the Minister of Foreign Affairs holds the record for the Transvaal, because he gave one of the candidates who stood against him such a beating that the candidate was only able to gain 249 votes, whereas the hon. the Minister’s total was more than 8 000 votes. If one processes the total votes of these candidates, one finds that his total number of votes was equivalent to a mere 2,75% of the total votes of the hon. the Minister.
The total votes of the opponent of the hon. the Minister of Justice were equivalent to a mere 4% of his own total votes, whereas the total votes of the opponent of the hon. the Minister of Information, the NP leader in the Transvaal, was equivalent to a mere 6,5% of his own votes. The opponent of the hon. the Prime Minister obtained only 2,5% of the votes in the constituency. There is an hon. member in the Transvaal who dealt with his opponent in such a friendly and considerate fashion that his opponent’s votes were equivalent to a mere 7% of his own votes. I am referring now to the hon. member for Meyerton. [Interjections.]
The candidate who set up the all-time record during last year’s election as regards giving his opponents a thrashing, is the hon. member for Pinetown. One of his opponents obtained a mere 160 votes. If the Bill had already been in operation, that candidate would have been in the fortunate position, despite the meagre support he enjoyed, that his candidacy would have succeeded without his having to submit 300 signatures, since he was a member of a party, the SAP, which was already represented in this House.
The Bill is a major improvement on the existing Act. On behalf of my constituency I wish to convey my thanks for the improvements. My constituency has in the past been harassed by publicity seekers who, although they realized that they had no chance whatsoever of winning, nevertheless put themselves forward for one reason or another. Since 1966 there have been four elections in my constituency. Three of the four Opposition candidates have on each occasion obtained fewer than 1 000 votes. In 1966 a certain Prof. Dr. Van der Merwe opposed me during my first election and he obtained 206 votes. If we had already had the position at that stage that the political affiliation of the candidates must be entered on the ballot papers, he would certainly have received far fewer than 206 votes. At that stage it was still the case that only the candidate’s profession could appear on the ballot paper against his name. It is therefore understandable that if uninformed voters had to choose between a Prof. Dr. Van der Merwe and a Mr. W. L. Van der Merwe, a simple farmer, they could not be reproached for voting for Prof. Dr. Van der Merwe.
Oh no, Willie, you are making a mistake!
In 1970 our opponent in Heidelberg gained 886 votes and last year he gained a mere 506 votes. Consequently, on behalf of my constituency which, like several other constituencies, has in the past incurred a great deal of unnecessary expense and done a great deal of unnecessary work, I wish to convey my sincere thanks to the hon. the Minister, his department and the Select Committee that devoted many hours of work to this legislation.
Mr. Speaker, I had not intended to participate in this debate at all, but I could not allow the remarks of the hon. member for Vanderbijlpark—there he sits!— to go unanswered, the hon. member for Vanderbijlpark who is so suddenly a champion of democracy! Really and truly, I must place on record some contradiction of some of the things he said this afternoon.
First of all he gives the impression that it makes a mockery of democracy if candidates standing in an election get a very small percentage of the votes. I think he mentioned one candidate, an independent, who obtained 67 votes, or something of that order, in the general election. I wonder, however, why the same consideration does not strike those hon. members when elections are held for the community council of Soweto. [Interjections.] Ah yes, it was that very same hon. member who stood up and objected vehemently when I stated that community council elections in Soweto were thoroughly unrepresentative because there had only been a 6% poll. I also want to point out to that hon. member that the chairman of the community council, I think— certainly one of the members elected— obtained a total of 37 votes in the whole election. So why, I wonder, does this argument suddenly become very important in the mind of that hon. member when it was dismissed out of hand when I used it as an argument for the overall non-representative nature of the election of the community council in Soweto? That is the first point.
Mr. Speaker, could the hon. member give me any indication of how many votes any single member of the Committee of Ten received?
The Committee of Ten did not stand. [Interjections.]
Why not?
Because they had no faith in the community council system. Because they had no faith in the community council they did not stand for the community council.
Who elected them?
They were elected by a number of representative bodies in the community itself, e.g. the Black Parents’ Association, the Teachers’ Association, the Residents’ Association, etc.
That is not true.
They were self-appointed.
Order! That, in any case, is not relevant to the Bill.
Right, then I shall move on to my next point This guardian of democracy, the hon. member for Vanderbijlpark, tells us that independents make a mockery of democracy. He mentioned the sort of candidates who stand, etc. Does one, however, have to be an independent to get up to strange practices in an election? I remember the election of 1974, the last time I was opposed. The candidate for the Official Opposition claimed to have a B.Sc. Eng. degree from the Witwatersrand University. He included that detail in his electioneering manifesto. However, when this was checked on, it was found that he had never set foot in the University of the Witwatersrand. Therefore, it does not really matter whether a man is an independent or whether he is the official candidate of a political party, as that man was of the then Official Opposition, the old UP, when it comes to improper practices being indulged in. Therefore that argument also falls away.
The third thing he said which was completely incorrect was that the National Party, as a demonstration of its democratic practices, gave the women in South Africa the vote. It is perfectly true that the National Party was in power—in fact, if I remember correctly, it was a Labour/National Pact government—in 1930 when women were given the vote in South Africa.
No, it was not a Pact Government.
All right, then it was a pure National Party Government. The Pact was over.
Your facts are wrong.
So are yours. The Pact Government was in existence in 1924, if I remember correctly. In any event, the Pact Government promised to give women the vote, although in fact it was after the elections in which Gen. Hertzog came to power that the vote was given to the women in 1930. It was therefore as a result of a pact government arrangement, if I may put it that way. The point that I am trying to make—it does not matter whether it was a pact government or a National Party Government— is that that vote was given not out of pure respect for democracy and wanting the women of South Africa to have the vote, but in order to reduce the importance of the Black vote. The value of the Black vote in the Cape Province, where African and Coloured males had a vote on the common roll dependent on their meeting certain qualifications which were exactly the same those which applied to White males, was becoming of increasing importance and therefore the Government agreed to give White women the vote. As a result of that, of course, the value of the Black male franchise in the Cape was halved. In respect of White women no qualifications applied and a year later, in 1931, the qualifications in respect of White men were also removed, although they were retained for the Coloured and African voters.
I simply want to get those facts on record, because the hon. member for Vanderbijlpark stood up here and held himself and his party out as a monument for democracy. As a final word, I should like to point out to this democratic gentleman that of course every effort was made to take the Coloured people off the common roll, which efforts included some of the most improper methods which were ruled invalid by the Supreme Court in South Africa.
Mr. Speaker, I think the hon. member for Houghton was totally unprepared to discuss this specific Bill this afternoon. I know that one never refers to the age of a lady, but I get the impression that she had a few bees in her bonnet and that if she hears anything which can be related to them, she discusses it. She did not discuss the amendments contained in the Bill at all today. All she did was try to reply to the speech by the hon. member for Vanderbijlpark. I think that the older the hon. member for Houghton becomes, the more faulty her arguments become too.
Mr. Speaker, if you will allow me, I do just want to reply to some of the points she made. In the first place, with regard to what another hon. member said in this connection, I want to point out that the issue of the people who in fact make a laughing stock of democracy by only drawing a small number of votes, is in no way comparable with the election in regard to community councils. In the one case it is a matter of an open election for everyone who can take part. There may be reasons why certain people do not want to vote, but the people who have in fact voted, comprise the percentage concerned. In the other case it is a matter of an open election in which a specific candidate attracts a minimum number of votes. Therefore the two can in no way be compared.
Another interesting point is that the years that lie ahead will show us to what extent the Black man, within his ethnocracy and with the change that is taking place in Government structures in Africa, will really take an interest in, and use, the franchise. However, I mention this merely in passing and I will leave the matter at that.
She also adopted the standpoint that the National Party has never, in the course of its history, taken any notice of the principles of democracy. That is just as incorrect, particularly in view of the introduction of the vote for women to which she referred. These are not statements which one can make summarily and categorically. One must go into the historic background in depth and determine the reasons which gave rise to the franchise. One has to find out why the men obtained the franchise first and what gave rise to the eventual introduction of the vote for women. Then, too, there is the issue of the age limits of 21 and 18 years. I want to state one point categorically, and with that I shall leave the speech by the hon. member for Houghton, namely that out of the roots from which it grew, the National Party has always sought to preserve and maintain the best elements of democracy. Because we sought to do this, we saw in the circumstances of Southern Africa a diversity of nations, and for each of those nations we either established or tried to inoculate the best elements of democracy. I shall leave the hon. member for Houghton at that.
There are three matters to which I shall refer by way of an introduction to my speech. To begin with I want to convey my sincere thanks and appreciation to the hon. member for Parow who, as chairman of the Select Committee, and also in the course of many years, has done a great deal of good work. As is the case with many things in life, the Electoral Consolidation Act will be adapted to changing circumstances in the course of years. It is actually a pity that such hard workers and a person of the insight of the hon. member for Parow, will eventually have to disappear from the party organization. Fortunately the Cape—and I say it as a Transvaler—has a very good party organization. Other hon. members, for example the hon. member for Kimberley South and the hon. member for False Bay, will however be in a position to follow the trail blazed by the hon. member for Parow. I also have very great appreciation for what the hon. the Minister has done, not only for his handling of this measure, but also for the way in which he went out of his way to accommodate the new Official Opposition. Agreement was reached with the previous Official Opposition with regard to certain matters in the Select Committee. During the election the then Official Opposition disappeared, however, and we now have the new Official Opposition. I think the hon. the Minister went out of his way to see to it that agreement was reached in regard to the rules by which the political game is played in South Africa.
I trust that we shall not have another reduction in the numbers of the Official Opposition, if another Select Committee is appointed to consider legislation of this nature. I also want to convey a word of thanks to the officials. It goes without saying that the officials are the people who have to deal with this legislation in practice. I have in mind in particular the Secretary and Mr. Pretorius. They are officials who have a very sound knowledge of the legislation relating to elections. The recommendations they made and the discussions we conducted with them were always worthwhile. More than 80 years ago, one James Bryce said—
During the Second Reading debate, and today as well, the statement was made that through this legislation we were making inroads on certain basic elements of democracy, and that the NP wanted to entrench itself and stabilize itself to such an extent by way of these amendments that normal procedures of democracy could not be used to dislodge it. I therefore went to reread, in a calm and peaceful atmosphere, what great authorities and leaders have had to say about democracy. The hon. members of the PFP are always so quick to attack the NP for having no understanding of or respect for democracy. I should like to quote to hon. members a few brief standpoints and truths expressed in this regard. In 1947, Winston Churchill said the following in the House of Commons—
Then, too, G. K. Chesterton said—
What is probably one of the finest descriptions comes from a certain Herbert Agar, who had the following to say in the introduction to his book The Perils of Democracy—
As a result of the dialogue between the Democratic Party and ourselves, it is vital, particularly for us in South Africa, to consider once again what are the true characteristics of democracy. What were our aims in effecting the amendments incorporated in this legislation? What is our ideal in this regard? We still want—and after these amendments have been effected, this will still be the case—every voter in the Republic of South Africa to be able to cast a vote to constitute this Parliament. Surely this is one of the most important aims of the legislation. A second very important aim is that it does not merely give the people the right to vote. It also makes it easier for them. This is so particularly since the party affiliation of a candidate must now also be effected on a ballot paper. In this way we are in fact assisting the voters even as regards where they must draw their cross. We are making it much easier for the people with physical deficiencies or health problems and those whose hours of work are such that they are unable to reach the voting booths at a specific time in order to vote. And despite what the hon. Opposition has said, we are also making it easier for parties and individuals to appoint candidates and for people to be candidates, even though it is only through the establishment of a specific order in regard to the registration of parties. Another aim of the legislation is that people can vote without improper interference. I am sure the hon. member for Durban Central will agree with me in this regard. Particularly where the NRP is engaged in a struggle with the PFP, the legislation seeks to prevent the PFP from attracting votes away from the NRP improperly or too quickly by means of pretty girls and well-dressed men. Furthermore it is also an aim of the legislation to afford individuals the right to put themselves forward as candidates. This legislation does not take away that right.
In this regard I should like to single out three important aspects. In the first place, the name of the party must be entered alongside that of the candidate on the ballot paper. The hon. member for Vanderbijlpark referred to the case of the two De Villiers. We also have many Bothas and Van der Merwes in this country and since there are a number of Van der Merwes who tend to the left of the political spectrum, it is not impossible that up to two or three Van der Merwes could stand in certain constituencies. In such a case one would have to indicate which of them was well-bred and which not. The second aspect to which I want to refer relates to clause 9, which provides that 300 signatures must be obtained when a party does not have a representative in Parliament or a provincial council. The hon. Opposition objected to this provision. In the course of his argument the hon. member for Sandton made use of terminology which, in the South Africa situation, must be viewed very sceptically. The hon. member said, inter alia: “We banned people,” meaning that we are prohibiting people from standing. I want to tell that hon. member that responsibility is one of the prerequisites of a political party. The requirement that it must be possible to obtain 300 votes is not aimed at stopping the normal, hard-working individual, party or new party from standing for election. There are other reasons, too, for this. One of the reasons is the so-called “cranks” that we get in modern life as well. The legislation therefore also provides for this type of case. The hon. member went on to intimate that we were infringing on the principle of secrecy. However, that is untrue, because when one is canvassing one surely discloses one’s affiliation in a certain sense, and also when the people come to vote, identity is sometimes disclosed. Independents are not being prohibited, and when a candidate stands as an independent he must at least live and work in his specific constituency, and then he also has many people, in the nature of the matter, who help him in his election campaign. In my opinion there is sufficient time for anyone to obtain these 300 signatures. Nor do I believe that the provision as to when an opinion poll may take place and when not, infringes in any way on democracy. Rather it affords the parties the opportunity to carry out their own surveys. Perhaps it derogates somewhat from the increasing power of the Pressocracy in South Africa.
Mr. Speaker, hon. members were in a humorous mood this afternoon and for the most part did not advance serious arguments, and consequently I myself will also be very brief. In the first instance, I owe the hon. member for Sandton a reply. During the Committee Stage he asked me, among other things, whether the voters living in the former homelands would be a factor in the loading and deloading of constituencies to which they would be added. When I replied to this in the affirmative the hon. member followed that up with a further question which I was unable to understand at that stage, since I did not hear the word he used. His question was apparently how the voters living in the former homelands would affect the so-called “area constituencies”. I then promised him that I would give him the details later. Section 43(3) of the Constitution of the Republic of South Africa provides, in the first instance, that a delimitation commission may load or deload a constituency up to 15%, viz. 15% more or less than the quota calculated by dividing the total number of voters in the Republic by the 165 constituencies and, secondly, that if a constituency has a surface area greater than 125 000 square km, the delimitation commission can reduce the number of voters by up to 70% of the quota. These so-called “area constituencies” can therefore be deloaded by up to 30%. In terms of the provision of the Electoral Act concerned, as now amended, all voters living in the former homelands register as voters with the magistrate’s office in the Republic situated closest to their respective dwellings in the homelands mentioned, as the crow flies.
Depending on the number of voters registered at the various magistrate’s offices in this way, voters living in the former homelands may be taken into account by a delimitation commission, in the first place, in regard to the 15% loading and deloading of constituencies and in the second place, by the 30% deloading in the case of area constituencies, and can influence the delimitation of constituencies in this way.
For the rest, I just want to reply briefly to the arguments advanced. A fuss has been made throughout by the Opposition, namely by the hon. member for Sandton, the hon. member for Durban Central and the hon. member for Houghton, about how we are allegedly doing violence to the democratic principle, particularly in regard to the provision relating to the 300 signatures. The hon. member for Houghton will excuse me if I do not dwell for long on her argument. She entered the debate because she was spoiling for a fight. The position is, quite simply, that if a party has no member in the House of Assembly, or if such a party does not have a single member in any of the provincial councils, the following procedure is required of such a party. The candidate of the party concerned must obtain 300 signatures to begin with. Once he has obtained these 300 signatures under the amendment Bill and has made the grade as a candidate, he opens the way for all future candidates of his party, as long as he remains an elected member of the Assembly or of any of the provincial councils. With all respect, I cannot see how the democratic principle is being seriously violated in this way.
Then, too, there is the issue of opinion polls. The hon. member for Sandton has now once again made a big fuss about this, saying that nowadays opinion polls are so scientific and reliable. He objected to our wanting to keep this wonderful, reliable medium out of our politics. The joke is this: The hon. member’s own leader proved how unreliable an opinion poll was with regard to the PFP. The hon. the Leader of the Opposition himself told us that the opinion poll in regard to Pinelands was wrong. The opinion poll predicted that the PFP would not win this election in Pinelands, but nevertheless the PFP candidate did win the seat. The hon. member heard from his own leader that an opinion poll is not necessarily reliable.
However, I want to repeat that I do not wish to disparage these people. I am sure that many of these organizations are honest and reliable and operate scientifically. However, there is not yet any discipline controlling these people. They can certainly be people who put themselves forward as an organization carrying out opinion polls, and that do not operate scientifically. Why should those people be permitted to influence an election in the critical few days before an election? However, the question now occurs to me: If hon. members of the Opposition are really so concerned about the issue of opinion polls, why are the people who are themselves concerned with opinion polls, not taking the matter so seriously? I have before me the Gazette notice in terms of which this commission of inquiry was originally appointed. It is dated 13 September 1974. The hon. member for Durban Point may know more about it than I do, but I do not believe—and I have no information to that effect—that any of them has come to the fore and said that they want to give evidence in regard to the matter. It might be said that at that stage they did not know that opinion polls were at issue, although at that stage they were already a matter of current interest. [Interjections.] I want to tell the hon. the Leader of the Opposition that when the report of the Select Committee was published in June 1976 it was surely a current matter, because at that stage an important recommendation was made that opinion polls should be prohibited. Even at that stage these people did not come forward. The first word my department had from them was when they issued this pamphlet dated 7 June 1978, a pamphlet in which they objected to the prohibition on opinion polls for the first time as far as my department is aware. Unfortunately I do not have it with me. However, it was only a few days ago that I heard for the first time a single representative objection raised by the Press. Hon. members must excuse me if I say that this is not a matter of particular importance among the people concerned with opinion polls themselves, that it is not a serious matter that opinion polls be prohibited for such a brief period, and that it is quite fair that in that brief time, parties be permitted to play their game according to political rules alone.
I want to thank the hon. member for Vanderbijlpark for having referred so good-humouredly to the essential and practical changes in the legislation. Apart from the few contentious things with which hon. members on the other side of the House are dissatisfied, they will concede that we have introduced a very practical and useful measure with which to conduct elections. I also want to repeat my promise, namely that since we do not have more time during this session to do this, the Act will be administratively consolidated in the recess and that we shall set to work and again, as in the distant past issue a proper guide to hon. members. Hon. members must just bear in mind that we do not accept responsibility for the factual statements in the guide and hon. members must therefore consult the Act itself if they are in doubt as to a specific clause or a specific interpretation of the Act.
I think I have already replied to the hon. member for Durban Central. However, I just want to add that I have not been stubborn. I even accepted two amendments he moved. Indeed, I accepted many other amendments and I also went out of my way to be as reasonable and fair as possible.
I want to thank the hon. member for Meyerton for having pointed out that with a view to the number of votes which some candidates have obtained in the course of elections, it is necessary to do something about people who want to make a farce of the whole democratic system of elections.
Then, too, I want to thank the hon. member for Rissik for the assistance he consistently gave me and is still giving me as chairman of the study group in question, and for having put the issue of the 300 signatures in the right perspective.
Finally, before I resume my seat, I want to thank hon. members on both sides of the House for their constructive debate on the Bill.
Question put,
As fewer than 15 members (viz. Mr. J. D. du P. Basson, Dr. A. L. Boraine, Mr. D. J. Dalling, Dr. Z. J. de Beer, Messrs. I. F. A. de Villiers, C. W. Eglin, R. J. Lorimer, J. F. Marais, P. A. Myburgh, Mrs. H. Suzman, Messrs. R. A. F. Swart, S. S. van der Merwe and A. B. Widman) appeared on one side,
Question declared agreed to.
Bill read a Third Time.
Mr. Speaker, as was the case with the National Welfare Bill, we have experienced a total overreaction by the Official Opposition also to this Bill. From hon. members of the NRP we have had a responsible reaction in the best traditions of Parliament. Because they agree with the principles of the Bill, the principles of control over collections and contributions, of accountability and of disclosure, they support the Second Reading of the Bill and reserve their right to argue the details at Committee Stage.
However, what do we get from the Official Opposition? We get from them an almost scornful negation of the parliamentary tradition, resulting in a wasting of time and, consequently, of public money. [Interjections.] The hon. member for Bryanston piously stated the following—
He goes on to say—
Lastly, he says—
Having said that, the hon. member, on behalf of his party, opposed the Second Reading of the Bill. The PFP even resorted to the most extreme form of objection by moving that the Bill be read “this day six months”. [Interjections.] I believe that that is an insult to Parliament However, we are not surprised. We know, and we are used to it, that the PFP wants to solve the problems of South Africa outside this House and not inside the House. [Interjections.]
Let us now deal with their main objections to the Bill. Strong objection has been raised to the control envisaged in the Bill being extended to contributions received from overseas. I want to state the good reasons for the inclusion in the Bill of clause 1(2). Firstly, it would be absurd to allow the receipt of contributions from outside South Africa for any purpose in respect of which we would not be prepared to authorize collection within South Africa. Therefore it is the obvious thing to provide that contributions from outside South Africa must be subject to the same control as contributions collected inside South Africa. It is a logical extension. Secondly, malpractice is not limited to collection only, but often occurs in the appropriation of contributions. That being so, it stands to reason that the public of South Africa has as much interest in contributions coming from abroad as in contributions collected inside South Africa. Thirdly, we know that large amounts coming from abroad are actually intended to ensure our destruction, and it would be irresponsible not to use all means at our disposal to prevent such moneys from being used. If the hon. member for Umbilo, as an anti-Nationalist who is strongly opposed to this Government, but who is a loyal South African, can understand this simple truth, why can the hon. member for Bryanston or the hon. member for Pinelands not understand it?
