Mr. Speaker, because the hon. the Prime Minister and Minister of Defence and of National Security is unable to be present here today, due to an earlier engagement, I wish to read the following statement on his behalf in his capacity as Minister of Defence—

The policy which I have followed since 1966, remains unchanged i.e. to keep the S.A. Defence Force outside the constitutional party political arena, yet positively involving the Opposition as far as possible, through briefings, visits, etc. to enable them to fulfil their functions and role as Opposition. In connection with the document in question I have found it necessary to order a formal inquiry as to the source, the compilation and the contents of the document and relevant matters. The inquiry will be held under the chairmanship of the former chief of the S.A. Defence Force, Admiral H. H. Bierman.

On receipt of the report I will decide what further steps may be taken.

Mr. Speaker, I move—

As you know, Sir, the Finance Bill is a measure which is usually introduced at the end of a Parliamentary session. However, the rationalization of the Public Service and the Republic’s financial relationship with the outside world, in so far as financial guarantees by the Government is concerned, resulted in a number of matters cropping up which require urgent attention. For that reason it is now considered necessary for a Finance Bill to be introduced at this early stage of the session.

Since the various clauses are explained in the explanatory memorandum which hon. members have before them, I consider it unnecessary to explain all the clauses in detail.

However, I should like to give the House a more detailed explanation in respect of those clauses dealing with the furnishing of financial guarantees by the Government.

†From a perusal of the schedule to the Bill before the House it is evident that some 40 sections in 29 Acts contain provisions empowering some or other Minister to issue guarantees on behalf of the Government. Not only does this state of affairs give rise to administrative inefficiencies; I also doubt whether it is sound in principle to incorporate authority of this nature in such enactments rather than in the Exchequer and Audit Act, which regulates the financial commitments of the State.

In reviewing the whole question of Government guarantees, it has been decided that the time is ripe to rationalize and simplify the legislation empowering the Minister of Finance and his colleagues to issue guarantees on behalf of the State. I therefore propose to scrap or amend the numerous existing provisions and to replace them with a general authority in the Exchequer and Audit Act. This proposal of necessity involves a few consequential amendments in the Exchequer and Audit Act and I will explain these in due course.

Clause 12 of the Bill provides that section 35 of the Exchequer and Audit Act, which relates only to commitments of the S.A. Reserve Bank, be substituted by a new section 35 incorporating the general authority to which I have just referred. This section reflects, in large measure, the existing approach, namely that the Minister responsible for the matter giving rise to the particular guarantee should issue such a guarantee with the concurrence of the Minister of Finance. I should point out, however, that existing legislation is not necessarily consistent in respect of the Minister who should issue the guarantee in question. For instance, guarantees for commitments of Escom are, in terms of the Electricity Act, to be issued by the Minister of Finance, while those of Iscor, in terms of the S.A. Iron and Steel Industrial Corporation, Limited, Act, by the Minister of Industries and of Commerce and Consumer Affairs, with the concurrence of the Minister of Finance.

In the rationalization process to which I have referred the new provisions rectify any inconsistencies in this respect.

To implement this approach a definition of “responsible Minister” must be provided for, and this is done in clause 7 of the Bill.

The issuing of a guarantee on behalf of the Government carries with it a serious responsibility to ensure that the financial state of the organization requesting the guarantee is such that the Government, as guarantor, will never be called upon to meet its obligation in terms of the guarantee. Default by such an organization is a very serious matter. It is not only the good name of the guaranteed organization which is at stake, but also the ability and full faith and credit of the State. For this reason Parliament has already, by means of section 10(2) of the Exchequer and Audit Act, approved the immediate availability of funds to meet any financial commitments in case of a guarantee being called up. However, because the implications of any default giving rise to the call on a Government guarantee are so serious, I have considered it necessary to add a new provision to section 10 of the Act, i.e. subsection (3). This subsection, provided for in clause 8 of the Bill before hon. members, stipulates that the responsible Minister should report to Parliament as soon as is practicable on the utilization of State moneys to meet commitments under a State guarantee.

There are, of course, a number of other implications in the issuing of guarantees. For instance, in stipulating in the proposed new section 35 that the issuing of the guarantee must be in the public interest, it is presupposed that the capital outlay is also in the public interest, i.e. that the funds are being wisely spent on projects to the benefit of the community and all its peoples. It is the duty of the Minister of Finance to ensure that this is, in fact, the case and that priorities for carrying out these projects are set to ensure that the most urgent economic and social needs of the community are met.

As the Minister of Finance pointed out in the Second Reading debate on the Part Appropriation Bill, 1980, for this purpose we need a streamlined departmental structure and an effective decision-making set-up. For the benefit of those who hold the guarantees of our Government, I believe it appropriate that I should again briefly define our decision-making structure through which we hope to achieve this aim.

In the first place there are the important structural reform recently announced by the hon. the Prime Minister. Some of these have already been put into effect, whilst others will come into effect on 1 April.

Secondly the Minister of Finance has also referred to the formation of a new standing committee under his chairmanship, called the Committee for Financial Policy and Strategy, consisting of representatives of monetary and fiscal policy-making authorities, such as the Department of Finance and the S.A. Reserve Bank. This committee will see to it that decisions at all levels form part and parcel of an internally consistent national financial and monetary strategy over a broad front.

Thirdly, hon. members will also be aware of the existence of the Interdepartmental Committee for the Determination of Capital Investment Priorities under the chairmanship of the Secretary for Finance. This committee has to inquire into and to make recommendations on the guidelines to be followed and the priorities to be set in the use of scarce capital resources in the public sector, considering, on the one hand, the extent, cost, suitability and dependability of various sources of capital, both domestic and foreign, and comparing these, on the other hand, with the total demands made on these resources by the public and private sectors.

Fourthly, I should also mention the Economic Development Programme for the Republic of South Africa released late last year on a revised basis by the office of the Economic Adviser to the Prime Minister for the period 1978-’87. Without a comprehensive plan of this nature, we cannot properly embark upon an orderly capital programme integrating the endeavours of both the public and private sectors.

I am convinced that these bodies will contribute materially towards a thorough and balanced decision-making process. This should be of paramount importance to our creditors abroad.

I wish to refer next to the fact that financial commitments which have a direct bearing on our own interests may also be incurred by parties outside our borders, particularly in neighbouring States, and that, in recognition of this fact, we should be prepared to give financial guarantees in certain of these cases. It is not difficult to envisage such a possibility, for example a joint venture, where it would be in the Republic’s interest to provide such a guarantee. Indeed, the future development of the whole of Southern Africa is a joint venture within the framework of the constellation-of-States concept. To bring this concept to fruition, financial co-operation across our borders is essential. As does existing legislation, the proposed new section 35 takes eventualities which may well arise from this concept into account by providing for the necessary flexibility to deal with the demands of wider financial co-operation.

However, I must stress there would have to be very cogent reasons for the Republic to guarantee the commitments of a non-South African venture, and such a guarantee should therefore not lightly be given.

Another aspect to be taken into account when considering Government guarantees, is the fact that South Africa has received substantial benefits from the credit provided by international and foreign sources of capital. While our whole community may count itself fortunate in the friends we have abroad, these sources of capital are not to be taken for granted. The Minister of Finance has, for instance, in recent times on numerous occasions referred to the instability constantly threatening the international financial structure. The balance of payments difficulties of oil-consuming countries are growing by the day, while political upheavals undermine the spirit of trust on which financial transactions across international borders are based.

Yet, despite the increasing efforts of our enemies abroad to create doubts in the minds of international investors about the political and economic stability of the Republic, South Africa stands proud amidst the confusion threatening the orderly operation of international financial markets and relationships between so-called North and South. We do not seek hand-outs; we do not seek moratoriums, and in all the decades of co-operation with the international financial community, South Africa has not once defaulted or had cause to reschedule any foreign debt. Our record proves that when the Government of the Republic of South Africa, through its guarantees, lends its full faith and credit to the commitments of our borrowing institutions, our guarantees are fully acceptable and credible. We are a stable country of proven creditworthiness in every sense of the word and we intend remaining that way.

It is the responsibility of the hon. the Minister of Finance to ensure that our international financial relations remain sound. For this reason, subsection (2) of the proposed new section 35 provides that if the Minister of Finance deems it necessary, he himself, in that capacity, should issue particular guarantees. In fact, any undertaking by a borrower to meet a commitment in a foreign currency would be deficient without the full cooperation of our exchange control authorities. In the case of significant public sector borrowings, the Government’s guarantee is evidence of Treasury backing. The Treasury’s backing in this case amounts not only to the provision of funds in accordance with the existing section 10 of the Exchequer and Audit Act, but also to the availability of sufficient amounts of the relevant foreign currency from South Africa’s foreign exchange reserves to discharge the commitment.

Subsection (3) of the proposed new section 35 referred to in clause 12 of the Bill, ties up this matter by stipulating in effect that, irrespective of any legal or technical interpretation which might be given to the meaning of the words “guarantee, indemnity or security”, a commitment guaranteed in terms of subsection (2) bears the full backing of the State.

I now wish to deal with an interesting new provision, namely that contained in the proposed subsection (6) of section 13 of the Exchequer and Audit Act, to be inserted by clause 9 of the Bill. Section 13 reflects the principle that in a democratic State the public is entitled to the regular publication regarding the disbursement of public moneys. In respect of our international financial relations this information could be sensitive as we do not wish to compromise in any way the relationships of our borrowers with our creditors abroad, or divulge information that in any other way could be to the detriment of the interests of the State. However, it was felt that it might still be possible to conform to these democratic principles without endangering the interests of the State if the Treasury were to publish annually figures to the global amount involved in guarantees given to foreign creditors. While these aggregate amounts neither relate to the country as a whole, nor reflect details of individual transactions or of the names of individual parties involved, they do give a meaningful indication of the extent and maturity of the foreign credit of the public sector. In this way Parliament, the public, the Press and our foreign creditors may analyse in a meaningful way the picture reflected by these annual statements.

Finally, let me hasten to assure those creditors who already hold Government guarantees that the new provisions in no way endanger their existing rights. As is made quite clear in subsection (2) of clause 3, which deals with the “repeal of laws”, no distinction is to be made between guarantees already issued and guarantees still to be issued under the new provisions. The provisions of this subsection are but further proof that our creditors can fully rely on the full faith and credit of the Government of the Republic of South Africa. In this respect I would again remind foreign holders of our guarantees that because our exchange control regulations stipulate, in effect, that nobody may borrow a foreign currency except with permission from the Treasury, the guarantees held by them will be deemed to have been issued under subsection (2) of the proposed new section 35, and, accordingly, they too will benefit from the provisions of subsection (3) of that section.

*If hon. members should wish to have more information on any of the clauses, I should be pleased to furnish further details.

Mr. Speaker, we in these benches, the official Opposition, will support the Second Reading of this Bill. However, we have a number of problems with particular provisions in the Bill, but we believe that those problems will be best dealt with individually in the Committee Stage. There are, however, some broad principles that we should like to discuss at this stage.

Firstly, may I take the opportunity of thanking the hon. the Deputy Minister and the hon. the Minister for making arrangements for officials of the department to see us and offer explanations to us in respect of this measure, particularly as the hon. the Minister wished to have it introduced at very short notice. Whereas this is a precedent in respect of this matter, I hope that this will also be done in future.

I want to express our thanks to the officials who took the trouble to come to Cape Town to explain the provisions of this measure to us. That, in itself, was somewhat unique. It was a novelty which we appreciated. The other novelty, of course, lies in the fact that this measure is being introduced before the budget—an aspect to which the hon. the Deputy Minister has referred. That seems to indicate that we will have a second Finance Bill a little later in the session, while one would have preferred to have had it all dealt with in one legislative measure. As there is, however, a degree of urgency, we are prepared to deal with the matter and to approach it in a co-operative spirit.

Perhaps the first issue we should deal with is the question of guarantees, a question which is referred to in a number of clauses of the Bill, the crucial provision being contained in clause 12. I want to support the hon. the Deputy Minister on one particular aspect and farther enlarge upon it. This country has a record for the payment of its debts which is unequalled by any other country in the whole world. We have a record in that this country has never defaulted not only in respect of a capital payment, but also never in respect of an interest payment, and the Government has, furthermore, certainly never, to my knowledge, defaulted on any guarantee, and I am not sure whether the Government has, in fact, in recent history been required to make payment of any guarantee. I do not believe that it has. This is a very proud record, and when we compare ourselves with many other countries in the world where today those countries are able to raise funds in the financial markets of the world at interest rates which are far more attractive than we have to pay, we have to say to the investors and bankers overseas that they must look at our record to see what we have done in the history of South Africa and that we have never defaulted on a single debt. That is an important factor, not only for ourselves, and we mention it with a degree of pride, but also in establishing the creditworthiness of this country in the international financial market. In the markets as they pertain at the moment, there is, of course, great instability. Firstly, interest rates worldwide are far too high by normal standards and indicate not only instability and insecurity, but also inflation rates which, from a world economy point of view, are of a very serious magnitude. When we borrow today in international markets, whatever the currency, we are paying interest rates which are abnormally high bearing in mind the prevailing rate of interest in South Africa at present. The question that needs to be posed is whether at some stage in the future, to take advantage of what I believe is a sound currency backed by a country which, as I have indicated, has a credit record which cannot be equalled, we should not consider, at an appropriate stage, to endeavour to place a rand denominated issue or a rand denominated foreign loan. In these circumstances, at a time when other currencies are under pressure, when there is tremendous uncertainty and when we find ourselves backed by a situation where we have a growth rate which can compare with most countries of the world, and a gold backing to give which very few other countries in the world can give, is this not a time when our creditworthiness should be established in this fashion? What might be of interest is that Mexico, for example, recently issued a bond issue which was linked to the price of oil. Other countries have had bond issues which are linked to the price of gold, but South Africa could have a rand denominated issue which could be linked to the price of gold. I believe that that could be a roaring success for South Africa financially and could establish South Africa in no uncertain fashion in the international financial world in this context.

I turn now to the guarantee issue specifically. Here we have some problems with what is proposed. We posed these problems immediately to the officials when they put the Bill to us. Our problem is with clause 12 of the Bill. We cannot see the logic of having both proposed sections 35(1) and 35(2). There seems to us to be no logic behind that. It is true that the proposed section 35(2) is intended mainly to be in respect of guarantees given to foreign entities, whereas the proposed section 35(1) is in respect of local entities. But the proposed section 35(1) also says specifically—and it clearly means that— that it could be used for both local and overseas situations. We have grave difficulty in understanding why it has been done in this form. We have great difficulty in understanding why, for instance, it is the hon. the Minister with the concurrence of the hon. the Minister of Finance and in the other case it is the hon. the Minister of Finance with the concurrence of the other hon. Minister. If two people have to concur, they both have to be there, and whoever concurs with whom really makes no difference in the context.

They have a lot of problems in the Cabinet.

I appreciate the problems in the Cabinet, but I am trying very hard to keep the hon. the Deputy Minister of Finance out of the problems of the hon. the Minister of Public Works and of Tourism. I think the hon. the Minister of Public Works and of Tourism is unlikely to try and raise very many overseas loans; so we shall leave him out [Interjections.]

You are fishing on dry land.

I am fishing in financial waters and I shall certainly get a dividend. I promise the hon. the Deputy Minister that. May I also draw attention to a further matter in the proposed section 35(1) which concerns us and which we posed to the officials. I assume the hon. the Deputy Minister will be able to deal with it. In terms of the proposed section 35(1) the guarantee may be given—

We have a difficulty with regard to the words “bank, company or juristic person”. We can understand that guarantees should be given in respect of entities which are created by law, e.g. the SABC, Iscor and Escom and all such corporations. However, why have a provision in terms of which the Government may give a guarantee for a private company? The only example, which we also quoted to the officials, that I can think of where this issue became really relevant was in terms of the Hotels Act, but that situation has fallen away. In terms of the Hotels Act, at some stage, there were guarantees given in respect of the repayment of mortgage bonds, but that situation no longer pertains. Why should there be the question of having a guarantee given for a private company, a company which is really not established by the Government and which serves no Government purpose? It is true that the hon. the Deputy Minister of Finance might well say that it should only be done if it is in the public interest, but the test of whether it is in the public interest or not is not an objective test, but a subjective test. It is purely a test whether it appears to the hon. the Minister concerned or the hon. the Minister of Finance that it is in the public interest. In other words, it is purely a subjective matter, and unless there is some very valid explanation why private companies should get Government guarantees, we are not happy to have this particular provision included in this measure.

There are a variety of other matters which concern section 35 and which I shall leave over to the Committee Stage. Some of my colleagues will deal with a number of them. May I draw attention now to one other factor which concerns us in relation to the guarantees, i.e. that there is actually no control by Parliament in respect of the quantum of guarantees that may be issued. In respect of money which is voted, actual cash which is voted by Parliament, it is Parliament which decides what should be spent by the Executive, but in respect of guarantees there is no parliamentary control at all.

