Mr. Speaker, I had commenced putting the position of the official Opposition before the previous discussion of this Bill was suspended. I should briefly like to summarize though what I have already said.

This measure has three important clauses in it. The first is the clause that transfers the right to confer judicial powers on Blacks in the urban areas, presently vested in the Community Councils Act, to the Blacks Administration Act, 1927. I am aware of the fact that the powers exist already and that they can be conferred. It is a permissive right which already exists in another statute. We found it offensive when those powers were introduced in the first instance. Therefore we are obviously going to oppose a transfer of those powers albeit simply to the jurisdiction of another piece of legislation. We consider it is highly improper, to say the least of it, to confer powers on people who have no judicial training, who live in the urban areas and are not under tribal law, to administer either civil, and indeed in some cases criminal jurisdiction, to the people concerned. It is true that the powers are not going to stretch very widely. They enable the persons administering these powers to impose fines of up to R40, but they also permit the imposition of corporal punishment on males under the age of 30 years. We do not like that and we do believe that powers of this kind should only be exercised by people who have proper judicial training.

The hon. the Deputy Minister will probably tell us that the powers are only going to be granted should they be asked for. But who is going to ask for them? People in the Community Councils themselves may wish to have an additional lever to use over the inhabitants, and in the case particularly of the Community Council of Soweto, this council is certainly not representative of the people concerned, having been elected by an electoral poll of something like 6% only. We are therefore against that power being granted.

The second important clause is, of course, the one providing for the transfer of Mafeking and immediate environs to the territory of Bophuthatswana. The hon. member for Musgrave and I did not oppose that in the Select Committee on Co-operation and Development, and we are not opposing that now. But we would like some enlightenment on the steps that were taken by the hon. the Deputy Minister or the department before the final decision was reached, because this matter held fire for well over two years, and the people living in Mafeking were considerably inconvenienced by the indecision over this matter. People were unaware of what was going to happen to their businesses, their professional practices, etc. The whole question of compensation is of course very important. There are, I believe, between 5 000 and 6 000 White inhabitants of Mafeking, something like 1 500 Coloured people and about 800 Asians. All these people are very concerned about what is going to happen. I therefore hope that the hon. the Deputy Minister will enlighten the House about the details of the transfer, so that we may be more certain of what we are doing this morning.

The third clause to which I wish to refer is clause 9, which seems to be very wide indeed in the powers which it confers on the Minister of Co-operation and Development or his authorized representative. We tried to get some clarification on this and the department was very co-operative in giving us information, but I should like a little more clarification to be given to the House. It appears that this clause is mainly related to the transfer of the administration of the labour bureaux to the Department of Manpower Utilization. This clause ensures that certain powers, such as influx control, remain under the Department of Co-operation and Development. This of course links up very closely with the recommendations of the Riekert Commission, which recommended that the presence of Blacks in the urban areas should be controlled by two factors, and two factors only: Firstly, the availability of a job and, secondly, the availability of approved accommodation. We need more information about this.

In the meantime I have to tell the hon. the Deputy Minister that we are going to oppose the Second Reading of this Bill, mainly because of the transfer of these judicial powers to persons who have no judicial training.

Mr. Speaker, I am sorry that the hon. member for Houghton is going to oppose the Second Reading of the Bill purely because they object to one or two of the clauses. It is true that this is a kind of omnibus legislation and one can therefore understand that the official Opposition has a bit of a problem with it. I shall not deal with the two objections advanced by the hon. member for Houghton, but by way of a change will deal with a matter about which she and I agree, namely the transfer of Mafeking. On an earlier occasion when she took part in the debate, and again today, the hon. member put certain questions in connection with Mafeking, and I shall try to reply to those questions. In the first place I want to state very clearly that the matter of Mafeking has not been allowed to drag on for two years by the Government. The instruction to look at Mafeking was issued during April 1979 and the commission began its activities with regard to Mafeking in April 1979 and submitted a report on the matter to the Cabinet at the end of May 1979.

The commission also, of its own accord, recommended that the case of Mafeking be dealt with on an ad hoc basis and not necessarily in the context of the total mandate of the commission to consider consolidation, but instead that Mafeking be dealt with by the Cabinet on an ad hoc basis, specifically because the commission gained the impression that the possibility of incorporating the inhabitants of Mafeking into the territory of Bophuthatswana could cause problems. Accordingly the commission recommended that the matter be expedited. Having decided in principle that it would transfer Mafeking to Bophuthatswana, the Cabinet appointed a technical committee to effect the transfer. As it happened, the hon. the Minister of Foreign Affairs asked me to act as chairman of this technical committee. The other bodies concerned with the technical committee are the department of Foreign Affairs, in the person of Mr. Snyman, the Treasury, in the person of Mr. Kemp; the Department of Co-operation and Development, in the person of Mr. Cilliers; Mr. Bloem, the mayor of Mafeking, who is acting on behalf of the inhabitants of Mafeking; and the Provincial Secretary of the Cape, Mr. Gie, acting for the provincial administration. This technical committee has already made good progress with its activities. I shall have more to say about that later on. It is very gratifying that the Government of Bophuthatswana itself has also appointed a committee similar to this technical committee to deal with the transfer of Mafeking.

As regards the question asked by the hon. member concerning the way in which the inhabitants of Mafeking had been consulted, I should like to say that the commission has paid various visits to Mafeking. The following organized groups submitted evidence before the commission. The Town Council of Mafeking, the Indian Management Committee, the Coloured Management Committee, the Divisional Council of Mafeking, English-language and Afrikaans-language churches, White teaching staff and the school board, the Farmers’ Association and District Agricultural Unions, the Chamber of Commerce, Afrikaans-speaking businessmen, because there is no Afrikaans-language chamber of commerce at Mafeking, the Municipal Staff Association and even the NP district council. Moreover, on 23 April a public meeting was held in Mafeking, and on this occasion 16 people submitted evidence before the commission and 30 memoranda were received by the Commission relating to the transfer of Mafeking. I am convinced that thus far the inhabitants of Mafeking had been afforded adequate opportunity to state their case. However, the technical committee will again afford the inhabitants of Mafeking the opportunity to submit further evidence or make representations in connection with the transfer of Mafeking.

However, the committee is of the opinion that we must first have the conditions, such as guarantees, in order before approaching the inhabitants of Mafeking, because after all, we want to give them the opportunity to know exactly what the transfer of Mafeking will involve.

I might just mention that this piece of legislation in fact only relates to three pieces of land, namely the town commonage, comprising 5,349 hectares, the Imperial Reserve, comprising 204 hectares, and the Lonely Park area, which is included in these areas. At this stage, Lonely Park is in fact a farm but it also includes the piece of land near Mafeking on which the South African Embassy is situated.

The hon. member asked the hon. the Minister how many people were being affected in the process. According to the figures for 1979, 4 158 Whites, 3 600 Coloureds and 300 Asians are being affected. It is possible that at this stage the existing figures already differ from the figures for 1979. Among other things, three White schools with 1 123 pupils, and one Coloured school with 830 pupils are affected. There is no school for Asians at Mafeking. There are 30 Asian children from Mafeking who are attending the Coloured school at present.

In 1979 the municipal valuation was as follows: Rateable property valued at R35,3 million; and non-rateable property valued at R12,6 million. This gives the total of R47,9 million. At present there are 1 110 houses and 130 flats for Whites. There are 330 houses for Coloureds and 36 houses for Asians. 215 of the houses for Whites already belong to the South African Government, to Community Development or whatever bodies may be the owner of that area. 58 of these houses are situated on the Imperial Reserve.

Last week the technical committee also met with the technical committee of the Government of Bophuthatswana. They agreed, subject to approval by the two respective Cabinets, that the target date for the transfer of Mafeking to Bophuthatswana would be 1 September 1980. All bodies involved in negotiations and agreements to be entered into must as far as possible finalize their business by 16 June, and then the technical committees will reconvene on 10 July, at which stage we believe we shall be in a position to make known all the conditions which will be set the inhabitants of Mafeking. I believe that if we were to succeed in confirming those points about which we have already reached agreement with the technical committee of Bophuthatswana—not only did we negotiate with the technical committee of Bophuthatswana, but the technical committee and the commission held discussions on occasion with the Government of Bophuthatswana—then as far as Mafeking is concerned we shall create a very good model, because we have also, inter alia, concluded agreements in terms of which the White community of Mafeking will suffer little or no disruption. For example it has been agreed—the technical committee as well as the president of Bophuthatswana have agreed to this—that the White schools in Mafeking remain under the control of the provincial administration and will be administered as White schools. As regards the officials, who will be seconded officials after the date of transfer, it has also been agreed with the technical committee of Bophuthatswana that the houses of such seconded officials will not necessarily be transferred to the Government of Bophuthatswana—although they will in fact fall within the jurisdiction of Bophuthatswana—but that the Republic of South Africa will obtain ownership of those houses in order to ensure that it will be easier for the Republic of South Africa to meet the demand for seconded officials, who will still have to be seconded to Bophuthatswana in future. The other matter dealt with is the maintenance of law and order in the process of transfer. It has also been agreed that we shall consult further with the Departments of Justice and Police of the Republic of South Africa and it is already very clear that the majority of officials who are already there are satisfied to stay there and carry on with their functions relating to judicial authority and police assistance in that territory.