The hon. member for Bryanston wants to know whether the Government will use the Bill against organizations of which it disapproves, and whether the contributions from outside the Republic for legitimate purposes will be prohibited in the case, for example, of the defence of people in our courts. When one analyses this question of the hon. member for Bryanston, it shows how venomous, bitter and cynical he has become. Since when is the test for steps against individuals and organizations the approval or disapproval of the Government? That, Sir, is an untruth in the fullest sense of the word. The likes or the dislikes of the Government are totally irrelevant. Had that been relevant, I can assure the hon. members of the PFP that they would not exist, because we totally disapprove of them. The sole test is the law, and not the wishes of the Government. The test is the law as promulgated and passed by this Parliament, and the test as applied by the law is the security of the State, not the security of the Government. The hon. member’s question furthermore suggests that our legal system is inadequate and unfair when it comes to the defence of an accused. He should consult with the hon. member for Johannesburg North, who will inform him to what lengths we go to ensure the proper defence of all accused in the case of serious crimes.
Having said that, I want to emphasize, also for the benefit of the hon. member for Pinelands, that clause 1(2) has no specific or secret purpose. It merely ensures that contributions from outside the Republic will be dealt with in the same way as contributions from inside the Republic. For instance, if there is credible evidence of misappropriation or of appropriation for illegal purposes, then steps can and will be taken. Furthermore, to avoid any misunderstanding, I would like to add that the exemptions contained in clause 33 will apply equally to contributions raised in the Republic and from outside the Republic. Likewise, all bona fide commercial transactions are excluded. There is therefore no question of a witch-hunt, which is apparently what is worrying hon. members, including the hon. member for Durban North.
*The next allegation from that side of the House was that the Black, the Brown and the Indian people had not been consulted in connection with this legislation. That is the second blatant untruth. The hon. member said in his typically emotional way—
But what are the facts in connection with this allegation? The hon. members know that there have been commissions of inquiry. They know about the Van Rooyen commission of inquiry. The non-Whites had exactly the same opportunity as anyone else of giving evidence before that commission. Indeed, they gave evidence before both commissions. They had the same opportunity when these Bills were published for comment, and they did indeed comment. I therefore say that it is an untruth which has been recklessly tossed into this debate. It harms South Africa’s cause. We charge them with that, and then they resent it if we reproach them. Let us look at specific cases, such as the two we have already had. The impression has erroneously been created that this side of the House does not consult the other population groups at all and, secondly, that we ban or restrict organizations for the sake of the safety of the NP Government, and not for the sake of the security of South Africa.
They have, moreover, advocated a board which should exercise the functions of the Director. I do not wish to comment on that now. There is an amendment in this connection, and it is therefore a matter to be discussed during the Committee Stage. However, there is something which I should like to mention briefly. A board does exist in terms of existing welfare legislation. It is called a commission. However, it has given rise to serious problems in practice. There were delays, not because the members of the commission had not done good work or had not done their best, but because a board is simply not functional. It consists of people who have to do the work on a part-time basis, and it does not have the administrative mobility which a Director would have and which would ensure quick decisions.
I now also want to say a few things about the office of the Director. He dare not act arbitrarily, and the PFP knows it, too. Nevertheless they say he is going to act arbitrarily.
His powers are very wide.
Surely they know that his decisions are subject to the right of appeal. Surely that is why there is a built-in control if he were to act purely arbitrarily, or do they now want to suggest again that we have such poor magistrates with 10 years’ experience, that a magistrate together with his two appeal committee members will deliberately approve of arbitrary action by the Director? Do they again want to make the sort of allegation which the hon. member for Houghton made about other legislation? He is, furthermore, subject to certain administrative checks. In respect of his wide powers in terms of the inspection clause, for example, he is subject to ministerial control and he may not do something of that nature without ministerial approval. Once again, therefore, it is not a question of there simply being unchecked, wide, arbitrary powers!
The question of dual registration was mentioned again, and also of appeal to the court. That was so fully debated in connection with previous legislation, and I am sure we are going to speak about it again during the Committee Stage. I should therefore not like to enlarge on that now.
I believe that we can discuss various other clauses much more profitably during the Committee Stage and I should therefore like to confine my attention briefly to certain specific questions that were put to me and also to a few clauses that were mentioned.
One specific matter which was scrutinized very thoroughly, was the provisions of clause 29, in which wide powers are being conferred upon a Minister in connection with imposing a prohibition on the collection of contributions for a particular purpose or by a particular organization; and also clause 30, which regulates inspections by the Director and his staff. Several speakers on this side of the House have pointed out the necessity of these provisions and have motivated them, and we have not had arguments that refuted factual contentions from this side.
Clause 29 is not simply the chimera of a power-drunk official or Minister. It is the result of a recommendation by a commission of inquiry, the Van Rooyen Commission. Hon. members should have a look at paragraph 4.48, and they will see that the essence of this clause was recommended by the Van Rooyen Commission.
It has been extended a little and is not in that precise form, but there were good reasons for it in the recommendation of a commission which investigated the entire field and collected evidence in a scientific way. The same arguments which I advanced in connection with clause 1(2), are also applicable to clause 29. When it comes to the subversion of authority in South Africa, the prevention of revolution and the security of the State, it must be possible to act quickly and effectively.
You have all the laws you need in that connection.
We make no apology for the fact that we are asking Parliament for powers which will enable us to safeguard the interests of South Africa at a juncture at which subversion is the order of the day and at which a serious onslaught is being made on the security of the State.
Give us a single example that … [Interjections.]
The hon. member for Green Point says we must give him an example. When we discuss the relevant clause in the Committee Stage, I shall give him six examples of money which entered the country and which was spent on subversive activities.
That is not what I asked.
What examples do you want, then?
Mr. Speaker, may I just ask the hon. the Minister to give us one single example of where money was spent on subversive activities and where there was no other legislation in terms of which action could be taken?
In respect of State security, there is an entire group of Acts of which he as well as I are aware. I do not dispute that. However, here we are dealing with legislation to regulate the flow of money raised at home or abroad. It is only logical that we will take certain powers in this connection. Let me just refer to other legislation in this connection. There is legislation in connection with control of publications. Now, there are many security laws in terms of which illegal reading matter can also be controlled. However, provision is also made in the legislation on the control of publications—although it is not the main object of the legislation—that when certain publications are discovered the matter may be dealt with in terms of that legislation. For that reason, the relevant provision in this Bill is a supplementary provision which is being inserted in the legislation where it belongs. In essence, however, the legislation is concerned with the whole wide field of fund-raising. It is not essentially security legislation. It is, in essence, regulating legislation, but in this process of regulation, we are also going to pinpoint situations which have security implications. That is, however, not the only object of clause 29. That clause is also aimed at fraud. The hon. member argued in his speech, and has now also again insinuated, that we already have legislation against fraud. Should we not try to prevent fraud, then?
Of course!
Should we not be able to clamp down, then, if we see that certain people are committing fraud? Should we not, in that case, prevent the funds which are collected from the public, being misappropriated?
Do we have to wait, in such a case, until we can prove that there has been an attempt to commit an offence or that the offence has already been committed, and only then clamp down on those people? That is an old argument. If the hon. member reads other previous debates, he will see that we have already mutually agreed that prevention is better than cure, as the proverb has it.
The wide powers may also be necessary to protect the public from fraud, as I have just told the hon. member, and they are also necessary to ensure rapid action. I want to state categorically that the necessity of clause 29 lies therein that it covers the entire field, and not only the field of State security. However, if we have to apply it for the sake of State security, we shall not hesitate to do so.
The hon. member for Durban North has asked me for an assurance. I gladly give it to him. Nobody who honestly and openly collects funds for a lawful purpose, will have any reason to fear anything in this Bill. I trust that the hon. member is satisfied with that. He will be able to quote me if this is applied in a different way after it has become law.
I also want to point out that moneys affected by the commission in clause 29, will not be confiscated, but that in terms of the legislation, it will be returned to those who contributed it, if this is at all practicable. The clause is not at all as radical as it is made out to be. The money is returned, and it therefore concerns the closing of a channel which might give rise to fraud or which might undermine the security of the State. If we want to go further with radical action, it will be done in terms of the other security legislation. In this case, it concerns the closing of a door which can cause the public to suffer injury or which may endanger the safety of the State.
The powers of inspection referred to in the next clause, are nothing new in our legislation. I can—and if it is necessary, I shall— in the Committee Stage, refer to approximately 15 instances where more or less similar powers are conferred in other legislation. In some cases, it is done in virtually identical provisions. In practice, some of these provisions have already been on the Statute Book for years, and we never receive any complaints from leaders of the Official Opposition about their application. It will also be the case here, because it will be applied fairly and correctly and because the provision is merely there because quick action is sometimes necessary. In any case, there is the additional control which I have referred to, namely that ministerial approval is necessary for such an inspection.
Now I want to come back to the hon. member for Pinelands. He insinuated that I had steered clear of the essence of the Bill. However, the opposite is true. The PFP wrested the Bill out of context, ignored the principles involved, and elevated certain supplementary provisions to be the essence of the legislation.
Not true.
I want to quote an example of how the hon. member tried to cast suspicion on my motivation. He said (Hansard, 8 June 1978)—
He went further and said—
†Mr. Speaker, I did not say that there were Western countries with very similar legislation. I did not say that. Even the hon. member’s own quotation from my speech proves beyond any doubt that he is completely misconstruing what I, in fact, said. I said the following—
Nowhere, Mr. Speaker, did I allege that other countries have similar legislation. However, they do have legislation.
That was the intent of your words.
But they do have legislation. He referred to the Van Rooyen Report. He alleged that he made a study of it and he used the words “only Austria”. I want to refer him to certain pages of the Van Rooyen Report. On page 291 the United States of America is dealt with and it is stated there that a first matter of importance is that the Federal Government has instituted certain measures for the control of voluntary financial contributions collected from the public.
Moreover, it is also stated there that in addition to the control measures at Federal level each state is autonomous in this respect and has its own legislation. On page 298 of the report the state of Ohio is dealt with whereas the state of Los Angeles is dealt with on page 300. Switzerland is dealt with on page 319. France is also dealt with on that page, and it appears that every organization in that country which wants to collect money from the public must apply for a permit from the ministery under which it falls. Yet that hon. member said “only Austria”.
No, I said only Austria had similar legislation.
Page 321 of the report refers to Belgium and it appears that in that country the permission of the municipal council, the first level of government, is necessary. At the second level of government the permission of the provincial authority is necessary, whereas royal permission is needed at the third level. Yet the hon. member said “only Austria”. Page 324 of the report refers to West Germany. In Germany there is control, including registration, of organizations wishing to collect money, at the Lander and the Federal level. Yet the hon. member said “only Austria”. Therefore it is not at all a question of only America having measures of control. I have now quoted to the hon. member from the very report to which he referred, to prove that many other countries also have control.
You used the words “similar to this legislation”.
I did not use the words “similar to this legislation”. If the hon. member can point those words out in my Second Reading speech I will withdraw it. If he cannot do so, however, I expect an apology. [Interjections.] One might well ask: What did the hon. member try to achieve by his allegation that I created the wrong impression? If there was any misrepresentation, I was not responsible for it. I shall leave the matter there.
The hon. member also wanted to know why we do not define the word “public”. I think it requires a very brave man to define the word “public”. The word must be interpreted against the background of the legislation in which it is used. In this regard I want to refer the hon. member to the case of the State v. Rossouw, 1968 (4) where the following was said about this word on page 385—
I think the hon. member can gather from that quotation alone how difficult it will be to define the word. I would also like to refer the hon. member—I shall not quote from it—to the case of the Western Province Agricultural Society, 1911 A.D., on page 283, where he will also find some comment on the difficulty of defining this word. The interpretation of the word “public” will therefore have to take place against the background of the Bill and the matter which is sought to be controlled by the provisions of the Bill. The particular circumstances in this respect will also have to be taken into account. The word must therefore be read in its context, and I do not think a definition is wise or necessary.
The hon. member for Pinelands also said the following—
I think the hon. member for Pinelands only read clause 12 and clause 29 and not the rest of the Bill. The Bill, in no way whatsoever, prohibits a donor from donating money. If the Ford Foundation acts as a donor, it certainly does not require any authority from the director or from the Government, nor can its books be inspected. What is necessary, however, is that the fund-raising organization which receives the contributions, must register, unless it is covered by the provisions of clause 33 of the Bill. The hon. member also wanted to know from me whether a report will be made to Parliament. I do not think the director’s activities need a special or separate report, but I can give him the assurance that it will be included in the department’s usual annual report.
In the last instance the hon. member wanted to know why it was necessary for the director to have more power than the police. Once again it is one of those suggestions full of secret motives and full of innuendoes, as if the Government is trying to slip something into our legislation, something which entails vast powers.
Why is a search warrant necessary?
What are the facts? In certain circumstances the police have the power of entering without warrant. What the hon. member said is therefore untrue. In this connection I refer the hon. member to section 24 of the Criminal Procedure Act. What he must also remember, is that ministerial consent is required for this search in terms of clause 30.
I think the other matters raised by the hon. member for Pinelands can be dealt with in the Committee Stage.
Mr. Speaker, may I ask the hon. the Minister a question? I did ask the hon. the Minister if he would respond to two issues in his reply. One issue has to do with the question of schools—because this would help us to draw up an amendment— and the second with the hon. the Minister’s attitude towards bona fide religious organizations. Could the hon. the Minister kindly reply to these issues now?
As the hon. member knows, there is an exemption for religious organizations in clause 33. The full effect of this provision can be discussed when clause 33 is put in the Committee Stage. Furthermore, there is an exemption for schools in clause 33, which apparently does not include private schools. I also received from other sources representations about private schools and am considering it, but I doubt whether I will be able to grant a blanket exemption to private schools. However, I am still considering the matter, and when we come to this provision in the Committee Stage we can discuss it further.
The hon. member for Hillbrow in his usual way fired a barrage of questions at me. I shall try to reply to most of them. He wanted to know why we withdrew the first Bill and then reintroduced this Bill. The hon. member for Pinelands also made a show of this issue, as if there were something sinister about it. The answer is plain and simple: We did so because the parliamentary official in charge required us to do so. [Interjections.] The hon. member for Hillbrow further suggested that the Bill would have a detrimental effect on fund-raising in general and on fund-raising for Blacks and Coloureds in particular. There is no provision in the Bill which provides for differentiation between groups or individuals on the basis of race and colour. As long as the envisaged formalities are complied with, any authorized person can collect for any lawful purpose from any person of his choice, and he can do so with the added advantage that he can assure contributors of his bona fides by proving registration of his organization as a fund-raising organization. I predict that registration in terms of the Bill will in practice be as big an asset to organizations and fund-raisers as the old W.O. number was and still is. There is no question of registration having a negative effect on the collection of funds. On the contrary. In my opinion it is going to have a positive effect.
The Bill resembles the existing provisions in welfare legislation concerning fund-raising in many respects. As a matter of fact, some of the clauses which are now being opposed by these hon. members and with regard to which questions are raised, closely resemble existing legislation. The hon. member for Hillbrow expressed concern about clauses 27 and 31. He shall find in the existing welfare legislation, which has been applied in practice now for many years, clauses with almost exactly the same wording. They worked fine in practice, and therefore they are again included in this Bill. The important difference between this Bill and existing legislation is that all fund-raising will now be controlled instead of only fund-raising for welfare purposes.
The hon. member for Hillbrow objected to this. I want to ask him: Why should welfare organizations be singled out for control, while other bodies collecting for sport or other purposes are not controlled? Why should welfare organizations, who are doing a good and important job, be subject to stringent control and the rest of the fund-raising organizations run free? I cannot see any logic in the hon. member’s argument in this regard.
The hon. member also expressed his worry about the fate of what he referred to as “service organizations”, such as the Lions and the Community Chest, and then made the astounding statement that they would no longer be able to collect funds and donate it to good causes, such as the blind. Where on earth does he get that?
Unless they are registered.
The whole purpose of the Bill is to regulate fund-collecting and not to stop it. The hon. member is quite correct when he says that they will not be able to collect funds unless they are registered. However, they only have to register once during their whole existence. What is wrong with registration? We have had registration of welfare organizations all along, and it worked perfectly fine in practice apart from the fact that it took a bit long for them to become registered because their registration had to be approved by a board, a board such as the hon. members opposite now want. In this Bill we are creating a director, who will be able to deal with it efficiently and quickly.
Mr. Speaker, as I understand it, the whole gist of the Van Rooyen report is to control organizations which regularly collect funds. I want to put it to the hon. the Minister that some people or organizations collect funds on a casual basis.
Mr. Speaker, if they collect funds regularly, they must register as a fund-raising organization. If they collect funds irregularly, for instance once every five years, they need not register, and all they have to do is to obtain a simple special authority to collect funds for just one occasion, an authority which will be valid for three or six months, a period in which they can complete their fund-raising. The Bill therefore amply provides for the two types of organizations.
Lastly, the hon. member referred to secret organizations and specifically mentioned the Freemasons and the Broederbond in this regard. As long as an organization does not go public and limits its fund-raising to its own members, it is exempted in terms of clause 33(1)(c). Why did the hon. member not read the Bill? Why did he ask me questions to which there are such obvious answers?
*The hon. member for Port Elizabeth Central has requested that there should be consultation between the director and the National Welfare Council. I want to tell him that there will certainly be consultation, but at an administrative and informal level, because there is no formal connection between the two pieces of legislation which are respectively applicable to them. There is a separation of functions. Fund-raising does not fall under the National Welfare Act, and welfare work, in turn, does not fall under this Bill. For that reason, it will be done informally and at an administrative level and there will not be a liaison body to promote further bureaucracy, as the Official Opposition says.
He also asked whether a local organization could raise funds if a disaster were to occur. Such organizations may most certainly do so, but subject to the authority of the Disaster Relief Board. As far as the other funds are concerned, too, members of the public are always welcome to offer their services. It is only logical that in such a case the local community should take the lead, but they must also, certainly, comply with the requirements and obtain permission from the control board concerned.
He was also concerned about the auditing of small statements and about the complicated process of an audited statement. If he goes through the Treasury and Audit Act, which is referred to in the Bill, he will find the solution to his problem, namely that in specific circumstances provision is also made for statements which are not fully audited. However, I shall again specifically look into that and we can discuss it in detail during the Committee Stage.
Mr. Speaker, the hon. the Minister quickly switched over to the speech of the hon. member for Port Elizabeth Central. I spent a considerable portion of my speech trying to point out the difficulty experienced by service organizations such as the Rotary Club, Round Table, the Lions Club and certain other organizations. Does the hon. the Minister not see the difficulty they will experience in regard to registration and collection of funds for charity?
Mr. Speaker, the hon. member persists in saying that it is an aggravation of the conditions of an organization and a burden on their shoulders if they are required to register. We shall just have to agree to differ on this.
Then you agree that they will all have to register?
All organizations which raise funds from the public and which are not exempted in terms of clause 33, or which have not obtained my special exemption in terms of section 33(h), must register. However, registration is merely a matter of filling in a form and obtaining a licence. Business undertakings must obtain a licence every year to do business. Every company, even if it has no turnover whatsoever, must send in statements every year. [Interjections.] Even if it is a service organization, surely it can also spend money incorrectly. Therefore control has to be exercised, because it is public funds which are involved after all. It concerns disclosure and control to ensure that funds are being utilized for the purpose for which they were raised, that the money is being handled honestly, and that the public knows, as is its perfect right to know, what is happening to their money. If those hon. gentlemen do not agree with that, they are untrue to their own liberal philosophy, because they always talk about the right of the public to know, and about other rights of the public and of the individual. In this case, we are concerned with the protection of the rights of people who donate money. This money also has to be controlled. We are concerned with the right of the general public to know how all the money which they have contributed to a specific project, has been applied, and whether it has been properly applied.
Where did it go wrong?
It does not only concern organizations which have gone wrong. I shall come back to that just now.
I want to conclude. The amendment Bill does not seek to inhibit fund-raising. I give the assurance that the regulations will be published for comment so that people can also still bring their influence to bear to ensure that the regulations are a well-finished product. The legislation will be applied in such a manner that red tape will be confined to a minimum. In this connection, I want to give the hon. member for South Coast and the hon. member for Gezina the assurance that I regard it as a challenge to see to it that when this legislation becomes law, it will be applied in such a manner in practice that from an organizational point of view it will function smoothly and it will be applied firmly and quickly. Delays must be eliminated at all costs. It is also my intention to delegate the powers of the director. As a starting point, I intend delegating them to a great extent to all offices of the Department of Social Welfare and Pensions throughout South Africa, so that his office will be nearer and more accessible to communities on a regional basis. There have been representations to the effect that we should delegate even further. We shall look into that, but I believe that for the first few years, we must first get the legislation into operation. We can again look at further delegation later on to make it still easier and still more accessible to every community. However, I do not want to commit myself in this connection.
This legislation does not impose excessively heavy burdens on organization which raise funds. Registration takes place once only, except in the case of special authority, but that again makes it easier for the organization which does not raise funds on a regular basis. It is necessary to fill in a form only once. Thereafter, the only obligations are, in general, written authority to collectors, and this is being done now, too, at present in any case.
In the second place, there is the annual submission of a properly audited statement No organization need regard that as a burden. Do hon. members want to tell me that in this age, there are still organizations which do not have proper bookkeeping? If there are, surely they ought now to be compelled to apply proper bookkeeping. It is as simple as that Fortunately, the Official Opposition may rest assured—they are also exempt from this legislation. The hon. member for Houghton can therefore continue with her secret fund.