We would like to see that in respect of guarantees which are to be issued, in exactly the same way that money is voted, that there should be a provision in the budget—in fact there should be a separate Vote—in terms of which the guarantees which may be issued are specified. Without such a provision the control which Parliament has traditionally exercised over the incurring of expenditure can be avoided. A situation could arise where a Minister who may be restricted in respect of other matters, could issue guarantees and then, to honour that situation, Parliament would have to vote the money. There would be no choice about it if we were to honour the good name of South Africa. But it does affect parliamentary control over expenditure and therefore a form of parliamentary control must be instituted. Here the hon. the Deputy Minister referred to the fact that it will now be necessary to disclose in the Government Gazette the furnishing of some of these guarantees, and certain provisions are also stipulated in terms of clause 8 in terms of which certain information in certain circumstances must be placed before Parliament. However, the problem with clause 9 is that it provides—

This is a very nice provision, and one has no quarrel with it, except that the following somewhat magical words are included “save in so far as the Minister may provide otherwise”. One can understand if the provision had been that the Minister may provide that the names and the countries might be deleted, but, for the rest of it, there seems to be no reason why full information should not be put in the Government Gazette for all to see and why we in Parliament should not be fully familiarized with that situation. So whereas this is a step which is desirable, it is certainly not carried to the extent that it should be.

The provisions of clause 7 deal with the “responsible Minister”. This is a strange thing because it says here that the—

That is fine—

In other words, it is the Minister of Finance who stands in judgment in his own cause. We would have preferred that, where there is a question of doubt, the hon. the Prime Minister would have been the one who would have made that final determination, because, after all, he is the one who has the responsibility for the whole Cabinet. May I ask the hon. the Deputy Minister a very simple question, because in dealing with who is a “responsible Minister” one also has to look at this legislation in relation to section 35. Who is the responsible Minister for a guarantee for a private company? Let us assume for a moment that Mr. X has a venture and the Government decides that that is in the public interest and a guarantee is to be furnished. Under whose responsibility does a private company fall? Who is it? It seems to us to be illogical, firstly, to have a private company included in the provisions of section 35 and, secondly, to have the Minister of Finance determining his own cause in terms of clause 7.

For the moment that is all I want to say about the question of guarantees. I now wish to return to some of the other provisions of the Bill.

Firstly, I want to refer to clause 1, which concerns the question of the Railways and Harbours Administration. To some extent we are dealing here with a very strange situation. At the end of the financial year, after the Railways and Harbours budget has been presented and before the main budget has been presented, we are told that what we have to do is to give R73,3 million to the Railways Administration and to pay a subsidy of R50 million, all of which applies to the financial year which is now in the process of ending. We are not doing this in respect of the future, but in respect of the past. What is interesting is that the amount of R73,3 million is a waiver in respect of interest, not interest over an indefinite period, but over a fixed period. Moreover there exists no certainty as to what is going to happen in respect of this interest for the future. In respect of the subsidy of R50 million we are being told that they are not going to obtain a loan of R50 million, but a grant. It is obvious that there is a very big difference between a grant, which one does not have to pay back, and a loan, which one does have to pay back, whether one pays interest on it or not. However, the crucial question the hon. the Deputy Minister has to answer is what the final position is going to be in respect of the Railways passenger services. We have been told that the Railways wants to run itself independently as a separate business entity, but that in respect of services which are of a socio-economic nature it expects the Exchequer, the taxpayer, to subsidize those services. We can understand that argument. We can understand that if the Government should for example decide to launch a resettlement scheme as a result of which people will have to travel longer distances than they would normally travel to work, it is logical that those services will have to be subsidized and that it should therefore be the Exchequer and not the Railways who should subsidize it. That is logical. In respect of many of the services for Blacks that is a reality. However, is it argued now that all the Railways passenger services should be subsidized by the taxpayer? In other words, the people who can afford to travel on the Blue Train and to travel first class are being subsidized. If that is so, something is certainly amiss, and we shall have great difficulty in agreeing with it.

We have been told that the Franzsen Committee has made certain recommendations. We do not know what plans have been made and what the future is to bring. All we are being asked to do, is to sign a little cheque for R73,3 million and another one for R50 million merely as an ad hoc measure, while we do not know where we are going. I think the hon. the Deputy Minister has a great deal of explaining to do here. I can understand the hon. the Minister of Transport Affairs ready to receive the money with open hands not wanting to do much explaining, but it seems to me that the hon. the Deputy Minister of Finance has a great deal of explaining to do here.

Another matter I should like to touch upon is the question of provincial auditors. I have a feeling I should like to test out with the hon. the Deputy Minister by asking him whether the question of whose control provincial auditors should fall under is not one that requires some degree of debate. Is there provincial autonomy? Is it intended that there should be a greater decentralization of power in South Africa, in which case the Administrations should have its own auditors? Or are we moving towards a centralized situation? I am asking this because the question as to whose control the provincial auditors fall under appears to me to be relevant to this major constitutional question.

I come to the provisions of clause 10. The rationalization scheme for the Public Service has had our approval and our blessing. We should have liked to have seen even a little more in relation to it, but when it comes to this provision there appears to be a rather strange situation. If one refers to the explanatory memorandum, one reads—

Good and well, but what happens when one actually looks at the Bill? If one looks at the Bill, one sees it provides that “unless otherwise directed by the Treasury, the accounting officer …”. The effect of this is that a junior official under the head of the new Department of Finance can decide who should be the accounting officer. In other words, if we take the present incumbent who is the head of the Department of Finance and who will be the accounting officer, it is not he who decides who should be the accounting officer, but it is one of the subordinates in the Treasury which is under him, some person there to whom the function has been delegated, who can decide that the present incumbent, who is the head of the department, should be removed from these responsibilities and somebody else should be put in. That is a very strange provision for anybody to put before this House. I do not understand why this should be done. I would have imagined that the wording should be “Unless otherwise directed by the Minister …” because, after all, he in the hierarchy is on top as the head of the Department of Finance. I would have imagined that he would have been the person designated to deal with that situation.

At this stage I should like to deal with on last matter; with the rest we shall deal during the Committee Stage. I come to clause 13, which introduces a principle which, with respect, we do not approve of. Let me explain what is happening here. It was anticipated that the deficit on the South West Africa Account would be R30 million, but in fact the deficit was only just under R24 million. Instead of following the sound and traditional practice of putting money back into the Exchequer when it has not been used or has not been needed and have it re-voted the following year, what is happening here is that it is now going to be allowed that this surplus can be kept in that account to be used the next year. This is a precedent of which we disapprove. It is a wrong principle and we have had problems in relation to this in other fields in respect of other departments. Perhaps I should not use the word “departments” because the South West Africa Account is in a different situation. Once one agrees to a situation where money which has been voted but is not spent by a department, can be kept back and does not have to be re-voted by Parliament, one goes against a time-honoured tradition of Parliament. That is why this is not a precedent that we should like to approve of.

If we look at the Bill as a whole and at the provisions that are intended to be enacted, we shall, while we may have, as I have indicated, particular problems in regard to certain provisions, not vote against the Second Reading.

Mr. Speaker, I should like to thank the hon. member for Yeoville for his and his party’s support of this legislation. I also want to associate myself with the hon. member in expressing his gratitude to the department and the officials for the help which we received from them. It is a great pity that the hon. member is trying to play politics in the discussion of a Bill of this nature, where finance is at issue, by referring to the hon. the Deputy Minister and the hon. the Minister of Co-operation and Development in the same breath. It is a pity that the hon. member wants to try to play politics even in a debate like this.

I do not understand your joke.

The hon. member for Yeoville pointed out that it is customary when dealing with a Bill of this kind, one which deals with a variety of matters—and he dealt with it accordingly here—should actually be discussed in detail during the Committee Stage, clause for clause. Like the hon. member, I shall also refer to various clauses.

The Bill provides for exempting the S.A. Railways from the payment of certain sums of interest in order to make good a portion of the Railway’s losses on railway passenger services. These losses on passenger services place a tremendous, unfair burden on the shoulders of other railway users. That is why, in accordance with the recommendations of the Franzsen Committee, to which the hon. member also referred, the Exchequer is making provision for a contribution to be paid in regard to these losses too. Accordingly, clause 1 provides that an amount of R73,3 million of the interest which the S.A. Railways owes the Treasury in regard to capital invested in passenger services, may be remitted whilst, in terms of clause 2, R50 million of the total interest-carrying loan amounting to R762 million, which was voted for capital requirements, is converted into interest-free grants.

If the hon. member for Yeoville had listened to the Railways debate, he would have noticed that as early on as in that debate, the hon. the Minister mentioned that provision would be made for a certain amount of money to be paid to the S.A. Railways in the same way for next year too. Consequently, although this is a new idea, it is definitely not an idea which has simply been plucked from the air. After a thorough investigation by the Franzsen Committee, it was decided to do so on this basis. A certain amount will also be voted for this purpose annually now, according to a certain formula.

The hon. member for Yeoville also referred to the rationalization of the Public Service. He also pointed out that some Votes would then be grouped under the Finance Vote, including the Treasury, the S.A. Mint, Customs and Excise and Inland Revenue. He also indicated that the Government Printer Vote would be incorporated in another department as from 1 April 1981. Therefore it is essential that we should make provision in the Bill that is now before the House that, should it become necessary to transfer the accountability for a section or sections of this Vote to someone other than the head of the department, it must in fact be possible to do this. The provisions concerning these votes which are operated by the present Department of Finance, as well as the Votes of the S.A. Mint and the Government Printer, become redundant and are consequently deleted as from the same date.

The hon. member for Yeoville also pointed out that as a result of the further rationalization in the Public Service, clause 6 provides that provincial auditors will be officers in the office of the Auditor-General as from 1 June 1980, instead of officers in the Department of Finance. As the hon. member ought to know, the majority of these provincial officers arezin fact public servants who are seconded to the provinces. This is the case here too.

The Bill makes further provision for the rationalization and consolidation of all legislation concerning the issuing of financial guarantees by the Government with regard to both domestic and foreign obligations. At the moment, approximately 40 provisions concerning the issue of Government guarantees are embodied in 29 Acts. Experience has taught us that tremendous problems are sometimes experienced particularly in regard to foreign loans because the wording in the different laws does not agree. The hon. member referred to this but I should like to remind him that loans often have to be dealt with speedily, particularly in view of interest rates which can change rapidly. That is why it must be possible to take rapid action at times in order to give guarantees, and thus we have this particular section.

This Bill therefore streamlines the legislation with regard to Government guarantees, as regards both the rationalization and the simplification of the legislation which authorizes the hon. the Minister of Finance and his colleagues to give guarantees. I think that this is very important legislation, especially in regard to the latter, and therefore I am glad to support it.

Mr. Speaker, I rise on behalf of the NRP to tell the hon. the Deputy Minister that we shall also be supporting this Bill. Before I comment on the Bill itself, however, I should like to say that I agree entirely with what the hon. member for Yeoville had to say in regard to South Africa’s reputation in the business world, and internationally, for settling its debts. I firmly believe that one of the greatest assets one— and here I include a business or a nation—can have in the business world is that of being able to meet one’s debts and to pay on the due date. I therefore think that it is of particular interest to us in this House that this Bill attempts to rationalize the present situation involving some 40 provisions and some 29 Acts that concern the issuing or furnishing of guarantees. We find that the purpose of the provisions of this Bill is to enable the hon. the Minister to co-ordinate these aspects so that there is a far better rationalization in regard to the borrowing of money and the utilization of capital. I think that this coordination of matters involving the utilization of South Africa’s capital resources is extremely important, particularly as far as the furnishing of guarantees of the State is concerned, when one considers the very many projects in which the State, in one way or another, is involved and for which the State so often issues certain guarantees.

I am particularly pleased to see that these provisions now require the concurrence of the hon. the Minister of Finance in the case of any guarantees issued by other State departments. I think this is extremely important. When one considers the problems involving capital resources that South Africa has had in the past, not necessarily today, I think it is extremely important for the hon. the Minister of Finance, the man who holds the purse strings for the nation as a whole, to know what is going on. Therefore I was particularly pleased about what the hon. the Deputy Minister had to say in his Second Reading speech, and I quote—

I think this is extremely important, especially as we move into an era of growth in South Africa. In such a situation we have to make sure that our capital assets are going to be used to the best advantage and to the benefit of all South Africa’s peoples.

I was most interested to hear what the hon. the Deputy Minister had to say about the effective decision-making set-up when it comes to the issuing of guarantees and the utilization of capital. I was glad to note that there would be a greater emphasis, on the part of the Committee for Financial Policy and Strategy, on ensuring that capital is utilized to the advantage of the State as a whole. He went on to talk about the Interdepartmental Committee for the Determination of Capital Investment Priorities. I feel very strongly about this particular subject, and I am sure that those who have listened to debates in the past, especially Railway debates in which there has been mention of capital utilization, will concur when I say that I have often been one to question the wisdom of the State using more of the available capital resources than its fair share.

The hon. the Deputy Minister referred to the Economic Development Programme which has been drawn up within the last 12 months or so. I should just like to say to the hon. the Deputy Minister that the last Economic Development Programme failed. I believe one of the reasons why it failed was that there was not co-ordination of capital utilization between the private and public sectors. I do believe that in the recent past there was a tendency for the State to spend too much of the available capital resources, and I think this was to the detriment of the State and the economy as a whole.

The same old story.

The hon. member may say I am back to my old story, but that is correct nevertheless. The point is that the old Economic Development Programme failed, and we on these benches saw many years ago that it was going to fail. When one studies figures and graphs, one can predict what might happen within the course of a year or two. The fact that the hon. the Minister has now seen fit to come with the provisions contained in this Bill does, I believe, give some justification for the stand we in these benches took in the past.

This is extremely important because in the hon. the Deputy Minister’s speech he refers to joint ventures and to neighbouring States. Looking into the future, one tries to envisage what the hon. the Minister has in mind. I can envisage what is coming in the future with joint venture projects. I should just like to say that, because I can envisage what is coming, it just re-emphasizes my attitude in the past that we have to be very careful about how and where our money is spent. If we are going to enter into any joint ventures in the future and if we are going to issue any guarantees in the future, I think it is absolutely essential that the whole programme of economic development in South Africa should be co-ordinated and be directly under the thumb of the hon. the Minister of Finance. If he sees that something is going wrong, by all means let him call in the Prime Minister, as the hon. member for Yeoville has said, if it requires the horse-power of the Prime Minister to put things on the right tracks. That is why I and my party welcome a lot of the provisions in this Bill, especially in regard to guarantees.

There is just one other matter I want to refer to and that relates to clauses 1 and 2, which concern the subsidies which are being given to the Railways and Harbours Administration in respect of the year which is just closing. I agree with the hon. member for Yeoville that here we are doing something retrospectively. It has all been debated in the Railway budget and now we are passing the necessary legislation to see that this is all above board and correct. I just want to preface my remarks on this subject by saying that I know that this is accounting procedure. However, with subsidies coming from the Exchequer or the Consolidated Revenue Fund in the future in the light of the Franzsen Committee’s investigation into passenger services and especially the socio-economic services, I sincerely hope that the moneys coming are not going to cloud the real costs the Railways are incurring. I sincerely hope that, just by reducing the interest or causing the Railways Administration to be exempted from its obligation to pay an amount of R73,3 million, that is not going to cloud the real costs the Railways are incurring. If the State decides to give a subsidy in respect of the socio-economic services, I think it should be clearly seen to be a subsidy and that the interest costs are not being reduced by an amount of R73,3 million just because the State has seen fit to exempt the Railways from paying that amount for a particular year. I hope the hon. the Deputy Minister understands what I am getting at. I think it is absolutely essential that the Railways Administration’s costs should be seen clearly by all and that they should not be hidden. It is no use kidding oneself when one is in business: If the Railways are incurring certain costs, these should be clearly stated and then, if a subsidy is required to keep the Railways solvent, let it be seen by the nation as a whole that the State has given the Railways a subsidy of whatever sum it may require to enable the Railways to provide the all important passenger services for the less privileged people in the country.

With these few words I should just like to say that we shall be supporting the Bill.

Mr. Speaker, I want to thank the hon. member for Amanzimtoti for the support he has given this measure. I want to thank him, too, for the positive words he expressed on the creditworthiness of South Africa. He also referred to the importance of the correct utilization of foreign loans, and I shall refer to that later in my speech.