Agreements have also been concluded to the effect that we shall provide for a minimum period of five years in which this transfer phasing-out process can take place, on the following basis; not only will people receive guarantees for their property, but if a person wishes to leave Mafeking after transfer, he must be in a position to do so. He can remain in Mafeking voluntarily, but no one is going to be compelled to do so. Both technical committees expressed the wish that the White skills and all that they entailed would be retained in Mafeking for as long as possible, even permanently. However, it is being provided that people who want to go, may do so. Circumstances will arise that one could regard as cases of hardship, where people may of necessity have to sell their property because an estate must be wound up, or because difficulties of some kind, for example financial difficulties, arise. We shall deal with those cases of hardship throughout. The idea has been expressed and also accepted that we shall see to it that there will be a point in Mafeking which if at all possible will be manned by a senior official, and where the inhabitants of Mafeking will be able to obtain information at all times, together with a brochure that we shall issue on how the transfer is to take place, what procedures they must follow, what their rights are, and related matters.

The case of the officials, not only the officials attached to the Government departments of the RSA, but also those attached to the municipality of Mafeking, has been ironed out. The officials, with the exception of one or two of them, have decided to remain. At the request of the technical committee of Mafeking it has also basically been agreed that more officials will probably have to be seconded in order to perform municipal services there. The city council of Mafeking has been asked by the Government of Bophuthatswana to administer Mmabatho and the Black city of Montshiwa on an agency basis, and therefore we have provided for the need that more officials will probably have to be transferred.

I just wish to say that in the recommendations it submitted to the Cabinet, the technical committee drew no distinction as regards the treatment of Whites, Coloureds and Asians. We only deal with those people who are RSA citizens. As far as this process is concerned, these people are all treated alike.

Another important matter which came to the fore was that an agreement was reached with the technical committee and the Government of Bophuthatswana that after the incorporation of Mafeking into Bophuthatswana, the existing embassy in Mafeking, would continue to be the embassy of the RSA. The area in which the embassy is situated—we did not deal with the Mafeking situation as a whole in the Select Committee, and the hon. member for Houghton referred to that too—has been surveyed and will be transferred in the name of the RSA. This means that it will not be necessary to build a new embassy for the RSA in Bophuthatswana.

Another important matter which deserves attention and to which the technical committee is giving attention at this stage is the situation concerning Government buildings. It was agreed with the technical committee that the Government buildings would be transferred to the Government of Bophuthatswana as soon as practicable. We foresee that for the present, the buildings will continue to remain the property of the RSA, until such time as the prevailing situation changes. We must realize that Mafeking is a very important place as far as the S.A. Railways are concerned. There are a number of railway officials in Mafeking, and the question of rail transport is also very important.

While I am dealing with this I also wish to point out that the technical committee is now giving attention to the section of line between Mafeking and Ramatlabama before it crosses the border with Botswana. The fact is of course that the whole railway line from Zimbabwe to Mafeking has in fact always been operated by a private company—I cannot remember the exact name of the company—which operates from Zimbabwe. At this stage negotiations are being conducted in this connection. However, the technical committee felt that the share of the Government of Bophuthatswana in this railway line from Mafeking to the border of Botswana should be protected and that the status quo should be maintained with regard to the function performed there by the S.A. Railways until other arrangements had been made in this connection.

The various State departments of the RSA will finalize the agreements they have concluded. It will be realized that there are a number of matters which have to be dealt with in the process. It is not only Railway activities that are involved, but also those of the Post Office and the Department of Justice and related matters. I could also refer to the important process of the water supply to Mafeking. I am satisfied that the spirit and the attitude displayed by, among others, the Government of Bophuthatswana and the technical committee, will result in our allowing the transfer of Mafeking to take place in an orderly fashion. The White inhabitants as well as the Coloureds and Asians need not, in my opinion, be concerned at this stage that the conduct of affairs will not be orderly. Nor need they be concerned about the attitude of the Government of Bophuthatswana in the process of transfer. We must accept that we are dealing here with a relatively new situation, that the process will probably involve growing pains and that there will be practical problems, but against the background of the sound attitude being displayed I think that the process will not be a difficult one, and when it comes to spelling out the guarantees and other aspects, we shall be able to afford all the inhabitants, as well as the Government of Bophuthatswana, considerable satisfaction. I hope that when it comes to 1 September we shall be fully prepared to implement this action in full. I think that answers the questions the hon. member asked.

Mr. Speaker, may I ask the hon. member whether, when the various bodies and individuals gave evidence before the technical committee and the commission, the general impression was that there was a willingness on the part of most of them for Mafeking to be handed over or whether there was opposition?

I think I can say without fear of contradiction that there was a general feeling that it would be better if Mafeking was incorporated in Bophuthatswana. I think it would be wrong to say that the people were simply prepared to give up Mafeking. It is true that there is sentiment as far as Mafeking is concerned, but we must understand the practical situation of Mafeking. Since the consolidation proposals of 1973, 1974 and 1975, the inhabitants of Mafeking have found that Mafeking is encircled on three sides by Bophuthatswana. At the same time there was the situation that a new capital city for Bophuthatswana, Mmabatho, had been developed alongside Mafeking. This had a tremendous influence, on, inter alia, the businesses at Mafeking. A practical example which probably had a major influence on the attitude of the people was that the 4% sales tax was not imposed at Mmabatho but was imposed in Mafeking. A street separates Mafeking from Mmabatho, and as a result the purchasing power had in fact shifted to Mmabatho. As a result Mafeking began to decline. I want to repeat that the general feeling was that it would be better for Mafeking to be transferred to Bophuthatswana, and not that Mafeking should simply be transferred. On that basis I say that there was no major opposition to the transfer of Mafeking to Bophuthatswana. After this announcement we did not experience many problems or receive complaints from the inhabitants of Mafeking, and from that it was evident that they had accepted the idea. Mr. Speaker, as MP for that region, you are aware that most of the problems related to the doubt as to whether Mafeking would be transferred or not, and as far as I am concerned that doubt has not only been felt merely since April last year, when the commission began to carry out an investigation. That doubt has existed since 1973. It is as well that this doubt should now be eliminated. Now these people are asking what the substance of the guarantees is going to be and what their position is going to be. These are matters which we can now spell out to the people in Mafeking, and I believe that once they have been spelled out we shall not really encounter resistance with regard to the transfer of Mafeking particularly in view of the attitude displayed towards the Whites in Mafeking by the Government of Bophuthatswana.

That is all I wish to say. If there is anything else that is not clear, we can dispose of it later.

Mr. Speaker, we will support the Second Reading of this Bill. The hon. member for Houghton adopted the attitude that as the Bill provides for the transfer of powers from the Community Councils Act to the Black Administration Act it was therefore encumbent on her and her party to oppose the Bill at Second Reading. I do not believe it is possible in any way to hold a meaningful debate on the principle involved in this Bill. I believe in fact that the principle before the House is really whether the provision should be in the Community Councils Act or in the Black Administration Act. As far as I am concerned, I think these provisions belong in the Black Administration Act and therefore we see no reason for opposing this Bill.

I think that the hon. member for Schweizer-Reneke has made a very important speech in the House today in connection with Mafeking. This is a matter that is going to affect a considerable number of people throughout the length and breadth of South Africa, and more particularly—I think I am right in saying this—the province of Natal. We have listened with great interest to what the hon. member had to say and we shall study his Hansard with very great interest indeed. He has given an assurance to the people of Mafeking that they will not be detrimentally affected in any way. He feels that the problems have been ironed out. I think that quite realistically he said that there may well be growing pains or problems as one moves into what is a totally new sphere of negotiation in reaching an understanding between neighbouring governments with the incorporation of the territory of one in the territory of the other. I would be very surprised indeed if there were no problems. I am quite certain that there will be.

What I welcome particularly, however, is that this is a living demonstration of what negotiation, compromise and consensus can achieve. I do not say that I welcome the idea that this is going to be carried out on a large scale, but I think it will be. I think that any meaningful consolidation of any of the provinces of this country means that this sort of action is going to happen time and time again. One accepts this as the law. This is in the hands of the hon. member and the commission which is charged with investigating consolidation proposals for South Africa. Any action which can be taken to smooth out any problems between neighbouring governments is to be welcomed. I should like to say to the hon. member that I welcome the statement he has made here today. There may be some additional questions which will arise, if not in the course of this debate, then in the course of other debates. We shall study the hon. member’s Hansard with very great interest indeed.

I should just like to refer the hon. the Deputy Minister to clause 9. As I understood him, he said that where certain powers are to be transferred to another department in relation to the administration of Black labour, this clause was merely to make sure which powers would be transferred and which would remain in his department. I must confess that the provision as it now stands gives no hint as to what he really intends. I should like him to spell this out in greater detail in his reply to the Second Reading. We do not want to oppose the clause, but from what he said it appeared that this would be to the advantage of Black people who were wanting to sell their labour in a market which might be more advantageous to them. The clause reads—

When one looks at this, at first blush it looks as if this relates to some homeland area in respect of which there is the potential of a legislative assembly being established. However, as I understand him, it refers actually to the administration of Black labour in the non-homeland areas. I must confess that I found the language of the clause perhaps a little bit confusing. I would welcome any more information the hon. the Deputy Minister can give us. We can then return to the matter, if necessary, in the Committee Stage.

Mr. Speaker, as usual, the hon. member for Mooi River once again acted very sensibly and, I would say, reasonably too, in adopting the standpoint that he did here. I should like to thank him for this.

On the other hand, the hon. member for Houghton objected to clause 1 of the Bill. She also spoke about clause 8 and clause 9. When she spoke about clause 1 last week, her main objection was the fact that this measure was unsuitable in the year 1980 because, as she put it, “untrained people” are being given the opportunity to exercise certain judicial powers.