I want to make the point, and I conclude, that registration in terms of this Fund-raising Bill creates an opportunity for every organization to look every contributor to its funds in the face and to say: “I am collecting for a lawful purpose and there will be a report about what we are doing with your money. It is proved by my registration in terms of this Act, and you can therefore give me money without worry and with peace of mind.” I therefore want to predict that the application of this legislation will be a stimulant to the contribution of funds by the public to organizations which exert themselves for lawful purposes. I believe that in conjunction with the National Welfare Bill, this Bill will ensure that we enter a new era in welfare work specifically, and as far as this Bill is concerned, in the raising and the handling of public funds. The PFP will stand branded as a result of their attitude in this debate, that they want money to be administered in dark little rooms and that they do not want the spotlight to fall on the handling of funds often raised under the pretext that it is for welfare purposes.
Question put: That the word “now” stand part of the Question,
Upon which the House divided.
As fewer than 15 members (viz. Mr. J. D. du P. Basson, Dr. A. L. Boraine, Mr. D. J. Dalling, Dr. Z. J. de Beer, Messrs. I. F. A. de Villiers, C. W. Eglin, R. J. Lorimer, J. F. Marais, P. A. Myburgh, Mrs. H. Suzman, Messrs. R. A. F. Swart, S. S. van der Merwe and A. B. Widman) appeared on one side,
Question declared affirmed and amendment dropped.
Bill read a Second Time.
Mr. Speaker, I move—
In consultation with the Department of Social Welfare and Pensions, an investigation was instituted into a new pension scheme which would create a better dispensation for judges and their dependants. Bearing in mind the position which judges occupy in society it was felt that it would not be inappropriate if they were enabled, as far as possible, to maintain the standard of living they had been accustomed to after their retirement. The measure now before you contains a proposed scheme based on the following principles:
- 1. That a pension equal to his salary upon retirement be paid to a judge if he retires after 15 years of service or more at the age of 70 years or as a result of infirmity or for any other sufficient reason, with a pro rata reduction for a shorter period of service.
- 2. That a pension equal to 80% of his salary plus 4% for each year of service after 65 years of age shall be paid to a judge upon retirement at the age of 65 years or thereafter, provided he has served at least eight years, also according to a formula of 1/15 of his salary for each year of service.
- 3. That a minimum pension of 40% of his salary be paid to a judge throughout.
- 4. That the widow of a judge be paid half of the pension which her husband would have received.
- 5. That judges, as is the case at present, do not contribute to their own pensions and that the contribution made in respect of widows’ pensions be abolished.
It is also proposed that the pensions payable to judges which have already retired and the widows of such judges, be raised by 10%. They were not included in the recent 10% increase in civil pensions.
If the Bill is adopted, the improved benefits will be valid with retrospective effect from 1 January 1978. There can be no doubt that the new scheme will constitute exceptionally great benefits for judges and their dependants, and it should be regarded as an expression of our great appreciation for the excellent and extremely important work which our judges are doing in the interests of our country. It is trusted that the measure will lead to greater peace of mind among our judges in respect of their old age and of their widows if they should die.
Mr. Speaker, it is with pleasure that we on this side of the House support this the first of two Bills which affect the retirement benefits and salaries and remuneration of the South African judiciary. If you would allow me, I should like to say just one or two words about our South African Bench. As we all know, the Republic is not short of its critics. It is not short of ill-wishers and of enemies, most of whom have long ago ceased to require any excuse, flimsy or otherwise, before inflicting whatever damage they can upon South Africa. Almost every aspect of South African life has and does regularly come under attack. Our laws, our standards, our bona fides, our systems and traditions, even our administrators and officials are all targets.
It is not relevant to this debate to discuss the reasons for this world hostility nor is it apposite here today in this discussion to assess the success or failure of this unremitting campaign. I should like to say, however, that there is one area in which the attack on South Africa has failed dismally, namely the area connected with the Supreme Court Bench. Attempts to discredit this body of jurists, to bring their impartiality into doubt, have fallen on barren grounds. I think the scattered seeds of doubt have withered and died, and properly so.
It is interesting to ask oneself why in this field has the attack on South Africa failed completely. I think it can be answered by saying that this attack has failed because it is common knowledge both within South Africa and outside that the impartiality and the standards of the South African Bench are unimpeachable. This impartiality is respected by the outside world for several reasons. Firstly, because judges, after their appointment, are independent of the executive; and secondly, because in the past judges of South Africa have always been of a very high standard and calibre. They have been drawn from the Bar, they are senior barristers, in fact, people of unparallelled knowledge and expertise. The South African Bench stands between us and, what I would call, total world rejection of the South African legal system.
Therefore, because it is our wish and the wish of all South Africans, I think, to stand fast on the integrity of our Bench and to move towards its improvement, should it be possible, we would support any measure which improves working conditions, salaries and pensions of judges and judicial officers. These are especially welcome because financial considerations, we believe, should not prevent suitable jurists from accepting appointment to the Bench.
Even with the improved pensions, as evidenced in this Bill, and the improved salaries, provision for which will be made in a subsequent Bill, I believe that the senior barristers, who accept appointment to the Bench, in fact face certain financial loss upon acceptance of such appointments. What Parliament can do to remedy that situation, to mitigate that financial loss and to help ensure that top men continue to accept appointments, must be welcomed and supported. This Bill before us provides significant improvements, as adumbrated by the hon. the Minister, to the pensions for judges and their widows. I think it should therefore enjoy the support of both sides of this House.
There is, however, on further point I should like to mention, and that relates to the aspect of the contributions made, by the judges themselves, to their pensions. Contributions have been completely eliminated. They were, in fact, only there in a token capacity in the past, but now the pension schemes are totally non-contributory. I do query whether this is a correct principle because I believe that in all other branches of endeavour, for example in private companies and in the Government service, pension schemes do have a contributory factor. I therefore cannot see why the contributions, small as they may be, are being eliminated. With those words we should nevertheless like to support the Bill before us.
Mr. Speaker, we on this side naturally support this Bill gladly. This piece of legislation once formed part of an Act relating to the remuneration and pensions of judges. Those aspects are now separated in this and a subsequent piece of legislation. We believe that this is a good and necessary step being taken by the department and the hon. the Minister to separate the remuneration and pensions of judges so that they can be administered by two separate departments in future.
This specific Bill actually relates to the increase of the pensions of judges, an adjustment which has actually lagged behind other adjustments, and this emphasizes the Government’s view of and appreciation for the office of judge in South Africa. There is no doubt that the office of judge of the Supreme Court of South Africa is one of the most esteemed and respected offices in South Africa. The incumbents of this office often have to give judgment on questions of life and death. They also have to give judgments on the means of individuals. In his office the incumbent also acts as supreme guardian of a specific minor child at a given moment, since the Supreme Court in South Africa is the supreme guardian of minors in South Africa. These offices are usually filled from the ranks of practising senior advocates, and this means that people who have had experience of legal practice over many years, people who have proved themselves and who are indeed also schooled in the independent approach to a particular legal question.
I think it is as a result of this that the South African judiciary enjoys the world-wide esteem it does. The independence of South Africa’s courts is never questioned and the integrity of our judges is accepted as a matter of course. Members on this side of the House are jealous champions of these characteristics of the South African judiciary. We also agree that most judges make financial sacrifices when they are appointed to the judiciary. During recent years the trend has been to appoint younger judges, judges with young families. Therefore, in order to assist these judges, the hon. the Minister is coming forward with this legislation, legislation which we support wholeheartedly.
Mr. Speaker, it would ill become us in these benches to criticize this measure, particularly in view of the debate we had on judges’ remuneration on 21 February of this year, when I in fact drew attention to the question of the pensions of judges and their widows. We are very grateful that the hon. the Minister has seen fit to bring this legislation to the House.
It is not because you requested it.
I am not suggesting for a moment that the hon. the Minister has done this as a result of the plea I addressed to him at that time. I am simply making the point that this is something we are patently and obviously in favour of. We have stated so in this House on a previous occasion during this session and we want to say to the hon. the Minister that we greatly appreciate the fact that he has brought this Bill before the House. I do not in any shape or form want to try to turn this debate, through interjections or in any other way, into a political debate. It is without a doubt one of the more favourable factors in this country that our judges are seen to be a totally independent body of men who give their decisions in that light. We in these benches believe that the legislation before us will add to the independence these judges and, indeed, their widows will have. In terms of this legislation they will have a non-contributory pension fund and we believe that this is an advantage, particularly when, as the hon. member for Waterkloof has said, these men normally suffer financially when they become judges in relation to their income in their previous occupations. Therefore, we fully agree with the non-contributory factor. The second factor is that none of those concerned will receive a pension of less than 40% of his salary, no matter how short a time he may have served as a judge. I think that this also greatly adds to the measure of the particular judge’s independence. Consequently we fully support this measure.
Mr. Speaker, I have little to add to what the hon. member for Sandton said on our behalf on this Bill. There is just one fact I want to draw to the attention of the hon. the Minister. I know it is something he is aware of and I am hoping very much that I will be able to persuade him to do something about this matter, if not now in this Bill, then perhaps in the Other Place or at the earliest opportunity next session.
As the law stands at the present time—here I am striking a blow for men’s lib—the widower of a female judge gets no pension whatsoever. I have never understood the nationale behind this sort of obvious discrimination against men. I may say that it also applies to the widowers of female members of Parliament and Senators, which is another obvious case of discrimination against men. The female judges will have contributed over the years to their pensions and therefore their husbands or spouses are entitled to receive those pensions when they die. They should at least receive a portion of that pension as do the widows of judges who die. Equally, I want to state quite unequivocally that in my opinion the husbands of female MP’s or Senators should also be entitled to receive the pensions of their wives when they die. Indeed, the current position reflects a gross discrimination against men. I sincerely hope that the hon. the Minister will give this matter serious consideration when he makes adjustments in respect of the many instances of discrimination that exist, by introducing the Matrimonial Affairs Bill which I believe he is going to bring to the House next year following on the recommendations of the Law Commission. In this case I know there is only one female judge in South Africa at the moment. However, bearing in mind all the democratic principles the hon. member for Vanderbijlpark talked about earlier this afternoon and bearing in mind, too, the very able women members of the legal profession in South Africa, I have no doubt that in the future there will be more women judges in this country. Therefore, this matter requires attention now. I hope the hon. the Minister will give it his attention. All that is required is an amendment of the definition of widow to include widower. Such an amendment would resolve the whole matter.
Mr. Speaker, I want to thank hon. members for their support. I want to give the hon. member for Houghton the assurance that during the recess I shall have another look at the aspect she mentioned. Should we decide to do this, I shall bring it before the House as soon as possible next year, possibly together with other lesser amendments.
And lady MPs too?
Order! That is not quite relevant.
Question agreed to.
Bill read a Second Time.
Bill not committed.
Bill read a Third Time.
Mr. Speaker, I move—
Matters concerning the remuneration and pensions of judges are administered through one Act, the Judges’ Remuneration and Pensions Act, 1975, at the moment. However, these matters are administered by two separate departments, viz. remuneration by the Department of Justice and pensions by the Department of Social Welfare and Pensions. It has now been decided to propose certain adjustments in the pension scheme concerned. Therefore we are taking the opportunity, with a view to efficient administration, to deal with the matters mentioned in two separate Bills. The Bill at present before the House is therefore for the most part a re-enactment of the existing legislation as far as the salaries and allowances to judges and their travel and transport arrangements are concerned. Only the wording of the provision which authorizes the promulgation of regulations is being extended slightly to ensure that matters which must of necessity be arranged, are covered.
Mr. Speaker, the hon. the Minister and hon. members will be most pleased to hear, I am sure, that we in these benches will support this Bill in all its stages without further comment.
Question agreed to.
Bill read a Second Time.
Bill not committed.
Bill read a Third Time.
Mr. Speaker, I move—
The report of the Select Committee on the subject of this Bill was submitted to you on 1 June 1978. The mechanization of the functions in some of the deeds offices by means of the use of a computer, have now reached the stage where it has become essential to make provision, in the Deeds Registries Act, 1937, for keeping information up to date by means of a computer. The proposed amendment contained in clause 1, makes the use of computers possible without affecting the reliability of the registration system. This opportunity is being utilized to do away with certain requirements that regulations must be made concerning matters that affect only the internal administration of the deeds office and the procedure of the registration regulation board. This will prevent regulations having to be adapted unnecessarily whenever improved procedures are introduced. The Select Committee proposed two amendments that are supported.
Mr. Speaker, when we saw the Bill published for the first time, we felt that difficulties would be experienced as a result of its implementation, and we were therefore of the opinion that before computerizing the deeds registries, the matter should be referred to a Select Committee. In the circumstances we are very pleased that the hon. the Minister and hon. members opposite apparently felt the same about this. Before the matter was discussed in the House, it was accordingly referred to a Select Committee. The result of the findings of the Select Committee is that I am able to say today, on behalf of the Official Opposition, that we shall gladly support the Bill which is before us.
In the first place I would like to thank the hon. member for Potgietersrus, who was the chairman of the committee, for the manner in which he conducted the Select Committee, for the incisive way in which he had the evidence brought before us and the lengths to which he was prepared to go in order to see that the best evidence was brought before us so that we could reach a fair and correct decision. It was nice to work with the committee, and I think every member of the committee played a part in trying to achieve this.
The reason why we at first had reservations in respect of the Bill basically springs from the fact that man resists changes. Despite what hon. members on that side of the House might feel, I think we are all basically conservative in many of our ideas. This is particularly so where practitioners are used to a certain method of dealing with particular aspects. They are then often very slow to change their methods. To switch over to the electronic and the computer age is a somewhat revolutionary step, especially when one has been following certain methods for many years and throughout one’s entire practising life. Mr. I. T. M. Jones, the previous Registrar of Deeds at King William’s Town and a man with many years of experience, wrote an article in De Rebus Procuratoriis, the official journal of the Law Society of South Africa dealing with conveyancing and deeds registries. He had the following to say in issue No. 119 of November 1977—
This is the issue at stake. In terms of the provisions of the Bill before us, computerization of deeds registries will mean that the Chief Registrar of Deeds in South Africa will elect which deeds registries, under his jurisdiction, will change and become computerized. In this regard we should bear in mind that in 1977 this House passed an Act which provided for the use of micro-filming in respect of deeds registries. Hon. members will know that when deeds are signed, black ink is used in order to make sure that the micro-filming can take place. A computer is a sophisticated instrument and a sophisticated staff is normally required to operate a sophisticated instrument like a computer. I am not referring to a computer that has to make calculations, work out details and produce an answer. What we are dealing with in this respect, is really a memory recorder. The whole system of deeds registries in South Africa, now contained in land registers, books and documents, will be on micro-film. A conveyancer, in order to get his information, will no longer be able to study the actual deed itself, but will have to obtain a micro-film print-out from the computer instead.
The Select Committee was worried about the time factor. The Deeds Registry in the Cape Province goes back to a system of deeds registries which has been in operation for something like 300 years and one gets worried as to whether the micro-filming computer can relay that information which has been stored up for the last 300 years. A similar position, although it does not go so far back, exists in the Transvaal where the question of mineral rights has been reserved, and it becomes a very complicated matter to single out particular mineral rights.
There also were other aspects of importance. There was, for instance, the question of security and also the question of fire danger. We are happy now that the micro-films will be kept separately from the old records, which will be retained. This will safeguard the position in regard to fire. A lot of progress in this regard has been made.
I think the committee was influenced mostly by the evidence given by the Association of Law Societies. Mr. Pretorius, who gave evidence on behalf of the association, answered the question “Are you in favour of the new system?” as follows—
In regard to the question of registers being kept, I think conveyancers will be able to meet the difficulty.
As the hon. the Minister has said, the two amendments placed before the Select Committee have been accepted. This in itself is an improvement and in the circumstances we are able to support the Bill.
Mr. Speaker, I should like to express my thanks to the hon. members of the Select Committee here in the House for the hard work which they did to make it possible to present this Bill to the House. I also want to say thank you very much to the Secretary of the department, the officials and all the persons who assisted by presenting memoranda or giving evidence in person. They made a very great contribution and in this way did South Africa a very great service. Twelve memoranda were submitted to the committee and 10 witnesses appeared before us.
Few people realize the importance of deeds registries in our country. Land tenure and the possession of other immovable property has an important effect on the economy of any country, and it is absolutely essential for these deeds to be registered. Information concerning the properties and the persons who possess them, any changes that may arise and any notes that are made about them, are probably some of the most important matters in connection with immovable property. So far we have had the old method in our deeds registries according to which everything was entered in the registers by hand. We called these registers manual registers and the system a manual system. A whole new dispensation is now being envisaged for registration in our deeds registries. A computer system is going to be introduced. The computer is going to record all transactions and it is in effect going to be a register. If anyone enquires at the deeds registry about a specific deed or person, or requires any information, all he has to do is to mention the person, describe the property or give the title or number of the deed, and the computer will provide him with all the information. A second aspect of the new system is microfilming. If such a person wants to look up anything more about a deed, the slide is found and he can study it through a microscope. If he wants a copy of it, it can be provided to him immediately at the press of a button.
The main question facing the Select Committee was whether we should maintain the present system and whether it should therefore be the only system, or whether, in the second place, we should replace the present system by a new system of computers and microfilming or whether, in the third place, we should retain both systems. This was the question on which the Select Committee had to decide. Many objections were raised. We must admit that in the beginning there were many objections to the new system. One of the objections was the possibility of queueing to obtain information. The possibility was also raised that there would be certain components that we would not be able to obtain. Objections were also made to the cost that would be too high. There were also objections to mistakes that could be made and the quality of paper. All these objections, however, were of a more technical nature and could be solved in an administrative way.
However, there were also other really deep-rooted objections. The Law Society objected that they would no longer be able to do research on old deeds. They suggested that if they wanted to know when a servitude was established or when mineral rights were granted, they would not be able to find the information with this new system. In the Cape Province in particular, where one has private deed system, where these servitudes, mineral rights and water rights are only described once—consecutive deeds simply refer back to the original deed—the objections of the Law Society was that they would no longer be able to do that research. The Select Committee undertook an in-depth investigation into this matter and discovered that these old deeds are not going to be destroyed. Therefore, there will be reference to the old deeds in the new ones, with the result that the old deeds can be looked up with the assistance of the old register. Of course, one can also reach the old deed directly. Therefore, it was not really a serious objection.
There were other objections concerning interruptions of service that may possibly arise, but the evidence disclosed very clearly that it would only be of a short duration. I think that interruptions of service has amounted to only five hours so far; it is hardly worth mentioning. That is why the Select Committee came to the conclusion that, together with the two amendments that have been made to it, the Bill may be recommended and that the Deeds Registry will in fact be able to solve the administrative objections in due course. There is in fact a large non-recurring cost attached to this change-over, but in time this cost will level off until the cost involved in the new system will be less than that involved in the old one.
We also discovered that the distrust towards this new system was chiefly based on the fact that it would entail a new dispensation for our deeds registries, and that it is something completely new and therefore strange. That is why people were rather mistrustful of it. Evidence proved, however, that the people in Pretoria, where the system is already in operation, have already grown accustomed to the new system and that they have accepted it, with the result that these objections have disappeared.
There were other objections about queueing, etc. The survey that was made in Pretoria indicated that one obtains information more quickly with this system. From the moment that one enters the premises until one has the information, takes an average of five minutes and 11 seconds. On the other hand it took much longer than that to obtain information under the old system.
As the hon. member for Hillbrow said, the Select Committee also made recommendations concerning the fire hazards. We obtained very good evidence from the Chief Fire Officer of Cape Town. He himself investigated the deeds registry in Cape Town and made certain recommendations. We hope and trust the department will consider this evidence of the Chief Fire Officer of Cape Town and do whatever is necessary at all the deeds registries in the country to combat the fire danger, whether the old or the new system is followed.
I think this new system will prove in time that it is the desired system and that we changed over to it in good time to the advantage of all of us in future.
Mr. Speaker, I am rising merely to thank hon. members for their support as well as to say thank you very much to the members of the Select Committee for the great deal of work they did. The work was done very thoroughly, and I appreciate it.
Question agreed to.
Bill read a Second Time.
Bill not committed.
Bill read a Third Time.
Bill read a First Time.
Mr. Speaker, I move—
As usual, this Bill deals with a variety of matters concerning the State Revenue Fund and the Railways and Harbours Fund. As the various clauses are explained in the explanatory memorandum which hon. members already have before them, I regard it as unnecessary to explain all the clauses in detail at this stage. Should hon. members require further information on any clause, the Minister concerned or I shall gladly furnish further details.
Mr. Speaker, as the hon. the Minister has said, this Bill, as usual, contains numerous provisions concerning various matters. It contains no single and apparent principle as such which is decisive, and therefore opposition on the basis of principle do not apply. For the purposes of this debate, however, there are various provisions which we find interesting and also important and which we believe should be debated. We shall raise them one by one and deal with them. Incidentally, I also want to express our appreciation for the very useful explanatory memorandum which we have received, the greater part of which does, in any case as the hon. the Minister quite rightly said, furnish one with the necessary information wherewith to understand this Bill.
I think it would be as well to deal with the provisions in the order they appear. Therefore we shall first look at clause 1, which provides for the disposal of certain surplus State Revenues, particularly with regard to South West Africa. Subsection (a) is the usual, subsection (b) is explained quite adequately in the explanatory memorandum, and we are satisfied with it. As far as subsection (c) is concerned, we should like a little more information from the hon. the Minister on the Economic Co-operation Promotion Loan Fund.