The hon. member for Yeoville questioned the fact that there were no parliamentary controls on the furnishing of guarantees by the State. He referred to clause 9 and said that it was in the discretion of the Minister whether he should publish this statement or not. It can indeed be envisaged that when South Africa is under a strong sanction from abroad, great pressure is exerted on people not to grant loans to South Africa, and if denominations are mentioned in this statement, bodies could easily be identified. Consequently I want to suggest that when an inflexible obligation is imposed on a Minister to provide the statement, it could easily be used as an instrument against this country.

I want to suggest that this discretion should, after all, be left in the hands of the hon. the Minister of Finance, since he would like to exercise it. It is to his benefit to exercise it. If he does not do so, foreign bankers could be discouraged in this way since they would think he had something to hide.

The purpose of this legislation as regards the furnishing of guarantees by the Government for financial commitments incurred by Government bodies, is on the one hand, to rationalize the furnishing of these guarantees, and on the other, to afford foreign bankers security and peace of mind. This is being brought about by means of the proposed new section 35(3) in terms of which an absolute indemnity is provided to foreign creditors. This is also effected by means of section 13(6) which provides that the Minister may provide a statement annually in which the total commitments incurred by the State in respect of guarantees is shown. This is also being done by rationalizing legislation in this regard in that foreign bankers need examine only one legal provision and need not consult a number of laws to see what the powers of the hon. the Minister of Finance and other Ministers concerned are.

If one examines the way in which Government and semi-government bodies have utilized their loans in recent years, one could draw the conclusion that the legislation is not really necessary, and that foreign bankers really have nothing to fear. History has demonstrated that South Africa can indeed be held out as a model State with regard to this matter. South Africa’s Government and semi-government institutions have incurred considerable loans during the past few years. Our Government commitments have risen considerably, between the years 1975 and 1976 in particular, but one must examine how these loans have been applied. The loans were used to improve the electricity supply in that some of them were furnished to ESCOM. They were used for better air transport in that the S.A. Airways was provided with export credit for the purchase of Boeings and Airbuses. They have been used to build a new harbour at Richards Bay in that loans have been furnished to the Railways. What country has had the courage in recent times to build a new harbour the size of Richards Bay? They have been used to construct improved loading facilities at other harbours, such as Saldanha. They have been used to build two new railway lines, one to Richards Bay and the other one is the Sishen-Saldanha line. They have been used to provide export credit and project financing for Sasol 2 and Sasol 3. These loans have in other words been used not only to ensure better productivity in this country, but also to strengthen the balance of payments of this country by means of which the repayment of the loans can be facilitated. This action has brought about a tremendous improvement in our balance of payment position. The Martin Spring Newsletter reports that during the year ending June 1979, South Africa had the largest positive trade balance in the world after Japan, Germany and the major oil exporting countries. If one takes into consideration that out of all the countries in the world South Africa probably pays most for oil, that this took place even before the astronomical rise in the price of gold and that this country has had a deficit in the current account of the balance of payments almost without exception from 1962 to 1977, except for a few surpluses during a recession, these trade balance figures can only be described as phenomenal, and I maintain that this is principally due to the responsible and well-considered utilization of foreign loans by the Government. The hon. the Deputy Minister made the statement that South Africa was a creditworthy country with a proud history in this regard. There is no doubt about that.

However, South Africa is also a developing country with great challenges and potential. However, this country has an inadequate capital supply and consequently, in the long term in particular, we shall be dependent to a large extent on foreign investments, and indications are that we are becoming increasingly dependent on them. This is apparent from the fact that the net inflow of foreign capital, as a percentage of gross domestic investments, grew from 6,6% per annum during the period 1962 to 1969, up to 9,6% per annum for the years 1970 to 1977. Another trend which has been very noticeable in recent years is that there has been a decline in the inflow of foreign risk capital in favour of loan capital, and an indication of this is that the interest payments, as a percentage of the goods and gold exports and services, rose from 2,7% in 1970 to 5,7% in 1977, while the foreign dividend payments as a corresponding percentage dropped from 9,5% to 4%. Everything indicates that foreign loans, in the long term in particular, are extremely important to South Africa. Consequently everything possible will have to be done to ensure that the technical and formal requirements to which Government guarantees are subject, must be neat and clear. This legislation will most definitely have that effect and facilitate and encourage foreign loans.

Mr. Speaker, the hon. member for Pietermaritzburg North raised matters which I shall refer to in passing. The hon. member is right when he says that we are a model State as far as the repayment of loans is concerned, and no one can deny that.

The hon. member also referred to the strong position of our economy. That is evidenced, too, by the fact that we are expecting a growth rate of 5% in South Africa this year, while other countries are either expecting no growth rate at all or a depression. The fact that we have a strong economy, cannot be doubted either.

†The hon. member for Yeoville made certain very valid points, but I do not quite agree with one of the other points he made, and I should like to hear from the hon. the Deputy Minister in that regard. The hon. member for Yeoville said that guarantees must be specified in the budget. It is possible that where the Government knows in advance what the guarantees will be, it can specify them. But what about guarantees that arise out of projects which only come to light or come to fruition after the budget date or which are only concluded after that date? I am afraid that one cannot regard the suggestion of the hon. member for Yeoville in that respect as feasible, because, as I have said, if one knows what one’s guarantees are when one introduces the budget, one can give particulars of those guarantees. However, there are many projects one can think of which have been suspended and held in abeyance, e.g. the semis project amounting to more than R2 000 million. It may well be that in August this year we can go into a consortium and find that we can go ahead with that particular project and to the issue of guarantees. How then can the hon. the Minister already advise in the budget in two days’ time that he is in a position to know that those guarantees would have to be furnished? So, in that respect I do not believe that one can furnish guarantees in advance. That they will be meaningless in the context of things.

We want to thank the department for the explanatory memorandum. It made this legislation very much easier for all of us to understand. However, after having listened to some of the lengthy speeches, I am not so sure that it was such a good idea to issue an explanatory memorandum in this regard.

The loss on passenger services cannot be the responsibility of the Railways alone. We accept that each year a decision must be made as to the level of the contribution. This is a service rendered which has to be subsidized for obvious reasons and this has our full approval.

Furthermore, guarantees are being simplified and certain clauses of the Bill deal with the rationalization of the Public Service, and we have no difficulty with these clauses.

The guarantee in respect of Iscor will be furnished in terms of the new section 35 of the Exchequer and Audit Act. I may mention in passing that it is very pleasing for us to see that Iscor is operating on a profitable basis, and in that regard we wish them well. Financial co-operation across our borders is vital, and in the circumstances it is understandable that at certain times we are going to have to give guarantees to our neighbouring States. As the hon. the Deputy Minister has explained, those guarantees will be very carefully looked at. Moreover, those will be exceptional cases. Some of us have pleaded for a long time for an African economic community in Southern Africa and it seems as though that day is drawing closer.

With these few words we from these benches should like to support the Bill.

Mr. Speaker, the hon. member for Walmer referred to the objection raised by the hon. member for Yeoville concerning conditional liability in this budget. I want to agree with the hon. member for Walmer that it is impossible to make provision in a budget for conditional liability. As regards direct liability due to the invoking of that conditional liability, there is in any event the amendment inserted by clause 8, viz. the adding of subsection (3) to section 10 of the Exchequer and Audit Act which will have to be incorporated in the budget from time to time.

Firstly, I just want to come back briefly to the first two clauses of the Bill, dealing with the compensation to the Railways and Harbour Administration for losses in respect of passenger services. The hon. member for Yeoville also raised serious objections in this respect since an allocation of R50 million had indeed been made to the S. A. Railways. I find it incredible that after an extensive discussion, firstly during the discussion of the Additional Appropriation Bill and subsequently during the discussion of the Treasury Vote under the Additional Appropriation Bill as well, he raised this matter again. I think that it is perhaps just as well, in connection with this allocation of R50 million, to refer also to Hansard of this year, col. 2423, in which the hon. member for Musgrave said the following—

That is a different matter. I made the point that that budget was correct.

Now the hon. member is saying that this is another matter, but surely the R50 million is in any event specifically intended to be utilized for the same purpose. What is important and what we must take into consideration here is that this does not impose an additional burden on the budget, but that it is simply loan capital which is being converted into a compensation.

The hon. member for Amanzimtoti also referred to the exemption of interest and allocations and suggested that it should not merely be seen as a compensation, but that it should be incorporated in the accounts in order to ascertain exactly what actual costs and losses were being carried on those specific services. I think it is going to be difficult, if one grants exemption from interest, to determine what the real cost would be in terms of a loan where interest had to be determined. I do not know what budgeting procedure the hon. member for Amanzimtoti suggests. What rate would then be taken into account so that the real losses could indeed be determined?

I now come to a second point. It concerns the rationalization of the legislation with regard to Government guarantees. In recent years South Africa has made a tremendous onslaught on the foreign capital market for the financing of various projects—the hon. member for Pietermaritzburg North indicated this as well—such as Sasol, Saldanha, Sishen, Richards Bay, Escom and various other matters. I think we are justified in saying that these have been excellent programmes, as is indeed also indicated by the benefits we have gained on the current account of the balance of payments. Almost every one of these projects was linked to some export programme which earned foreign exchange wherewith to repay the very loan incurred for the financing thereof. This foreign exchange was earned from the projects themselves. Some banks were indeed sceptical as to the strength of our foreign reserves, particularly the banks of the USA who got to know us only just before Angola and Mozambique became independent, but I think the old banks, the British and European banks in particular, then grasped the opportunity to do very good business.

It is also gratifying—and I think it is necessary for me to refer to this as well—that the hon. the Deputy Minister of Finance was able to say that South Africa had an unsurpassed record in that it had never been necessary for South Africa to default or even to reschedule the terms of any loan. The hon. member for Yeoville emphasized this too. This is indeed something to be proud of.

The foreign banks did have problems which had nothing to do with our real record, but in fact with the technical aspects of our legislation, and accordingly this is the chief principle with which this Bill is for the most part concerned. In the first place it was pointed out that there were approximately 40 sections in 29 laws regulating provisions with regard to the authorization of the issue of guarantees on behalf of the Government. These provisions are now being abolished and replaced by the general authorization which, as a sound practice, is consequently being incorporated in the Exchequer and Audit Act, an Act which, as a whole, regulates the financial commitments of the State. This also enables us to act more quickly. If one takes the example of any foreign consortium, for example a loan from London in which Japanese, British and German banks are involved, one finds that every part of the consortium has its own approach. Each has its own legal advisers, and although they usually act under a bank that acts as leader, problems are often experienced with the interpretation of our legislation. The rationalization ought now to enable us to finalize these contracts over a much shorter space of time—as the hon. member for Smithfield also indicated. The mobility is essential particularly in a time in which interest rates can fluctuate to such an extent that the Eurodollar rate, for example, could rocket from 12% to 19% within two weeks. The question as to who is to issue the guarantee, is consequently also clarified in clause 12, in which section 35 of the Exchequer and Audit Act is replaced.

In order to avoid confusion, no express reference is made to or distinction drawn between domestic and foreign loans, but the proposed section 35(1) does refer very clearly to the practice relating to domestic loans where, in terms of the definition in clause 7 of the Bill, the responsible Minister, in co-operation with, and with the permission of the hon. the Minister of Finance, stipulates that the loan be taken up and the guarantee furnished.

One must also examine the definition in clause 7 to which the hon. member for Yeoville referred. However, I do think it is meaningful that the hon. the Minister of Finance is indeed to stipulate who the responsible Minister is, for the Minister of Finance is after all the person who regulates the overall financial affairs of the State. If a dispute where to arise the matter would in any event be taken to the Cabinet for a final decision. Thus I do not think it is necessary to involve the Prime Minister as a mediator in financial legislation. The proposed section 35(2) in fact puts it the other way round where the practice relates to foreign loans and the Minister of Finance arranges the guarantee with the permission of the responsible Minister.

In the second place, problems were also experienced in the implementation of the concept “guarantee”. The question was whether “guarantee” referred only to a surety or indeed to an indemnity. In other words, the question is whether the State only stands in for the losses of the foreign creditor in the sense that it first has to excuse the debtor, or does the Government immediately become a co-principal debtor on the non-payment of the commitments of the debtor? Legal opinions sought indicated that the concept “guarantee” can indeed refer to security and not to indemnity. The guarantee required by foreign banks is, in the nature of the matter, one of indemnity. They want to be in a position to approach the Government without further ado if Iscor, for example, were not to meet its commitments. This is understandable. In the case of a domestic loan there is no problem, but the basis on which any foreign loan agreement is secured, is one of trust. In that case the loan is not covered by any security, and that is why they ask the Government, in the event of the debtor defaulting, immediately to take the place of the debtor as principal debtor.

The proposed section 35(3) makes provision for this position to be explained very clearly in this way. The unconditional and irrevocable commitment of the Republic in the case of the non-fulfilment of an agreement, pertains only to an undertaking in terms of section 35(2), which specifically concerns foreign loans. Thus we are making it clear that we do not want to hide behind technical provisions and that the undertaking of the State stands on its own two feet. The reason why section 35(3) does not cover section 35(1) as well, is clear, because the domestic matter is already being dealt with in terms of the State Liability Act, No. 20 of 1957, section 1 of which provides that claims ex contractu can be laid against the State by the creditor in any competent court.

A third problem concerns the question of investigation of the extent of the Government’s guarantees, an inquiry which is similar to that addressed to me each year by my bank manager concerning the extent of my own conditional liability when he has to revise my overdraft facility. Various hon. members have referred to this matter.

Clause 9 amends section 13 of the Exchequer and Audit Act by adding subsection (6) in terms of which the extent of the Government’s commitments is published once a year in the Government Gazette.

The hon. member for Yeoville raised an objection to the meaning of the proviso contained in subsection (6). If the definition in this provision is too wide for the hon. members’ liking, we can examine it in the committee stage. Personally I have no problems with it. I think its intention is very clear. One could perhaps examine the wording at a later stage.

The rest of the provisions chiefly concern consequential amendments as well as amendments relating to the process of rationalization in the Public Service. I think the Bill is absolutely essential. As a result of the elimination of these problems, many hours of discussion with foreign bankers as well as their legal advisers will be avoided once this Bill becomes law. I believe it would also be meaningful if the hon. the Deputy Minister were to make a copy of his Second Reading speech in Hansard available as soon as possible to the major foreign banks with which we do business. I take pleasure in supporting this Bill.

Mr. Speaker, permit me in the first place to convey my sincere thanks to everyone who has taken part in this discussion. I also wish to express my appreciation for the calm and responsible way in which this discussion was conducted. I think, too, that it is fitting that when one discusses matters such as financial guarantees by the State, one should do so in a very responsible way and not adopt a controversial approach. I think that this also contributes to the development of the sound image and the good name which South Africa enjoys in the financial world in general. I want to convey my appreciation to the hon. members who expressed thanks to the officials who explained the legislation to them. I really appreciate that.

The hon. member for Yeoville quite rightly pointed out that many of the discussions on the Bill could take place in the Committee Stage, because in the nature of the matter, this legislation is a Committee Bill. The hon. member stated a few points which one could regard as standpoints adopted on principle. In the first place he referred to clause 12, concerning which he wanted to know why Ministers should in fact exchange places as far as the furnishing of guarantees is concerned. Clause 12 seeks to amend section 35 of the Exchequer and Audit Act. The fact is that countries abroad prefer, in the case of a guarantee, to obtain such a guarantee from the Minister of Finance of the country concerned. It is correct and appropriate that the Minister of Finance should furnish such a guarantee, because since he carries responsibility in regard to the finances of a country and also controls the currency, he is the person who will inspire the greatest confidence abroad. A foreign banker or financier will in the nature of the matter prefer to have a guarantee from the Minister of Finance of the country in question. This ought to go a long way towards eliminating the lack of clarity that has existed in regard to this clause. I appreciate that it is somewhat difficult to follow clause 12.

Then the hon. member wanted to know, also with regard to clause 12, why it should be possible for the loans of a private company to be guaranteed by the State. In the course of the discussion the hon. member acted with propriety, but then he sought to cause a little mischief. I think that the hon. member wanted to refer to events that had occurred in the past, and expressed concern about the State guaranteeing the loans of all kinds of front companies from abroad. I think I understood the hon. member correctly.

It is not we who are saying that; you are saying it.

I did not even mention it.

It does happen that bodies and persons and even Governments are prepared to do business with South Africa but not with the Government of South Africa. This is all that I really want to say in this regard. Then, too, there are certain bodies and Governments beyond the borders of our country—the hon. member for Yeoville need not shake his head—that are prepared to purchase South African goods with the aim of reselling them. Sometimes quite interesting products are involved. It is true that export credits are sometimes created for this purpose, but that the company doing the exporting does not want to be alone in carrying the risk involved. If such trade is in our interests and the Government supports it, it does happen that we sometimes guarantee the export credits in that regard as well.

But there is a company that has been established for that purpose. It has been established by law.