[Inaudible.]

I think that was an unsavoury reference to the people of the control board and those who will be appointed by the hon. the Minister to exercise this judicial power. There is something that she must have no doubt about. The Black community is aware of and is completely au fait with the tribal customs and traditional customs within their own way of life. Those who have to administer justice, are also quite aware of the customs within the tribal context and traditional context. She could well leave it in the hands of those people …

[Inaudible.]

… who over the years, through tradition and existing customs, have become au fait with what they want and what they do not want when it comes to their own customs.

She did not object to clause 8, for which we are grateful.

I am not sure of it. I shall have to think again.

This clause flows directly from one of the hon. the Prime Minister’s new initiatives. I am referring to the terms of reference that he gave the Commission for Co-operation and Development, to take a fresh look at the consolidation of the Black States. One of the first recommendations, or rather the very first recommendation of the commission, was also, as the hon. member for Schweizer-Reneke has already said, that Mafeking and its township, and the areas that are known as the Imperial Reserve and Lonely Park, should be included in the territory of Bophuthatswana. By doing this South Africa, the Government, is giving effect to what it has always stated as its policy and premise, viz. to help Africa to help itself. I want to express the hope that this course of action will contribute towards promoting peaceful co-existence and good neighbourliness with Africa, because this is South Africa’s express desire. Mafeking is now giving Bophuthatswana the opportunity to prove that co-operation and peaceful coexistence is possible between White and Black in an independent Africa State, but what is more, that it is in fact essential.

This transfer of Mafeking must destroy the Africa syndrome, viz. that Blacks have a hostile and destructive attitude towards Whites. If we do not succeed now, particularly with regard to those States that have received their independence from South Africa, this Africa syndrome will continue and the fear of it will simply be heightened in the future. The toll that it is going to exact, will have an extremely detrimental effect on Africa itself, on the long term. President Mangope and his nation now have the opportunity to lay the foundation of a community order and a system of value systems which can have far-reaching results for all times, because in the first instance it must not simply prove that Black people can five within an independent State in peace and harmony together with White inhabitants, and in fact maintain and promote their distinctive characteristic interests and value systems, but secondly it must also be able to prove that the fear of the Whites does not have to last for ever. If this could happen, Mafeking would usher in a chapter in Africa history which would be just as important as that day in world history when the first atom bomb fell on Hiroshima, because Mafeking will then be the instrument by means of which South Africa could form part of the raw heart-beat of a new Africa that is in the process of giving birth to its first-born. However, it will also be realistic to issue the warning that all births are accompanied by pain, often by the death of either the infant or the mother too, sometimes of both, if the necessary precautionary measures are not taken in time.

One feels that although on the surface this clause is merely proposing a border alteration, one is dealing with something far-reaching and dramatic. One almost feels that, without being sentimental about it, one is giving away something of oneself, something very valuable, to a totally foreign, ungovernable force. One almost wants to beseech President Mangope to guard this portion of our country and of our history as if it were a valuable jewel, so that it can become one of the components that will assist in writing the new history of Africa some day, possibly by means of a constellation of Southern African States. To my mind, Mafeking would be a good seat to serve as an administrative centre for such a constellation of Southern African States.

That is why, just as in past history, Mafeking must also keep its place in the history of the future, and Mafeking must remain a symbol of South Africa’s confidence in Africa. Allow me therefore to express the hope that Africa will betray neither our confidence nor Mafeking.

The hon. member for Houghton also referred to clause 9. I want to put it to her that there is no question of a new principle in this clause. The principle of influx control has existed for some time. Here it is merely a case of the labour bureaux being transferred to the Department of Manpower Utilization, and to prevent anyone who manages a labour bureau, as happened in the past, from issuing permits to those who spend more than 72 hours in a specific territory. Provision is being made in clause 9 for that function not to be transferred together with the labour bureaux to the Department of Manpower Utilization, but that it will remain the duty of the Minister of Co-operation and Development and his officials. Therefore, there is nothing new in question here; no new principle. In fact, the hon. member actually alleged that she and her party would not oppose the Bill as a result of this.

Mr. Speaker, as the representative of Mafeking for many years, I feel that on this moving and dramatic occasion, as the hon. member for Parys referred to it, I too should say a few words. It is definitely dramatic to me and moving too. It is also generally known that I was opposed to this incorporation of Mafeking. I gave evidence before the Commission of Inquiry, and gave my reasons there. They are not personal reasons, nor are they reasons that are based on a political foundation. They are reasons why I felt that it would be better for Mafeking to remain a neighbouring town, a twin town of the town of Mmbatho which will develop in due course.

I felt that there could be greater cooperation between those two towns, that a better opportunity could be created for those people, but that each one could retain his own infrastructure nevertheless. I also submitted a request for a decision on Mafeking not to be taken on an ad hoc basis, but that, in the process of consolidating Bophuthatswana, Mafeking would form part of the large whole.

Unfortunately my plea was in vain. I assume that stronger evidence was probably submitted to the commission. It was decided otherwise, and today Mafeking is being included in Bophuthatswana on an ad hoc basis. However, now I just want to make a request for the people of Mafeking. It bothers me that there is talk of compassionate cases only enjoying attention, and that guarantees would be given to such cases only. Surely it cannot be true that compassionate cases only will be taken into account for the purchase of land. Anyone who wants his land in Mafeking to be bought out because he may want to settle elsewhere, anyone who feels that he is not at home there, anyone who retires, as well as teachers or public servants who are transferred, are all going to be involved in this respect in the future. They are the ones for whom I am asking that their land should be bought out at once; as soon as possible.

When we originally decided on this matter, I held discussions with the hon. the Minister of Co-operation and Development and with the hon. the Minister of Foreign Affairs. I was assured that people who want to leave Mafeking will be able to do so as soon as possible, and that the necessary funds would also be made available for this purpose. Therefore, my plea today is that these people’s interests should be looked after. In fact, these are people who are sacrificing a great deal, more than we realize. Land that they have owned for many years, that has become their sanctuary, is now being sacrificed. That is why I am asking that these people should be treated as well as possible by the Government under all circumstances for the sake of the tremendous sacrifices that they are making. I should like to see White entrepreneurship remaining there, but we cannot exercise force in order to keep it there. We shall have to make it as attractive as possible there, so that the entrepreneurship will remain there in order to help with the development of Mmbatho in the future.

Secondly, there is another matter that is bothering me too in regard to this matter, and the hon. member for Schweizer-Reneke did not say much about it, viz. the question of valuations of erven in Mafeking and what they will be worth in five years time. Is there a certain formula that could be worked out so that the value of that land will not remain static? If not, it would be unfair, because there will not be a natural market for those lands.

A final request that I should like to make—and I had thought that it might be included in clause 8—is for the bordering areas like Aslaagte, Lanrick and those places that have been divided into small-holdings and form an integral part of Mafeking. This includes some other farms that are situated as far as on the Transvaal border. All of these people are dependent on the economy of Mafeking. Some of those people are already telling me today that their position as farmers is being made untenable and that the Government will have to give serious attention to purchasing all these lands too as soon as possible, since, as far as I am concerned, they form an integral part of Mafeking. These are the two matters that I should like to bring to the attention of the hon. the Deputy Minister urgently and forcefully.

Mr. Speaker, first of all I want to come to the hon. member for Houghton since she objected very strongly to clause 1 which deals with the institution of tribal law or Black law in White areas. As hon. members know the principle of applying this law in White areas has been discussed on various occasions. Perhaps I should give examples of this. In 1959, the same principle was discussed and accepted by this House in connection with the Promotion of Black Self Government Act. Later, in 1961, the same principle was debated once again and accepted by this House in connection with the Urban Black Councils Act. Then, in 1977, provision was later also made for community councils, as set out in section 7, to make use of sections 12 and 20 of the Black Administration Act, which provided for the implementation of Black civil law and Black criminal law in the homeland areas. What we are basically concerned with, therefore, is a consolidation of section 12 and 20 which is being applied to a whole series of laws. We are simply putting it in the right place now to make provision in the Black Administration Act for the requirements and problems of community councils, inter alia. However, the hon. member for Houghton must realize that even in the year 1980 we are not in a position even to consider abolishing Black law or traditional tribal legal systems, in the urban areas too. The way of life and traditions, those of people in the urban areas too, are still largely linked to their traditional law. In the nature of things one cannot ignore this, not even in the year 1980. I think the hon. member is aware of the fact that the judicial powers of the people who have obtained judicial power in consultation with the hon. the Minister and the Commissioner, is restricted. The Act provides very clearly that certain criminal matters are excluded. In other words, a position cannot develop where people, in their capacity of representatives of Black law in urban areas, on the basis of the judicial power that they have received, can now overstep the mark completely and create situations that can create contempt and aversion in other people in a sophisticated community. I think there is proper control in this regard, as far as such powers are concerned.

The hon. member referred to the Viljoen report, in which the commission expressed an opinion, inter alia, on the question of the Kgotla. I went to the trouble of looking up the report. I tried to establish what the key idea of these people was. I now quote from paragraph 3.2.14. I shall quote the paragraph so that the hon. member can obtain the key idea with regard to the standpoint on the Kgotla from it—

I repeat “the true representative of the people”—

It therefore means that if there was proper liaison and consultation between the S.A. Police and members of the Kgotla, it would make a much greater contribution towards creating law and order in the Black areas. However, I think it is essential that we should also spell out certain practical advantages with respect to the implementation of Black law very clearly. In the first instance the police can be given a tremendous amount of help by the establishment of these Kgotla’s. As I understand, having investigated it, the Black Commissioners are thoroughly trained in Black law and in this traditional law. Anyone who is accused, can appeal to the Commissioner, as hon. members know. His trial takes place de novo, i.e. they begin at the very beginning. It is not like other appeals where the evidence alone is studied. In this case, the trial begins at the beginning. Therefore, there is a great deal of protection. However, what is very important for the Black people in the urban areas, is that there is a great cost benefit attached to it. This type of court is very cheap.