†When we come to clause 2, the situation changes. We know we are precluded by the rules of the House from moving any amendment on this matter, but hon. members will not be in the least surprised when I express our greatest regret that this is being done and when I seek to motivate that. As is well known, the greater part of the funds for which Parliament’s authorization is sought here is to cover expenditures incurred by the Department of Information which were pronounced as unauthorized by the Auditor-General and found so by the Select Committee on Public Accounts. However, the matter was debated in this House, and the House decided to authorize these funds. We have consistently maintained our opposition to this authorization. Our attitude conflicts with that of hon. gentlemen opposite not on that there was malpractice—that is agreed upon by all sides—but that the State did suffer damage. I again take this opportunity to refer to the figures to show that this is so. Of the R411 397,63 mentioned in clause 2, some R396 000 relates to the Department of Information, and of that plus minus R250 000 relates to a publication called Stepping into the Future. Of that, again, R35 000 represented a pre-payment which was contractual and in terms of an agreement arrived at between the department and the publisher. The other R238 000—let us say R240 000 to make our arithmetic easy—was not so agreed upon. That, as the record of Hansard shows, was paid out in March 1975. In fact, the last of the goods in respect of which payment was made, was delivered only in August 1976. It is therefore beyond question that an amount of R240 000 was in the hands of Mr. Chris van Rensburg and of his organization—the publishers—for a period of some 15 months.
It is interesting to discuss this in the context of this very Bill which is now before us, because clause 13 of the Bill provides precisely for interest to be paid on moneys owing to the State. If I may, I want to refer to the excellent explanatory memorandum on the various clauses of this Bill. Explaining clause 13, the following is stated—
When we come to clause 13, we will strongly support it. It is an entirely sound principle. It is absolutely right that people who owe money to the State over a period should pay interest on that money. Why an unfortunate civil servant, or ex-civil servant, who owes the State some money should pay interest, however, while Mr. Chris van Rensburg does not have to pay interest, has always been beyond us. An amount of R240 000, taken at an interest rate of 7,5%—in other legislation that will come before the House in the next couple of days that is the interest rate the State will be charging on outstanding moneys—will amount to some R18 000 a year, if my arithmetic does not let me down. This, of course, was a period of longer than a year. Therefore, the damage suffered by the State is something like R25 000. It is not a negligible sum, and we think it is a very great pity, in principle, as well as for the sake of the money concerned, that no attempt has been made to recover this money.
Hon. members will be consulting the Third Report of the Select Committee on Public Accounts, a report which has come into their possession this afternoon and which is now a public document. From that they will see that the same Mr. Van Rensburg, on other occasions since then, has had the opportunity of making, what looked to be—we do not know for sure—quite substantial profits out of the contracts he has continued to enjoy from the Department of Information. We expressed our regret that these moneys—of course, not the other R14 000 involved—connected with Stepping into the Future are being defrayed here with so little protest and so little difficulty.
I now refer to clause 3, which reads as follows—
The explanatory memorandum tells us that this will apply to any government. We particularly have in mind homelands which will become independent. We do not object to this power being given. The Government is in the position in which it will frequently be sensible to help these countries, and if it can help by way of guaranteeing a loan, the cash being provided by a foreign bank or similar institution—I gather that is what the hon. the Minister has in mind—we are prepared to co-operate and to go along with that. We have a couple of comments, however, to make, comments flowing from this. I think it is likely that borrowings of this kind, entered into by recently independent countries around us, will in many cases be for the purpose of public works. This tends to be the sort of thing on which Governments of this kind spend a good deal of money. If our Government is to guarantee loans, and even more so if it is to provide money for this purpose, we think it would be in order if it became policy for the Minister to insist, as a condition for these loans, on the use of South African services and South African goods, within reason. This is the basis upon which the CGIC makes loans in similar circumstances. We would be interested to hear what comment the Minister may have on this suggestion.
The next comment I want to make relates really to a matter of financial prudence. We do not know, in accepting this provision, for what countries and at what times it may be used. In terms of normal business practice, when one guarantees a man’s obligations, one normally has a good look at his balance sheet, and I think the Minister should first of all look extremely closely at the financial conditions of countries to whom loans of this kind may be made. Secondly he should, from time to time, as appropriate, also inform what I may refer to as his shareholders, i.e. the people of South Africa through their representatives here, of the conditions of the balance sheet on the security of which he is making guarantees. With those observations, we are prepared to support clause 3. I shall not spend any time on clause 4. We cannot see any vice in it, and we are quite happy to go along with it.
Clause 5 calls for comment. What is being done here is that the Railways are being financed to the tune of R157 million by some very short-term money indeed, apparently in anticipation of a loan from elsewhere which it was expected they would get. There is the suggestion, both in the Bill and in the memorandum, that it might have been a foreign source. Evidently the long-term loan has not been forthcoming, and so what is happening in effect is that the Treasury is substituting its own long-term loan for the short-term finance which has been provided by the PDC. Now clearly, as a matter of financial practice, this is right; this sort of money should never be financed by short-term borrowing. Nevertheless, it reveals a situation of which the House ought to take note.
It seems that the Railways had reason to think it could raise this amount of R157 million from its normal sources, but that it has found that it is not able to do so. This is a considerable sum of money which we now have to provide internally, whereas we originally intended to get it from an external source. This is therefore simply money which is no longer available to be applied to any one of the excellent objectives upon which it could have been spent in South Africa. It serves to underline the fact that it really is very important indeed that the Government, in its policy, its attitudes, its statements and its general behaviour, should always have an eye on the effect of those attitudes and actions on the possible flow of investment capital from abroad. It is a great pity that we have had, evidently at reasonably short notice, to find R157 million out of the Minister’s own resources, which we normally would have hoped to find from abroad. The explanatory memorandum states that this loan will be self-financing as far as the Treasury is concerned. I am not 100% sure what that means. I imagine it simply means that the Treasury will charge a rate of interest to the Railways equivalent to what the money is costing the Treasury.
Yes.
The Minister confirms that that is so. That concludes my comment on that clause.
Clauses 6 and 7 can, I think, be dealt with together. In both cases the Government is obtaining power to act as re-insurer to insurance companies in cases where there are special risks from civil unrest, warlike conditions and disturbances. We in these benches have sought arrangements of this kind, and we certainly support them. We would like to hear the Minister’s comments as to whether he believes it is right to leave this commitment quite open-ended, or whether it might be wiser to set up a special fund and to make appropriations to it. I am not very clear in my own mind about this. We support the provisions either way, but it is noticeable that as they stand here, they are quite open-ended and could involve very large amounts of money.
I am not going to deal at any length with clause 8 because my colleague, the hon. member for Constantia, has made a very special study of the affairs of Iscor, as the hon. the Minister is aware. I think, however, that I should just give warning that we dislike this clause very much indeed. We think it is the worst kind of business practice to find large sums of money so that businesses do not have to pay interest on their loans. We do not think it is conducive to sound management. On the contrary, we think it creates just the wrong sort of conditions in which one would wish to get sound and prudent financial management. However, my hon. friend will deal with that matter.
Clause 9 involves the removal of the poll tax, and this we unreservedly welcome, as we said in the Second Reading debate on the Appropriation Bill. We are very glad indeed that this is happening, and in passing we express the hope that this will be the precursor of the elimination of all discrimination in taxation between Black people and the rest of the population and that the income tax provisions will shortly also be brought into line.
Clause 10 involves the Uranium Enrichment Corporation, which is once more a speciality of my hon. friend, and he is going to deal with that. I shall therefore make no observations about that now.
Clause 11 sets out a new procedure whereby a weakness which has hitherto existed can be removed. Under the present system there can be double counting for purposes of assessing Government expenditure, and this can present an unrealistic picture. In fact if the department were not most astute in its budgeting, it could lead to the raising of unnecessary funds to meet imaginary obligations. What is here proposed seems to us to be sound, subject of course to the one condition—which I am sure will be met—that the trading accounts which are now being created are very carefully kept under observation by the Auditor-General and his department. I take it that that will be the case.
Clauses 12, 13, 14 and indeed 15 do not seem to us to touch upon any matters of any considerable importance, and we are happy to see these go through.
*Therefore, to summarize, I just want to say that we have serious reservations about the provision concerning the unauthorized funds of the Department of Information, as well as those concerning Iscor. We have commented on the others, and when he speaks, my hon. colleague will take the matter further.
Mr. Speaker, I am grateful that the hon. member for Parktown supports practically all the clauses. In the nature of things, however, it is not possible for me to comment on the proviso in connection with clause 8 that the hon. member said he would deal with later on. I shall therefore just refer briefly to the one reservation that the hon. member expressed, and this is in connection with making available the funds that have been reported as unauthorized by the Auditor-General. I think we have settled the lack of authorization or otherwise in a previous debate, and Parliament decided that those funds may now be authorized. This is apparent from the previous debate when the report of the Select Committee was discussed. What is actually before the House at the moment, is therefore only the legislation needed to rectify the matter.
It is essential to bear in mind that the Select Committee could take only one of two decisions. The Select Committee could recommend Parliament, as it in fact did, in its first report, to authorize the unauthorized expenditure. In that case this legislation follows in order to implement that. Otherwise the Select Committee could have decided to recommend to Parliament that the unauthorized expenditure should not be authorized and that that sum of money be recovered from the officials concerned. It was clear—and it is still clear now—that the Select Committee could not take this decision. There was no justification for it. That is why the first decision was taken, and all we have now is the practical follow-up of that decision, that this Parliament must enforce. I feel that if we had to harp on this any longer, it would not get us any further. The hon. member for Parktown will concede that it will not get us any further at all. Reservations that we may have concerning contracts that are still continuing, as reported in the third report, are in my opinion something that can be discussed when we come to the consideration of the third report of the Select Committee. We can decide then whether this should be dealt with in another way. In passing, I want to say that clause 13, in which the interest provision is introduced, was probably also inserted with a view to the type of case referred to, where people have to make certain repayments to the State. I think it will be very difficult to interpret the provision contained in clause 13 in such a way that it can be applied to cases like that of Chris van Rensburg and to unauthorized expenditure of that nature.
I only drew a comparison.
The hon. member must be careful, however. There is still a lack of contracts here and there, but I just want to draw attention to the fact that in certain cases where contracts are entered into, the position of the State as regards outsiders is determined in the contracts. There is a different relationship, however, between the State and its own employees as regards irregularities that occur. There we are not dealing with a contractual position, as when an outsider is concerned. We must therefore be careful in this regard and always bear in mind that the best basis on which to deal with these matters is to draw up proper contracts for any outsider. In that case, as normally happens, provision can be made for the escalation of costs and, if there is default as regards complying with the contract, it can be seen to that interest is paid, etc. What is being envisaged here, however, must not be applied to those cases.
I am grateful that the hon. member indicated that his party supports most of the clauses. I just want to draw attention, from this side of the House, to clause 9 in particular, in terms of which the head tax on Black people is being eliminated. We are grateful for the support that the hon. member has given this Bill.
Mr. Speaker, I think the hon. member for Schweizer-Reneke showed a considerable degree of hindsight in saying that these matters should always be governed by contract. I think everybody will agree with him that in future we cannot allow that those sort of arrangement being entered into by anybody dealing with public funds on behalf of the State. I am not taking it amiss that he showed hindsight. I think this is a matter that has emerged from the investigation and I, too, like the hon. member for Parktown, regret that the amount shown in clause 2 should be included in the Bill.
However, I actually wish to raise the question of clause 3 with the hon. the Minister. Earlier on we were given a draft of the proposed amendment by the hon. the Minister’s department. At the time I indicated that I had some fairly severe reservations as far as this clause was concerned. I will in fact propose an amendment in the Committee Stage. I hope the hon. the Minister will accept that amendment because I think it will clear out of the way one of the problems I have with clause 3. The clause allows the Minister of Finance, on certain terms and conditions he may determine, to guarantee the repayment of capital, interest, etc., on any loan granted by any person to a foreign government or foreign government institution. One of the things that worries me is that we have seen in Africa so many instances and occasions where projects have been set up and funds have been borrowed and the whole thing has eventually turned out to be an absolutely unmitigated disaster. The problem I have is that I am not happy that we should be placed in the position that an outside body or person should set up in countries which have been part of South Africa and which may have become independent, a scheme such as an irrigation scheme, a business of any kind or whatever it may happen to be, for which he arranges finance overseas and which he has in a nutshell, as it were, and that such a person should then approach the hon. the Minister and ask him to guarantee it. It might very well happen that we will find ourselves in the situation that we have to decline to guarantee it, except on such terms and conditions as will make it unviable or unacceptable to the government concerned. I think that in that way we stand to create a considerable amount of ill will and bad publicity in countries overseas who will say that, while we have given these countries their independence, we are now not prepared to offer them a guarantee and to help them to get off the ground financially. I would welcome it if some person from the outside, for example from the World Bank, were included in any kind of negotiation of this nature that might take place. I want to inform the hon. the Minister that I will in the Committee Stage move an amendment on page 5, lines 30 and 31, to omit the words “person to a foreign government or foreign government institution” and to substitute the following words: “South African citizen or institution registered or incorporated in the Republic to a government or government institution of a country which in terms of any law of the Republic of South Africa has been declared a sovereign independent state.”
If we do this I believe we will then be bringing the whole matter under the control of ourselves and our own Government. If somebody who is within the boundaries of South Africa or who is working through an agent in South Africa is going to do this sort of thing, set up this sort of organization and arrange the finance overseas, they should then come to us first to ask whether or not this is a matter which we are prepared to guarantee. Then we can short-circuit any problems that we may have. I hope the hon. the Minister will be prepared to consider this matter favourably because I think we can buy ourselves an awful amount of trouble and bad publicity if we put ourselves in a particular situation. For instance, one of the homelands may wish to embark upon an irrigation scheme with which we cannot go along, knowing the conditions there as we do, and having long experience of the conditions in that homeland. I hope the hon. the Minister will agree with me that it is a reasonable proposal that should such a scheme be undertaken within the boundaries of South Africa, where our Government is concerned, people should establish whether we will be prepared to guarantee such an undertaking before they go overseas to seek money for the financing of such a scheme. I think this is reasonable and we will certainly do ourselves a favour if we accept an amendment of that nature because, in doing so, we will avoid what I regard as being put in a position of being blackmailed. Once everything has been set up and people who may not be familiar with local conditions have been approached and have agreed to allocate funds, pressure may be brought to bear on us to guarantee a project in respect of which we may have very severe reservations. In the event of a failure the guarantee which we have given, will have to be exercised. Then this Government will in no further case allow itself to be prevailed upon to guarantee a project of that nature. That is the effect of the amendment I will move in the Committee Stage and I hope the hon. the Minister will consider it.
As far as clause 6 is concerned, I wish to query with the hon. the Minister the policy which is being followed in this case. I understand this arises from the events in Soweto where considerable damage was done to property insured by a commercial insurance company. There is a court case pending on that matter and it will take a considerable while to be resolved. I wonder whether this is not a situation where the Government itself ought to be the insurer. It ought to insure its own bodies or the quasi-bodies which are associated with the Government in a matter of this nature. We are rapidly reaching a situation in Bantu areas where uninsurable risks are involved or where the cost of reinsurance may become so high that commercial undertakings will not be prepared to insure them. Up to now this has been pretty good business because there have been no untoward risks and this has been an ordinary commercial operation. However, the moment one introduces the element of political violence, I wonder how long private insurance companies will continue to do this sort of business. The hon. the Minister is taking powers here to reinsure. He is, in fact, becoming the insurer of last resort and if people are faced with bills and claims of a certain nature, the Government will then indemnify those companies. Would it not be desirable for the hon. the Minister himself and the Government to act as if the Government were its own insurer? Would that not avoid a considerable amount of difficulty and problems with insurance companies as regards their relationship with administration boards or any other quasi-Government body? We have very serious reservations in regard to the position as it is now and we would suggest that the hon. the Minister should at least consider this suggestion, as he obviously cannot give a reply today. However, it is a point which we think worth considering and we shall leave it to the hon. the Minister to consider.
Mr. Speaker, the hon. member for Mooi River had a considerable number of reservations about clause 3 of the legislation. I am amazed that the hon. member objected to this clause. The NP is always being accused of doing too little or nothing for the Black man in South Africa. The provision is exclusively aimed at assisting the Black States, and moreover this is spelled out very clearly in the explanatory memorandum on the various clauses in the legislation.
You do not help them by putting them into trouble like that.
We are not going to put them into trouble.
*In order to prove it, I quote the following from the explanatory memorandum—
This does not apply to countries that are hostile towards us—
Further on the following is also provided—
We are therefore going to help those countries and it is also spelled out here that we are going to grant assistance to friendly countries. Firstly, we are going to help them to tackle economically viable projects. The hon. the Minister, the Government and all involved, are definitely not going to lend the money to the detriment of South Africa. It is very clearly laid down that granting assistance will be to the advantage of South Africa, whether directly or indirectly. A good example that I want to mention in this regard is a hydroelectric scheme in Mozambique from which we get a great deal of our power. So far, therefore, it has been to South Africa’s advantage to grant loans to that country, because we now get cheap electricity from them. It is therefore profitable. International agreements may still be maintained, because it is not necessarily true that all the Black States in Southern Africa are going to leave us in the lurch and are going to be bad. I respect the hon. member’s reservations in this regard, because we must have reservations, but we must not criticize this piece of legislation entirely.
I now want to deal with the provisions of clause 8 of the legislation. According to clause 8 it seems as if a completely new principle applies here in the sense—this is also set out very clearly in the explanatory memorandum—that R70 million is being given to Iscor to help cover interest, finance costs and other losses incurred by Iscor. I feel it would be as well for us to take a look at the activities of Iscor over the years. Here before me I have the financial statement for the past financial year ending on 30 June 1977. What is the position according to this statement? We find that between the years 1952 and 1970 there were very slight price increases in the price of steel. In this period Iscor also maintained a fixed profit pattern.
At that time the Government did not allow the steel price to increase. If we had allowed this, Iscor could have built up a tremendous surplus at that time in order to provide for future expansions that would come later. I feel that the Government acted wisely at the time by not allowing the steel price to rise, because in this way cheap steel was ensured in South Africa All the industries that shot up like mushrooms, are evidence of this. This also applies to the building industry and all other sectors, because there is not a single sector in the entire domestic economy where steel is not absolutely essential. Therefore, by means of their cheap steel prices, Iscor contributed a great deal towards South Africa’s development.
In the year 1973-’74, there was a major revolution in Iscor’s entire financial structure, and from 1973-’74 the capital increase rose by R30 million from R165 million to R195 million. In comparison with 1973, the fixed assets in 1974 increased by more than R374 million. This is more than double the amount of the previous year. In that year Iscor’s total assets amounted to R1 597 million in comparison with a much smaller amount the previous year. What, however, was the position as regards Iscor’s fixed term loans as regards those same years? In 1973 they amounted to R493 693 000 and in 1974 to R814 824 000. This is R375 million more and it means that the total fixed assets that Iscor obtained during those years, were financed by loans to the tune of precisely R1 million. This is an unhealthy position, through and through. The Government is therefore trying to help now, just as they did in the case of the Post Office, to bring about the situation that the debts should stand at 50% in relation to the total assets. It was as a result of the tremendous increase that took place that year that this “irregularity” occurred in the financial structure of Iscor.
The question now is: Why did it occur? As hon. members will recall, there was a shortage of steel in South Africa at that time. Iscor could not provide for all the steel requirements, and steel was imported at very high prices at the time. The Government and the board of directors of Iscor itself then decided, very wisely, to expand the capacity of Iscor tremendously, and this was done at Newcastle and other places. It is true, however, that one cannot expand a little and then think that that is adequate. The entire construction, including the furnace, had to be erected so that the enterprise could work as a whole. This was done at Newcastle, for instance. These extensions meant that Iscor had a greater capacity than could be used at that stage.
Then, too, a recession in the foreign economy has occurred in recent years. Some of the foreign steel companies even wanted to dump their steel in South Africa. Prices dropped and Iscor could no longer obtain the export quotas that it wanted. This meant that Iscor has suffered over the past three or four years in this regard. I think that what the hon. the Minister is doing in this legislation to help Iscor in this regard, is a very good thing. It was not the fault of Iscor as such that the world market deteriorated a great deal and practically collapsed. All of us also wanted Iscor to have the necessary capacity, especially since steel was one of the products that we could export in order to earn foreign currency. As a result of all these circumstances Iscor has had a poor profit over the past two years.
It is also true that all the interest on the financing costs of the construction, has been written off by Iscor against its current revenue. I think this is a very conservative, sound policy. As far as I know, there is only one other steel factory in the world, viz. one in Australia, that follows the same policy of writing off this interest against its current income and not capitalizing.
The hon. member for Parktown said that he has reservations about some of the provisions in the Bill. I think we can discuss these aspects further in the Committee Stage. I personally am quite satisfied with the Bill and take pleasure in supporting it.
Mr. Speaker, the hon. member for Sunnyside, said that he is in favour of the Bill and he mentioned a few aspects, inter alia, the circumstances of Iscor. In the course of my speech I shall also refer to the matters which he raised and I shall therefore not react directly to his speech now.
†We should like to express our appreciation to the department for the most detailed memorandum we received in regard to this Bill. The memorandum makes the Bill very easy for each one of us to follow and, in fact, saved the hon. the Minister from reading a long Second Reading speech. I think this is something which we could make more use of in the future, not because I have anything against the hon. the Minister making long Second Reading speeches, but because I believe hon. members understand financial measures far easier if the department does make detailed memorandums available to us as it has done in this case, and in other cases as well.