That company does not market everything. That, specifically, is the underlying reason why affairs are conducted in this way as far as certain export credits are concerned. Then, of course, the hon. member also mentioned an example here, an example which I believe we might as well mention. Two hotels were built in Johannesburg, and the loans obtained abroad in that regard were guaranteed by the State. I think that at that stage it was a very good thing. The building of those hotels paved the way for others.

I think that when a really meritorious enterprise such as this is undertaken by the private sector, and they are unable to obtain a guarantee in any other way, and it is in the national interest—it is of course an absolute requirement that it should be in the national interest—we can consider the matter. However, I want to give the hon. member for Yeoville the assurance that guarantees will not lightly be granted by the hon. the Minister of Finance. After all, he bears the financial responsibility in this country. Then, too, there is also the Committee for Financial Policy and Strategy, the Priority Committee for Capital Projects that we already have, etc. In any event, funds would not be spent very freely, nor would guarantees be freely provided. The hon. member for Yeoville also made mention of the issue of the publication of foreign guarantees. His problem in this regard is that the Minister is in fact being allowed a discretion, that the Minister of Finance will decide what guarantees he will or will not make known. I should like to react to what the hon. member said in this regard. If transactions were to be conducted in, say, roubles and rupees, would it be in the interests of South Africa that such transactions and guarantees be made known? As I have just said, there are certain countries that trade with us and use is often made of other currencies. However, one does not wish to publicize all this information. This is of course in the national interest, too, and it is not the aim to conceal anything. It is quite simply the case that some of that information may be sensitive, and if it is published in detail, the world will know exactly what we are getting up to. Then the world may know about transactions that are to our benefit and that are conducted in secret. Therefore it is in the national interest not to publicize them.

As regards clause 7, the hon. member for Yeoville wanted to know why there was a dispute as to which Minister could furnish the guarantee. The hon. member again tried to poke fun. However, this is not really a problem, and if a dispute were to arise between the Minister of Finance and another Minister as to which was the responsible Minister with regard to the project or undertaking in question, it would not have to be the Prime Minister who would endorse or sign the guarantee in question. The fact is that if such a dispute were to arise, the matter would be referred to the Cabinet, where the question as to who is the responsible Minister, will be settled. The hon. member need not therefore have any fears or difficulties in that regard.

Then the hon. member for Yeoville wanted to know who the responsible Minister would be in the case of a private company. As I have already said, the Minister of Finance is the Minister responsible for the finances of the country as a whole. If, therefore, it was a case of a private company to which a loan is to be guaranteed, the matter would be settled in the good spirit that prevails in the Cabinet and in the NP.

What have you just said, Pietie?

In that case we should decide peacefully among ourselves who should sign that guarantee.

Say it again.

Say it again out loud.

I reacted to the allegation of the hon. member to the effect that there would ostensibly be problems in determining who the responsible Minister would be in terms of clause 7.

Tell us again about the fine spirit in the Cabinet.

The hon. member has problems with regard to clause 1 and clause 2, and there have been a number of questions as to why the amount should be R73 million. It has been asked whether this will happen again next year, etc. The hon. member for Yeoville said that we were now in fact subsidizing the first-class services and the Blue Train, etc., as well. We were asked what the final answer was for the Railways. We were asked what we were going to do about it. As the hon. member probably knows, we have the Franzsen Committee.

Yes, but where is the report?

We requested the Franzsen Committee to investigate the whole issue of transportation—not only rail transportation—in depth. After all, there are other types of transportation as well. The transportation of passengers, particularly the transportation of people in the lower income groups, is not a problem limited to the S.A. Railways alone. This is a much wider problem and affects road transport, etc., as well. It is a difficult issue, a problem which occurs throughout the world. Throughout the world there is a tendency for bodies to lose money on passenger services. There is the issue of bus transport in cities, etc. Accordingly Prof. Franzsen was requested to study the matter in depth. If one takes into account his expertise as an economist and financier, one knows that he will not come forward with a recommendation amounting to so-called hand-outs, or one which does not afford a really well-considered solution. Prof. Franzsen has instituted a thorough investigation, and in the interim we are granting this aid to the Railways because we want to make an effort, at least, to lessen the impact of the rate of escalation of tariffs to some extent. I take it that the official Opposition welcomes this, because in the course of the debate on the Part Appropriation they made earnest pleas for a “people’s budget”, a “caring society”, etc. Here we are making a positive contribution towards the subsidization of a service for the lower paid people in particular. The hon. member asked how this amount was calculated. I can say that the interest for a full year will amount to R165 million. The fact that the amount is only R73,3 million is due to its only having been calculated for a period of five months. The total capital sum regarded as having been invested in passenger services by the Railways is R1 870 million, and the remission of interest thereon for a full year will of course amount to R165 million. However, I want to put it very clearly that the Treasury has not committed itself finally to this. This is an interim step, pending the report of the Franzsen Commission.

Mr. Speaker, does the hon. the Deputy Minister accept the fact that there is a difference in principle between subsidizing socio-economic services and subsidizing passenger services as a whole, including the upper levels, i.e. first-class services and the Blue Train?

Yes, Mr. Speaker, I do accept that there is a difference. My personal view is that whenever people can afford to pay for a service they must pay, and whenever people cannot afford to pay, the Government should subsidize them if possible …

That sounds much better.

… within the framework of the financial capacity of the State, and without creating a socialist State.

You are now becoming a Social Democrat.

I am just stating a principle.

*The hon. member also referred to the issue of the transfer of the provincial auditors from the Department of Finance to that of the Auditor-General. He asked whether this did not undermine decentralized Government in South Africa. This is by no means the case. It is just that it is better that the provincial auditors should fall under the staff of the Auditor-General.

Then the hon. member raised the very interesting point that the Treasury will determine whether the Director-General of Finance would be the accounting officer. He alleged that in fact a junior official would say to the head of the department that the head was the accounting officer. The hon. member for Yeoville should just go and look at the definition of “Treasury”. According to this definition the Treasury is, inter alia, the Minister or an official designated by him. In effect, therefore, it is the Minister that determines this.

As regards the issue of the deficit on the South West Africa account, I want to tell the hon. member here and now that the procedure is that if there are funds remaining that have not been spent, they are redeposited in the Exchequer. We still adhere to that standpoint. We have no fault to find with that principle. That is the standpoint of the Government. But due to the fact that this is something that occurred some time ago due to delays that occurred in South West Africa with regard to carrying out projects exclusive to South West Africa, and the circumstances prevailing there, which I should not like to elaborate on here, it was decided not to redeposit those funds but to leave them there for utilization in the following year. However, it is not the principle that we now permit a department to build up a lot of surplus funds without Parliament knowing about it. If such funds are not redeposited, the danger could arise that the departments could build up large reserves without Parliament being aware of it. That is why I am today informing Parliament as to the extent of that amount and what is being done with it. The hon. member for Smithfield gave a very clear explanation of clauses 1 and 2, and I want to thank him most sincerely for doing so. I also wish to thank the hon. member for Amanzimtoti, and tell him and the hon. member for Yeoville that I greatly appreciate the fact that members of the Opposition have so clearly emphasized South Africa’s reliability and credibility. I think it is a fine thing to hear these things from all the parties in the Parliament of our country.

All they have to do now is to help with the maize price this year! [Interjections.]

The hon. member for Amanzimtoti made the point that the subsidies to the Railways should not “cloud” the true cost of the Railways, as the hon. member put it. I can only say to the hon. member that he need not be concerned about that, because those things will appear every year in the Budget A report in that regard is submitted to Parliament, and the subsidy cannot be concealed anywhere.

The hon. member for Pietermaritzburg North supported us very strongly in connection with clause 9 relating to the withholding of information concerning, and publication of, guarantees. The hon. member spelt out very clearly what important projects have already come into being in South Africa by way of foreign loans, projects for which guarantees were of course necessary. He also referred to the important contribution of these very projects to the earning of foreign exchange for South Africa. I thank the hon. member for his contribution.

I also wish to thank the hon. member for Walmer for his very positive and praiseworthy contribution, and in particular, too, for his support.

The hon. member for Randburg, too, made the point that it is foreign loans and the guarantees relating thereto that create growth, employment opportunities, etc. in South Africa. I wish to thank him, too, for his very praiseworthy contribution.

Question agreed to.

Bill read a Second Time.

Mr. Speaker, I move—

In 1959, the Land Bank Act was amended to empower the Land Bank Board to raise funds in the open market by issuing Land Bank debentures to supplement its loan funds. Although the State has, since then, made capital appropriations to the bank from time to time for certain specific projects, the bank has, for the past two decades, been dependent mainly on the open capital and money market for its normal long-term funds. Debenture loans which the bank raised during this period, have enabled it to increase its financing to a considerable extent. During the past year, for example, the Land Bank received 3 888 applications for long-term loans from farmers for an amount of R204 047 368, and out of this total 3 100 applications to an amount of R138 899 273 were granted by the Land Bank Board. In addition the bank received 2 900 applications for short-term and medium-term loans to an amount of R42 235 092 from individual farmers, of which 1 994 applications for a total of R27 245 368 were granted. During the same period 58 applications were received from agricultural co-operatives and control boards for instalment loans for capital expenditure, to an amount of R40 439 890, of which loans to a total amount of R34 960 290 were granted by the Land Bank Board. Apart from these applications for the defrayal of capital expenditure, the Land Bank also advanced seasonal loans to the amount of R2 525 047 000 to agricultural co-operatives for 1979.

Up to the end of the 1979 financial year, debenture loans raised by the bank for its capital requirements, already amounted to R1 860 million. Mindful of the uncertainty connected with the farming industry and the unpredictable elements which farmers in our country have to cope with, it is the policy of the Land Bank Board to adjust loan interest rates to the requirements of the farmers at the most equitable level possible, and to stipulate for the interest rates on the bank’s debenture issues for that purpose accordingly. Land Bank debentures qualify as a prescribed investment in terms of the Banking Act, 1942, and also entail for financial institutions such as banks and insurance companies the benefit that in terms of the Banking Act, 1942, they qualify as liquid assets.

Over the years the Land Bank has been the traditional source for the financing of agricultural co-operatives, and in the course of time it has developed into the main source of finance for both their long-term and short-term requirements. Under the provisions of the Land Bank Act the bank provides agricultural co-operatives with long-term credit for durable capital works and equipment by way of instalment loans, the period of which extends over a number of years, and also with short-term credit for seasonal requirements, by way of cash credit accounts for periods adjusted to the agricultural product or service that is being financed. The rapid development of the co-operative concept in South Africa during the past decade has considerably extended the activities of the co-operatives and has resulted in a great increase in capital requirements. In order to make additional provision for the financing of the additional requirements of the agricultural co-operatives, I propose that the Land Bank Board should be authorized to create a new credit instrument which could indeed qualify as a prescribed investment, but not as a liquid asset for financial institutions. In the money market, this instrument has to be clearly distinguished from Land Bank debentures which do indeed qualify as liquid assets if they have a currency of three years. The Bill therefore seeks to amend the Land Bank Act to provide for the issue of Land Bank stock at competitive interest rates, with an initial currency of more than three years and which, regardless of the remaining period of such currency, would not qualify as a liquid asset at any stage.

This legislation brings the Land Bank to a further milestone in its history, and I trust that the powers envisaged here for the Land Bank Board, will help to simplify and extend the bank’s financing of agriculture.

Mr. Speaker, we shall support the Second Reading of this measure, as also its remaining stages. There is very little that one can really say in regard to the measure, although there are a couple of points that need to be raised. Firstly, the figures which the hon. the Deputy Minister has given tend to indicate very clearly the extent to which farmers in South Africa are, firstly, in need of financial facilities in order to conduct their affairs and, secondly—and perhaps this is more important—the extent to which farmers in South Africa are in debt. In fact, the position of the farmers appears to be of such a nature that they appear to be getting more and more into debt in South Africa. I am sorry the hon. the Minister of Agriculture is not here, because it fundamentally affects him. In any case, he might be pleased to hear that I am actually supporting a measure which is going to help farmers. However, there are a couple of other matters which we should ask the hon. the Deputy Minister to deal with. Firstly, there is the question of the interest rates at which it is contemplated these new means of financing are going to be issued. If the stock that is going to be issued is not going to rank as a liquid asset but merely as a prescribed investment, then, presumably, the interest rate must be high. May we therefore ask the hon. the Deputy Minister what sort of margin does he see is going to exist between those Land Bank issues which are going to be regarded as liquid assets and those which are purely going to be prescribed assets, and secondly, what market is he aiming at? Who is he aiming at should take up these particular obligations? I think we should know that because there should be some distinction in rate between the two. Also the marginal rate is important. If we knew this we could really weigh up whether this is a practical proposition or not.

The other question is whether this does not require some further steps in terms of which these assets should be declared to be prescribed assets. Some further legislative steps will probably have to be taken in order to implement this. Another matter which the hon. the Deputy Minister has not touched upon and which to me seems important, is the provisions of paragraph (e), which relates to the buying and selling of Land Bank debentures and stock issued by it. In other words, the board itself will now have the power to buy in Land Bank debentures and stock. In other words, it should be able to create a market by itself for these things. What is the intention in this regard? Is it the intention that there should be a ready market available in terms of which people who want to sell stock and debentures will know that the Land Bank will have prescribed rates for this? If so, on what sort of basis will this be done, because, quite obviously, this will also have an effect on the market operations which take place through the medium of the Stock Exchange. Unfortunately the whole question of the marketing of fixed-interest securities in South Africa has not yet reached so sophisticated a stage that there are true, active, open-market operations of the volume that is required in order really to have a true market created in South Africa Unfortunately that does not yet adequately exist. One hopes that it will come into existence. I think, however, that the hon. the Deputy Minister should give us some indication as to what is intended by paragraph (e) and what the role of the board of the Land Bank is going to be in this particular issue.

Mr. Speaker, the hon. member for Yeoville supported this Bill, and we thank him for doing so. He could also see that this was legislation with good intentions and that it also entailed progressive planning. The hon. member for Yeoville is experiencing some problems with regard to how the funds should be raised. I shall try to furnish replies to his questions in the course of my speech.

It is intended with this Bill to amend the Land Bank Act of 1944 to make provision for accession to the money market in such a way that additional funds could be obtained. It is therefore being proposed to issue stock that would yield interest and which would be competitive in the money market. The return would therefore be market related; in other words, it would have to be adjusted to the market. The Land Bank wishes to acquire money which other persons or bodies would regard as investment assets. These stocks would have an initial currency of more than three years.

The situation at present is that the Land Bank issues debentures. The money that is attracted in this way, is for the most part money which financing institutions have to retain in liquidity in accordance with the requirements of the Reserve Bank. This money is loaned at a relatively lower rate of interest, which is partly why the Land Bank is able to charge a low rate of interest on loans.

In the second place, overdrafts are being obtained as a source of financing. These methods of obtaining outside money have certain drawbacks, because (a) the availability of funds is tied up with the prevailing monetary situation and (b) the bank cannot negotiate capital by means of competitive rates of interest. Shortages could consequently arise, and this could have a detrimental effect on agriculture. Such a situation could cause a chain reaction which could affect the economy of the country as a whole, since the importance and the prosperity of agriculture not only makes a direct contribution to the national product, but also has a stimulating effect on the development and growth of the national economy.

A classic example of the shortcomings in respect of the obtaining of funds by the Land Bank became evident in the budget for the 1971-’72 financial year when Parliament had to appropriate an amount of R25 million to the Bank, of which R15 million was earmarked for the continuation of the loan scheme, for the construction of grain silos and the bulk handling and storage of grain. An amount of R10 million was for the purpose of supplementing the capital of the Bank for the provision of long-term financing to farmers.

Consequently the hon. the Deputy Minister has now proposed that the Land Bank board should be empowered to create a new credit instrument with the aid of which it will be possible to overcome this problem. The helpful attitude of the Government in the past, and also now with this extension of powers of the Land Bank board, reaffirms the concern of the Government for the financial requirements of the agriculturist and his auxiliary, the co-operative.

There are various questions which could be put in this regard. Do the farmers actually need the Land and Agricultural Bank of South Africa? What is the origin of this bank? Is the Land Bank as a financing institution indeed essential? What course is the Government adopting by adding further amendments to the statute of the bank? In answering these questions, we shall first have to consider the financial situation of agriculture and of the agriculturist; in the second place we shall have to outline the attitude of previous Governments, and in particular the attitude of the NP Government; and in the third place, we shall have to take a closer look at the activities that have been implemented, so as to try to identify the milestones which the Government has, through the years, planted along the road of agricultural development in South Africa.

The 1979 Year Book of the Republic of South Africa summarizes the financial situation of agriculture in an excellent way on page 623—

Order! The hon. member must not deviate too far from the Bill. This amending Bill definitely affects only the issue of stock by the Land Bank.