That is the trouble.

People accept this law. The premise of these courts —and it is very traditional in Black law—is that the trial will culminate in a reconciliation between the different parties. They consult together in the Kgotla with the veterans who are there, and when they have conferred with one another long enough, everything will come right, as the Black people say. In other words, these trials culminate in a reconciliation and not necessarily in the satisfaction of the various parties. This is very important for the Black people. Disregarding Black law, even in urban areas, the law according to which the traditions of the Black people are recognized, would be an insult at this stage, to the Black people of Soweto too. There is a need for this type of law too.

In conclusion the hon. member asked how the application arises. The people of the area ask for it, and the Commissioner of the area establishes, with reference to the requests of people and communities within a specific urban area, whether there is in fact such a need. The Act states very clearly that the Community Council has to be consulted with regard to the appointment of the right people in order to implement judicial power.

The hon. member for Schweizer-Reneke gave a very thorough reply on the question of Mafeking. I also want to put it very clearly that this hon. member, who is the chairman of the Commission for Cooperation and Development as well as the chairman of the technical committee whose task it is to look to the method of transfer of Mafeking to Bophuthatswana, achieved very good results, particularly in the respect that the technical committee, in co-operation with the technical committee of Bophuthatswana and the local community, succeeded in dealing satisfactorily with the many important guarantees that people are seeking, in the first place with regard to their economic position and in the second place with regard to community guarantees relating to schools, the police, etc. In other words, by means of his technical committee, the hon. member succeeded in bringing about a great deal of satisfaction and causing consultation to take place on a wide front in order to enable the transfer to take place as satisfactorily as possible.

The hon. member for Mooi River supports the second reading, for which I am grateful. However, he has certain reservations about clause 9, concerning the security of justice which the hon. the Minister is to retain. The problem is, and we shall probably discuss this during the committee stage, that the labour bureaux are being transferred to the hon. the Minister of Manpower Utilization. There is a tremendous intertwining of labour legislation throughout our legislation, and all that is being envisaged with this short clause, is simply to ensure that the hon. the Minister of Co-operation and Development retains security of justice with regard to the implementation of influx control, i.e. whereas in the past he always used the labour bureaux as an instrument, as was clearly spelled out by the hon. member for Parys, he is losing that instrument and we want to prevent that, with the transfer of the labour bureaux, one does not transfer his security of justice and judicial power in the process, i.e. in future the hon. the Minister of Co-operation and Development will have to make use of other instruments according to the judicial power and security of justice that he is receiving in terms of this clause. This is basically what the clause is about.

The hon. member for Parys delivered a very fine speech here on clause 8, on the transfer of Mafeking to Bophuthatswana. He said it is introducing a chapter in the history of Africa. He went on to say that this action is showing Africa the willingness and ability of the RSA to reach agreements, in cooperation with the various Black States. It brings it home very clearly to everyone that we are in a position to reach a settlement between the RSA and the Black people by means of meaningful agreements, in order to ensure peace in Africa, particularly in Southern Africa. I think it was a very good speech, and I think the transfer is definitely a milestone in the history of this country. Particularly if it can take place in the way that the hon. member described here.

The hon. member for Vryburg also made a contribution. One actually feels strange about the sentiments—we respect them— that he expressed here on the transfer of Mafeking today. He left no doubt about the fact that he does not feel very happy about the matter, but under the circumstances he is nevertheless prepared to accept that this transfer will take place. He expressed his concern regarding the question of the adjacent border area. He felt that the people living there, are also involved in this transfer process and that their position should also be looked at, i.e. beyond the mere question of the transfer of Mafeking. The commission is in the process of looking at that position at the moment. The matter will be weighed up within the framework of the terms of reference of the commission.

The hon. member also mentioned compassionate cases with regard to people whose position may be disrupted as a result of the transfer. We have specific methods according to which we deal with compassionate cases. The chairman of the technical committee, however, has informed me that they discussed this in their commission too. If funds are available, we will look at compassionate cases on a very much broader basis than we have done before. I am now talking about compassionate cases as defined in the 1975 proposals. A great deal of sympathy will probably be shown in the case to which the hon. member referred, viz. the case of people who have to retire on pension. I thank hon. members for their contributions.

Question agreed to (Official Opposition dissenting).

Bill read a Second Time.

Mr. Chairman, when the debate was adjourned, I was replying to the standpoints which hon. members had raised with regard to clause 5. I do not believe there is much more I can add, apart from referring to various aspects by way of a summary.

According to the provisions of the Act appeal to the National Transport Commission can only be made on the merits of a determination by a local road transportation board. In other words, for the purposes of a substantive application with regard to the determination itself, appeal cannot be made to the courts, but has to be made to the National Transport Commission. In respect of any appeal lodged with the National Transport Commission, there is no fixed pattern of conduct as regards the implementation or non-implementation of a decision by the local road transportation board. The Commission itself has to decide on that. As regards the courts and the function which they have to fulfil, it is simply a case that the courts may be involved in the decisions of the local road transportation boards by means of a revision procedure. There is sufficient evidence to indicate that it should not be difficult for the courts to give a final verdict within a very short time on the question of whether the procedure had been so defective that it should lead to a decision being set aside. For that reason I want to reiterate that we should not create the impression that we are, as the hon. member for Orange Grove put it, interfering with the “supremacy of the courts” here.

†The courts have never been supreme in this particular regard. All the courts had, and which they still have, is the right of review under certain specific circumstances, while the right of appeal against the substance of a decision of the local transportation board is to the National Transport Commission.

Mr. Chairman, it is not my intention to go on for a long time on this clause. We have discussed it at length and it would appear that we cannot reconcile our differences. With regard to the hon. the Minister’s last point about the supremacy of the Supreme Court, I want to say that the reason why we are going to object to the hon. the Minister’s amendment as well is the fact that an interdict would have no effect in the circumstances. We believe that an interdict should be heard by the Supreme Court because there are various circumstances which could bring about the necessity to apply for an urgent interdict. However, this legislation says that an interdict shall have no cause and effect. We appreciate that there is the right of review, but the supremacy of the court is questioned. Overall, we do not like this clause and will vote against it for the reasons which we have expressed during the last instalment of this argument.

Amendment agreed to (Official Opposition and New Republic Party dissenting).

Clause, as amended, put and the Committee divided:

Ayes—100: Aronson, T.; Badenhorst, P. J.; Ballot, G. C.; Blanché, J. P. I.; Botha, C. J. van R.; Clase, P. J.; Coetzer, H. S.; Conradie, F. D.; Cronjé, P.; Cuyler, W. J.; De Jager, A. M. van A.; De Klerk, F. W.; Delport, W. H.; De Wet, M. W.; Du Plessis, P. T. C.; Durr, K. D.; Geldenhuys, A.; Geldenhuys, G. T.; Greeff, J. W.; Grobler, J. P.; Hartzenberg, F.; Hayward, S. A. S.; Hefer, W. J.; Heine, W. J.; Heunis, J. C.; Heyns, J. H.; Janson, J.; Janson, T. N. H.; Jordaan, J. H.; Kotzé, G. J.; Kotzé, W. D.; Langley, T.; Le Roux, E.; Le Roux, F. J. (Brakpan); Le Roux, Z. P.; Ligthelm, C. J.; Ligthelm, N. W.; Lloyd, J. J.; Louw, E. van der M.; Malan, G. F.; Malan, W. C. (Paarl); Malan, W. C. (Randburg); Marais, J. S.; Marais, P. S.; Mentz, J. H. W.; Meyer, R. P.; Morrison, G. de V.; Munnik, L. A. P. A.; Myburgh, G. B.; Nel, D. J. L.; Niemann, J. J.; Nothnagel, A. E.; Olckers, R. de V.; Olivier, P. J. S.; Poggenpoel, D. J.; Pretorius, N. J.; Rabie, J.; Raubenheimer, A. J.; Rossouw, D. H.; Schoeman, H.; Schoeman, J. C. B.; Scott, D. B.; Simkin, C. H. W.; Smit, H. H.; Snyman, W. J.; Steyn, S. J. M.; Swanepoel, K. D.; Tempel, H. J.; Terblanche, G. P. D.; Theunissen, L. M.; Treurnicht, A. P.; Treurnicht, N. F.; Ungerer, J. H. B.; Uys, C.; Van Breda, A.; Van den Berg, J. C.; Van der Walt, A. T.; Van der Walt, H. J. D.; Van der Westhuyzen, J. J. N.; Van Eeden, D. S.; Van Heerden, R. F.; Van Niekerk, S. G. J.; Van Rensburg, H. M. J. (Mossel Bay); Van Vuuren, J. J. M. J.; Van Wyk, A. C.; Van Zyl, J. G.; Van Zyl, J. J. B.; Veldman, M. H.; Venter, A. A.; Volker, V. A.; Wentzel, J. J. G.; Wessels, L.; Wilkens, B. H.; Worrall, D. J.

Tellers: J. T. Albertyn, L. J. Botha, F. J. le Roux (Hercules), H. D. K. van der Merwe, P. J. van B. Viljoen, and A. J. Vlok.