There are many aspects of the Bill which are important I should like to deal very briefly with some of these matters. In regard to clause 2 I want to say that I believe that we shall be given ample opportunity on Friday of debating this matter. The Bill allows the hon. the Minister to guarantee loans granted to sovereign independent States created by South African laws and also to guarantee loans of other countries who maintain friendly relations with us. I think this is a most important provision as it has, amongst others, the following effects: Firstly, it will allow that country that obtains the finance to obtain the finance on the most favourable terms; secondly, it ensures the viability and economy of a neighbouring country and in this way enables that country to flourish; thirdly, it will create job opportunities for the unemployed citizens of a neighbouring country and this will make them less dependent on job opportunities in South Africa, and this will have the beneficial impact on our own unemployment situation; and fourthly, it will raise the standard of living of a neighbouring country, which again will improve their capacity to trade with South Africa and this will also be beneficial to us. In giving these guarantees South Africa is taking the lead in Southern Africa—something which can be expected of South Africa—and this must ultimately lead to a far better relationship between South Africa and the countries to which we are giving the guarantees. These loans could have a direct impact on our internal situation, as they might have the effect of substituting, at least in some of the cases, foreign loans for South African loans. This in turn will result in more money being available in the South African economy if we can obtain foreign loans in substitution for South African loans to some of these countries.
I briefly want to raise the matter of the Government acting as the re-insurer against loss or damage to property caused by persons intending to change or violently disrupt the existing political, social and economic order. In this regard we favour this scheme which is applied in other countries. However, I should like to hear from the hon. the Minister when he intends implementing this scheme. We should also like to hear from him whether he intends to determine a ceiling, or whether there will be no ceiling to the amount of the scheme. We are in favour of allowing private enterprise to participate in the form in which they will be participating, but with the Government acting as the re-insurer.
I now want to refer to another clause. We are in favour of the Government acting as reinsurer of policies in relation to the Defence Force. I am sure the hon. the Minister will tell us that because of circumstances it is impossible to budget accurately for the amount which will be involved in this particular case. We should like the hon. the Minister to tell us whether he wants to determine a ceiling in this regard as well.
We welcome the concession of the abolition of fixed tax payable by adult Black males.
I now want to deal with Iscor. This matter was raised by the hon. member for Sunny-side. I believe Iscor plays a very vital role in the economy. It requires enormous capital sums for its projects. Iscor employs approximately 67 000 people—I am subject to correction concerning this figure. From what I can gather, Iscor has a stable and happy working force. This must be attributed to the working conditions created by Iscor for people of all races. I was also impressed by conditions at Sishen, where I found that housing, facilities and the working conditions of the staff were of outstanding quality. I mention Sishen particularly, since the other projects I saw were urban projects, if I may call them that I expected a high standard in their case, but in the case of Sishen, being a rural project, I did not anticipate the high standard I saw there.
It is obvious that the Iscor loss factor must be of substantial concern to the hon. the Minister and the management of Iscor. I am pleased that Iscor asked of their own accord for a committee—it was approved of and appointed by the hon. the Minister of Economic Affairs—to do an in-depth investigation into all the ramifications of Iscor, which would naturally include the pricing policy and the financing policy of Iscor. I understand that the committee has reported to the hon. the Minister. From what I can gather, this committee can see the light at the end of the tunnel. I believe that in the circumstances their advice should be followed. I should like to ask the hon. the Minister to tell us whether he or his colleague, the hon. the Minister of Economic Affairs, is actually going to follow the advice of the committee. I should also like him to tell us something about the prospects of Iscor as envisaged by the committee, and whether the major recommendations of that particular committee are to be implemented. I realize that this committee’s report is obviously an internal one which cannot be made public. However, I should like to ask the hon. the Minister whether he is in a position to disclose what the major recommendations of the committee were.
The last question I want to put to him is whether the committee will continue serving as a standing committee or a permanent committee, because I believe that if they have done a good job of work, it may be a very good idea to have them operating as a standing committee.
With those few words we shall support this particular Bill.
Mr. Speaker, I should like to express my particular support for clause 3. With this clause we are embodying in this Bill South Africa’s good intentions towards its neighbouring States, not only those that were previously dependent States within the Republic, but also the other states of Southern Africa. I think this is proof of the fact that the Republic of South Africa means well, as regards the states of Southern Africa in particular, and that we are prepared to contribute substantially towards the prosperity of the whole region. The hon. member for Mooi River raised the aspect and said that when the Government receives requests for assistance and they are refused because the project may not be economically viable, it could be a major embarrassment for South Africa Then, if I followed the hon. member correctly, he argued that this aid should always be given via South African financial institutions. I can assure the hon. member, however, that the assistance is no longer dealt out so readily today to backward territories or developing countries. For instance, the World Bank lays down much more stringent requirements before they will lend a cent for a project in a specific country. They first make a study of its economic viability before they give it their approval. After that they check the payments in that regard, etc. Of course, we shall do the same here in South Africa too. We shall not guarantee any loan without further ado. Moreover, when such a request reaches the Government, the Government will definitely first look at the economic viability of such project.
I now want to say something about clause 6 to which the hon. member for Mooi River referred. According to him, the Government should rather do this type of insurance itself. Our policy is rather to leave matters of this nature to the private sector. When the private sector is not able to provide this service due to extraordinary circumstances, it becomes the responsibility of the State and the State then acts as re-insurer. The hon. member, however, is making a mistake if he thinks that this type of insurance is only required in urban Black residential areas. The danger of such damage exists not only within the Black residential areas; there are people who live outside those areas or in the region of those areas that would also like to have insurance. If the Government were to enter that sphere, too, as regards insurance, then I feel we would very definitely be interfering in the province of the private sector.
I should also like to support clause 7. I think this is a very fine gesture on the part of the Government to provide for the people who endanger their lives in order to defend our country. They can now have proper insurance, and if they die on the battlefield, their dependants will be properly covered.
With these few words I should like to express my support for this Bill.
Mr. Speaker, I should like to touch upon a few items in this Bill. Firstly, I wish to refer briefly to clause 2. I believe that the hon. member for Parktown was incorrectly understood by the hon. member for Schweizer-Reneke. We are not suggesting from this side of the House that these particular amounts, these unauthorized expenditures, should be recovered in toto from the people who were guilty of the malpractices. This is not the suggestion. However, what we do urge the hon. the Minister to do, having provided, as he proposes, to meet these unauthorized expenditures from public funds, is to take legal advice, if necessary, to discover whether some of the unauthorized expenditure which has led to undue enrichment of third parties, can still be recovered from them. I believe that in certain cases recoveries have already been obtained from officials concerned, officials who were unduly enriched in consequence of unauthorized practices. I believe, too, that if there are people outside the department who have in fact been enriched in consequence of unauthorized or improper practices, it should be the duty of the State to protect the public purse by investigating whether these moneys can be recovered. The hon. member for Parktown has referred, for example, to the question of interest which has, in our view, unduly enriched a person who is trading with the Government. He received payment before payment was due and he held those moneys, to his own advantage, for a considerable period of time. I believe this is appropriate for investigation, and we should like to recommend to the hon. the Minister that he must at least seek to recover that part of the funds which is due to the public purse, and not due to third persons for their enrichment.
I now come to clause 3, a clause to which the hon. member for Mooi River has also referred. In his brief explanation we have not been able to follow precisely what his intent is. However, we would like to look at his amendment when he moves it at Committee Stage. We will support his amendment if he succeeds in convincing us of its validity.
I have convinced you already!
I now want to refer very briefly to clauses 6 and 7. Unfortunately, I do not believe I can support the hon. member for Mooi River in this respect. I believe there are two important reasons why this should be so. Firstly, I believe that the hon. the Minister, who is appearing— according to these two clauses—as the insurer of last resort, is in fact correct in maintaining the private sector insurer as the insurer of first resort. I believe this is a good principle to follow.
In the second case—and I think the hon. member for Mooi River will recognize this if he thinks about it—the properties and the people concerned in clauses 6 and 7 are often already insured by commercial insurance companies. They already carry insurance on their own lives.
They already carry insurance on their properties. What insurance companies are now having to undertake is a new or an additional form of risk, which will oblige them perhaps to create far greater funds, and therefore to increase the premiums by a very large extent—something which could not be borne by the insured. It is in respect of those additional risks and additional costs that the hon. the Minister is providing for re-insurance.
I think this is a most valuable function. In order to enable people to maintain their present insurances, while extending their cover at a reasonably low rate for additional risks which may be incurred, I think that the role of the hon. the Minister, in coming in as insurer of last resort—or as re-insurer—is a most useful function in the times in which we live, and also meets the particular needs which we have now.
I come now to clause 8. Earlier in the session we were asked to provide the sum of R100 million for the purchase of shares in Iscor. The reason for that was perfectly obvious—that Iscor was being run at a considerable loss and the public was asked to subscribe a further R100 million by way of the estimates of expenditure in order to assist Iscor in its difficulties. If one carries out this sort of rescue operation it is probably right to say that the best and traditional way of doing this would be by purchasing shares in the company which is in need of rescue. We are now being asked to contemplate another approach. Instead of using the R100 million in the way which was indicated to us when the money was voted, we are now told that R70 million of the R100 million should be used to assist Iscor to reduce its annual interest commitments. This, I think, is bad business practice and we really have difficulty in accepting that it is the right way to handle things. It must be recognized that Iscor does in fact have a very high interest commitment. If this high interest commitment is allowed to continue it will create further losses and therefore further obligations on the part of this House to find money to assist Iscor. We are therefore in a bit of a dilemma, but one cannot forbear to say that this dilemma has been a long time coming. In the memorandum which has been most usefully prepared by the department, it is stated in respect of clause 8—
This is quite correct. This was in fact a large part of the capital commitment to which Iscor was obliged to tie itself. There were, however, other activities as well. I want to put it to the hon. the Minister that it is not merely what is described as an increase in the liquid steel production capacity which has caused Iscor’s present difficulties, but also what might be described as virtually unbridled expenditure on other projects, simultaneously with this heavy commitment which Iscor was asked to undertake.
By Iscor?
Yes, by Iscor. I refer in particular to the Sishen-Saldanha scheme. There were many people in this country, and certainly we on this side of the House, who protested very strongly at the heavy commitment which was being undertaken by Iscor simultaneously with the other heavy commitments it was already obliged to carry in the national interest. There was at that time an alternative scheme available which could have been carried out at far lower cost by private enterprise which, in fact, had foreign support and which could have been tied to contracts which were offered and available and which were strongly supported by the Japanese market at the time. There were railway advantages in the sense that a railway existed from Sishen to a point near St. Croix, outside Port Elizabeth, which the Railways Administration was most anxious to employ for the carriage of ores and which would have greatly assisted the Railways in improving its own accounts at that time. The fact was that there was a lobby in Pretoria in support of Iscor, which had decided to push the Sishen-Saldanha project at any price, and the price eventually moved up from an estimated R400 million to R700 million and I believe that if everything is counted now, it is probably around R1 000 million. This kind of money costs a lot of interest. Some of it may have been acquired at low rates of interest; some was certainly acquired at high rates abroad. Nobody knows what the average rate of interest is over the whole of that capital amount. One could, however, conservatively estimate on average that the interest on R1 000 million must be of the order of R75 million per year. That is just on the Sishen-Saldanha scheme.
The iron ore market was fairly optimistically predicted to be something like 15 million tons per year at the time that scheme was established. If one calculates the cost of mining ore, transporting it down to the coast from Sishen, and of shipping, as against the price of ore, which was predictable then and which has not changed all that surprisingly since those days a few years ago, then it is quite clear that the profit left to Iscor after it has paid these costs is hardly sufficient to pay the interest charges on the loan involved. In fact, it was perfectly clear at that time. We predicted it and we have been shown to be correct—and it was not such a difficult sum to do—that Iscor was going to lose money on the Sishen-Saldanha scheme, that it was going to incur very heavy capital debts and that it was going to find great difficulty in servicing those loans.
Do you want an increase in the steel price?
The steel price was increased. In fact, I believe the steel price may even have been increased to a slightly uneconomic level, because there are people who say that the cost of steel from Iscor is higher in South Africa now than it is in some other countries. Or it could be so produced by alternative means even in South Africa. This is a very sad and disastrous change from a situation where we prided ourselves on Iscor’s ability to produce steel in South Africa at a much lower cost than the cost on the international market. I think it is a tragedy that we are describing here. It is a great pity, in my view, that we are having to face, this evening, not only the possibility of meeting Iscor’s losses by means of a contribution in the form of share purchases, but also the further sad situation that instead of purchasing shares and securing our contribution to Iscor, we have to see R70 million of this being turned to the payment of Iscor’s interest charges. The note by the department ends with an optimistic tone. It says—
It certainly is. It continues—
That is a very “iffy” statement, if ever there was one. We would be grateful, when the hon. the Minister replies, if he would tell us whether he really believes that this departure is justified because “it is foreseen that Iscor will, in due course, reach the position where it may be able to redeem a portion of its share capital”? How long is “in due course”? We are the people who are paying the money. Members of the South African public are having to pay this money and they therefore have the right to ask that the affairs of Iscor, which are going to cost us very dearly, should in fact be properly administered, in such a manner that the public is not exposed to further departures from previous practice of this kind, on the vague or optimistic suppositions which are stated in this note.
Having said that, let me also tell the hon. the Minister that one of the reasons why we agreed that we should subscribe R100 million to the share capital was because the hon. the Minister had promised that there would be a full inquiry into the affairs of Iscor. We are indeed very glad to know that that inquiry has taken place. There is, however, a corollary to that. Not only must we know that the inquiry has taken place, but we should also like to know something about that inquiry. There are heavy sums of money involved and there is very serious public interest in this matter. I hope—in fact, I am sure—that the hon. the Minister will recognize that he has a corresponding obligation to tell us that he is satisfied, or that measures have been imposed that will put the affairs of Iscor in order so that we will not have to face, for an indeterminate period, this open-minded commitment to solving the difficulties which Iscor is in at the present time.
Lastly, and more briefly, I want to come to the Uranium Enrichment Corporation. The situation in the uranium market at the present time is such that there is a great increase in the price of uranium because of numerous consequences of the energy crisis. Those power companies which seek to purchase uranium for their nuclear power programmes are, in fact, having to go to producers who are generally sold out of present production supplies and also of foreseeable supplies from current production facilities. They are having to pay advance money to them, to make loans to them, to subsidize them in some way in order to enable the uranium-producing companies to open up new mines to expand their production. This is in fact the case with a company like Nufcor and corresponding companies in other parts of the world in that, when they sell uranium or enter additional contracts for the delivery and supply of uranium, they can actually ask the power companies concerned to pay in advance in order that the money may be employed in the expansion of the plant and the operation. In the case of Ucor, i.e. the State Uranium Enrichment Corporation, Nufcor has been prepared to waive this usual requirement. Nevertheless, it is going to have to spend money to produce the additional uranium required by Ucor. Therefore the hon. the Minister, I believe quite rightly, has undertaken, rather than to pay in advance, to guarantee in advance that payment will be made. So far as Nufcor is concerned, this is also in a sense money in the bank. It means that Nufcor can with certainty raise the necessary capital to expand its production capacity in order to supply Ucor.
The point is, however, rapidly being reached where very large amounts of money will become involved in the expansion of Ucor’s activities. So far as we in the House are aware, Ucor is essentially involved in a pilot plant activity which is a comparatively small-scale operation. The evidence appears to be quite clear that Ucor is now embarking on a much wider operation, that it is embarking on a series of contracts or on a large contract with Nufcor to purchase uranium and that it must also therefore embark on other allied contracts. There is some mention of this in this explanatory memorandum. It states in the memorandum that the possibility exists that guarantees by the Government will also be required in future in respect of the corporation’s financial commitments in respect of other agreements. The proposed clause also makes provision for such other agreements.
As the hon. the Minister knows, the amount of money involved may be very large. Looking at it quite conservatively, I would say that, if Ucor is going to buy uranium for enrichment on a commercial and therefore on a viable economic scale and if Ucor is going to build a plant for such commercial production on a large and viable scale, the amount of money involved will be not less than R1 000 million in the near term. It could be more, but it will be in that target area. That is a very large amount of money. Since we are today entering an advanced commitment in respect of Ucor, I think the time has certainly come for the hon. the Minister to tell us something about the envisaged scale of this operation. As I say, the information available to the House at the moment is in respect of a pilot plant which in scale must be very much smaller than the commercial operation which is envisaged in the clause. Without wishing to demand of the hon. the Minister that he disclose information that may be confidential at this stage, I think that, in view of the amount of money involved, the time has certainly come for the disclosure of some information about the scale of the commitment to which we are tacitly committing ourselves today by accepting clause 10. I think that that much, at least, the House is entitled to.
Mr. Speaker, this evening I want to begin by congratulating the hon. the Minister and the Government on this Bill which, although it contains a variety of clauses with a variety of points of departure, nevertheless contains certain elements in respect of which we must congratulate the Government on its farsightedness and its ability to create confidence in the country as a whole. I find it strange that I should also have to congratulate the Official Opposition tonight for agreeing with us in certain respects. In a certain sense, however, this gives rise to one cause for concern. A national leader once told a man who usually differed from him: “Congratulations on our agreeing this time.” His reply to this was: “It does not matter: Every broken watch has the opportunity to be right at least twice in every 24 hours.” Now we want to congratulate the Official Opposition on encountering one of those two occasions today.
Clause 6 provides for the granting of protection in regard to damage to property as a result of riots. A great deal of anxiety could be caused without this clause. It could cause problems in the agricultural sphere for people in the rural areas, as well as for agents who store large quantities of food in the rural areas, as regards its insurance of it and the premium paid. In view of that we welcome the principle being introduced by the hon. the Minister that the property may be re-insured and that the Government may then act as reinsurer. This can mean a great deal as regards the premium payable on this specific product.
The hon. member for Mooi River asked that the Government should undertake the insurance itself. I want to differ from the hon. member in that respect in the sense that the Government must recognize the principle of private initiative, as it was put by the hon. member for Lydenburg. In the explanatory memorandum, however, the hon. the Minister also put it very clearly that private initiative is used for certain purposes and that private initiative can complement the Government. It is put very clearly that private initiative can make a contribution towards covering risks, issuing policies, collecting premiums and dealing with claims. In that respect private initiative can therefore complement the State in handling the entire situation.
What about Soweto, where such large amounts were involved?
Well and good, Mr. Speaker, but then there is another aspect that one must also look at. One must consider this whole matter in a global sense. It is not only in Soweto and other areas threatened by unrest where damage to property may occur. Damage can also occur to property in other areas and it may even occur sporadically. The question is whether it is worth the trouble for a specific body to pay an insurance premium if one takes into consideration the times in which we are living and the extent of the damage that may occur. In that respect it is correct for the authorities to complement private initiative by granting additional coverage so that insurance may be to the economic advantage of the general public and so that the confidence of the general public may be obtained in this way.
There is also another aspect that I want to raise in the short time at my disposal. It concerns the life assurance involved here. The issue here is life assurance, and in this regard one thinks more specifically of those who are attached to the Defence Force. I want to campaign for one aspect in particular, an aspect that one may perhaps divide into two parts. Firstly, it concerns those who are attached to the Defence Force in a more permanent capacity. The question concerns the extent to which a compulsory insurance for the risks that they are exposed to, is possible. Furthermore there is the question of the temporary employment of national servicemen who are in service for a short period only and are also exposed to this specific risk. The question concerns the extent to which a group insurance is possible on the one hand, and to what extent it should be a compulsory insurance.
The final aspect concerns the premium attached to that insurance, because although the Government accepts responsibility for the re-insurance thereof, it must be in accordance with the salary of those persons and it must also be in accordance with the posts that the people concerned occupy and the service they perform at that stage. As far as group insurance is concerned, the risks involved in the different stages of training in which national servicemen find themselves, must also be taken into consideration. This must be taken into consideration not only for the purposes of life assurance, but also for the purposes of insurance against the physical disabilities that such a national serviceman may incur as a result of which he may no longer be able to do his work in civil life. If insurance of that nature can be granted at a premium that falls within the capacity of the national servicemen, it may be of great advantage to the Defence Force as well as for the national servicemen involved.
At this stage we want to thank the hon. the Minister in anticipation for this provision and for the possibility of such coverage. We are sure that it will create greater confidence among the general public in regard to the tasks that have to be carried out.
Business suspended at 18h30 and resumed at 20h00.
Evening Sitting
Mr. Speaker, I want to convey my thanks to hon. members on both sides of the House for their positive contributions to this debate. I also want to convey my thanks to those hon. members who were so kind to refer to the explanatory memorandum. This is, indeed, a very useful explanatory memorandum and it is good to see that it is appreciated. I merely want to reply briefly to one or two of the questions put to me with regard to clauses 1 and 2. For the rest, the discussion dealt mainly with clauses 3, 5, 6, 7 and 8. In the light of the contribution of the hon. member for Constantia I should also like to say something about clause 10. The hon. member for Parktown wants me to explain what is meant by clause 1(c). Clause 1(c) provides for a development fund under the control of the Department of Foreign Affairs. The fund is used, in consultation with the Minister of Finance, for assistance and/or loans to friendly States for the promotion of mutual relations and trade. The fund is supplemented annually in this way. The amount for the last two or three years was R5 million. For a short time it was R6 million. This is basically what this clause is about. The hon. member for Parktown also referred to clause 13, when he discussed clause 2. Clause 13 provides for the payment of interest on debt to the State. As far as the interest payable on the payments to Mr. Van Rensburg is concerned, I just want to mention that the Treasury approached the department concerned in this connection, and the matter is handled by the Treasury. I mention this for the sake of the hon. member, and we shall have to wait and see what happens there.
†In connection with clause 3 the hon. member for Parktown suggested that where such guarantees might be given, it would be good perhaps to insist or state it as a condition that South African content be involved if these loans were made for the payment of services or goods from South Africa, or any other similar transactions. We shall certainly look into that. I would not like to say that it will always be an absolute condition, but I certainly see the importance of it. We already do that in a number of like cases. I also want to put the mind of the hon. member for Mooi River at rest by telling him that we shall handle any sort of request for a guarantee on a loan of this kind with great circumspection; it will be done ad hoc and we shall look at the strict merits of every case. I do not believe that there will be many such guarantees, but as this is an enabling measure, we think there could be instances where it might be very much to the advantage of the State concerned. It might be a young independent State, and it might indeed be very much to the advantage of South Africa if such a transaction were possible under certain circumstances.