Mr. Speaker, I shall come back to the subject. In the free Western world, financial institutions similar to the Land Bank are fairly generally encountered. In South Africa, Land Banks were encountered as early as 1907.

The Cape Province had its Boards of Executors and the Orange Free State, the Transvaal and Natal each had a Land Bank. On 1 October 1912, the Land and Agricultural Bank of South Africa was established by a special Act of Parliament. Act No. 13 of 1944 consolidated the amendments of the 1912 Act. In 1957 the Act was amended to provide for the issuing of the debentures and the opening of a mortgages account. The amendments of 1975 introduced short-term and medium-term loans by the completion of a promissory note. With this Bill, a breakthrough is also being envisaged with regard to the making available of loans, at market related interest rates, to co-operatives for the purposes of their secondary activities.

In this regard, I wish to emphasize the fact that other loans of the bank do not bear market related interest but fixed interest rates determined by the Land Bank Board. In other words, fixed interest rates are charged for primary production. In connection with loans to co-operatives for their secondary activities, it is being envisaged to charge an interest rate which would be adjusted to the market. The source of capital for these requirements of the co-operatives would then be the issue of stock market related at interest rates.

This Bill involves the creation of an additional source of capital. This measure would eliminate friction due to unfair competition entirely. The obtaining of additional capital by means of the issue of stock creates an additional source of funds which will be utilized for the requirements pertaining to the co-operative activities I have referred to.

The logical result of this would be that the Land Bank would be able, by means of its other resources, to channellize the capital at its disposal to other requirements. That is very important. As a farmer, I am delighted at what this is going to mean for agriculture, since agriculture continually requires more capital, as the hon. member for Yeoville pointed out. The demand for Land Bank loans is increasing all the time. Consequently it is important that the Land Bank should continually have more capital at its disposal to make available to the farmer as an individual. That is also the conclusion arrived at by the Jacobs Committee on the financing of agriculture by the Land Bank. In Chapter 6, para. 27, the following is stated on this subject—

Hon. members can therefore see that that is the direction in which the NP Government is moving, and that it keeps abreast of the times. The realities of prevalent conditions are realized and recognized. The matter is therefore dealt with immediately and a well-considered measure is implemented with the necessary promptness.

Just to emphasize how much money is required in agriculture, we see in the Digest of Agricultural Statistics for the Division of Agricultural Marketing Research in the 1979 annual report that the capital investment in agriculture for the year 1977—that is the latest figure we know of, and it has increased considerably in the meantime—was R20,5 milliard in a round figure. Last year the farmers owed the Land Bank R532,5 million in mortgage loans and R43 million in medium term loans. In aggregate, co-operatives owed the Land Bank R2 675 million. The total amount owing by individuals and cooperatives therefore amounts to a round figure of R3,2 milliard. These are indeed big amounts. It must be noted that the Land Bank considers loans to any person regardless of race or colour, provided only that he is entitled to own land in the Republic of South Africa.

The matter of the acquisition of outside capital for which this Bill makes provision, is one which the Land Bank has been struggling with for years. This has developed into an issue that has dogged the bank throughout its history. We read about it in the 1914 Annual Report. We can go through every Annual Report and we shall always encounter the question of insufficient capital. I therefore support the Bill with the greatest confidence, for the following reasons: In the first place, our farmers and co-operatives definitely need the Land Bank. In the second place, modern farming practices require more and more capital and the farmers are going to depend to an ever greater extent on the Land Bank. In the third place, the times in which we are living require that the Land Bank should be brought into line with modern banking practices. In this respect, I have every confidence in the Land Bank, and I therefore believe that this adjustment, too, will be handled with expertise and skill by the able board and management of the Land Bank. I believe this because the Land and Agricultural Bank of South Africa can boast of a unique achievement in the world of finance, viz. that in the operation of its various loan schemes, not a cent has ever been lost as a result of bad debts. What a proud achievement. I say Bravo to its stewardship!

Mr. Speaker, we in these benches will be supporting all the stages of this Bill. We agree with the hon. the Deputy Minister that this is in fact another milestone in the history of the Land Bank. Like the hon. member for Yeoville, however, we are very concerned to see the ever-increasing number of applications made to the Land Bank, the ever-increasing amount of money that has to be made available by the Land Bank each year to the agricultural sector. Although we have no argument with the fact that funds must be provided, we do believe that it should be a cause of some great concern to this House that agriculture in our country is in the situation in which it has to find, for the purposes of long-term loans during the year 1979, an amount of R138 million, and for short- and middle-term loans something like R37 million, making a total of R166 million.

This is, by the very nature of it, a cause for a certain degree of alarm. As I said earlier, we have absolutely no argument at all with moneys being made available. We know that Land Bank applications are dealt with on merit. We know that the Land Bank does not dish out money indiscriminately, and we have the utmost confidence and faith in that organization. We hope, however, that things will improve for the agricultural sector so that it will not have the need to lean so heavily on this type of financial assistance and that it will not find itself again in the position in which it was in 1979.

We support the Bill and we certainly have no problem in allowing it to go through all three stages here today.

Mr. Speaker, I am rising merely to pledge my support as well to this Bill.

In the Free State, there are three organizations to which farmers remain true. The first of these is naturally the Church, the second is the NP and the third, the Land Bank. [Interjections.]

The Land Bank is a financial institution that sets itself the task of serving agriculture and the agriculturist. The Bill provides that the Land Bank may also issue stock so as to acquire more finance to extend the services which they render. The services which the Land Bank renders to the agriculturist, may be divided into two categories, namely those of direct aid and those of indirect aid.

By direct aid, we understand assistance in the form of long-term loans, for example for the purchase of land and the take-over of already existing debts. Short-term and medium-term loans, mainly intended for the purchase of cattle, implements and machinery, also fall into the category of direct assistance.

Under indirect assistance there is for example the sort of assistance that is rendered to agricultural co-operatives and agricultural control boards for capital expenditure and for seasonal loans. This type of loan reaches astronomical figures, as the hon. the Deputy Minister has already indicated. Many of these seasonal loans are ploughed back into agriculture by means of the co-operatives. This is assistance that is made available in the form of, inter alia, production loans. The role which the agricultural co-operatives play in the financing of food producers, has grown tremendously in importance in recent years.

I also foresee that this trend will continue in future. Various economists have already pointed out, and it has been confirmed by the Jacobs Committee, that the liquidity position of the farmers is a cause for concern. If the terrible riskiness of agricultural inputs is borne in mind and also the rapid increase in production costs, it can be accepted that the food producer will have to make use of production loans to a far greater extent in future. The co-operatives do not have the necessary funds to meet this demand, and they therefore turn to the Land Bank. If it had not been for the Land Bank, the approximately 230 agricultural co-operatives in our country would not have been able to render such an efficient and wide-ranging service to their members. It is interesting to note that the turnover of the co-operatives has increased tremendously during the past decade. Ten years ago the turnover was in the region of R132 million, whereas last year it was in the region of R3 milliard. If it had not been for the assistance of the Land Bank, the co-operatives would not have been able to accomplish this achievement. On behalf of all the agricultural co-operatives in the country I wish to convey our thanks to the Land Bank for this assistance.

I wish to dwell for a moment on direct assistance. In last year’s budget the hon. the Minister of Finance announced that in future the Land Bank would follow a more accommodating policy. I am aware of the fact that individual loans in excess of R100 000 are being made available. We are grateful for that. However, too many deserving applications are still being turned down. To illustrate this I wish to mention just one applicant from my constituency as an example. A certain man—let me add at once that this is a good, forward-looking farmer—had three bad harvests in a row, crop failures caused by circumstances beyond his control. The commercial bank of which he is a client provided him with overdraft facilities to an amount of R168 450, on which he has to pay 13% interest. This overdraft is covered by two bonds. The commercial bank is turning on the screws and he has no harvest on his lands. He applied to the Land Bank for a loan of R120 000, because he could obtain a second bond of R50 000 from a private individual. However, the Land Bank was prepared to lend him R85 000, in other words, 50% of his overdraft with the bank. I am explaining the dilemma of this person. He now has to obtain a second mortgage which is larger than his first. This is, of course, very difficult to obtain, and also far more expensive. I can just confirm that this man does have the necessary security.

I just wish to quote from what the State President said at the opening of Parliament at the beginning of the year, and I am referring to Hansard, column 10—

With this in mind, I am putting the need for the Land Bank to the hon. the Minister. I am requesting that we should be more sympathetic towards those people who find themselves in difficulties through no fault of their own. I have a newspaper report here under the headline “Drought in parts of the OFS the worst in 30 years”. In this report, one reads that this drought is already driving fanners from their farms. That is the position in my constituency. To whom should such a person turn for assistance? He approaches a trustworthy organization, one which, in the past, was willing to assist him through the difficult years, viz. the Land Bank. If we pass this legislation the Land Bank would, according to estimates, be able to obtain approximately R180 million by means of this stock over a period of three years. In view of the droughts prevailing in certain areas, I make an appeal that applicants for assistance should be helped to a greater extent.

I wish to conclude by telling the Land Bank: Remember, timely assistance is double assistance; do not allow the producers to lose courage before rendering assistance to them. The hon. member for Yeoville said that he was concerned about the vast amounts owed by the farmers. I request him also to express his concern in words when the hon. the Minister of Agriculture comes forward with a new maize price. Then he should not curry the favour of consumers, but confirm his concern for agriculture.

Mr. Speaker, in the past year 3 888 applications were lodged with the Land Bank and, as the hon. the Minister indicated, 3 100 of those were granted. That means that in the final analysis 788 applications were refused. One can understand that of the 788 cases that were refused a fair amount would have had to be refused for very good reasons. I should however like to ask the hon. the Minister whether there were many cases amongst these 788 that were refused because of a lack of finance. In other words, were there deserving cases amongst the 788 so that the applications were refused merely because of a lack of finance on the part of the Land Bank? If that is the case, it is a pity that deserving farmers are not always able to get the assistance they require. One understands that amongst those cases there would be many which were not deserving cases, but I am dealing now with the deserving cases.

Mr. Speaker, we feel that this measure will enable the Land Bank to render an even greater service to the various applicants. In fact, it may now well be able to help applicants it could not help in the past. Food is going to be our strongest weapon in the years that lie ahead and it is essential that our country should be geared and prepared to export food throughout the world. More especially, our food could be of great value in Africa. We could sell our food throughout Africa. I think it is essential that our farmers should be geared to achieve the maximum possible production. This measure will promote the farming interests in South Africa and as such we shall support it.

Mr. Speaker, in the first place I wish to thank the hon. members who participated in the debate for their support. I also wish to thank the hon. members of the Opposition for their agreement that we could take the Bill through all three stages today.

The hon. member for Yeoville started off by saying that there was an increasing need for financing on the part of farmers. That is true. The fact of the matter is that, as a result of public enemy No. 1 in South Africa, inflation, the inputs of the farmers are increasing tremendously. It increases the riskiness of their undertaking and it also implies that they have to re-utilize the profits they have to make in financing the inputs for the following year. That causes the farmers to begin to experience liquidity problems. Therefore we regard the Land Bank as one of the instruments to satisfy in that need. The Land Bank, via the co-operatives, is the greatest single provider of credit to the agricultural sector. On this aspect I can tell the hon. member for Yeoville that it is our policy that co-operatives should not be lacking in production credit. The best method of growth in South Africa is to ensure that the entrepreneurs in South Africa, in this case the farmers, have the necessary inputs and the necessary means of production to enhance their production.

†Mr. Speaker, the hon. member also raised the question of what would happen if there should be a ready market for the Land Bank’s stock. In this regard I want to say that the present Act already makes provision for the buying and selling of Land Bank debentures issued by the bank. This provision was introduced in 1959, when the bank first obtained the power to issue debentures in order to augment its loan funds in the capital and money markets. The purpose of this provision is not to empower the bank to deal as a matter of course in the buying and selling of debentures, but to do so only if it should happen to be in the direct interest of the bank in the particular circumstances. The new proposed paragraph (e) therefore merely brings Land Bank stock, which is now inserted in the Act, into line with the already existing debentures in this respect.

*As regards the interest rates at which the stock would be raised, I wish to tell the hon. member for Yeoville that one may assume that the bank will pay more for stock than for debentures, owing to the fact that Land Bank stock has a currency of more than three years and does not qualify as liquid assets, but only as a prescribed investment. In the case of Land Bank debentures, which qualify as a prescribed investment as well as a liquid asset, it is of course a field of investment for financial institutions, whereas stock does not qualify as liquid assets and would not sell as readily because financial institutions would probably insist on a higher interest rate on the stock as a result of its longer currency. As hon. members know, the idea is to finance the activities of co-operatives from the funds raised by means of the stock, which is actually not within the traditional province of agriculture, and furthermore, that for these particular funds for co-operatives, higher interest rates will be charged than would be the case with stock.

I just wish to refer to the fact that this legislation is one of the consequences of the recommendations of the Jacobs Committee. This particular recommendation was made as a result of the inquiry initiated by the Jacobs Committee. The hon. member for Griqualand East made an excellent speech and made the point that the Land Bank would perhaps obtain more funds now. I agree with him that the possibilities for obtaining funds are now being improved and that the Land Bank will now be better able to finance another type of activity in which agricultural co-operatives are engaged.

I wish to thank the hon. member for Umhlanga for his support of the Bill. We on this side of the House appreciate his support.

The hon. member for Winburg said the Free Staters stood by their Church, their Party and their Land Bank. I, in turn, wish to tell the hon. member that I shall see to it that the Land Bank will stand by the Free Staters. [Interjections.] The hon. member made an important contribution by pointing out the liquidity problem of the farmers. The hon. member for Yeoville also said that the increase in inputs eroded the profits which the farmer had made the previous year, the profits he had to utilize to finance the inputs for his next crop. This causes the liquidity problems of the farmers. The hon. member for Winburg referred to a case in the Free State about which he felt concerned, and requested that the Land Bank should be more accommodating, particularly in cases where a severe drought was prevailing. I can assure the hon. member that in areas where there are serious drought the Land Bank is inclined to be more accommodating because they appreciate that when the elements turn against one, there is no other way out. In this regard, the Land Bank follows a far more accommodating policy. The hon. member quoted a particular case here and if he is not quite happy about that case, I invite him to come and see me and I shall look into it and I shall also request the Land Bank Board to re-consider the matter.

The hon. member for Walmer asked a very important question. He asked whether there were deserving applications which were refused as a result of a shortage of funds. The Managing Director of the Land Bank has informed me that no applications are turned down as a result of a paucity of funds. When a loan is not granted this is, as a rule, not attributable to a lack of the necessary security. After all, we have to bear in mind that the Land Bank has a limited field in which it can operate. The Land Bank cannot supply agriculture with unlimited financing. There is one group of farmers in the country who are financially so sound that they have to obtain their financing in the private market, in the private sector. Then, again, there is another category of farmers who do not fall into that category and who have to obtain their finance from the Land Bank. Then, there is yet another category of farmer whom one wishes to help in a cheaper and easier way, and these people are assisted by the Department of Agricultural Credit and Land Tenure at a very low interest rate, lower than that of the Land Bank, and normally with more reasonable terms of repayment.

The Land Bank cannot and dare not ever take over the total financing of agriculture in South Africa, because then it would be poaching on the domain of the private sector. There is a balance between the share which the Land Bank and the private sector and the State as such should have in the financing of our farming community, having due regard to the fact that it is the policy of the State to finance our farmers on a fundamentally sound basis, in the interests of the consumer and of the producer, so as to ensure long-term stability for all of us in South Africa.

Mr. Speaker, I move—

From 1910 to 1965, the delimitation of electoral divisions in South Africa took place according to provincial quotas. The delimitation of electoral divisions in the Republic according to the Republican quota was introduced in 1965 by Act 83 of 1965. Its purpose was to make the value of a rural vote the same throughout the Republic and also to make the value of the urban vote the same throughout the Republic. However, it did not work out this way in practice.

Because of the amendment of section 81 of Act 79 of 1973, which laid down the number of electoral divisions for the provinces, the delimitation of electoral divisions according to the Republican quota became impractical. In this connection I refer to the report of the Thirteenth Delimitation Commission of 1973, which reads as follows—

I think you have got Andries pinned down.

A position has now been reached where meaningful delimitation according to the Republican quota, especially in the bigger provinces, is not possible. In the light of the preceding considerations, it appears to be desirable and more realistic for the delimitation of electoral divisions in the Republic to take place according to provincial quota and not according to Republican quota, as presently required by the Act. It is consequently proposed in the Bill that section 43 of the Constitution be amended to provide for the delimitation of the electoral divisions in the provinces according to provincial quota.

Mr. Speaker, that is one of the most tongue-in-cheek introductory speeches I have heard in this House for a long time, and the smile that the hon. the Deputy Minister evidences at this moment I think proves my point beyond any doubt whatsoever.