Noes—22: Bartlett, G. S.; Dalling, D. J.; De Villiers, I. F. A.; Eglin, C. W.; Goodall, B. B.; Lorimer, R. J.; Marais, J. F.; Miller, R. B.; Myburgh, P. A.; Page, B. W. B.; Pyper, P. A.; Raw, W. V.; Schwarz, H. H.; Slabbert, F. van Z.; Sutton, W. M.; Suzman, H.; Swart, R. A. F.; Van der Merwe, S. S.; Widman, A. B.; Wood, N. B.

Tellers: B. R. Bamford and A. L. Boraine.

Clause, as amended, agreed to.

Clause 7:

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

This simply means that the 10% refers only to the fuel portion of the costs.

Mr. Chairman, the hon. the Minister’s amendment has, in fact, improved the clause. It is a much better clause as a result of the amendment because the amendment makes it quite clear that any increase must be directed towards the section of the tariff relating to fuel. I just have a feeling, however, that it might be necessary to include—possibly by regulation, though I am not sure that this can be done—a pre-declaration, in any tariff structure, that a certain percentage of that tariff structure is, in fact, related to fuel, because unless one has that pre-declaration it is only when a fuel increase comes along that the bus company concerned can decide to put the tariff up by a certain amount. It would then be necessary for the hon. the Minister to invoke his powers to bring an independent financial expert in to have a look at that section of the books to make sure that the bus company is, in fact, only adding on a percentage that relates to fuel, because otherwise the hon. the Minister would have no knowledge of that. This is a rather ponderous exercise, and it might take a considerable amount of time before the hon. the Minister and the department are absolutely satisfied that the increase relates only to a fuel increase. I think it might be necessary, perhaps by means of regulation, to make a predeclaration that a certain percentage is related to fuel. We shall support the clause.

Mr. Chairman, I agree that the hon. the Minister’s amendment does clarify things. I believe, however, that this is going to create many problems for the department. I hope the hon. the Minister will confirm that I am right when I say that I assume that he is hoping to take care of certain operators who may be getting special discount rates on their fuel purchases from oil companies because they are bulk users. So although fuel may be subjected to a 10% general increase, a particular operator, possibly because of his special relationship with his supplier, may actually only be subjected to an increase of, say, 8%. I think we would all like to make sure that such an operator does not put up his tariffs the full 10%. This is going to mean that in every instance an operator will have to state clearly, in his declaration, at what price he obtains his fuel. I ask the hon. the Minister whether he is happy that this provision covers the situation? I think it does, but somewhere in the paperwork required when tariffs are reviewed, there has to be a declaration stating that a person gets his fuel at the particular price. I assume that aspect is covered, but I should like the hon. the Minister to comment on that.

Mr. Chairman, it is a fact that fuel is one of the most important inputs that affect public transport tariffs. Secondly, it is a fact, too, that the repeated cost increases which have occurred here during the past few years have been drastic. All this amendment seeks to do, is to enable the companies to adjust their tariffs by a maximum of 10% on the fuel input portion thereof. Then, within 10 days, a statement has to be submitted. So the hon. member is quite right. A statement has to be submitted indicating what the fuel prices were and what they are now. This would also include where the fuel is obtained. This information will then be verifiable so that the road transportation boards or the Commission will be able to pass a reasonable judgment.

Mr. Chairman, I should just like to raise one further thought. In the unlikely event of fuel prices ever coming down, there is not the commensurate power for the hon. the Minister or the department actually to drop the rate. I think the hon. the Minister should possibly think of that at some future stage.

Mr. Chairman, as soon as I have practical evidence at my disposal which indicates a downward trend in fuel prices, I promise to come to this House with an amendment to that effect.

Amendment agreed to.

Clause, as amended, agreed to.

Clause 10:

Mr. Chairman, there are several aspects of this clause that worry us. One of them, I think, seems to have been dealt with already. I have an amendment on the Order Paper, which I am not going to move in view of the fact that the hon. the Minister, having had a look at my amendment, has seen what I was trying to achieve, and has reworded it slightly and made it better than my own amendment. On that basis, if the hon. the Minister is going to move that amendment, I shall not move mine.

There are, however, a couple of other aspects of the clause that worry us. I should like the hon. the Minister to comment on these. I believe that in the amendments we talk about whether or not the justification exists “in all the circumstances of the case”. That is very wide indeed, because the words “all the circumstances of the case” can mean almost anything. We are trying to reach a situation in which there will be no unnecessary wastage of petroleum-based fuels, so much so that we have covered the situation of the empty leg with the hon. the Minister’s amendment, which is on the Order Paper.

It is most important that we should not have a situation in which vehicles are going on long distance trips, inter-city trips, e.g., between Johannesburg and Cape Town, and are returning empty from Cape Town to Johannesburg. That is simply ridiculous. Therefore, in terms of the hon. the Minister’s amendment, the relevant transportation board will now have to take consideration of a possible wastage of fuel if that vehicle does return empty. On that basis a transportation board would be more inclined to grant a permit to fill that vehicle for the empty leg. I do think, however, that what is worth bearing in mind, when we talk about this clause, are the comments made by the hon. the Minister during the discussion of his Transport Vote, when he spoke about the necessity for a transportation policy. I believe that a lot of the difficulties being experienced by private enterprise operators in the transport industry today are a result of the fact that there is no definite transportation policy laid down by the Government, which gives them an area of operation and of advancement and growth. Inevitably our transport systems throughout South Africa are going to grow. Inevitably, too, we are not going to be able to rely totally on the S.A. Railways for every aspect of transport.

They are now being given a further advantage in that consideration has to be given to fuel saving, so that if the S.A. Railways have an electric service running, that should be taken into consideration by a board. We must also realize, however, that the S.A. Railways are in fact very big users of diesel fuel. Specifically where the use of diesel fuel is involved, trains operating with diesel fuel, I believe, need consideration given by transportation boards and by the National Transportation Commission in order to give private enterprise an opportunity as well. In other words, all things being equal, if no more diesel fuel is being used, I believe, we should consider giving operations to private enterprise. Here too I should just like to give the hon. the Minister an idea that I gave to his predecessor, an idea on the whole question of passenger transport. At the moment we run trains because we have to run them, to various outlying areas of South Africa, many of them not on electrified fines but on diesel operated fines. The pattern of road transportation in many countries, such as the USA and some European countries, has been that passenger trains have diminished in number, and they have been replaced by luxury motor coaches. Somebody who wishes to travel reasonably cheaply from coast to coast in the USA, uses diesel motor coaches. I believe that if one rationalizes transport one has to give consideration to eliminating certain of our diesel train services and to try to use luxury motor coaches for passengers and road transportation for goods that have to be transferred.

Obviously, this is a difficult and very complicated process, but I believe there is place in some instances for doing away with that regular rail transport and coming back to private enterprise. I suggest to the hon. the Minister that he does not use this as an excuse to extend the road transportation services of the S.A. Railways, but that private enterprise should be given an opportunity in this connection. I should like the hon. the Minister to give a brief comment on that. As I say, I am also unhappy about the words “circumstances of the case”, and I do believe that the hon. the Minister should motivate a little as to what he means by “in all the circumstances of the case”.

Mr. Chairman, there is nothing sinister in the use of these words. If the hon. member refers to section 15 of the Act, the section which stands to be amended by this clause, he will see that section 15 of the Act lays down, inter alia, what factors are to be taken into account by a local road transportation board or the commission in the evaluation or adjudication involved in granting or refusing a specific application. All this clause does is to add another item to that list, namely the issue of the consumption of liquid fuel. The hon. member will recall that during December 1978, particularly in view of the crisis situation that arose, this House established various committees which were to give attention, among other things, to the issue of fuel conservation in general, and the Department of Transport itself took the lead in one of the committees. The hon. member will recall that at the time the idea was also put forward—and this was confirmed in practice—that a close look should be taken at the granting of temporary road conveyance permits, and this was in fact done. It is by no means the intention here that we should channel all the traffic to the Railways, to the State itself. That is not the aim, nor is that the idea.

I am very pleased to hear that.

The idea is merely that this should be an element to be considered. Of course, if the road transportation services of the Railways also use liquid fuel, then they too are involved to an equal extent. It cannot be otherwise. We cannot make one set of rules for one institution and another set of rules for another. I hope I am setting the hon. member’s mind at rest in this particular regard. Nor do I want to create the impression here that we have no transport policy for the country. Moreover, in all fairness I did not imply that. Of course we have a transport policy, and that transport policy is contained in various Acts, inter alia, the Road Transportation Act which we are now discussing. So many changes have taken place necessitating a total revaluation of every facet of our transport policy, namely the research, planning and creation of infrastructure, with regard to which we have to work in very close co-operation with the private sector. This is in fact my standpoint, and on that basis I have already conducted discussions with the private sector and with the various other bodies, inter alia, also the provincial administrations, in this specific connection. When we reconvene next year I hope we shall be able to be a little more exact with regard to what we envisage in this particular regard. The hon. member states that I must also give him the assurance that I shall not expand the road transportation services of the Railways at the expense of the private sector. The fact is that of the total freight conveyed by road transportation services, the S.A. Railways conveys a mere 1% of the total. The rest is conveyed by the private sector. The road transportation services of the Railways are largely really an extension of the rail services themselves. Basically, that is all they are. I often hear objections from hon. members in this House when I want to terminate a road transportation service provided by the S.A. Railways, and I can understand why. Often these services are operated at a heavy loss, particularly services to remote areas. Let me give hon. members an example. In many of the border areas of our country, which are also frequently mentioned by the hon. the Minister of Agriculture when he pleads that we should do everything in our power to keep the farmers in those areas, the road transportation services are one of the most important services they ask us to maintain when it comes to the marketing of agricultural products, irrespective of the fact that such services are not always economic.