Another important issue is the fact that Parliament should know what is going on in this respect. I can see the importance of that and I am perfectly prepared to inform Parliament from time to time if anything along these lines have been done and, if so, what we have done. That is a perfectly reasonable request. The amendment of the hon. member for Mooi River—he might well want to go ahead with it during the Committee Stage— does seem to place a rather undue restriction on the Government in the possible granting of a guarantee of this kind.
I cannot quite see why he wishes to circumscribe the transaction quite to that extent. As I have said, these cases will be more the exception than the rule. Obviously there will be very few such transactions.
Then there is clause 5, which has to do with the amount which was not made available on a short-term basis to the South African Railways by the Public Debts Commissioners and which is now being converted into a long-term loan from the State to the Railways at interest. For the 1976-’77 year the position is actually that the Railways asked us for an additional R100 million, to which the Exchequer just at that time had considerable difficulty of committing himself. The Railways themselves were going to make every effort to obtain R57 million which they felt they would still have to obtain. As the hon. members know conditions for loans in the overseas market have not been all that easy. The Railways did not obtain that R57 million, and we then decided that as the Public Debt Commissioners should make that sum available as a bridging short-term operation, they be asked to make the money available to the Railways. When the Railways then did not obtain the R57 million which they set out to endeavour to obtain, and as we were in fact all along asked for the R100 million, but also wanted more time to see how we could from our side provide it, we have now come to the conclusion that we would make this R157 million available. It would therefore be on a long-term basis. The Public Debt Commissioners are now phased out and the Exchequer comes into the picture. In short, that is the story and I hope it would be acceptable to the House.
I think clauses 6 and 7 are quite important clauses in the sense that we have for some time been anxious to make provision for the compensation for damages that could arise in this sort of way, e.g. violence or serious action that can cause damage to property. The second type of compensation relates to Defence Force personnel, and other people affiliated to these services, where people’s lives may be in danger or where there might be a serious risk of disability, as the hon. member for Carltonville rightly pointed out. All we are trying to do here is just to get certain enabling powers to continue with what look very promising negotiations with the insurance industry itself. One way to do this would be to do it simply like they do it in Britain in regard to Northern Ireland. There the damage is simply paid by the British Government if it falls within certain categories requiring compensation. However, I think we have the opportunity here for a much better scheme. We have had some very constructive consultation with the insurance industry, and the insurance industry is prepared to make this sort of cover available, provided of course that there is the opportunity for re-insurance. There will obviously be some private re-insurance in the normal course of events as insurers normally also insure with re-insurers. However, as hon. members correctly said, one could get a position where the risk of damage to property, and therefore loss, or the risk of loss of life, will be such that the insurance industry might feel that for them this will be, even with their own re-insurance, unduly heavy. In those cases the idea is that the State will come into the picture as a final re-insurer. What we have in mind at the moment is that one might for instance form a company consisting of representatives of the insurance industry and representatives of the State—the Registrar of Financial Institutions or whoever. They set up an organization or, if you like, a company—this still has to be worked out This whole thing was done according to clearly defined agreement to determine as to what precisely is the State’s role. Obviously, the more participation there is by the insurance industry as such, the less onus or possible incidence there would be on the State in that sense. However, I am happy to say that the discussions up to now have been extremely constructive. The Registrar of Insurance has been conducting these discussions himself and he is well satisfied with the progress which has been made, so much so that he has strongly urged that we should have this enabling power so that we can continue with this and so that we can possibly set up a scheme or schemes in full co-operation with the insurance industry. I think we are going to introduce a type of formulation which at the moment looks to be superior to what the Registrar has seen overseas—he has checked on this in three or four countries. I very much hope that our expectations will be fulfilled. I believe they will, and that is why I put this matter to the House.
Clause 8, which is concerned with Iscor, is, I freely admit, a debatable one. It is quite correct that on occasions we have asked Parliament to vote money for purchase of shares in Iscor to increase the share capital. Unfortunately there is, as hon. members know and as has been explained by the hon. member for Sunnyside and others, this malrelationship between loan capital and equity capital. The interest burden is extremely heavy. Of course this is one of the unfortunate symptoms and results of inflation. If there had not been this serious inflation for several years, I am perfectly certain that the Railways’ capital position would be easier and that certainly the position of these capital-intensive public corporations would be easier. One sees it throughout the world. One can look at the state of the British steel industry as only one example. If five or six years ago we could have foreseen that there would have been this type of inflation, of 10%, 11% or 12% over a period of several years, I dare say one would at that point have said that it was going to cause an awfully difficult capital investment position and that one would have to take early action.
Iscor was over-extended for more reasons than that.
I do not know about that. It is not quite so simple. If Iscor had been smaller and if we had had to import more steel earlier on, we would have had to do so at prices very much higher than the local price. Make no mistake about that. If one averages that out over a few years, one may find that the overall financial position of Iscor and of the Government is not quite as easy as the hon. member suggests. It is a pretty complicated matter. However, some time ago the hon. the Minister of Economic Affairs appointed a committee to look into these problems of Iscor, particularly the financing problem. It was a very authoritative committee. Amongst others we also seconded for this purpose Mr. J. C. du Plessis, one of the Deputy Governors of the Reserve Bank— hon. members will know that he is an extremely competent economist and financier—Prof. Pistorius and others. They made a very thorough study and submitted a report which deals with the short-term and long-term aspects of the problem. Many aspects of this report are still receiving the close attention of my hon. colleague and, indeed, through his department, also of the Department of Finance. We are working very closely together in this respect. This investigation is therefore continuing—just to answer the hon. member for Walmer—and we certainly can make use of the members of that committee. Indeed, we are doing so. I believe they have done very thorough work. This is one of the proposals, as a short-term alleviation of what has become an extremely serious interest burden for this big capital-intensive project.
The hon. member for Constantia referred to the investment in Sishen-Saldanha. I think he suggested that it could have been done in another way at a great cost saving. I am not at all convinced of that. As a matter of fact, for a while I was very directly involved in that for the short period of time that I was Minister of Economic Affairs. Apart from that, I think the hon. member must concede that, whatever else might be the position arising from Sishen-Saldanha—and I think we are going to obtain the benefits increasingly as that line is increasingly used together with the new harbour at Saldanha Bay—we have been able to convert a big deficit in the current account into a substantial surplus under difficult conditions. That was partly done through fiscal and monetary policy, but it was certainly also partly as a result of the increase in the volume of exports, again, substantially due to the Sishen-Saldanha scheme together with Saldanha Bay harbour and the Richards Bay harbour scheme.
One cannot assess the profitability in the same way that one can in the case of a company, but that they are productive investments I have not the slightest doubt, because if one looks at the effect on the economy of the country, the fact that we could convert this big deficit into a surplus on the current account, is to a significant extent due to the fact that those facilities are there.
St. Croix could also have provided those facilities.
Yes, but those are long term and Sishen-Saldanha has after all only begun. The whole scheme is still being improved and extended and the use of the line will extend as we open up the North West Cape and other parts. I would therefore see this as something that has come at a difficult time because of the scarcity of capital and also the high cost of capital. Also, over the years we have not wanted to be guilty of charging what could be regarded as an unduly high price for steel. These are difficult decisions to make. What are one’s criteria? There are several criteria, but we find ourselves in the same position as similar large capital-intensive corporations worldwide. One encounters this in the USA, in Germany and in Sweden. In Sweden they are having great problems with the big utility companies. These big corporations are faced with heavy interest commitments. Therefore what we have done on this occasion is to come to Parliament and say, under these difficult conditions, in the light of the very full study that has been made by these people whom I really think we can call experts, that of the R100 million—we are not asking for more— we mentioned in the budget…
What about next year?
Let us first deal with this issue. Of the R100 million, R30 million will be for the purchase of redeemable preference shares, because, who knows, the good days will come and one day Iscor might want to repay capital. I do not know how long I shall be here and perhaps hon. members opposite will be here longer than I, but if it is not in my time it will be in their time.
Your time, not theirs! Your chances are better than theirs!
My hon. colleague very kindly says my chances of being here are somewhat better. Perhaps we need not go into that interesting topic. However, I think that under all the circumstances, where this has been a very fully investigated problem, we feel that this is something which is justified. It is something rather new and we feel that if we can get this very heavy burden of interest alleviated to this extent it ought certainly to assist Iscor in the short term. I do not necessarily want to commit this House at all by saying tonight that this is necessarily going to come next year. I do not honestly know, and I am certainly not saying it one way or the other. However, we have these very expert advisors who are keeping a close watch on this, and we will have to see what is going to happen, particularly in the light of the further study of the report and in the light of the close study of the longer-term implications. I certainly would not wish to commit the hon. the Minister of Economic Affairs, or indeed myself, or even try to commit this hon. House. Nevertheless, I hope the House will feel that in the circumstances this makes sense. If we can, to some extent, get Iscor relieved of his very serious problem, I believe it would place Iscor in a far better position with regard to the future. That is what is involved here.
The hon. member for Constantia referred to clause 10. That is the clause that deals with the Uranium Enrichment Corporation and with the question of guarantees, as the hon. member pointed out, for these transactions with Nufcor. The hon. member pointed out that it was likely that the amount of these guarantees would increase. That may be the case, because one hopes that this whole corporation’s activities will increase in the course of time. However, to the extent to which these amounts are paid, the guarantees on those amounts which are paid off will, of course, fall away. Therefore, it does not follow that one will simply have an accumulating amount as a whole. From time to time a guarantee will fall away, and one would certainly have to look closely to see that the State is not overcommitted to this type of guarantee, a guarantee which, I do not think, is a risk at the moment, not for some time to come.
I think the other clauses of the Bill…
Mr. Speaker, before the hon. the Minister goes on, I want to point out that it is quite clearly indicated in the explanatory memorandum that, in addition to the purchases of uranium for the purposes of enrichment, there will be other demands on capital for the development of the commercial plant.
Order! What is the hon. member for Constantia doing now?
Mr. Speaker, I am putting a question to the hon. the Minister. [Interjections.]
Order! The hon. member did not ask permission to put a question to the hon. the Minister.
I beg your pardon, Mr. Speaker. May I put a question to the hon. the Minister?
The hon. member may put his question.
Mr. Speaker, the hon. the Minister acknowledges that there are other demands on the capital resources of the country for the subsidization of the development of Nufcor. I ask that he should indicate to the House at this stage, without divulging confidential information, what he anticipates the scale of this operation will be, the operation of establishing a commercial enrichment plant in South Africa.
Mr. Speaker, it is quite correct. I had the opportunity, during the supper adjournment, of mentioning this very briefly to the hon. the Minister of Mines. He correctly pointed out that this was obviously a highly confidential operation. Indeed, it is a rather secret operation. He suggested that one should deal with this operation with great circumspection. Therefore I think I should rather discuss this privately with the hon. member. It is very difficult to try to put what would at the moment be speculative figures in public. I think it would assist neither the hon. member nor us. However, we would be quite prepared to talk with the hon. member and to see what information we could divulge to him. I think it is a rather delicate issue. I think the hon. member will agree with me on this.
Mr. Speaker, I think that really disposes of the issues that were specifically raised. I should like to thank hon. members for their general support.
Question agreed to.
Bill read a Second Time.
Committee Stage
Clause 2:
Mr. Chairman, I immediately want to express our thanks and appreciation for the news that the hon. the Minister gave us in his reply to the Second Reading debate, viz. that negotiation is taking place between his department and the relevant department concerning the question of possible levying of interest on the amount of nearly R¼ million that was in the hands of Mr. Van Rensburg of Erudita Publications for more than a year before it should have been. It would have done a great deal to set our minds at rest if we could have known that something like this could possibly be recovered. As I said, we were deeply concerned not only about the not insignificant amount involved here, but also about the principle that, apparently due to his important personal relationship with the senior officials of a certain department, anyone should be in a position to be treated in such a way that he was able to lay hands upon large amounts of Government money and to keep it for a long time before he was really entitled to it. Despite what the hon. the Minister said, we are still unhappy about the fact that these amounts were authorized so readily. In spite of what the hon. the Minister told us, and not without appreciation for it, we intend maintaining our attitude in this regard by voting against the clause. We are also doing so in order to be consistent in maintaining the attitude we adopted in other debates on this matter.
Mr. Chairman, we in these benches also feel that the item of R396 000, an awful lot of money, which is being approved in the schedule to this legislation, is not an amount which this Parliament should in fact approve. We will also be voting against this clause at this stage, not—and I would stress this—because we are against the Public Works, Water Affairs or Forestry items being approved, but because we are against the item Information. The amount in respect of the item Information makes up the vast majority of the amount of R411 000, which is being approved in this schedule. We still are of the opinion that the State has suffered loss in this regard, and we will therefore also be opposing this clause.
Clause agreed to (Official Opposition and New Republic Party dissenting).
Clause 3:
Mr. Chairman, it is my lot to move the amendment of the hon. member for Mooi River as follows—
To an extent my hon. colleague did speak to this during the Second Reading debate. Therefore I will not detain this House very long. There are, however, a couple of points I should like to make. This amendment in fact has two sections, the second of which is that we wish to limit the granting of these guarantees only to foreign countries which in fact have been declared sovereign independent States in terms of the laws of the Republic of South Africa. As the situation currently stands; this would mean that the hon. the Minister would merely be able to grant these particular guarantees in respect of the Transkei and Bophuthatswana.
What will happen, of course, in the future we do not know, but judging from what the hon. the Minister of Plural Relations and Development has said, perhaps in five or 10 years’ time they will all have their independence, in which case we shall be able to make these loans to all the present homelands which will then be independent states. We believe that although this Government’s record on undertakings outside South Africa’s borders has been a sound one to a degree, there has nevertheless been a certain amount of room for doubt particularly, of course, in so far as the Ruacana project is concerned. We therefore believe that it should be possible to make these loans, but only to states that have formerly belonged to South Africa, in other words homelands that have become independent.
The first part of the amendment states that the loans or guarantees should only be applicable to South African citizens or institutions registered or incorporated in the Republic. What we are seeking to do here is to ensure that these loans are channelled through the Republic of South Africa and not from a foreign government directly to the foreign government that we are guaranteeing. There are a number of reasons for this. We believe, to start off with, that this will give the South African Parliament, and the hon. the Minister in particular, a greater degree of control. Secondly we believe—and we know this from business experience—that if a financial institution is aware of the fact that it could possibly get a guarantee for a loan it is about to negotiate it will, in every case, attempt to get that guarantee. I am sure the hon. member for Parktown will be well aware of this in relation to the company of which he is a director. If Anglo American, for instance, has a subsidiary company whose loans it is prepared to guarantee, in every case in which a loan is made to Anglo American, they will be asked for a holding company guarantee.
That is why we never do that.
Well, exactly. I believe that the same principle holds good in this particular instance. Once we make the world aware of the fact that we are prepared to guarantee loans for foreign countries to overseas institutions, we believe that this is going to place the hon. the Minister in a very difficulty position. Every time the Transkei or Bophuthatswana, for example, want an overseas loan, the people who are making that loan will come to that hon. Minister and try to get him to guarantee that loan. I say this because we are well aware of the history of foreign loans into Africa in general. We are well aware of what has happened in all these instances. We are also well aware of the fact that South Africa’s reputation probably stands higher than that of any country in Africa when it comes to financial affairs and when it comes to being able to guarantee financial loans. Therefore we urge the hon. the Minister to accept this amendment which I have moved.
Mr. Chairman, I definitely agree with the hon. member for East London North when he says that if a guarantee from the South African Government is available, lending institutions throughout the world will be much more prepared to advance money to the countries we are discussing than would otherwise have been the case. This is undoubtedly true. Somewhat to my regret, however, I must say that we do not feel that we can support the hon. member’s amendment. Our problem with the amendment is that the real advantage of the arrangement proposed in this clause, is specifically that money may become available from foreign sources. We do not have an excess of loan or investment finance here, and to use money from South African resources in order to strengthen these other countries, might not be economical for us. Of course, we cannot see clearly into the future. There might be better days ahead. At the moment, however, one is most definitely only too keen to obtain cash wherever one can get it. Under the circumstances I believe that the whole advantage of what is being proposed here, is that loans may be forthcoming from overseas institutions.
As I said in an earlier debate this afternoon, one must also be very careful. I think the hon. the Minister has in fact given us the undertaking that he will be very careful. Some of the countries around us are acting very recklessly in the financial sphere, if I may put it that way. One must therefore look very carefully at their balance sheets before advancing them money. There are also important advantages attached to this, however.
For instance, the hon. member for Sunny-side spoke this afternoon about the Cabora Bassa project which, I believe, can in general be described as a success in this sphere. There are other success stories too. Therefore, subject to the qualification that we have already expressed earlier on, viz. that one must go about this very carefully, we are prepared to support the clause in its present form.
Mr. Chairman, I think I should point out at this stage that nothing in our amendment would prevent a South African financial institution from raising the funds necessary for a loan to such a foreign Government from overseas sources. I appreciate that it might be more difficult for the South African association or financial institution to get that loan overseas than it would perhaps be for Bophuthatswana or the Transkei in view of the push across the world and in Africa for the Black populations or the Black countries. At the same time, however, I do not believe that our amendment cuts off foreign sources for these loans. It only tries to ensure that they would then come through South African financial institutions which, we believe, would give us a greater measure of control.
Mr. Chairman, I cannot add very much to what the hon. member for Parktown has said and I have made my own view clear already. What I cannot understand is why the hon. member for East London North would want to have the situation where a South African citizen or institution must borrow the money from abroad, presumably to make it available to another independent State, after which the South African Government must then act as guarantor. What is the point of having that sort of dog’s leg in the transaction?
Greater control for us.
Surely the independent State is going to want to show its own value in the capital market at some stage and is going to want to be able to try to borrow from abroad. We are not saying that we are necessarily going to guarantee that transaction at all. We will look at it entirely on merit. As I say, it is quite clear, for many reasons, that there will not be many transactions of this kind. We shall therefore look at each one strictly on merit. I cannot see the reason for a system in terms of which the borrowing must be done by a South African institution or person, after which the money must then go to the independent State. I do not think the independent State would like that at all. That is one of my problems. I regret I have difficulty with the amendment.
Amendment negatived (New Republic Party dissenting).
Clause agreed to.
Clause 5:
Mr. Chairman, the information made available to the House by the hon. the Minister was interesting. If I understood him correctly what was originally envisaged was not that the Railways would borrow the whole of the R157 million abroad on their own recognisances but that it was always intended that they should borrow R100 million from the Treasury because they thought they could find the other R57 million abroad. That certainly alleviates one’s gloom about the situation that this reveals because it would seem that we are only R57 million worse off in cash terms than we might otherwise have been, instead of R100 million. Still, it is depressing that this should be happening. The hon. the Minister in his Second Reading speech in the budget debate this year told us that such loans as were offered to us were very often offered on terms which he considered to be punitive and unfair and that he would rather undertake self-financing than those loans. To what extent that situation has improved since the budget debate a few months ago, we do not know.
There can be very little doubt, however, that if we wished to—and I know the hon. the Minister does wish to—promote an acceptable rate of economic growth we are going to have to find a good deal of foreign capital one way or the other. One would have hoped that the Railways, which had a very successful period over the last few years and gave evidence of good management, would have been a very successful borrower. However, having said all that, there is nothing else to say about this. Clearly the Railways cannot go on being financed by the Public Debt Commissioners. What we are doing here is probably the best we can do in the circumstances. We shall not oppose this clause.
Mr. Chairman, I would like to point out that the Railways are receiving capital from abroad, and where the liquidity on the home market would appear to be such that this R57 million could be raised without much difficulty, we thought it made sense to do that.
Clause agreed to.
Clause 8:
Mr. Chairman, the main point in regard to clause 8 has already been made in the Second Reading. None the less, there are one or two points I would like to make. Firstly, the argument by the hon. the Minister that the development, untimely though it may be, of the Sishen-Saldanha scheme has in fact produced foreign revenue or foreign exchange, is to some extent a false argument in the sense that another port operated more cheaply with less capital outlay and with lower interest charges, if it had been able to handle the same volume of iron ore for export, would have earned the same amount of foreign exchange. If one is therefore comparing one facility against the other, it is not really a valid argument to say that we have developed Saldanha and that it is earning RX million if another facility developed more cheaply could also have earned RX million.
We are creating an infrastructure.
The arguments relating to the value to South Africa of the addition to the infrastructure by developing Saldanha Bay is irrefutable. Of course, South Africa is a country with a not very hospitable coastline. It has very few indentations in the coastline suitable for the development of major ports. The question is not whether South Africa should year by year for decade by decade develop its ports. We will have need of every single one. The question at the present time is whether we are developing these facilities in the right order and whether we are timely in the way and in the proportion and the rate at which we develop our assets. In the case of the Sishen-Saldanha scheme, Sishen could have been linked with the available facilities and the available infrastructure to Port Elizabeth. It was an error of timing and an error of judgment, but I will be the last person in this House to say that we must never develop Saldanha. It would have had to come sooner or later, but I think it was done at the wrong time. I want to ask the hon. the Minister to admit in the House tonight that he and his colleagues committed an error of judgment in this respect.
But that decision was taken in the good times.
In view of that I should like to ask the hon. Chief Whip: Why is it—it has been recorded for four years in Hansard—that we on this side of the House realized that the project was untimely, while no one on the other side realized it? But I shall not take the matter any further. We shall accept it like that. There is, however, another matter I brought to the hon. the Minister’s attention and to which he has not yet replied. The fact remains that we feel very unhappy and uncertain about the present state of affairs within Iscor. The time will come when the hon. the Minister will have to take this House into his confidence by indicating more clearly what is going on and what possibilities there are of solving Iscor’s problems. Iscor is of tremendous economic and strategic value to South Africa, and our primary motive in this regard is, therefore, not to criticize the Government. We are, however, concerned about the state of affairs within this undertaking which has such economic and strategic value for South Africa. Merely to brush the problem aside and to say that it will be solved tomorrow or the day after, is really not satisfactory and therefore I hope that the time will come when we can discuss this matter fully. Mr. Chairman, may I go a bit further?