The origins of this Bill are to be found in the deliberations of the Select Committee which considered electoral matters in 1973. That Select Committee brought out a unanimous report which resulted in the drafting of the Constitution and Elections Amendment Bill, which was debated in this House and passed through Parliament with one dissenting vote, namely that of the hon. member for Houghton, on 12 June 1973. The most important changes brought about by the Bill introduced in 1973 were, in fact, changes to the Republic of South Africa Constitution Act and not to the Electoral Act as such.

I want to refer to the main tenets of the Bill that went through Parliament at that time. Firstly, the method of simultaneous election of members of Parliament and provincial councillors was brought about then. The second principle introduced at that time increased the total number of seats for South Africa to 165. The third principle introduced in 1973 was that those 165 seats were allocated to each of the provinces and then pegged. Transvaal was allocated 76 seats, the Cape 55 seats, Natal 20 seats and the Orange Free State 14 seats.

A rip-off!

The fourth principle that was introduced in 1973, a principle which drew some comment from the hon. member for Houghton at the time, was that the number of seats per province was in fact pegged for a period of 10 years, commencing in 1973. The then Minister who introduced the Bill—and I find it ironic that it was Mr. Connie Mulder—spoke, in motivating the Bill, of protecting the rural areas in relation to the cities. I quote (Hansard, 12 June 1973, col. 8929)—

What his argument boiled down to at that time, was that the Cape, the Orange Free State and Natal were to be protected against the Transvaal. That was basically the argument. The Cape, the Orange Free State and Natal were to be placed in a privileged position vis-à-vis the Transvaal.

What does that have to do with this Bill?

It has everything to do with it. The hon. the Deputy Minister asks what this has to do with this legislation. He is smiling again. He knows exactly what this has to do with this legislation. It is exceedingly relevant to this legislation because South Africa has a long history, dating right back to the days of the Union, of taking steps to neutralize electorally the drift of voters to the cities, and also the drift of the population to the industrial and mineral rich north. As the years went by, and particularly since the war, these actions have taken on a new urgency. The 15% loading/deloading provision was introduced, the large-area seats were created, and in 1973 the number of seats allocated to provinces was pegged for 10 years. These provisions have, certainly since the war, helped to play their part in keeping the Government in government. Let us not bluff ourselves about that.

To nullify the Opposition.

These provisions have played their part in the attempt—and they have succeeded—in keeping the Opposition in opposition. It was only in 1961, after 13 years of NP rule, that the Government actually achieved an overall majority of votes in a general election.

Lionel Murray took part in that debate of 1973. He was then the member of Parliament for Green Point. He had the following to say (Hansard, 12 June 1973, col. 8937)—

That was Mr. Murray. He was of course both right and wrong. He was right in that further revision in fact did become necessary, and a lot sooner than after the elapse of 10 years. But he was wrong when he assessed that isolated major projects would stem the flow of voters either to the established cities or to the Transvaal Province. As we all know, the process of urbanization has never lost pace, nor has the predominant growth of the Transvaal.

After only seven years, since 1973, what is the up-to-date position today? How has this development progressed? As at the end of February 1980—and I look at the figures that have been handed to us and I am going to use in my argument the figures as at the end of February 1980—we have a position which I am now going to discuss. The total number of voters on the voters’ roll for the whole of the RSA is 2 261 564. If one breaks that down, there are 674 808 voters in the Cape, 260 003 in Natal, 176 736 in the Free State and 1 150 017 in the Transvaal. The Transvaal constitutes 50,8% of the voting strength of South Africa. So, if we apply the existing law and in terms of the existing law work out a national quota for the constituencies—that is, by dividing the 2 261 564 by 165—we come to a mean of 13 706 per province. What does this mean? What does this mean if the law is not changed, if the allocation of seats remain unchanged? It means that the Cape starts with a deloading of 11%, Natal with a deloading of 6%, the Orange Free State with a deloading of 8%, and, most important, the Transvaal starts with a loading of 10,5%. That means that in the Transvaal, if we look at those figures critically, it would be virtually impossible, on these figures as they stand today in the existing law, to juggle the deloading and loading so as to favour the country areas, and in other provinces by virtue of the scarcity of votes manipulation would also be very awkward. What in fact has happened is that it has become clear that, with the rapid growth of South Africa as we have experienced it over the past years, a national quota in fact cannot be applied in a situation where the number of seats per province is pegged. I think that is a sine qua non. So, if a delimitation must take place, the law as it presently stands must be changed. That must be acknowledged. The question is: How do we change the law?

We in the PFP take as a guiding principle the view that a vote in one constituency should have roughly the same value as a vote anywhere else.

Like in England.

That is a basic principle on which the PFP bases its arguments on electoral matters. It is a basic principle we will not contemplate moving away from. It is therefore our standpoint that the steps to be taken if one is to get out of the hole into which the Government has been put by the decisions taken by the 1973 Select Committee, and if those problems have to be obviated, there are certain things that have to be done. Firstly, we say there should be a reallocation of seats per province based on a national quota. Secondly, we say that the limitation to loading and deloading should be reduced to somewhere between 5% and 10% at the very most. Thirdly …

Order! That second point the hon. member has made is, I believe, not relevant to the Bill.

Well, Mr. Speaker, I have already finished the point. It does not appear worth withdrawing. Therefore I shall move on. Thirdly, I believe that if we wish to solve the problem of one province growing out of proportion to the strength of other provinces there is an easy way to do it. That is that provinces should be guaranteed minimum representation in the House of Assembly regardless of voter numbers. This last suggestion is a protection against being overwhelmed. I can claim authoritative support for this idea. Here I should like to quote the words of the hon. the Deputy Minister of the Interior uttered here in this House on 12 June 1973. I quote (Hansard, Vol. 44, col. 8943)—

He admitted it at that time—

That was the idea then, in 1973, of the hon. the Deputy Minister. I believe that in the South African circumstances as they are today, that is quite correct and proper thinking. The problem is that that thinking is not being followed through at this time and in this Bill. Instead, the Bill seeks not to rectify the growing disproportion, about which the hon. the Deputy Minister was concerned in 1973, but it seeks to entrench and to aggravate the disproportion as the years progress. Do we realize …

[Inaudible.]

Mr. Speaker, the hon. the Deputy Minister cannot get away from it at this point. Do we realize that if the delimitation based on this legislation, which is being hurried through Parliament—it is the third amendment Bill to the Constitution, and it is going through before the first one—takes place the Transvaal will be disadvantaged for a period of some 17 years, from 1973 until possibly 1990? [Interjections.] There is no obligation on the Government—and the hon. the Deputy Minister must admit it—to have a delimitation commission sitting again before 1990. There is no obligation on the Government whatsoever to have that.

That is quite right.

We are creating here a statutory situation in which we are discriminating against the largest, the strongest, the most powerful province in the country, for a period of 17 years. That is what is happening in terms of this Bill. [Interjections.] This means the Transvaal will be shackled in its representation for a period of 17 years. How is this disproportion …

That is absolute nonsense.

Mr. Speaker, the hon. Cape Chief Whip—and I expect this from a Cape Chief Whip—he obviously has sectional interests at heart, says this is nonsense. How does the hon. the Deputy Minister intend to entrench the disproportion? It is very simple. He does so by changing one key word. The word “Republic” is changed into the word “province”. That is all. A provincial quota is substituted for a national quota. What effect does this have on the voters’ strength of the constituencies? Let me look at the February 1980 figures again. On the basis of a provincial quota the Cape will have 12 269 voters per constituency, Natal 13 000, the OFS 12 624 and the Transvaal 15 132 …

Shame!

… and that at a time when the Cape retains 55 seats, Natal 20, the OFS 14 and the Transvaal 76.

This can start the third war of independence.

If that were to occur, as the hon. member has suggested, that may be the only occasion on which I would find myself fighting on the same side as the hon. the Minister of Public Works. [Interjections.] If the total of 165 seats is retained, what should the true position be, given a fair allocation of seats? The Cape should have 49 seats, Natal should have 19, the OFS 13 and the Transvaal 84 seats.

Purely guess-work.

This is not guesswork. This is dividing the national quota in such a way as to bring out the number of seats for each province. That is all.

You are oversimplifying.

These are straight statistics. Now, however, let me enter the field of conjecture. [Interjections.] I honestly advise that hon. Chief Whip to say absolutely nothing further at all, because if he does speak out too much he might find himself in trouble with one of his Transvaal colleagues in a dark alley later tonight. [Interjections.] If we take the normal projection of the growth of South Africa, what should the position be in 10 years’ time? I predict that the Cape should have 43 seats in 10 years’ time and that Natal should have 18 seats.

Thank you very much!

This is a scientific projection of the figures. The Orange Free State should have 11 seats and the Transvaal should have 93 seats. In fact, however, the Cape will have 55, 12 extra, Natal will have 20, two extra, the OFS will have 14, three extra, and the Transvaal will have 76 seats, which will be 17 seats less than it should have. So I want to say that in voting for this measure the hon. member for Sunnyside and other Transvaal members are throwing away eight Transvaal seats now, and over the next 10 years they are throwing away 17 Transvaal seats. This could conceivably mean …

Andries will never become the Prime Minister.

Quote the figures again.

Right, I shall quote the figures again. He is throwing away eight seats now and 17 seats over 10 years.

This is how PW is fixing it.

If the Transvaal throws away these 17 seats without a murmur, as they are doing today, this could conceivably mean a great deal to the forces of political power in the development of South Africa. Perhaps, if the PFP were not so bound to principle, we might even have voted for this Bill because, let us make no mistake about it—and here I am absolutely serious— this Bill, devised and divined by the hon. the Minister of the Interior, the leader of the OFS, the hon. the Deputy Minister, a “stoere Kaapse ondersteuner”, and I am sure the hon. the Prime Minister, who, I am told, does not come from the Transvaal, provides a serious setback, if not a death blow, to the aspirations of the Transvaal section of the NP, and certainly to its leader. I believe that it is both ironic and fitting that it was Connie Mulder who proposed it at the time, and the only member of Parliament who knew what was going on, who correctly predicted what was going on and who said it in this House, was the hon. member for Houghton sitting here in front of me. That hon. member’s objection to the 1973 Bill, which has precipitated the Bill before us today, was contained in her amendment, which read as follows (Hansard, 12 June 1973, col. 8946)—

1. (1) perpetuates the existing disparity between the values of the votes of urban and rural electors;
2. (2) introduces a disparity between the values of the votes of electors in the different provinces.

Those were prophetic words, because that is exactly what happened then and it is exactly what is being entrenched today. For this amendment the hon. member was attacked by the hon. member for Durban Point—and I regret that he is not here today—who made the statement that the reason why he accepted the recommendations of that Select Committee as contained in the Bill …

His seat is overloaded. [Interjections.]

Mr. Speaker, I would be most grateful if you would call my hon. colleague to order.

Order!

Sir, the reason why the hon. member for Durban Point accepted that Bill was that, as he said, he tried to achieve a balance. He went on to make another one of his always fallacious comments (Hansard, 12 June 1973, col. 8959)—

How wrong could he have been! But then we all know that that hon. member is always wrong. He is always wrong on delimitation, on election predictions …

He can only subtract.

… and when he says “my party is going from strength to strength”, I say: “How can you believe him?”

Using this as a basis for making a few comparisons, let us compare the Cape with the Transvaal under the new provincial quotas, viz. the Cape quota of 12 269 and the Transvaal quota of 15 132, a 19% difference. Leaving out the large-area seats and just taking the ordinary seats, the following can happen: A country Cape seat which is being deloaded by, say, 14% will end up with 10 429 votes while an urban Transvaal seat which is being loaded by, say, 14% will end up with 17 401 votes—a 31% discrepancy. In other words, the Transvaal vote is worth only two-thirds of the vote in the Cape. If one takes a large-area seat into account, the following can happen: A country Cape seat deloaded by, say, 29% or 30% can have 8 589 votes while an urban Transvaal seat can have 17 401 votes. Here we have a 51% difference which is allowed and enabled by the Bill before us today. So we have one Cape vote having double the value of a Transvaal vote. I ask the hon. members for Vanderbijlpark, Kempton Park, Rissik, Witwatersberg, Verwoerdburg and others: Have they nothing to say about it? One Transvaal vote will have half the value of a country vote in the Cape. Sir, in the light of all this, quite apart from our feelings on the aspirations of the hon. the Minister for Public Works, we cannot go along with this Bill.

The hon. member for Houghton said two other important things during the 1973 debate. She was supported at the time in what she said by somebody who was not in Parliament then and who is today, namely the hon. member for Yeoville. She said (col. 8956)—

Here we are in 1980, witnessing a progression of that very tendency. It cannot be justified democratically. Secondly, the hon. member said (col. 8957)—

That is exactly what is happening again today. It will be an interesting sight for me today to watch the Transvaal National Party voting for their own eclipse. It seems to me that it is a question of discipline ¼ber alles, being a principle far more important than the principle of voting equality.

It may be argued that the principle of pegging the seats is now established and that to give effect to this principle the national quota must be replaced by a provincial quota.

What about the Cape Progs?

We belong to South Africa.

I want to say that if that is argued—and it may well be argued later in the debate—it is a spurious argument. It is without foundation and without substance. A national quota is a long-established principle in the Act which is to be amended.

Why do you take that line …

Sir, if that hon. member wants to ask a question, he is most welcome to stand up and ask it, but he must please not “brom” like a wounded porcupine. The national quota principle is a long established principle. The pegging principle is a more recent introduction. It is a foreign intrusion. We have all agreed that these two principles are incompatible. We understand that, but the newer, more mischievous principle should disappear and not the time-tested one which ensures reasonable equality of voting power throughout the country.

I want to sum up why we oppose this Bill. We oppose it because no Select Committee has been appointed, the Government has not sought to reach any sort of consensus on this important matter affecting elections with the Opposition and has not even put this matter before the Constitutional Commission. It is using its parliamentary strength to pass this Bill. We are also opposed to this Bill because it lays the ground for Cape Nationalist domination in collusion with elements in the Orange Free State and Natal. It is absolutely …

Order! That argument is not relevant to the Bill. The hon. member must argue on the merits of the Bill before the House.

Mr. Speaker, I consider this aspect to be one of the merits. In fact, that is what the Bill is all about. It perpetuates and aggravates the disparity in vote values between rural districts and the cities. It perpetuates the disparity in vote values between the provinces, ignores the growth patterns and, finally, it perpetuates this for a period of 10 years. This Bill is a classic case of a measure designed to enable or to allow a situation to develop where possible gerrymandering is not only condoned, but also positively encouraged. It is a Bill devoid of principle, and yet it is packed with solid political expediency. As far as I am concerned there is only one mildly humorous aspect to this Bill and that is that for the first time it is not only the official Opposition which is deleteriously affected, but also, and very seriously, the unofficial position within the NP. So weak, so ineffective have these Transvalers become in past weeks that I venture to say that not one of these brave warriors will have the gumption to stand up and to speak out on behalf of the Transvalers. They have become the Mickey Mouses of Parliament. They are allowing themselves to be eclipsed, and in this regard I wish to congratulate the hon. the Deputy Minister, the hon. the Minister of the Interior and obviously also the hon. the Prime Minister for the manner in which they have put it across their colleagues. To bring Waterberg, Rissik, Nelspruit and Sunnyside so visibly to their knees is no mean achievement. The hon. the Deputy Minister has done well for his master, but the Lord help democracy! I therefore move the following amendment—

1. (1) discriminates unfairly against the voters in the Transvaal;
2. (2) departs from a fundamental principle in the Republic of South Africa Constitution Act that, subject only to discretionary loading and unloading in terms of section 43(3) of the Act, all electoral divisions should consist as nearly as possible of an equal number of voters; and
3. (3) is a slight to the Schlebusch Commission, which was appointed at the request of Parliament and which is considering, inter alia, the constitutional matters dealt with in the Bill.”.

Mr. Speaker, I must honestly say that I was rather surprised by the excellent spirit in which the hon. member for Sandton delivered his speech in contrast to the way in which he usually approaches matters of this kind. The hon. member sketched the history of the Select Committee which was appointed in 1973, to the House, and I have no fault to find with it. However, the hon. member went further and argued that delimitation since 1973 has favoured the NP, the ruling party. I really find it a bit much to believe that the hon. member really thinks that the NP has remained the ruling party because of the delimitation alone. If this is his view, he is making a very big mistake. The fact is that the NP is where it is as a result of its policy and it has nothing at all to do with delimitation. [Interjections.] If those hon. members do not yet know what the policy of the NP is at this stage, they will never know. Nor would there be any point in explaining it to them. The hon. member alleged further that the hon. the Deputy Minister said that it is not a long term solution. However, I want to point out to the hon. member that at the time, as he himself has said, the Select Committee unanimously recommended that this regulation should remain in effect for at least ten years with regard to fixing the number of seats. Those ten years have not yet expired. That Select Committee consisted of all the different parties in this House. In other words they gave this recommendation their unanimous assent. Since that period has not yet expired, I want to argue that it is not at issue at the present moment nor is it at issue in the legislation which is before us at the moment. That is not all. I want to allege further that the hon. member theorises that it will continue for another seven years. I could argue in the same way that it does not necessarily have to be so, that a change could take place within a much shorter term.