I want to conclude by giving the hon. member the assurance that we have nothing in mind apart from what I have said, namely to include the other element in the matters for consideration.

Mr. Chairman, I now move as an amendment—

Clause, as amended, agreed to.

Clause 11:

Mr. Chairman, by moving this clause, the hon. the Minister is, in fact, improving the situation, in that he is making it necessary only for a private permit to be obtained, and not a public permit in certain instances. I have not phrased an amendment on this, but the hon. the Minister may remember that, during the Second Reading debate, I suggested that there might well be a case to be made out for this class of goods to be declared exempted goods, that they should not necessarily be transported by road at all. I also put forward the possible difficulties. If people are allowed to move construction equipment, for example, purely because they want to repaint it or give it a maintenance service, there will obviously be a loophole. It would be difficult to amend this clause as it stands. I should like the hon. the Minister to give consideration, if he is going to liberalize the whole matter of road transportation, to these exempted goods at some stage in the future.

Mr. Chairman, I should like to explain that the list of exempted goods is being revised continuously. If the hon. member, or any other hon. members, wishes to send proposals to the commission to add to that list, I am sure that the commission would like to have a look at such proposals. Personally, however, I do not favour the proposal that these items should be included in the list of exempted goods, because it is very difficult to control them. The hon. member will understand how difficult that can be. Let me just explain. The requirement that any application shall be made in the manner prescribed by regulation, is nothing new. It already forms part of section 17(2), if the hon. member would just look at fines 50 and 51 of the Bill. Technicalities do not only apply to the applicants, but to the other people as well. I should like to assure the hon. member that if we receive any information with regard to the extension of that list, we shall surely look into it.

Clause agreed to.

Clause 12:

Mr. Chairman, on this clause I want again to refer to the matter raised during the Second Reading debate. The hon. the Minister was a little upset because I suggested that, in relation to private permits, when they are not published it always seems that the Railways and the major bus companies have had notice of it. The hon. the Minister replied that there was no question of this and that road transportation boards were not supplying the Railways or bus companies with notice of application for private permits, and that the Railways Administration and the bus companies themselves were keeping a watching brief. I should like the hon. the Minister to confirm that there is no question that road transportation boards actually, without any request at all, supply the S.A. Railways with notice of private applications.

Mr. Chairman, the hon. member will recall that I have already reacted during the Second Reading debate to the point raised by him. It is not correct, according to the information that I have at my disposal, that the S.A. Railways automatically receive copies of all applications for private and public permits. I should just like to repeat it.

*According to the best information at my disposal, it is not correct that the S.A. Railways automatically receive copies of the applications for private or public permits. The hon. member will understand, however, that the Railways is involved in the applications for permits and naturally it has personnel whose specific task it is to give continual attention to the applications for permits which could influence its activities and for that reason it is obvious—I did not even inquire into the matter, because it seems unnecessary—that they go to the offices of the local transportation boards and to the Transport Commission regularly to determine what applications there are so that they can decide whether they would oppose a particular application or not. However, there is no question of their getting copies automatically and if I should receive any evidence to the contrary, I shall take the necessary steps to prohibit it immediately.

Mr. Chairman, I feel a bit happier after the hon. the Minister’s reply. The reason why I have raised the matter in the first instance is that it appears to me that on many occasions one gets opposition to an application for a permit from the S.A. Railways purely for the sake of opposing it. There are many instances of the transportation of goods which, I believe, will result in a further loss to the S.A. Railways, but it seems to be an automatic reflex action for them to object and to try to gather everything into the fold. I believe that instructions should be given to road transportation boards to the effect that they must see that this sort of thing does not happen. Also, when the hon. the Minister wears his other hat, the S.A. Railways should be instructed that they must not always oppose applications for permits, specifically in instances where it will be of no particular benefit to the S.A. Railways should they succeed. This happens every day and if the hon. the Minister would like me to do so, I shall get some of the road transportation organizations to send directly to him details of this sort of thing, so that he can get a better idea of what happens from day to day as far as road transportation boards are concerned.

Mr. Chairman, I want to give the hon. member the assurance that I do not need anyone to give me information about what has happened. I was in practice for 22 years. I think the hon. member has a superficial impression and that it is incorrect. I repeat that the Railways is an affected party in an application for a permit and all that has to happen is that its standpoint must be given a hearing, because the deciding body is not my department, the General Manager of the Railways, or myself, but the local road transportation board and the Transport Commission, which are absolutely autonomous. Hon. members are aware that I often receive representations from them to interfere with the decisions of local transportation boards and the Transport Commission. I have consistently refused because I have no role whatsoever to perform in the decisions of the road transportation boards or the commission. They must retain their autonomy in this particularly regard. Hon. members will understand where I would land up if I were to interfere in that.

Mr. Chairman, I would like to ask the hon. the Minister a question. Every week the various boards publish a list of applications for permits in the Government Gazette. Am I correct?

Yes.

Then, what are we really arguing about? I know that there are legal firms who specialize in working for transport companies in order to make sure that they are kept aware of any applications for permits. But it is public knowledge that people have made applications. So I cannot understand what we are really arguing about. The fact that the Railways monitor applications is no worse than many big transport companies which do the same, through their legal firms, holding a watching brief for them, making sure that they are made aware of all new applications for public permits. So I do not think there is any real argument in this case.

Mr. Chairman, I just want to put the hon. member for Amanzimtoti right. Although he sat on the Road Transportation Commission which looked into this legislation, he has obviously forgotten the provisions of the Bill. There is a difference between private permits and public permits. It is necessary for public permits to be published in the Gazette, but there is no earnest necessity to publish private permits. It is the matter of private permits we are discussing. During the Second Reading debate I asked the hon. the Minister how it was that the Railways always knew about applications for private permits. I may say that I have been asked to raise this matter by two different transport organizations representing many private operators.

My final answer is that we are effective.

Clause agreed to.

Clause 14:

Mr. Chairman, I have an amendment on the Order Paper which I am not going to move, because the hon. the Minister and I have had a discussion on this and are prepared to compromise. I should therefore like to move the following amendment, which almost reads as the amendment on the Order Paper, although instead of substituting “28 days”’ we now substitute “21 days”. The reason behind this amendment is that if there has been a smash, it is very rarely that repairs can be carried out in as short a time as a fortnight, which involves only 10 working days. The hon. the Minister has agreed that it is reasonable to extend the period slightly. We came to a compromise, and I am therefore very pleased to move the following amendment—

Mr. Chairman, I accept the amendment.

Amendment agreed to.

Clause, as amended, agreed to.

Clause 16:

Mr. Chairman, as the hon. the Minister probably knows, this clause has caused a considerable amount of distress amongst many private road transport operators, because I think they have misread the amendment the hon. the Minister is proposing. Their understanding is—and perhaps it would be advisable for the hon. the Minister to put this right himself—that this provides for additional powers to cancel any permit without notice. I do not believe that powers to that effect exist. The wording could be slightly changed. It appears as if these people have understood the words “cancel or vary any condition”, in the proposed section 25(1)(c), as introducing a new principle on the basis of which the Minister could at any time, because of the necessity for petrol economy, cancel any permit. It was put to me very strongly that the investment made by private enterprise in various operations is considerable and that the right the department has to cancel permits should only be used with a great deal of circumspection, because an investment in buses or trucks of one sort or another can become a worthless investment if a permit is cancelled overnight. I would like to urge and impress upon the hon. the Minister that any action in terms of this particular provision should only be used in extreme circumstances, or at least after due warning to the private enterprise operator that there is a chance that a permit might be varied, altered or cancelled so that he would have time to make adjustments.

Mr. Chairman, I just want to confirm that no new principle is incorporated in this particular clause. It is merely extending an existing principle. The same comments I have made in relation to clause 10, are also applicable here. I hasten to assure the hon. member that use of this particular clause will only be made with the greatest circumspection.

*Of course it is true that transport operators have often invested large amounts of money in the vehicles alone, to say nothing of the other investments in this particular regard. For that reason it would be totally arbitrary to use the provisions of the proposed section to deprive people of their livelihood.

†Just to show what the position has been in the past, my information is that section 25 has up to now not been abused by the local transportation boards or by the commission. I can mention that where an operator has been instructed to appear it has been on account of unauthorized conveyance and non-compliance with the conditions of the permit. That is the only case where this has happened. Although many complaints have been received in the past five years about, for instance, the quality of the tourist services, only one permit was suspended, and this only for three months on account of the continuous violation of the provisions of the Act. In other words, the instances where this has, in fact, been applied has been the exception, and I can foresee that in future this position will still obtain. I therefore want to allay the fears of the hon. member. We do not propose to invoke the fines by using this section of the Act.

Mr. Chairman, I am satisfied with the hon. the Minister’s reply. A new dimension which comes into this is the saving of petroleum-based fuels. As long as we have the assurance that it will not be arbitrarily applied, that it is the intention to save fuel on a major basis and that permits are not going to be scrapped overnight, at least private enterprise operators will have the opportunity to make some sort of adjustment over a period before it is invoked.

Clause agreed to.

House Resumed:

Bill reported with amendments.