The hon. member is already going further than the clause.
I merely want to add that this House should, in my opinion, create the necessary facilities for us to discuss the public corporations in more detail than has been the case until now, because they form a very important part of our economy.
Order! Now is not the time to do that.
Mr. Chairman, I do not want to enter the discussion of the Sishen/ Saldanha complex, since it is a matter that was decided upon whilst I was not a member of the House. My hon. colleague is therefore much better equipped to do so than I am. I cannot, however, resist telling the hon. Chief Whip and the other hon. members around him, that the businessman who makes a success of his enterprise is not the businessman who knows when the good times are here, but the one who knows when the good times are coming. This is very difficult to judge, and in this respect the judgment in this connection was wrong. This, however, is not what I want to speak about tonight.
I should like to come back to the content of the clause. The fact is that we are being asked to vote R70 million to relieve the burden of Iscor and only R30 million for new share capital. The fact that the capital is in the form of preference shares, I shall leave at that, because I am not quite as optimistic in this regard as the hon. the Minister is about when the time will come when Iscor will be able to repay its capital. However, I shall leave the matter at that. I should like to repeat, however, that I cannot help feeling that it really is a dangerous custom, when a company is experiencing difficult times, to assist it in this way. It is obvious that a company like Iscor must be assisted in some way or other, but to adopt this method, i.e. by carrying its burden of interest for it and thereby creating an atmosphere and circumstances that make it seem as if the company is much more successful than is the case in reality, is, according to my limited experience, a dangerous way of assisting a company that is in difficulties. The appropriate action in these circumstances is, on the one hand, to curtail expenditure in every possible way with the objective of limiting the unit costs to the absolute minimum and, on the other hand, to find new share capital where necessary rather than to assist the company artificially to carry its burden of interest. This is still our conviction, and therefore we are still opposed to this clause.
Mr. Chairman, I want to tell the hon. member for Constantia briefly that the actual problem which Iscor and we are faced with here, of course arose long before the Sishen/Saldanha scheme was broached. I can also assure the hon. member that it is not so clear that any other scheme would have succeeded easily. Nothing came of the willingness of private bodies to provide capital for an alternative scheme. The State therefore had to take the responsibility for this infrastructure that was required for the development of our country.
As far as Iscor’s problems are concerned, I want to point out that I nevertheless think that the suitable occasion to discuss these things, will be when the Vote of my colleague, the hon. the Minister of Economic Affairs, is being discussed. We cannot solve this problem within a few months. We hope gradually to strengthen Iscor’s financial position, and next year there will be good opportunities, not only under that Vote, but also in other debates, for the Opposition to bring these matters up for discussion. I therefore want to let what I said earlier on in connection with this clause, suffice.
Mr. Chairman, in actual fact the hon. the Minister told us in so many words that he too was concerned about the situation, but nevertheless he asks us to wait until next year to speak about it.
Why did you not speak about it during the debate on my Vote?
When that hon. Minister’s Vote was being discussed, this specific legislation was not yet before the House.
The facts were there, however.
I am merely reacting to what the hon. the Minister said. He told us he thought that we could discuss this matter more successfully next year. At this stage, however, we are amending certain provisions in the legislation with this clause. [Interjections.] I agree with the hon. the Minister’s statement that Iscor’s problems arose long before the start of the Sishen/Saldanha scheme.
Surely I have said that before.
It is quite correct to say that long before the Sishen/Saldanha scheme a series of blunders were made by Iscor. As an Opposition we have to air our dissatisfaction on this matter.
Nonsense.
For instance, one found that Iscor developed and built an entire infrastructure. The hon. the Minister said that they wanted Iscor to develop the entire infrastructure and, as the hon. the Minister also said, the blunders, the mistakes, were made long before the Sishen/Saldanha scheme. For instance, one finds that the entire Sishen residential area was actually built on land which must now become a mine. The residential area must consequently be shifted now. The hon. the Minister is therefore entirely correct if he says that the problems arose earlier on.
Order! The hon. member is really going very far now.
Mr. Chairman, I agree, but the situation has progressed so far that already we have to be asked to donate R70 million, not to help Iscor out of its difficulties, but simply to be able to alleviate its burden of interest. This is as far as the problem has advanced, and at some stage, we as a responsible Opposition have to air our dissatisfaction about it. This is what we are doing now. Perhaps we should accept the hon. the Minister’s advice and just oppose the clause at this stage or register our objection to it, and then accept his invitation to take an in-depth look at the position of Iscor next year. [Interjections.] We shall therefore wait for 1979. [Interjections.]
Mr. Chairman, the hon. member who has just resumed his seat, made such a big fuss that he actually derailed (ontspoor) himself. Is there such a word as “verspoor”?
Yes, if you run on one rail only, then the word “verspoor” applies.
I do not know if it is “verspoor” or “ontspoor”. The fact remains, however, that he put words in my mouth that I never said. Surely it is absolutely clear that anyone who has an interest in these things and looks at them, will know when inflation begins. Surely we know when Iscor, Escom and the Railways and all the other large capital-intensive corporations began experiencing these problems. It was not yesterday. Who is speaking of blunders now? If the hon. member was so clever, why did he not tell us what to do live years ago? He also sat as quiet as a mouse during the discussion of the Vote of my hon. colleague two weeks ago. In my budget speech I said that R100 million was being voted for Iscor, but he did not even notice that. Now he suddenly speaks about blunders. I shall not concede that blunders were made. We will have other good opportunities to argue this matter. I should like the hon. member to tell us what his analysis of Iscor is and to give us an exposition of what we must do to rectify the situation. He must not come along with a load of generalizations, but instead should tell us precisely what we must do. Only then will we be able to conduct a meaningful debate. It is very easy to stand up here and speak about blunders. This is my reply to the hon. member’s argument.
Mr. Chairman, the hon. the Minister said that we must speak about blunders committed. [Interjections.] I am simply referring to what the hon. the Minister said. Long before the Sishen/Saldanha project was undertaken, things began to go wrong. The hon. the Minister admitted this and tried to relate it to inflation caused by the building of major infrastructures. I just want to tell the hon. the Minister that one can in fact draw a comparison between the operating circumstances of Iscor and those of similar organizations. In other words, one can look at how they operate and function, and then draw a comparison. One will then find that, for instance, mistakes were made in the Northern Cape. Mr. Chairman, you will perhaps rule me out of order if I now say what Iscor will have to do to get its affairs in order. We shall therefore debate it next year.
Clause agreed to (Official Opposition and New Republic Party dissenting).
House Resumed:
Bill reported without amendment.
Third Reading
Mr. Speaker, I move, subject to Standing Order No. 56—
Mr. Speaker, I shall be very brief. I think that this debate has been illuminating in various ways, but there is one point which I wish to make. It arises out of this debate that there are certain questions which are not satisfactorily disposed of in a debate on a Bill of this nature. The hon. the Minister has indicated that an opportunity will have to be found next year to discuss certain matters which have not been satisfactorily disposed of in the debate this evening. I believe that when one deals with matters affecting the State corporations in particular, whose affairs we have been discussing and for whom provision has been made in this Bill, there is not adequate provision within the rules of this Parliament to discuss them in a Bill of this nature. I therefore believe that the time has come to consider whether State corporations which are neither fully discussable in terms of the rules of this House, nor exposed to the full disciplines of the market place outside this House, need a special provision because they occupy an increasingly large place in the affairs of the economy of South Africa. I believe that this is an appropriate time to call attention to the fact that State corporations are in fact a vital part of the economy of South Africa and that they absorb public money. Parliament has to vote money in time of their weal and their woe and when, as in the case of Iscor this evening, things go wrong for them, demands have to be made by Ministers for the public purse to provide money to see them through their difficulties. Yet we, who are the guardians of the public purse, have an inadequate opportunity to discuss the internal affairs of the State corporations. If a State corporation such as Iscor mismanages its affairs, or when things go wrong, if they impose heavy burdens on the taxpayer, there are inadequate opportunities in this House to discuss these matters. I believe—and I shall say no more than this evening—that we have to think very hard about new procedures in this Parliament to provide adequate opportunity to discuss the affairs of the State corporations. We have to think in terms of Select Committees which, beyond discussing water affairs, land use, etc., should discuss the State corporations because they utilize a very large proportion of the public money and occupy an important part in the economy of South Africa.
Mr. Speaker, I rise merely to say that obviously the State corporation are very important. I think that is absolutely axiomatic. Why would we have appointed a most senior committee in 1975 to make this very thorough investigation in this particular case if we did not regard these as being of the first importance? However, it does strike me as being a little strange that where hon. members now have these presumptions of problems of one or the other State corporation, these matters have not been raised on the many occasions on which it was possible to raise them in this House. [Interjections.]
When a particular Minister’s Vote is discussed, these matters can be fully discussed. They can also be discussed during the no-confidence debate, in any of the budget debates, in the Part Appropriation Bill or in the main budget debate during the Second Reading or the Third Reading. The Third Reading itself is 12 hours. We have just completed this discussion.
I think the implication of the hon. member for Constantia’s remarks is apparently that these important corporations cannot be properly discussed in public. But there is every possibility and opportunity to do so. These corporations publish accounts. The hon. member can read those accounts and study them at any time. These accounts are tabled and the hon. member can raise any matter relating to the accounts or any matter relating to the organizations themselves.
I rose merely to say that, Mr. Speaker, because there is, indeed, a very full opportunity to discuss these matters.
Question agreed to.
Bill read a Third Time.
Mr.Speaker, I move—
This year’s Revenue Laws Amendment Bill is somewhat shorter than usual and contains nothing of a contentious nature—in fact, with the exception of two technical amendments, the Bill contains only concessions, two of which will be of particular interest to many taxpayers. In these circumstances the usual explanatory memorandum has been dispensed with and, instead, I shall attempt to explain, as briefly as possible, what the Bill is intended to achieve.
Two important corporations are in the process of entering the capital market for the first time and it is as well that the position in regard to taxes payable on the marketable securities to be issued by them be made clear at this stage. The corporations involved are the South African Gas Distribution Corporation Limited (Gascor) and the Uranium Enrichment Corporation of South Africa Limited (Ucor). Hon. members will be aware that both of these corporations are performing very special functions, that they operate on a non-profit basis and that they are not competing with private enterprise in any way. Certain exemptions are therefore justified.
Clause 1 of the Bill amends the Marketable Securities Tax Act in order to provide that when the securities of these corporations are dealt in on the Johannesburg Stock Exchange the transactions will be exempt from marketable securities tax. Clause 8 introduces similar amendments into the Stamp Duties Act which will exempt from stamp duty the original issues of marketable securities by these corporations and also any registration of transfers of the marketable securities of the corporations.
Clause 2 introduces two amendments into the Transfer Duty Act. The first amendment accords Bantu Affairs Administration Boards the same status as local authorities, which means that they may acquire fixed property without attracting liability for transfer duty. Clause 4 introduces a similar exemption into the Stamp Duties Act. Instruments executed by a board will be exempt from stamp duty if that duty would otherwise legally be payable and borne by that board.
The other amendment to the Transfer Duty Act will be of far greater interest to most taxpayers. It has constantly been the aim of the Government to bring the cost of suitable housing within the reach of as many households as possible and with this in view the rate of transfer duty has steadily been reduced over the past few years. In 1974 it was possible to reduce the rate of transfer duty to as little as 1% on property costing not more than R20 000.
The Commission of Inquiry into Housing Matters (the Fouché Commission) felt that the concession made in 1974 did not go far enough and recommended that there should be complete exemption from the duty in respect of acquisitions by natural persons of building stands costing not more than R8 000 and of dwellings costing not more than R20 000. As I mentioned in my budget speech a little over two months ago, the Government has accepted the recommendations of the Fouché Commission. This amendment is designed to translate that acceptance into law and it will apply to transactions concluded on or after 1 April 1978.
*Mr. Speaker, the second important amendment deals with the question of estate duty. In this matter as well the Government has tried over the years—and has succeeded—in easing the pressure of this tax, and simultaneously eliminating as far as possible its frightening aspects. The amendments introduced into the Estate Duty Act by clause 3 give effect to the concessions which I announced in my budget speech, viz. that each of the rebates which may be deducted from an estate in determining the dutiable value of an estate are to be increased from R25 000 to R30 000. This means, for example, that if a deceased is survived by a spouse and two children, liability for estate duty will only commence when the dutiable value of the estate exceeds R120 000 and not R100 000 as is the case at present. If the estate of such a person includes a maximum of R70 000 in the form of the proceeds of Government stock and life insurance policies, this sum of R70 000 will suffice to cover the duty on an estate with a net value of no less than R472 308. It is therefore obvious that with judicious planning in advance, few cash problems should be experienced in respect of estate duty.
The remaining amendments deal exclusively with stamp duties. The Stamp Duties Act provides in general that instruments which are liable to stamp duty shall be stamped at the time of execution or, in any event, within 21 days. When the payment of a stamp duty is denoted by means of adhesive stamps, such stamps shall be defaced within the prescribed period of 21 days. In the case of failure to deface the stamps in time, a penalty is payable. In terms of section 10 the adhesive stamps on various kinds of instruments may be defaced by various persons, provided the defacement takes place within the prescribed period. In many cases the stamps may be defaced by the person who is required in terms of the Act to stamp the instrument. In spite of this provision, which is intended to facilitate the defacement of adhesive stamps and, as far as possible, to eliminate unnecessary traffic in what are sometimes valuable instruments, it is the established practice of quite a number of persons, and often attorneys, to submit instruments to revenue offices—principally receivers of revenue—for the defacement of the adhesive stamps on such instruments. This practice might have had its origin in the Stamp Duties and Fees Act of 1911 which required various kinds of instruments to be submitted to receivers of revenue for defacement of the stamps thereon.
Recently a measure of doubt has arisen as to whether this time-honoured procedure is in fact permitted by section 10 of the Act. That the stamps on instruments which are stamped late, have to be defaced by a revenue officer or a banker, is beyond any doubt, but the position affecting the defacement of stamps within the period of 20 days is not as clear. The purpose of the amendment which is being inserted by clause 5 is to eliminate the uncertainty and to sanction the long-established practice, with retrospective effect.
The Stamp Duties Act was amended last year to make agreements of lease in respect of movable property subject to stamp duty. Since the proposed sales tax will soon be payable on such agreements, I announced in my budget speech that the stamp duty on them would be abolished. The amendments introduced by clauses 6 and 7 give effect to this proposal and are deemed to have come into operation on 1 April 1978.
The final amendment, viz. the one introduced by clause 8(b) is merely of a technical nature. Two words which were erroneously deleted last year from an exemption in item 15 of schedule 1 to the Stamp Duties Act, are now being reinstated in the exemption, with retrospective effect. This Bill is being recommended for favourable consideration by the House.
Mr. Speaker, we on this side of the House intended to go through this Bill one part at a time. However, I want to thank the hon. the Minister for dealing with it very systematically in the speech which he has just made, and I also want to say that we do not really have any objection to the passage of the Bill. On the whole we feel that it is an improvement. It is an alleviation of the burden of taxation which is being imposed, and in general we are entirely in favour of that.
When the hon. the Minister speaks again at a later stage we should very much like to hear from him whether he could give us a little more detailed information on the exemption of the S.A. Gas Distribution Corporation from marketable securities tax. We have heard about this, of course, but this evening we are being requested to exempt this corporation from marketable securities tax, and we would of course like to know more about the matter to be able to establish precisely what it is all about. The same applies to the Ucor Enrichment Plant. We have already discussed this plant in connection with another piece of legislation, but up to now we have not taken the matter very far.
As far as the other duties are concerned, particularly the stamp duties, we think there is a clear improvement to and simplification of the legislation. In the last few clauses of the Bill, a complication which was introduced last year, is being rectified. That complication is being eliminated this year. In general we have no objection. We welcome the improvements to the legislation and therefore have no objections to the Second Reading of the Bill.
Mr. Speaker, like the Official Opposition, we shall also be supporting the Second Reading of the Revenue Laws Amendment Bill. Clause 1, relating to the Marketable Securities Tax Act, and the clause relating to the Stamp Duties Act, merely add two State corporations and we are entirely in favour. For the rest, there are some minor changes, putting things right that were perhaps somewhat loosely handled in the past. This, of course, we are also in favour of.
I think, however, that the one aspect on which we on these benches should take a stand, is that relating to clause 3. We want to say that we are very much in favour of clause 3 which relates to estate duty. It does extend the amount of an estate which is, in fact, duty free. This, of course, we are fully in favour of. I must, however, draw to the hon. the Minister’s attention the fact that the predecessor to the NRP objected fairly vociferously, I understand, to estate duty as such. The fact that we are supporting this clause cannot in any way be taken as support, on our part, for estate duty as such. As this is an improvement of the situation, however, we are in favour of it and will therefore be voting in favour of the Bill.
Mr. Speaker, we welcome the provisions which allow purchasers exemption from the 1½% on debentures issued by the S.A. Gas Distribution Corporation Ltd. and the Uranium Enrichment Corporation of South Africa Ltd. The original issue of debentures will now also be free of tax. The two corporations are issuing debentures for the first time in 1978. They are vital and strategic corporations and should be allowed to raise funds on the open market.
The provision which exempts a house and sectional title properties, not exceeding R20 000 in value, from transfer duty is one that will assist the property industry, the building industry and the home owners.
Unfortunately, this provision does not go far enough because the purchaser of a house or property priced at R21 000 has to pay the transfer duty on the full amount and does not get any rebate whatsoever. Surely it would be only equitable and fair that the first R20 000 should be free and that only the balance of the purchase price should be dutiable. To make the entire purchase price dutiable is not fair, more particularly with the building costs being what they are today. The hon. the Minister may want to penalize those who build or buy luxury housing. What he should then do is to allow on a house costing up to R30 000 the first R20 000 to be free of duty while the balance of up to R10 000 could be dutiable. In the case of a house costing over R30 000 the hon. the Minister could be quite correct in saying that one is then entering the luxury class and that then the full amount should be dutiable. I think that, in fairness, if one allows the first R20 000 to be free of duty, one should also give consideration to providing that only the balance of the amount will carry duty and not the entire amount. I know that the hon. the Minister cannot change the position in this particular Bill, but I hope that his department will investigate his matter and that he will come with the necessary amendment during the course of next year’s budget.
I also want to point out to the hon. the Minister that we of the SAP are totally opposed to transfer duty. That was a temporary, emergency measure introduced at a particular time. We feel that, in the existing circumstances, to bring down the cost of living it is essential that transfer duty be abolished completely.
The last matter I should like to deal with concerns estate duty, to which clause 3 elates. The amendment increases the maximum value of an estate free of estate duty from R100 000 to R120 000. This full amount would accrue if the deceased left a wife and two children. This is an improvement which we welcome, but once again we eel that the hon. the Minister has not gone far enough. We of the SAP feel very strongly that estate duty should be abolished. Many people at their death leave an estate with large assets which are heavily encumbered. The estate often does not have the liquid funds to meet all the obligations and that places the heirs in a very invidious position.
In this regard I think particularly of the farming communities and I am sure that the farmers present in the House will support my thinking on that. Some farmers owe substantial amounts to the Land Bank. Very many farmers are bonded to the hilt because of circumstances beyond their control. A farmer may have left a large estate and the value for estate duty purposes may be very substantial. The property may be bonded to a large extent and the estate may not have sufficient liquidity as a result of which the heirs will be placed in an impossible or very invidious position. A large family farm that goes to successive heirs over the generations would lead to estate duties having to be paid on the death of each heir. This adds enormously to the cost of the land. The estate duties paid by successive generations put the price of the farmland beyond the purchasing ability of the average farmer. In the circumstances this is also a matter the hon. the Minister cannot rectify in this particular Bill, but again he can rectify it in his 1979 budget and we appeal to him to have another look at this matter and to have discussions with the Land Bank before he takes a final decision in this regard.
In the circumstances we will not oppose this Bill.
Mr. Speaker, I want to thank the hon. members for their support which they have pledged to this measure. I appreciate it. It is true that what we are actually dealing with here are concessions, and I am very pleased that this measure is being seen in that light by the Opposition. The hon. member for Constantia, as I understood him, referred to clause 8 and also to clause 1, which relates to Gascor and Ucor. In point of fact these are of course utility companies directly involved in the generation of power. In this connection I am thinking for example of Escom. I am not certain whether I understood the hon. member correctly, but I think that he wanted me to elucidate the two clauses a little more fully.
†Clause 1 is an amendment to the Marketable Securities Tax Act. The amendment is aimed at excluding transactions involving these two corporations from marketable securities tax. That relates to securities dealt in on the Stock Exchange. Clause 8 contains the corresponding amendment to exempt these two corporations from stamp duty, or rather, to exempt the marketable securities of those corporations from stamp duty. In terms of Item 15 of the first schedule to the Stamp Duties Act, 1968, stamp duties are payable in respect of the original issue of any share, stock or debenture and in respect of the registration of transfer of any marketable security. In respect of the original issue of shares, stock or debentures, stamp duty is payable at the rate of five cents for every R20,00, or part thereof, of the nominal value of such shares, stock or debentures. In respect of the transfer of the registration of marketable securities, the duty is payable at the rate of 1,5% ad valorem. Excluded from the scope of these provisions are the marketable securities issued by local authorities and by certain similar bodies, like the Rand Water Board and the Electricity Supply Commission. The amendment introduced in respect of clause 8(1 )(b) will also exclude the marketable securities issued by the South African Gas Distribution Corporation Limited and the Uranium Enrichment Corporation of South Africa. Clause 8(2) provides that paragraphs (a) and (b) of clause 8(1) shall be deemed to have come into operation on 1 March 1978. That is as far as the exemptions from stamp duty is concerned which is provided for in clause 8. The intention of clause 8(1)(b) is simply to restore the words “or sale” to the exemption granted, and it is accordingly merely a technical amendment.