Put it on record like Vause Raw and then we can see how wrong you are.

Now my argument is exactly the same as that hon. member’s. We are both theorising, and it has no validity in this argument in regard to this legislation.

Furthermore I want to allege that the hon. member raised an argument in regard to the value of the vote and he elaborated for a long time on the fact that some constituencies in the Transvaal would be worth only half of a Free State constituency. As long as we retain the principle of loading and deloading, even within the framework of the hon. member for Sandton’s argument, we will still have that difference in value between votes. This could only be eliminated if one could succeed in giving every constituency and equal number of voters, and this is impossible. Therefore, even within a province—within the Transvaal, within the Cape of within the Free State—there will be a difference in numbers or in “value”—as the hon. member called it—between the different constituencies. Therefore, as far as I am concerned, it has no value at all.

I now want to come back to the amending Bill itself. The fact is that since 1973 we have had an allocation which fixed the number of constituencies within the provinces at a total of 165. This Amendment Bill has nothing to do with that principle as such, but it is simply dealing with the instrument for making the best of this matter for the various constituencies and various provinces so that it will better satisfy a specific constituency. This is a fact. A delimination has certain objectives and I just want to elucidate one, two or three of them now. The first is that one must have the ideal number of voters within a specific constituency to be served by their representative in the best possible way. This is one objective. The second objective is that one must keep the geographic area of a constituency in mind in order to make it possible for a representative to serve that constituency in the best possible way. Since this is the case, we find that we must try to deload the area constituencies as much as possible and load the urban constituencies as little as possible.

It is also true—and the hon. member for Sandton referred to this too—that one should take the interest groups into account too. Then if one accepts that the number of constituencies have been fixed since 1973 and that we have these objectives which we should like to achieve, I just want to give an account of the facts of the matter, before I make the application. This is that the number of voters in the provinces do not all increase to the same extent. It is very clear and we are all aware of the fact that the number of voters in the Transvaal and Natal increase more rapidly than in the Free State and the Cape. A second aspect is that depopulation of the platteland occurs in all four provinces and that the urban constituencies tend to become much larger as a result whilst the platteland constituencies tend to become much larger as a result whilst the platteland constituencies tend to become smaller. These are facts that we cannot ignore.

In order to negotiate the best position with the given facts, one cannot but agree to this amending Bill that is before us at the moment, because if we were to keep to the Republic’s quota, it would mean that in several cases one would have a higher number of voters than if one were to use the provincial quota. For instance, we find that the constituencies in the Cape would have approximately 1 000 more voters if one were to use the Republic’s quota than if one were to use the provincial quota. In the Free State the number of voters will be approximately 765 higher in the various constituencies if one were to use the Republic’s quota instead of the provincial quota. On the basis of our objective, viz. to create machinery by means of which the constituencies can be served most efficiently, we cannot but accept this amendment Bill as we have it before us. Therefore it is a privilege for me to support it.

Mr. Speaker, I should like to commence by saying that the hon. member for Sandton referred to the hon. the Deputy Minister as having delivered a tongue-in-cheek speech. I think the hon. member for Sandton should rather have listened to his own speech before he made that statement. I listened to his speech very carefully, and I must say that the problem he suffers from is purely and simply a complete and total lack of practical knowledge of the problems which one has to face when bringing about effective delimitation. [Interjections.] In 1973 he approved of all that. A perfect example of his rather muddled logic was the fact that he mentioned here—and advocated in front of everybody—as a principle that we should accept a minimum representation per province. The moment that happens, however, one is going to find oneself in a situation where one will in fact have disproportionate numbers of voters between constituencies. That hon. member cannot deny that the 14 seats of the Free State already is just about the minimum.

You have been colluding with the NP again.

The hon. member for Bryanston should rather go and play marbles.

He does not even have a “ghoen”.

I am going to deal later on with specific cases to show hon. members that the whole argument of the loading and deloading is totally fallacious. The hon. member for Sandton tried to prove what the case would be if one had a deloading of 15% in the Transvaal, and he tried to compare it with deloading in the Cape Province. That is a totally fallacious argument and I should like to deal with it immediately. One can only get a 15% or a 30% disparity in a particular province if, for instance, the number of seats which qualify as rural seats and the number of seats which qualify as urban seats are, in fact, in a 50:50 relation to one another. If half of the Transvaal seats were situated in rural areas and the other half were situated in the urban complexes, one could bring about a 50% loading and a 50% deloading. If only the hon. member for Sandton had gone to a little bit of trouble to do a little bit of homework, he would have found that only 19 out of the 76 constituencies in the Transvaal could possibly be deloaded. Therefore, one does not have the theoretical situation that 50% can be deloaded and 50% can be loaded in order to bring about the 30% difference.

The fact of the matter is that only 25% of those seats can be deloaded, because they are the only ones which qualify as being rural in character, whereas 75% of those seats can be loaded. Therefore that sort of situation can never arise. In Natal, for instance 4 out of 20 seats qualify as seats which can be deloaded. 20% can be deloaded and 80% can be loaded, with the result that there just are not enough extra votes to load the urban seats by the theoretical 15%. The only province in which it can be done—and then only within the province but in comparison with the rest—is the Cape Province, in which according to my judgment 25 out of the 55 seats can be classified as being rural in character. In this province 45% of the total number of seats can therefore be deloaded, whereas 55% can be loaded. I wish the hon. member had considered these issues. Half of the time he tried to build up a case for claiming that the urban areas were being discriminated against, but in the Transvaal, which has a higher provincial quota, the areas which will be discriminated against, will in fact be the rural areas.

How many voters do you have, Andrew?

The hon. member wants to know how many voters I have. There are about 9 000 or 10 000 of them. [Interjections.] Delimination will take place and more voters will be added. The hon. member for Sandton has tried to play it both ways. He spoke about the protection of the tradition of the official Opposition, referring to the urban seats they held. In fact, what is being advocated here is rather going to militate against the rural seats. And yet he quoted other examples to support his argument that the rural areas were ganging-up on the urban areas. [Interjections.] I wonder whether these fallacious arguments should be allowed. If one wants to be fallacious and if one does not want to do one’s homework, one must take one’s medicine. He tried to sell to the House a story that what in fact…

I do not think you are a very good chemist.

Let us have a bit of honesty in politics. He tries to sell the idea in this House that one has a ganging-up of the Cape, the Free State and Natal against the Transvaal. Let us start adding. There are 76 seats in the Transvaal and in the Cape, 55, with some six or seven PFP seats included. Let us make it 49 seats, which together with the 14 seats in the Free State gives a total of 63 seats. Then there is Natal, where even if the NP should get half or more than half the seats …

That is not the point

That is the point. It was pertinently said here that there was a ganging-up …

Oh, belt up!

… of the three provinces against the Transvaal.

Andries Treurnicht knows that is quite true.

I say the argument about ganging-up is fallacious, and even if one adds up the total it does not lead to that situation. The real issue before the House is that of the 165 seats. It is not whether there should be more or fewer seats. The question is purely how one should bring about a more effective delimination in a province. It is on this basis that I believe we have no other option but to go, even from a practical point of view, for the acceptance of a provincial quota.

I would like to come back to the matter of pegging. It was agreed upon in 1972. We cannot presuppose that there will not be a change. I believe there could well be a change. The present situation will not last for another 17 years. [Interjections.]

Not another 17 years.

I mean 17 years from 1973. I do not believe the retention of the present situation would be practical politics. What is important in this particular case is which of the two systems would bring about within a province a far better relationship between the rural and urban seats. If one looks at the provincial quotas which were mentioned by the hon. member, one will find that between the provinces of Natal and the Free State there are virtually the same number of voters per rural or per urban seat. So the only province in which one could say there is a disproportion in the present situation is the Cape Province, although, it is not a disproportion which threatens to undermine the basis of democracy in South Africa, as we have been told. The numbers involved are nowhere near the stage where one can say that the balance of power will be upset. The balance of power cannot be upset in this particular case, because there is already such a high concentration of voters and such a large number of seats in the Transvaal.

So the NRP supports this Bill because we believe it is the only way to bring about an effective and practical situation.

Mr. Speaker, the Deputy Minister of the Interior probably had every reason, when he introduced this Bill, to expect that it would be a simple and easy matter to dispose of, because after all, all that is being envisaged by this Bill, is to add at this stage an aspect which should have been included in the parcel which was presented to the House by the Select Committee in 1973 and which was with one exception accepted unanimously by the House. Part of the solution of 1973, viz. the amendments to the Constitution proposed by a Select Committee, was that the constant factor of 165 constituencies for the following 10 years would be qualified by co-ordinated constant factors, i.e. the numbers in each province. Therefore it is logical that the quotas which would have to be used under such a delimination, would be provincial quotas because the constant factor has been qualified in that way. As I have already said, I believe that the hon. the Deputy Minister had every reason to expect that this would be a simple matter and that this would be the easiest way in which the existing problems could be rectified. However, now the hon. member for Sandton has dragged a number of completely different considerations into the matter, considerations which, in my opinion, are of an unfortunate nature.

The hon. member for Sandton tried very hard here to arouse a spirit of provincialism in the debate. For instance, he tried to play off the Transvaal against the other three provinces. Consequently, it may be appropriate for me to express my gratitude towards the hon. member for Durban Central for the fact that he did not take part in that. In the nature of things, we from Natal can discuss this matter with a great deal of impartiality. The hon. member for Sandton was quite correct when he said that if a country-wide quota is maintained in this delimitation, Natal would most probably have to forfeit one Parliamentary constituency. In terms of the Constitution, Natal would then win 18 provincial constituencies. In other words, for Natal it would be a case of gaining 18 provincial constituencies and losing one Parliamentary constituency. Consequently, if the hon. member for Sandton wants to approach this matter from a provincial point of view, I can quite rightly point out to him that we from Natal can discuss this matter with a great deal of impartiality.

However, that is not the end of it. The hon. member for Sandton also suggested a number of instant solutions, which he wanted to put forward across the floor of the House, as examples of ways in which the Constitution should ostensibly be amended if one wanted to be fair and correct. However, the hon. member for Sandton ought to know—even though his party, with one exception, did not yet have a place here in the House in 1973—that it has become a tradition here for the rules of the game not to be changed without first being referred to a Select Committee, that they are not changed without consensus having been arrived at between the various political parties. Surely the hon. member for Sandton cannot think that he can hold up a lot of instant solutions to this House in a one-sided manner. Furthermore, the hon. member for Sandton evinced an amazing argument here, in my opinion at least. It was his very simplistic argument that the value of a vote merely amounts to one man, one vote; thus merely a numerical consideration. This comes from a party and from a spokesman of a party—if I may just disgress for a moment by eay of illustration—that when it comes to South Africa’s future dispensation for the various nations, are fond of declaring that their future solution for South Africa is not based on the principle of one man, one vote, and winner takes all. However, this is the exact principle that he is advocating here for the White voters of South Africa. Then can he tell us, if that party is already intimating its intention so clearly now, once we ultimately become involved in the greater constitutional debate of South Africa, how a single South African can expect different criteria to be applied by him and his fellow party members?

I consider this measure to be a simple, practical one. If a country-wide quota is to be applied, as the Constitution provides at the moment—the hon. member for Sandton mentioned the figures here, and I am not going to repeat them—we will find that the Delimitation Commission would be saddled with an additional burden. As it is, the Constitution lays down seven requirements which the Delimitation Commission must bear in mind when constituencies are being delimited. I am not going to mention all of them. Reference is made to the question of community or diversity of interests, the consideration of means of communication, physical features, local authority and magisterial district boundaries, etc. A Delimitation Commission must draw up a delimitation plan for the country as a whole within the framework of these seven norms, without deviating by more than 15% either way. In the present dispensation of fixed numbers of provincial seats, if one is going to pin down the Delimitation Commission further to a country-wide quota, it means that in the case of the Transvaal one is giving a loaded quota of 10% on the true average in the province in advance. In the case of the Cape it is a deloaded quota of 10,5%, whilst Natal and the OFS have slightly lower figures. In other words, not only will the work of the Delimitation Commission be made incredibly difficult, but it will be almost impossible if, against the background of the number of provincial seats that have been pegged, they still have to work on a national quota system. However, that is not all. By using a national quota, one will have a total imbalance between the size of constituencies in the different provinces. In respect of the platteland in the Cape, with the 15% deloading which the commission allowed, and the deloading which already exists, they will be able to deviate 25% either way. The result will be that platteland seats in the Cape and Transvaal will show completely different results to those of urban constituencies. I concede that since this 10 year provision in the Constitution is a temporary measure, the question of provincial quotas will probably be a temporary measure too. I also want to concede that the whole question of simply taking the number of voters into account, and whether very important considerations such as area should also be taken into account, should be investigated once again. Let me explain why I say this. Whilst the area of the Cape is larger than that of all three other provinces in total, when it comes to the number of voters, the Transvaal is larger than all three other provinces in total. The question is whether the number of voters alone should be taken into account. Of course, the value of a vote does not simply depend on the value of a cross that is made. Consequently it does not have a numerical value only. The value of a vote is also determined by the value of representation that is laid down for the five years after the cross is made. [Interjections.] In an urban constituency—I am able to speak about this because I have one—it is much simpler to represent 10 000 voters efficiently than to represent 5 000 voters efficiently in the Karoo, because it is a case of physical presence. In Durban, approximately 1 200 people may be living in a block of 450 flats. In the Carnarvon area one would most probably have to travel through an entire district in order to speak to as many voters. Consequently, I want to concede that these are matters which deserve further investigation, but then the right place and the right time for doing so is the calm atmosphere of a Select Committee in which all parties are represented, and where there is the possibility of arriving at consensus, and definitely not here in the open House. I support this measure enthusiastically.

Mr. Speaker, I rise to support the amendment moved by the hon. member for Sandton, but before I do so I should briefly like to refer to one or two arguments used by hon. members on the other side of the House.

*The hon. member who has just resumed his seat accused my colleague of not playing by the rules of the game. He said that in this House we accepted the rules of the game and that there would be no change, unless these rules were amended after having been referred to a Select Committee. That is why we are asking why this Bill was not in fact referred to a Select Committee. There is a Select Committee, there is a commission, but in spite of that, this Bill was never referred to that Select Committee or to that commission.

But did you not listen to what the hon. member said?

The hon. member for Virginia said that there had been an agreement between the parties in 1973. However, that did not concern only one aspect of the whole Electoral Act. It is true that the position was pegged down for 10 years, but the national quota was to be decisive. Now the hon. member says that there are two matters that were pegged down and that one is being changed now. Our argument is that because the other one was temporary and applied only for 10 years, there is much more reason to change the allocation of constituencies to the various provinces.

†The hon. member for Durban Central usually makes a significant and worthwhile contribution to debates, but I am afraid I cannot say that on this occasion. He used a number of superficial and specious arguments. One interesting one was that one should compare like seats with like seats, for instance in Natal and the Orange Free State. I think I am correct in saying that he said that in the Natal and the Orange Free State rural areas the loading was more or less the same. That is correct, but there are 20 seats in Natal and 14 in the Free State and if one had to make it 19 seats for Natal and 13 for the Free State the relative position between the Orange Free State and Natal would remain the same, there would be absolutely no difference. If the argument advanced by the hon. member was accepted, the position he finds so satisfactory in the Free State and Natal would continue to exist and those two provinces would not be disturbed.

The most interesting contribution was that of the smiling hon. the Deputy Minister. He is smiling almost like the cat that swallowed the cream. He is “slukking” the arguments in as he sees the debate progressing. He read out an extract from the report of the Delimitation Commission. In fact, the Delimitation Commission does not argue in favour of this Bill; it points to a problem. He says it is difficult to compare similar seats with similar seats in different provinces and that equally, it is difficult to compare similar seats with similar seats in the same province. The Act says, however, that all seats must be as near as possible to the national quota. That is the point. That is the principle that was entrenched in the original Act. That the Delimitation Commission came to certain conclusions on the basis of the figures before it, is certainly no reason—why did the Government not act before?—to abandon what is the basic healthy principle in the Act.

Let us recap. As far as we are concerned, this Bill is grossly discriminatory against one of the provinces. It could have been the Cape but, as it happens, it is the Transvaal.

It is not this Bill.