Mr. Speaker, when the House adjourned on Friday I had discussed the question of clause 7(b) and (c) and the Select Committee’s amendment recommending the scrapping thereof, and I welcomed the fact that the Select Committee had seen fit to recommend its scrapping.

I had also gone into a fair amount of detail as regards the reasons why it was necessary to recommend the scrapping of those two provisions at this stage. Hon. members will recall that we had been talking about the situation of the Durban Corporation and the Pietermaritzburg city council vis-à-vis the Umgeni Water Board and the various water works that were going to be taken over by the Umgeni Water Board. Negotiations were already in progress, and the fact that clause 7(b) and (c) were included in the Bill before the House, had prejudiced the situation relating to Durban Corporation and the Pietermaritzburg city council as far as these negotiations were concerned. I explained that there were possible gaps in the Expropriation Act of 1975 and that it would be necessary for the hon. the Minister of Agriculture and Fisheries to look at that Act with regard to a specific problem, i.e. that in terms of the Expropriation Act it appears, according to certain legal opinions, that future benefit to the individuals involved, in this case a water service to water users, should be taken into account when expropriation is discussed. We believe that it is correct and that there might well be good reason to change the Expropriation Act.

We listened with a great deal of interest to the evidence submitted by both the city councils and the United Municipal Executive. Port Elizabeth is probably going to be involved in the same situation. There is the possibility that in the next few years there might well be a water board in the Port Elizabeth area. I think that, when I finally moved the deletion of the relevant clauses in the Select Committee, there was total agreement in the Select Committee that it would be entirely inequitable to pass the Bill as it stood then as it would have prejudiced the situation of water users in the Durban and Pietermaritzburg areas.

I am absolutely certain that negotiations will continue on a reasonable basis and that negotiations in terms of the Expropriation Act as it stands will be quite adequate to resolve the situation to the satisfaction of all parties. I am quite convinced that in the final analysis it will not be necessary to make any major alteration to the Expropriation Act of 1975. I would not like the hon. the Minister to adopt the attitude that he is going to urge the hon. the Minister of Agriculture and Fisheries to change the Expropriation Act, because that again could be seen as an axe hanging over the head of the Durban Corporation or the Pietermaritzburg City Council, implying that unless they settle on that basis, legislation will be brought before Parliament and their heads will be chopped off some other way. I am absolutely certain that the hon. the Minister is not going to operate in that way. I am sure that he is going to approach the matter in a spirit of sweet reason and that the Umgeni Water Board will take over at a fair rate the waterworks that have been built up by foresight and a lot of work over a long period by the two respective city councils. Generally speaking, we believe that the amendment is a very, very good one indeed and I am glad that the members of the Select Committee could come to the House unified on this thought.

While the hon. member for Piketberg is here—he was not able to be present when I started my speech the other night—I should just like to repeat the compliment I paid him as chairman of the Select Committee. He did very well indeed. He was a very fair chairman and I think he handled a very difficult task, a task which was technically very complicated, with a great deal of competence and efficiency. My thanks to him for that competence.

Generally speaking, as I have said, the majority of the clauses in this Bill are dealt with very fully in the explanatory memorandum. They were discussed at some length by the Select Committee. Some other minor amendments have been brought before the House, but all in all I believe that we have produced a better Bill as a result of the Select Committee’s work. I would commend to the House the practice of putting Bills before Select Committees so that they can be thrashed out at length, instead of bringing Bills to the House which have not been dealt with by Select Committees, as a result of which one is forced to deal with complicated technical matters in the House when the majority of members of the House have no particular interest in the subject concerned. In fact, Sir, the very next item on the Order Paper is a case in point. It is quite extraordinary to us that, instead of using the mechanism which was used in respect of the Water Amendment Bill, which resulted in a very happy compromise, we are going to be faced with a very different situation with the next Bill on Order Paper, namely the Limitation and Disclosure of Finance Charges Amendment Bill.

We shall support this Bill at Second Reading. We are very glad that the Durban users are not going to be prejudiced as a result of the sweet reason on the side of the Select Committee. I think that the people in Durban and Pietermaritzburg can be very happy with the work the Select Committee has done. There were considerable amounts of money involved. It could well have been a matter approaching R100 million which Durban would not have received if the legislation had been passed in its original form. The case is now, however, altered. We are now able to present to Durban a situation of equity where they can state their case. Any benefits of theirs will be replaced at replacement value less depreciation plus a certain amount for future benefits to the users.

Mr. Speaker, I should like to thank the hon. member for Orange Grove for his words of appreciation. However, I do not want to spend any more time on that. I also want to express my appreciation towards all the members of the Select Committee who dealt with this Water Amendment Bill.

One of the most important clauses is clause 7, which deals with the very matter of the possible expropriation of the waterworks of local authorities. This chiefly concerns the larger local authorities, because these are the bodies that have to provide for a large demand for water and therefore depend on a large portion of our country’s available water resources. It is to be understood that the department experienced certain problems over the years with the proper rationalizing and optimum utilization of water supply. This is of particular importance in the work which certain established water boards are asked and obliged to do.

On the other hand, we can easily understand that local authorities are also very concerned about what they have built up with the taxpayers’ money over the years within the townships in question and that they are not so easily going to give up their properties and assets. Of course they also feel that these are assets that they also use from time to time to negotiate certain large capital loans for essential works that they can show on their statements as part of their assets.

After we had spent a few days listening to representations in regard to this clause from the Durban city council in particular also Pietermaritzburg, and the United Municipal Executive—other large city councils also alleged that they had an interest in the matter and were concerned with it—we realized that it is a matter that one could not gloss over due to the co-operation of those people and the service that they had rendered over the years. The discussion also brought out some important points. On one occasion the department submitted an amended motion, and this in turn had all sorts of implications that had to be given proper attention and had to be reported back on. In the nature of things, such matters always take time. In any event, in due course the Select Committee felt that at this stage we should rather not proceed with clause 7(b) and 7(c) of the Water Amendment Bill because it would create an atmosphere which would not promote cooperation between such a water board and the local authorities, and because there was not really enough time to give proper attention to all the implications thereof.

In addition it has been shown, as the hon. member for Orange Grove said, that the Expropriation Act is also relevant here and that there are certain provisions in the Expropriation Act that have not yet been studied or settled properly or completely with regard to this matter at the moment. That is why the Select Committee, after discussing it with the chairman and senior officials of the department, the Director-General of Water Affairs, Forestry and Environmental Conservation and the Deputy Director, came to the conclusion with the co-operation of these people that the sub-sections in question should be deleted. I think this has paved the way for further investigation, consultation and possible negotiation. I want to express the hope that once we have made a proper study of all the implications of the Expropriation Act, and the possibilities contained in it, and have offered the interested parties the opportunity to hold further discussions, with a view to the fact that the service related to these water works must in fact be continued, in this way we will find a more satisfactory solution that has been carefully investigated and that will be more satisfactory to all these bodies in question.

With these few words I have tried to give hon. members an indication that it was a complicated matter which involved many implications that were very important to the local authorities. The hon. member for Orange Grove referred to this in passing. In one case, for instance, mention was made of an amount of R136 million, which was allegedly involved. In the nature of things, such a matter cannot simply be dealt with hurriedly.

I do not want to elaborate further on this. There are also other less important provisions in this amendment Bill, that we were able to accept. That is why we are submitting an amended Bill to the House, in which the urgent matters do in fact require the approval of Parliament. I want to thank hon. members once again, and also express the hope that in due course, after we have studied all these things properly and looked at them from all angles, if we still want to continue with such an amendment, we will have more satisfaction and general agreement because it will inevitably ensure that greater co-operation is brought about as a result.

Mr. Speaker, we will support the Second Reading of this Bill.

I should like to echo the words of the hon. member for Orange Grove in relation to the chairman of the Select Committee, the hon. member for Piketberg, who has carried a considerable burden during this session, and who has made, I believe, a significant contribution to the working of Parliament. He has gained strength as the session has gone on. We are very happy indeed to see him flourishing as he is at this moment.

He is looking better every day.

The Bill, as amended by the deletion of section 60(1)(b) and (c), as contained in clause 7, now eliminates to a considerable degree the usual administrative grab-bag that one comes across from time to time in the Department of Water Affairs in the regulation of the administration of the department in its normal activities. There was nothing of any particular concern that came to the fore in the Bill as amended. Therefore it did not merit considerable discussion by the Select Committee.

The question of the Umgeni Water Board was another matter to which hon. members alluded. I have been engaged in the matters of the Umgeni Water Board for many, many years, and I have also attended meetings of the Umgeni Catchment Association. I can remember the affairs of Durban, Pietermaritzburg and my own town of Howick, before the Midmar Dam was even contemplated. The Umgeni Water Board was established a number of years ago. The board that is currently serving is in fact the second board.

The hon. the Minister, I am sure, will remember that I raised the question of the board during a discussion of the Water Affairs Vote by a Standing Committee in the Other Place, a year or two ago. Then I asked the question why the board did not take more urgent steps to acquire the works of these particular corporations. From my own personal knowledge of the people concerned I believe that the way of negotiation is very far from being closed. I was in fact surprised when a Bill was put before the House, in which it was intended to make negotiations no longer a necessity. In other words, it meant that there would be defined in the Bill a means of valuation through which the board could acquire the assets of the corporations concerned. The Select Committee, however, in its wisdom—and I believe that it was quite correct—decided to withdraw the relevant subsections of clause 7. I am convinced in my own mind that this matter is not only of importance to Durban and to the Umgeni River, but to the country as a whole, and of prime importance to the Department of Water Affairs. I am also convinced that there will be a reasonable attitude on the part of the Durban Corporation, as being the prime negotiators in this matter. The interests of Pietermaritzburg in this matter are very, very significantly less as far as the actual value is concerned that they are claiming from the department.