The hon. member for Walmer has suggested that a sort of graduated exemption should be provided for in respect of transfer duty on residential property. In other words, as the amount goes above R20 000, relief should be granted compared with the existing position. I am quite prepared to look at that. The hon. member quite correctly said we cannot do anything at this moment. But we can look at this with a little more thoroughness during the recess and then talk again during the next session. The idea is certainly to give some tangible form of relief especially to the younger members of society who want to buy houses or obtain their own housing accommodation. Therefore that is not an unreasonable approach.
That hon. member also mentioned estate duty and said he would like to see estate duty going by the board. I, too, would probably like to see it going by the board, but it would mean that we will of course lose several million rands of revenue and this is not so easily found elsewhere at the moment as we do not want to increase income tax …
Get it from the general sales tax.
Let us see how that one works out. Perhaps if the hon. member and hon. members of the other Opposition parties unconditionally support the general sales tax, we might see what we can do about the estate duty! I hope hon. members of the Official Opposition are listening carefully.
Do you want it “added in” or do you want it “added on”?
Mr. Speaker, the point is that if someone has taken R35 000 worth of Government stock and a life policy of R35 000—which he is allowed to do in terms of this legislation— that R70 000 will meet his death duties on an estate of up to R472 000, if he should die leaving a wife and two children, which is a fairly common sort of family unit.
But most fathers do not have money to invest.
Yes, but that does not mean that one has to take out up to R35 000 in respect of each. One may take out R20 000. That will take one a long way as well. I have figures here indicating that if one were to have only R25 000 and not R35 000 involved, one would still find that one could afford to leave an estate of somewhere between R250 000 and R300 000 and have provided for the payment of duty on that estate. The matter is therefore not really all that bad from the point of view of availability of cash. I think the hon. member’s one problem was the availability of the cash that has to be paid on an estate, something which is sometimes a problem. This is a very practical way of at least providing a considerable part of the liability for estate duty.
If one has the liquidity.
Yes, that is true. However, all that one has to do in the case of one’s policy is to pay the premium. However, these matters are constantly under review. I think the hon. member for Walmer will agree with me that if one compares the position now with that which existed seven, eight or ten years ago, not to say 20 years ago, it is clear that this is a very substantial relief. Who knows, we might be able to go even further in due course.
Question agreed to.
Bill read a Second Time.
Bill not committed.
Bill read a Third Time.
Clause 21:
Mr. Chairman, we all know that this Bill was before a Select Committee and that in the course of the discussions in the Select Committee, the various clauses were considered in detail. Clause 21 is in fact a recommendation by the Select Committee to the House. The effect of this recommendation is that clause 21 should be referred to a special committee which will act in an advisory capacity in respect of the workings of the Copyright Act. I merely wish to draw the attention of the House to this recommendation and to ask the House to endorse the recommendation as it is one of the few matters, in the Bill presented to the Select Committee, which caused concern.
Mr. Chairman, I accept the recommendation by the Committee, and I shall refer it to the advisory committee.
House Resumed:
Bill reported with amendments.
Third Reading
Mr. Speaker, I move, subject to Standing Order No. 56—
I want to avail myself of this opportunity of thanking the hon. members who served in the Select Committee, for the unanimous report they compiled on the Bill at present before the House.
Mr. Speaker, we have now come to the Third Reading of the Bill. At the very outset it is my pleasure to express our gratitude to the chairman of the Select Committee, the hon. member for Germiston District, who conducted the proceedings with admirable skill and great despatch. We are grateful to him for the manner in which it was done. It was a committee which I think wasted no time, but nevertheless made a thorough investigation of those matters which were found to be worthy of investigation, and agreed upon and prepared a report which I think is a model of brevity, amongst other things.
We on this side of the House asked for a Select Committee because we believed this was that type of technical Bill in regard to which difficulties might arise, not so much from the phrasing and the composition of the Bill itself, but difficulties in the minds of those people outside the House who would have a very real interests in the way in which the Bill would work. We therefore thought it was right that we should have time on a Select Committee to consider their difficulties—which were stated in writing—and to see in what ways the Bill could be improved should it prove to be necessary. We were grateful that the hon. the Minister agreed without any demur that a Select Committee should be appointed to investigate the Bill.
One of the major difficulties which arose in connection with the Bill as drafted was the doubts in the minds of the Institute of Patent Agents. These are professional people with a great deal of practical experience of the manner in which these things work. Being accustomed to looking after copyright in a standard and traditional way, they certainly had doubts and difficulties in connection with the Bill. One of the things which the Select Committee therefore had to look at very carefully was the objections raised by this institute. There were, of course, also other people and bodies who had difficulties or uncertainties in regard to the Bill. I think the Select Committee gave due attention to the representations received from these organizations. In passing, one might say that in view of the technical nature of the arguments raised it might have been advisable to have had verbal representations. This would have given those who had difficulties the opportunity to respond to the arguments of the experts brought in by the department. I do not think there are many people in the country who are truly experts on the subject of copyright payments, designs, trade marks and so forth. These difficulties tend to be of a rather esoteric nature, and it might therefore have been of advantage to the Select Committee to have had verbal evidence and arguments directly from the interested parties.
The basic problem in connection with copyright is, in fact, because of the close association between four different concepts. There is copyright which is an active or artistic creation of a very unique and personal nature. William Shakespeare could for instance create a copyright in the sense of creating a unique intellectual work, as compared to a design—“’n model” in Afrikaans—where the definition is dictated solely by the function rather than the intellectual creation. There are different types of protection. Copyright is protected for 50 years, whereas the design or the model is protected for only 15 years, because of the different nature of protection which is required.
There are also patents and trademarks. I shall not discuss them because they also have special meanings and tend to encroach upon one another. However, the real difficulty in dealing with this particular Bill lay in the conflict, as seen by South African practitioners of the law of copyright, between copyright and design.
This brought us to the crux of the difficulty of this Bill. Section 11 of the Copyright Act provides for a compromise of a kind between copyright and design, in that conflicts can be dealt with by saying that a copyright becomes a design if certain things happen. This is based on a British concept which has been extant for very many years. It had become customary for practitioners of the art of copyright protection in South Africa to depend not only on the British approach and philosophy, but also to depend on the precedents of the British courts. Obviously this was very useful to the practitioners of the art in South Africa and gave them a ready source of reference to the precedents and judgments which could assist in the interpretation of these distinctions in South African law.
At the same time there has around the world been growing up a more international approach to this problem. South Africa is a signatory to international conventions which in fact draw a very clear and a very different distinction between copyright and design. We are signatories to the Berne Convention for the Protection of Literary and Artistic Works, a convention which was drawn up as long ago as 1886, but which has been brought up to date from time to time in new conventions. It was revised again as recently as 1971 in the Paris Convention.
We went to the Select Committee very much aware of the difficulties and fears of the South Africa patent agents and of the customary practices which have grown up under the shadow of the British law and practice. Nevertheless, having heard evidence and having looked at the conventions, we came to the conclusion that it was time for South Africa to move away from a rather confused field to a more clear concept of the differences between copyright and design, to distinguish them more clearly and to follow the international practice, not merely because international practice is necessarily the greatest good, but because it has the greatest and broadest advantage. Having heard the evidence, we therefore decided, while paying due regard to the representations of the South African Institute of Patent Agents and other interested parties, to accept the major purpose and intent of the Bill before us, because we believed it was justified by the arguments presented in its support.
We believed that the further arguments put forward by the Institute of Patent Agents and others, namely that we should wait for the outcome of the Whitford Commission which is investigating the same matter in depth in Britain, which has been our source of information and guidance in these matters, was in fact perhaps not as justified as it appeared on the surface, because our information is that the Whitford Commission, being obliged to re-examine the thing from the roots up, is likely to come to the same kind of conclusion to which this Select Committee came. In other words, there is now a need for greater clarity, a need to move away from the old traditional compromises, towards better definitions and greater consistency within the international community. For this reason we decided to support the Bill very largely in the form in which it was presented to us. We are hopeful that those organizations and institutions in South Africa which made representations to the Select Committee will accept that the Select Committee examined their representations with the greatest care, with great good faith and came to a conclusion as objectively as was possible under the circumstances. We hope that the workings of the Copyright Act will be found, when this Bill is passed, to be effective, that the Act will be found to be rational and logical and will soon find support and acceptance among the practitioners of copyright and design in South Africa.
I have little more to add. Clause 40 provides for an advisory committee which will have the power of review. We ourselves in the Select Committee have already recommended one item in the Bill—quite an important one—for review by this committee and I have no doubt that when this legislation becomes law and is used in practice it will meet with the difficulties and problems which are sure to arise; and that, in fact, such difficulties, inconsistencies or problems which are not covered by the Bill will be smoothed out and streamlined; and that, eventually, in South Africa we will be in possession of a very practical and efficient Act in terms of which we can run our copyright. Copyright is important to South Africa, particularly in the world in which we live today and it is right that we should have an efficient and effective Copyright Act for the protection of copyright in our relations, not only in South Africa, but with other countries as well.
We on this side of the House have the greatest pleasure in recommending this Bill to South Africa for the future operation of opyright and we also have no objection to the Third Reading.
Mr. Speaker, I am merely rising briefly to express my thanks to the hon. member for Constantia for the words he addressed to me. I appreciate them. Actually, I wish to convey my thanks to all the hon. members of the Select Committee who really made my task as chairman very easy. I had the co-operation and support of every member of the committee, and that enabled us to consider the matter without delay and publish a report.
Finally, I want to express my thanks towards Adv. Schoeman, the Registrar of Copyright, who is really an expert in South Africa and on whose knowledge we relied heavily. This enabled us to dispose of our work quickly. My thanks to Adv. Schoeman, and thanks once again to all the hon. members of the Select Committee.
Mr. Speaker, in common with what the hon. member for Constantia had to say, we hope that once this Bill finds its way onto the Statute Book, it is going to find favour with all those whom it will effect. I am sorry that the hon. member for Germiston District rose and addressed you before I had the opportunity of saying to him that I was happy to have been associated with the Select Committee, particularly under his chairmanship, as I felt it was a most informative committee indeed, an extremely well-conducted one and one which considered a great deal of evidence. If anything, I have a greater understanding of what copyright is all about than I ever had before.
Question agreed to.
Bill read a Third Time.
Mr. Speaker, I move—
At present there is no specific protection for any South African business against the enforcement of a civil judgment given against a South African business outside the Republic of South Africa.
The problem with which South African businesses are confronted in regard to civil judgments given abroad against such businesses arises from the civil procedure known as Edictal Citation which exists in our South African legal system. According to this legal principle it is possible that, subject to the existence of certain circumstances in a particular case, a foreign civil judgment may be enforced by means of the South African courts in the Republic.
According to the existing legal rules a court decides on whether such a foreign judgment may or may not be enforced solely on the basis of recognized legal principles, and nobody has any effective control over the matter.
The urgency of this matter has now been specifically emphasized by the investigation instituted at the end of 1977 in the United States of America into a possible contravention of the so-called anti-trust legislation by the former members of the Uranium Producer’s Club, consisting of Australia, Canada, France and the Republic of South Africa. This club was established during 1972 for the purpose of stabilizing the producer price of uranium at a stage when America, with its very high uranium production, caused a steep decline in the world market price of uranium. However, the club was disbanded in 1975 when an effective demand for uranium once again developed and the producer prices of uranium returned once again to economic levels.
At present there are civil actions pending in the United States of America which were brought by Westinghouse Electric Corporation against uranium producers who were members of the Uranium Producers’ Club. Applications for judgment by default have already been made in respect of these actions against two South African uranium suppliers.
These judgments may in fact be granted by default because the Republic of South Africa, as well as the two South African businesses concerned, in the same way as the other former members of the Uranium Producers’ Club, does not recognize the jurisdiction of American courts. The result is that no defence was recorded by the South African businesses when these actions were instituted against them in America.
Owing to the absolutely independent position of the South African courts, the latter, owing to the Edictal Citation procedure, may issue orders enforcing foreign civil judgments, and since the judgments, as requested by Westinghouse Electric Corporation may be granted at any time, or may perhaps already have been granted, it has become imperative that South African businesses should be afforded adequate protection in this regard without delay. The Protection of Businesses Bill, which is now before this House, has been drawn up with this object in mind.
†The problems which may arise in respect of civil judgments from abroad against South African undertakings had of course been realized long ago and the Reciprocal Enforcement of Civil Judgments Act, 1966 (Act No. 9 of 1966), had therefore, been accepted by Parliament. This Act provides for the reciprocal enforcement of civil judgments on an agreed basis by means of agreements between South Africa and any other country which may be interested in such an agreement. In terms of the relevant Act civil judgments could, therefore, only be enforced on a reciprocal basis if such international agreements were to be concluded between South Africa and other individual countries. However, in the absence of such agreements foreign civil judgments can still be applied to local undertakings by means of orders of South African courts.
Worldwide inquiries revealed that, in view of the prevailing international attitude towards South Africa, it would not be possible to conclude or to attempt to conclude meaningful agreements in this regard with more than only a few countries in the world. As a result of this unfavourable reaction experienced by South Africa no agreement had as yet been concluded in this connection. Despite the fact that this Act had been accepted 12 years ago it was, in view of the lack of international interest, not yet brought into operation. The said Act does, therefore, not fulfil the basic objective to protect South African undertakings against foreign civil judgments.
There is at present another measure which has as its aim the protection of South African undertakings, namely, the Second General Law Amendment Act, 1974 (Act 94 of 1974). This measure prohibits the furnishing of information to overseas parent companies by South African subsidiary companies without the written authority of the Minister of Economic Affairs. It is felt that this measure should be embodied in the same Act as that which pertains to the enforcement of foreign civil judgments. The provision in question is, therefore, transferred from the Second General Law Amendment Act, 1974 (Act 94 of 1974) to this Bill. The measure in question is mainly applied in cases where overseas parent companies require or request information from their South African affiliated companies.
Mr. Speaker, it has been interesting to listen to the hon. the Minister’s exposition of the reasons for this measure because, as he is no doubt aware, it has aroused a certain amount of curiosity in various circles. All kinds of people, most of them, like myself, rather ill-qualified for the task, have been trying to assess, over the last week or two, exactly what it was that the hon. the Minister was after with this measure. There has, all along, been a school of thought that held the view that to pinpoint the Westinghouse case as one of the reasons would not be very far off the mark. It is therefore interesting, and I think on the whole satisfying, to learn this evening that this is the case.
Those who have had anything to do with the impact of American anti-trust legislation on the conduct of international business will know that it is an extremely awkward thing to handle. This is not to criticize it. One respects the right of nations to make their own laws, and the history of anti-trust legislation in America indicates that there were good reasons why a great deal of it was introduced. At the same time I think it involves concepts which most other Western trading nations would prefer not to have in their own legal systems. For this reason, when the American way of doing business impinges upon ours or upon those of other Western nations, we get into the kind of trouble which the hon. the Minister has foreseen our possibly getting into as a result of the Westinghouse case. I do not think this is the place to go into the merits of that case at all, but it is at least arguable that a large number of uranium producers might find themselves in hot water quite largely as a result of a normal error of business judgment committed by certain of the executives of the Westinghouse Company.
That being so, we are confronted by this piece of legislation which, as I understand the hon. the Minister—and I hope he will help me in his reply or, if necessary, in the Committee Stage—now really has a dual function. It has, if I understand him correctly, the function which section 2 of the General Laws Amendment Act of 1974 has had.
That is merely completing that section. There is nothing new here.
No, I understand. The hon. the Minister is just picking that up and carrying it over into this new piece of legislation. In addition to that he also has this protection against court orders—if I may use that term in a non-technical sense—of any kind emanating from the United States, or hypothetically elsewhere, orders which might compel compliance by companies in this country.
The purpose of the 1974 Act, as I have always understood it—and this is where I may need help—has always been different. This resulted from the attempts of organizations in Britain and elsewhere to extract, from South African connected companies of theirs, information about such matters as employment practices which it might be preferable not to divulge. The 1974 Act has been there in order to protect companies from having their affairs disseminated abroad in a way they would not wish to have done. It is my impression—and again the hon. the Minister must help me—that in practice not very much use has had to be made of those provisions.
In general we have been quite content to let people have the information they wanted about our companies abroad. Indeed, in the field I have indicated, we have on the whole been able to spread good news rather than bad news and it has not been necessary to make much use of that provision.
I should like to ask the hon. the Minister— it might sound as if I am niggling and nit picking, but I am not: I genuinely want guidance—to explain to me a few differences of wording between the old Act and the Bill. Clause 1(a) reads as follows—
In the existing Act the phraseology is: “Order, direction or letters of request”. In other words, the words “arbitration award” are being added and also the words “delivered” and “given”—the words “issued” and “emanating from” are in the present Act. I do not know whether this is particularly significant or whether it is just an improvement and tightening up the draft, but one would like to know.
The other new feature relates to the words “arising from any act or transaction contemplated in subsection (3)”. Subsection (3), as I read it, is restricted to the production, importation, manufacture and sale of commodities. We are dealing here, I think, with the question of trade in commodities specifically. To that extent subsection (3) restricts clause 1(a) specifically to a certain category of business transactions. That seems to me to be a favourable factor from our point of view as we would not necessarily wish to have these powers ranging far and wide over the whole field of business. As it stands, it seems to us that it only covers certain fields, and, from the point of view of doing sensible business in South Africa—as we have always done it—this measure is to be welcomed. Subject then to hearing what the hon. the Minister may think right to say by way of reply or at Committee Stage we raise no objection to the passage of this Bill.
Mr. Speaker, I am rising to thank the hon. member for the support he has promised to give to this legislation. Let me just explain that in clause 1 we are dealing with a specific new principle. This is the enforcement of civil judgments abroad against South African businesses. I tried to explain that the deficiency in this specific regard has existed for a long time and that, as a result, an Act was passed by Parliament in 1966 making provision for the reciprocal enforcement of civil judgments, in whatever form they may take, against South African businesses. In terms of the principles of this Act, it was essential to have bilateral agreements between South Africa and specific countries in order to enforce the provisions of the Act relating to the judgments. As a result of political and other considerations, it was not possible to enforce agreements in accordance with the provisions of that Act. The result was that businesses in South Africa had to be protected in respect of the enforcement or otherwise of foreign civil judgments, either in the form of an order of the court, or a direction, or an arbitration award having the authority of a court order. In our legal procedure in South Africa we have a method whereby it is possible to apply by way of Edictal Citation to enforce a judgment against a South African business in our country in another country. The courts in our own country are independent institutions, and therefore they are not motivated as we would normally be in the consideration they would give to applications in this specific connection. In view of this it has become necessary for us, in the absence of agreements, to take steps to protect South African businesses against such judgments.
I referred to the case of the Uranium Producers’ Club, against which judgment has been, or is in danger of being, obtained in terms of the American anti-trust legislation. I therefore had to take steps to protect South African businesses in this connection. We would have preferred to have arranged these particular matters on the basis of treaties or agreements between South Africa and the other countries but in view of the circumstances that have been prevailing, this is not possible. Therefore I think it is important that we should protect our businesses against—I am saying this with all due respect—arbitrary actions on the part of other countries, particularly because we have no control over their legal systems. Since the draft legislation makes provision for the enforcement of those judgments with the approval of the Minister, I want to give the undertaking that when such approval is being considered, one important aspect will be of cardinal importance, and that is that we shall do nothing which will influence the ordinary trade between countries, in the sense that overseas contracting parties may feel that they are not able to enforce judgments against South African businesses while they should in fact be able to do so. I hope the hon. member understands what I mean.
The other provision has been applied since 1974. Naturally applications are submitted to me from time to time by companies when their holding companies in other countries require certain information from them. In determining whether we should or should not furnish the information my point of departure has always been that we do not have anything to hide. Secondly, I do not want any company to do anything in South Africa and then allege that it did so as a result of an arrangement which applied here while the company in fact took that action because it suited the company’s financial purpose or in order to conceal an omission on its part in that way. Thirdly, I think that it is wrong for foreign companies with a minority shareholding—frequently a very small shareholding—in a South African company to be dictated to by their Governments what information they should furnish. Therefore, my approach in this connection is that when the majority shareholding thus situated, I shall not refuse the request to furnish the information, except if there are circumstances present which affect South Africa’s security and its national interests.
Question agreed to.
Bill read a Second Time.
Committee Stage
Clause 1:
Mr. Chairman, I am sorry about the misunderstanding which arose, but I wanted to indicate that we are quite content to take all the stages of the legislation now. The hon. the Minister has succeeded in reassuring us. In particular we appreciate the fact that it is his policy, in the application of this legislation as it has existed since 1974, not to defend any South African company when such a company does anything which, in terms of common law and good business practice, means that such a company is merely looking after its own interests and then trying to imply that it is entitled to the Minister’s protection in that regard. There are certain people who were anxious about legislation in this connection. I just want to repeat that when a court in a foreign country might wish to enforce a judgment on some of our companies as a result of something which is internationally known as a malpractice in the business sphere, our companies deserve no protection whatsoever. But when it is a matter of a bona fide difference between the legal system of another country and our own and if the Company acts correctly according to our standards and criteria, we think that our companies are entitled to this protection. We now understand one another in this regard, and we are therefore satisfied with this clause and also with the others.
Clause agreed to.
House Resumed:
Bill reported without amendment.
Bill read a Third Time.
Amendment agreed to.
Mr. Speaker, I move—
Agreed to.
The House adjourned at
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