It is. I shall prove it. As my hon. colleague has indicated, we believe that, if one applied strict proportionality to the numbers of registered voters, the Transvaal would have 84 seats instead of the 76 as established by the parent Act. Let us make our attitude towards this clear. We are not playing marbles. We are not just dealing superficially with a vote in a debating society. We are dealing with the Constitution of the Republic of South Africa. We are dealing with the composition of this House. We believe that the best system of representation …

But that is not the issue now.

Subsection (2) says that it should be as near as possible to a national quota. We say that the concept of it being as near as possible to a national quota means that it should basically be a system of proportional representation. That is the thrust of the present Act which the hon. the Minister is seeking to amend. We believe in proportionality and that in principle each vote should have as nearly as possible the same value. We believe that each province should be allocated seats in proportion to its number of registered voters and that each party should be represented in the House in proportion to the number of votes it gets in a general election.

That is not relevant now.

The basic provision of a national quota is being amended. As I have indicated, subsection (2) says it should be as near as possible to a national quota, and we agree with that.

You are totally wrong.

We believe that the hypothesis put by the hon. member for Sandton and myself would be fair, would be democratic and would allow the real pressures within the voting part of our South African society to be accurately reflected in the House. We do not agree that a voter in Parktown, Berea or Rondebosch should have only 60% of the value of a vote in Kuruman, Cradock or Waterberg.

But that is the situation now. We are not changing that.

We are arguing in favour of a system as close as possible to the national quota. We think it is wrong and anomalous that a voter in Namaqualand or in Gordonia who happens to move to Groote Schuur or Hillbrow should have the value of his vote decreased by 40% or even more. We argue in favour of the ideal of proportional representation or “one vote, one value”. We think that that is the correct approach. That was dealt with to an extent in subsection (2) of the particular provision.

To meet the problems of the hon. member for Durban Central and those pointed out by the hon. the Deputy Minister, we must look at the reality. The reality is that we do not have a perfect system. There is a provision in the Republic of South Africa Constitution Act which permits the loading and unloading of constituencies by a maximum of 15%, except in the case of certain large constituencies where a permissible deloading of 30% is allowed. This loading or unloading is not mandatory but is applied solely at the discretion of the Delimitation Commission. This loading and unloading factor, combined with the fact that each province must by law contain a whole number of constituencies, gives rise to problems in predetermining the number of seats to be allocated to each province, because basically certain criteria have to be taken into account. The total amount of loading must necessarily equal the total amount of unloading, i.e. the total number of votes added to the Republican quota must equal the total number of votes subtracted from the Republican quota. If all the provinces had an even number of loaded and unloaded seats, it would be fairly easy to allocate on a proportional basis. However, the fact is that not all provinces have the same number of loaded and unloaded seats. It differs from province to province, and this does lead to problems in allocating seats, if one does it within the framework of, as we see it, this imperfect law. One would therefore have to build in a certain amount of loading and unloading before one allocated seats to a province. We think this is undesirable, but, nevertheless, one may be compelled to do this if the hon. the Deputy Minister persists with this legislation. This would enable constituencies of a similar character to be either unloaded or loaded by approximately the same amount in each of the provinces.

If one takes the last delimitation as a guideline to see which seats were loaded or unloaded, one finds that in the Cape there were 24 loaded seats and 30 unloaded seats and that the Stellenbosch seat was exactly on par. In Natal 13 seats were loaded and seven were unloaded. In the Orange Free State, four seats were loaded and 10 were unloaded. In the Transvaal 57 seats were loaded and only 19 were unloaded.

What about the percentages?

I will deal with the percentages. There were 98 loaded seats and 66 unloaded seats in the Republic. What does this mean in terms of the percentages which are required on an overall basis between the loaded and unloaded seats? It means that if one had an even loading between the various provinces, one could unload 66 constituencies by 9,8% and one could balance this by loading 98 constituencies by only 6,6%.

In a province like the Cape the fact is that Delimitation Commissions apply a high percentage of unloading, because they have an additional 12 seats which they have decided are large-area seats. Therefore, they have to load the seats in that particular province by something like 19,44%, which is in excess of the maximum that would be allowed. Conversely, if one takes the Transvaal in the present situation, if one loaded the Transvaal seats by an average of 6,6%, which is the average for the country, one would have to take the 19 unloaded seats and unload them by more than 19,8%. It simply would not work. So, this whole question of loading and unloading of seats is bedevilling the electoral process in South Africa. It is creating the confusions and the problems which exist at present.

In 1973, at the time of the last Select Committee, they—we think wrongly—did not allocate constituencies on the basis of a strict proportion of voters. They gave the Cape 55 seats, an average of 4,7% below quota; they gave Natal 20 seats, an average of 0,3% below quota; they gave the Free State 14 seats, an average of 5,8% below quota; and the Transvaal 76 seats, an average of 5,3% above quota. By shifting the zero load as they did, unloading the average in the Cape and loading the average in Transvaal, it was possible for them to give effect to the loading/unloading principle as written into the Act. This is not something of which we are in favour, but it was possible to do that. However, when one looks at the present situation and one takes the previous percentages and compares them with the new ones, one sees that at the time of the 1973 delimitation the Cape was unloaded by an average of 4,7% and now it is going to be unloaded by an average of 10,5%; Natal was unloaded by 0,3% and it is now going to be unloaded by 5,2%; The Free State was unloaded by 5,8% and it is now going to be unloaded by 7,9%; and Transvaal which was loaded by 5,3% is now going to be loaded by 10,4%. In other words, it exacerbates the whole situation and it departs even further from the principle of a national quota. Quite clearly, it is grossly discriminatory to the province of Transvaal.

Let us accept the fact that the hon. the Minister and the Government are in a dilemma. Instead of resolving the dilemma by reallocating seats to the provinces so that the letter and the spirit of the Act could be complied with, the Government abandons the letter and the spirit of the Act and it is going in for a provincial quota which is discriminatory and unfair.

We have always had that.

No, we have not always had that. Prior to 1973 we did not have it. We had it for the first 10 years of Union and for a very good reason, but subsequently it was changed and there was always an adjustment of constituencies in order to see that it was as close as possible to a national quota.

We have always had the provincial quota.

If we were to take the 1973 percentage loading averages and we applied them today, in other words if we applied the same percentage loading averages which were applied before, this would still mean that the Cape should lose three seats and only have 52, that Natal should only have 19 and that the Transvaal would have 80. Even if one accepted all the arguments of the hon. member for Durban Central as well as all the arguments of hon. member on the other side of the House and one applied the same average quotas, loaded and unloaded, as one did in 1973 when the numbers were pegged, then the Transvaal should get four more seats than it has at the present time and the Cape should get three less. Even accepting their arguments, accepting that the 1973 percentages were correct, the Transvaal is still being asked to forfeit four seats. To go beyond the average provincial loadings and unloadings as determined in 1973 is to discriminate grossly against a section of voters in this country.

Although there was an agreement amongst the members of Parliament who at the time of the Select Committee were asked to give evidence before that Select Committee and proposals were put forward which were roughly the proposals which were accepted by the Select Committee, none other than Mr. Horak, who was then the General Secretary of the United Party, gave evidence and said—

That is the first point: inequity between the provinces. I want to argue that it also creates greater inequity between the various constituencies. In principle the Act says, even leaving out the question of the allocation to provinces, that we should try to work towards a national quota. While the Delimitation Commission may depart from the national quota in considering seven factors, one of the factors it cannot take into account is the question of provincial quotas. There is no right in law for taking provincial factors into account. Seven factors are quite clearly laid down, and those are the seven factors the Delimitation Commission can use when applying a loading or an unloading. It cannot use the fact that a constituency is in the Cape Province, Natal, Transvaal or the Free State to justify a loading or an unloading. What will happen? I now want to give specific illustrations, based on the registration figures for February 1980. What would happen if one were now to apply a provincial quota? Let us take a look at some practical illustrations. Firstly, the average loading—unloading factor in the Cape Province was minus 4,7% in 1973. There is going to be a shift of another 5,8% in the Cape Province in favour of unloading. According to the latest figures, 11 out of the 12 special-area seats—those are the large-area seats that can be unloaded to the extent of 30%—are already in excess of the unloading factor of 30%. In other words, they are already unloaded more than 30%, and if this Bill goes through it would be proper for them to be unloaded by more than 30% on the national quota.

Nine of the balance of 19 unloaded seats in the Cape Province are already unloaded by more than 9,8%, and with this additional unloading they would be more than fully unloaded. In other words, they will already be unloaded by more than 15%. Therefore 11 out of the 12 large seats are already hopelessly unloaded, and nine out of the 19 ordinary seats which are unloaded would already go beyond the limit of 15% if this Bill goes through. Eight of the 24 loaded seats in the Cape Province are already just on or under zero loading, and now a further minus loading of 5,8% is going to be applied to them. They are already at zero loading. They are urban seats and they are going to be unloaded by a further average of 5,8%.

Do you prefer the Republican quota?

I shall deal with that in a minute. We should have a Republican quota, as there is, and there should be re-allocation of seats between the provinces. [Interjections.] There are two sides of a coin, and the hon. the Deputy Minister should not always point to the one side. There is only one seat in the whole of the Cape Province which exceeds the 15% loading and that is Durbanville. The Bill will permit a maximum unloading of 30% on a provincial quota in the Cape, which will result in seats of only 8 588 votes, which will be nearly 40% below the national quota. Not a single Cape seat, even on maximum loading, will be allowed to be loaded more than 3% above the national quota. Does the hon. the Deputy Minister realize that henceforth, if this Bill should go through, no Cape seat could be loaded more than 3% above the national quota? In fact it will permit Cape seats to be unloaded by nearly 40% below the national quota.

The converse applies in the Transvaal where an average load of 5,3% is going to be pushed up to an average load of 10,4%. I must point out that 27 seats are already above the maximum national loading of 15%, and they are going to be pushed up by an average of a further 5,1%.

This Bill will not allow an ordinary Transvaal seat to be unloaded by more than 6% below the Republican quota, or a special-area seat by more than 23% below the Republican quota.

Let us look at the difference between a Cape and a Transvaal seat in these circumstances. A Cape seat with a maximum unloading will have 8 588 voters, and a Transvaal seat with a maximum loading will have 17 400 voters, 102% more than the other seat. A Cape seat will have less than half the voters in a Transvaal seat has. A Cape vote, therefore, will be worth two votes in Transvaal. That is the practical reality.

The permissible disparity at the moment between constituencies in our country … [Interjections.] Let me finish. We do not want any disparity at all, but the permissible disparity between constituencies at present is 45%. Surely that is generous enough. Is 45% not more than enough, more than the gap between those seats that are loaded and those that are unloaded? However, if this Bill becomes law, it will permit a differential of 102,6%. [Interjections.] This is a totally unacceptable situation for anybody who believes in our parliamentary system of government and in fair play when it comes to the ballot box.

I want to deal with one final point in connection with this proposed legislation, in line with the third leg of the amendment the hon. member has moved. I believe that this Bill, as it stands, is a slight to the Schlebusch Commission which has been appointed at the request of Parliament and which is considering, inter alia, the very constitutional matters dealt with in the Bill. Ever since the time of Union it has been a principle of Parliament that one does not tamper with the composition of Parliament, or with the electoral process, save by first appointing a Select Committee and trying to get the agreement of the various parties in the House. This is fundamental. [Interjections.] The hon. member said: “Ons speel binne die reels.”

It is not a principle.

Is it not a principle? Is it not a principle to abandon the Republican quota and that all seats should basically be equal?

It is a major principle.

It is a major departure from principle. The commission has been asked by this House to consider a new constitution for the Republic of South Africa. Quite clearly systems of representation or voting must be amongst the important issues being considered by the Schlebusch Commission. It is known in this House, because it has been reported in the Press, that representations have already been made, in public sessions, to the Schlebusch Commission on the very issues of proportional representation and of loading and unloading. A Select Committee, which has been converted into a commission, has been appointed by this House. After the Government has heard certain evidence—and we have read about this—it is now anticipating and prejudging the findings of that commission and is going to do what it wants to do. The chairman of the commission is the very Minister under whose portfolio this Bill falls. The Government has a problem in respect of the forthcoming delimitation. It was not Parliament that appointed that commission, but the Government. There is no hurry. There is no need to have a Delimitation Commission this year. The Act only requires a Delimitation Commission to sit by 1983. Now the Government wants to rush along with the appointment of a Delimitation Commission without any good reason for doing so. It then finds itself on the horns of an electoral dilemma, but instead of using the proper machinery of the commission under Mr. Schlebusch, it comes to this House with a half-baked piece of legislation. I want to say that in any case the Government should have appointed a Select Committee prior to the introduction of any legislation in this House. Secondly I want to put it to the hon. the Deputy Minister that if there is a problem he must postpone the sitting of the Delimitation Commission.

What for?

The hon. Cape Chief Whip, who is an expert on Delimitation Commissions, asks: “What for?” He is most probably going to give evidence before it. He knows all about it. He also knows that there is a problem. We challenge the Government, out of respect for the Schlebusch Commission, to delay the sittings of the Delimitation Commission until the Schlebusch Commission has had time to report. The Government must refer this matter to the Schlebusch Commission. Let that all-party commission have the stature it should have. How can one tell the public of South Africa that one invites them to give evidence to this prestigious commission, which has to deal with the constitution and amendments to the constitution of South Africa, and then, without referring matters to the commission, introduce unilateral pieces of legislation in this House? The question arises why there is this unseemly haste. Why is there this helter-skelter on behalf of the Cape element of the Government? Why is there this unseemly haste to change the Constitution in a manner which can only have the effect of affecting the composition of Parliament? There is no need for a Delimitation Commission to sit now. As I have said before, it is only required to sit by 1983. So we ask the Government why it should proceed now. Surely the correct and orderly way of doing it, out of respect for the Schlebusch Commission and Parliament, is to put the question before an all-party Select Committee and try to reach agreement before one changes the electoral laws of South Africa. This Bill undoubtedly discriminates against the voters of the Transvaal. More important than that perhaps, because one does not want to be too provincial, are the disparities which already exist as a result of the loading and unloading principle between the voters in various electoral divisions. Bad enough as they are today, they are going to be compounded, increased and entrenched if this Bill goes through. This Bill will not resolve the dilemma. It will give a short-term advantage to the “Kapenaars” in the NP. It will see to it that a few seats are saved which they would otherwise lose.

This Government by tampering with the electoral system, by changing the Constitution of South Africa without referring it to a Select Committee, we believe is doing a disservice to Parliament. As my hon. colleague mentioned earlier, there will not be another Delimitation Commission at least until 1985 if the present one does its work this year. There need not be another Delimitation Commission until 1990. Is that correct?

Yes.

17 years.

This will mean that for 17 years a position which was wrong in the first instance will be getting worse and worse and worse. What is more, I do not believe that the Select Committee which sat in 1973 anticipated that it was going to be pegged for 17 years. They did not anticipate that. I think the correct procedure would have been that as the 10 years drew to a close, they should appoint a further Select Committee to see how the figure should be altered. I do not believe that any members of the Opposition— the United Party of that time—would have voted for a Bill if it was going to peg the position for 17 to 20 years.

They supported the Bill.

The hon. the Deputy Minister says agreement was reached.

He does not understand.

It is not only pegging a position which is wrong.

*The hon. the Deputy Minister knows in his heart of hearts that the situation will get worse and worse.

What heart?

What the hon. member is saying is not relevant now.

The hon. the Deputy Minister knows that as long as there is a population increase in the Transvaal, attempts will be made to discriminate against the Transvaal in favour of the other provinces. [Interjections.]

†We say to the Government that they must stop gerrymandering with the political system in South Africa and realize that a constitution is more than just a plaything of the NP, of one section of the NP. A constitution belongs to all the voters of South Africa and each is entitled to reasonable and fair treatment.

Mr. Speaker…

Here come the Transvalers.

… we have listened to the hon. member for Sea Point, and I agree with the hon. the Deputy Minister of the Interior that we have probably listened to vocal eloquence but certainly not to a speech with a meaningful content. Nor do I think the hon. member for Sandton attained the heights which he ought to attain as a Transvaler, even though he is in the Opposition.

I think there are two obvious reasons why the hon. Opposition is opposing this Bill. The one reason is a very obvious kind of political game, namely the exploitation of provincialism within this side of the House.

Are you looking for a Cape Seat?

It is a very superficial kind of game. I shall probably give some attention to it tomorrow.

I think you accept that the HNP is going to take Rissik.

The second reason why the hon. members of the Opposition seem to be so vehemently opposed to this measure is that these hon. gentlemen know that we are going to have an election within the next year or two.

They are afraid of an election.

Yes, they are afraid of an election. The hon. members of the Opposition have only a small measure of support in any event, which is concentrated in some of the metropolitan areas. I think this is the second very obvious reason why the hon. Opposition is opposing this measure. [Interjections.]