I should imagine that continued negotiations, and the fact that this provision was first introduced into this House and subsequently withdrawn, will be a spur to the Durban Corporation to act in a reasonable fashion, as the Umgeni Water Board also has to act now in a reasonable fashion, in making what would be a reasonable offer to the Durban Corporation. I am therefore happy that the matter has reached this conclusion, and I think that it will proceed to the hon. the Minister’s satisfaction. In the memorandum which it submitted to the Select Committee, the Umgeni Water Board itself listed certain advantages which would flow to the board itself from a high valuation. So there was no all-out condemnation of the idea of the Durban Corporation that there should be a high value. Of course the figure of R136 million is the upper ceiling which Durban would claim with a considerable amount of negotiation, but the water board itself was not so much concerned with the price. What it was concerned about was whether the Department, and Parliament ultimately, would approve of such a price. That was the problem. If the board took over the waterworks at a high figure it still meant that there were considerable advantages in the bookkeeping of the board itself namely the matter of raising loans, etc. which would not have perturbed the board unduly. I can see very well that if a board of this nature should have to borrow money— which they will have to do—and to borrow an amount of R136 million, to take a figure, then base the whole of their cost structure awards on that basis, it would cause them considerable grief, if nothing else. Now that we are in a situation where there will be a reasonable attitude on the part of both parties, I think the hon. the Minister must see that the board will acquire the operations of the Durban Corporation at a much reduced figure than the figure of R136 million. I hope that will be the outcome, because as has been indicated, there will be other negotiations for which this is really a test case. In fact, I think some members of the Select Committee felt that it might have been an advantage if this matter had actually gone to court, because then the court would have been able to adjust the matter in relation to benefits received, and this sort of thing.

Therefore we shall support the Second Reading of the Bill. It has been an interesting exercise for all of us.

Mr. Speaker, the hon. member for Orange Grove and the hon. member for Mooi River expressed words of appreciation towards the hon. member for Piketberg for the way in which he occupied the position of chairman of the Select Committee. It is my privilege to associate myself with those words of appreciation on behalf of the hon. members on my side of the House. The hon. member for Piketberg deserves all our thanks and also our congratulations for the way in which he handled the chairmanship of the Select Committee. He ensured that the committee conducted its consultations in the best tradition of efficient action.

I do not want to talk about all the matters in the explanatory memorandum which was submitted to the House. If hon. members have done their homework, they will know what it is about. I just want to draw attention to clause 8 of the Bill. I think it is a very important provision. Clause 8 deals with the extension of the powers of the Minister concerning the disposal of water for irrigation purposes. In spite of the fact that South Africa is a growing industrial country, the bulk of our available water and our water resources is still being used for irrigation, and food production by the agricultural sphere remains of great importance in providing our rapidly increasing population with food. It is therefore essential for all our irrigable land to be used for farming, of course if enough water is available. In isolated cases we are in that very fortunate position. I want to give hon. members the example of the dams in the Orange River, the Fish River and the Berg River, where there is in fact a surplus capacity of water available, which allows one to put more land under irrigation than is the case at present. At the moment, therefore, the provisions of the Water Act are that farmers along these rivers can only have as much water as is necessary to turn their farms into economic units. Many of these farmers have more land available that could be put under irrigation if they received additional water. In terms of clause 8 of the Bill the power is now being granted to the hon. the Minister to incorporate such additional land for irrigation too. This is a measure that is very welcome. After all, it is better for us to use the water of the Hendrik Verwoerd Dam, for instance, to put larger areas under irrigation instead of that water evaporating uselessly behind the dam wall.

If the available water can be granted to such farmers in addition, the value of their land and their properties will of course be increased as a result. The clause now provides for such owners to remunerate the State for the benefit that they are going to receive as a result of the additional quantity. In terms of the clause they must pay the State a sum for every additional hectare of land being put under irrigation. This provision is also welcome, because all sorts of malpractices, such as speculation and an unfair treatment of owners or various groups of owners, is going to be eliminated as a result.

I do not want to say much about clause 7 of the Bill, except that hon. members on this side of the House are also very satisfied with the result that was achieved by means of a unanimous decision in the Select Committee. I just want to submit these few ideas. I think we are all in agreement that, when waterworks are taken over from a municipality by a Government body like a water board, the most important criterion is that the remuneration that is to be paid for such works, should be fair for all parties. I think it will be necessary to reach a very delicate balance between the interests that I am now going to mention. I think there are basically three interest groups.

The first is the interests of the State, because the State has a very direct interest in making water available to the ultimate consumer at the lowest possible price, whether that consumer is a city dweller, an industrialist who needs water for his factory, or a farmer who needs the water for his agricultural production.

The second interest group is the interests of the municipality whose assets and those of its consumers within its area of jurisdiction are being taken over. We all agreed that such a municipality should be properly remunerated for the loss of its water, but at the same time it should at least not be allowed to make exorbitant profits on such assets. Eventually somebody must pay for a high price, and ultimately it is going to be a specific consumer or group of consumers will have to pay the additional amount.

I feel that the third interest group consists of all the consumers and groups of consumers who are going to use water in the greater area of the water board. Fortunately, in practice the different parties usually find a solution to this very difficult problem through negotiation. If goodwill and the national interest, viz. the optimum utilization of our scarce water resources, are at all times borne in mind by the various negotiating parties, I tend to agree with the hon. member for Mooi River that we may hope that further legislation in this regard will not even be necessary. We support the legislation.

Mr. Speaker, in the first place I want to convey my appreciation to all the hon. members who have taken part in this discussion for their fine contributions, and also in particular for their contributions in the Select Committee to which I referred in my Second Reading speech. I associate myself with the hon. members who thanked the hon. member for Piketberg, who was chairman of the Select Committee, for his leadership in handling this difficult matter. We have the greatest appreciation for the service rendered by him and also by the other members of the Committee.

It is necessary for me to repeat that it will be the practice while I am Minister that as far as Water Affairs and Forestry, and perhaps also Environmental Conservation are concerned, if there should be far-reaching legislation, a select committee should be enabled to look at the legislation. This is particularly true with regard to Water Affairs, and possibly Forestry, because Water Affairs does not have easy legislation. It is difficult to understand, has a very wide scope and is often of a technical nature. Therefore I want to repeat the undertaking I have given in the past, namely that as long as I am Minister, any comprehensive legislation affecting this department will be referred to a select committee so that hon. members on both sides will have the opportunity to look at it carefully, otherwise we shall have the situation sketched by the hon. member for Mooi River, namely that we have to debate legislation here before it has been properly studied.

Then I want to refer to the hon. member for Orange Grove, who devoted the greater part of his speech to the clauses to be deleted. Other hon. members also referred to that. We were faced with a very difficult situation in this regard.

†The hon. member did not indicate whether he was going to support the Bill or not.

I did, at the end.

I am glad to hear that. I thank the hon. member and his party for that. That could save some time. He said something in connection with an axe over the heads of Durban and Pietermaritzburg, as a result of my Second Reading speech. This makes it very difficult for me because as the responsible Minister I have to do something and I have to inform the House of what I intend doing if the people do not solve their problems.

You are forgiven.

The hon. members who have spoken in the debate indicated that they hope that the two parties will find a solution and that it is very necessary for both sides that they do find a satisfactory solution. However, in the meanwhile I cannot sit still and do nothing. I said earlier that I would have to consult with the hon. the Minister of Agriculture and Fisheries but, as a result of rationalization, it will probably have to be with the hon. the Minister of Community Development. I hope what the hon. member said in connection with this will not be taken seriously by especially Durban.

*It is very important that we adopt a meaningful and balanced approach to this whole problem, in which one local management takes over works from another.

The hon. member for Ermelo referred to three interest groups involved and adopted a very balanced standpoint. The problem remains, however. That is why I said that we should take another look at the Expropriation Act in order to determine whether, when we originally adopted it, we had duly taken into account the specific circumstances that apply with regard to two bodies. My basic argument is that if a person does not have to replace public works, he is not entitled to the replacement value. I cannot see why one body should receive replacement value while another body has to finance replacement. This problem can only be resolved if the two bodies can reach agreement with one another, which they are apparently capable of doing. If one does not approach the legislation with a view to amending it, one has to rely on the favourable attitude of such bodies. I do not know whether we should be so idealistic as to depend upon people always reaching agreement with one another. That is why I ultimately decided to introduce legislation in order to precipitate this state of affairs. As the hon. member for Mooi River said, these negotiations have been in progress for a long time. A board was appointed, but it is making no progress. He asked me two years ago when they were to take over the work. Therefore we must do something. I just wish to repeat that what I have said here, namely that we shall have to take another look at this Act, should not be regarded as a threat to any party, but as a genuine intention to provide legislation in order to deal with problems of this nature which we are going to encounter in the future. I therefore hope that it will not be interpreted as such. The hon. member for Orange Grove referred to the Durban Corporation. They have already accused me of hanging a sword of Damocles over their heads. I want to tell them that I would refer the matter to a Select Committee and that they should come and state their case there. I told them that the mere intention on my part to look at the Act should not be construed as a threat that they had to reach an agreement. I want to leave it at that. As I have said, these are complicated matters. One could make these matters very complicated academically and theoretically, for example the question of how monies are in fact to be spent on either side and what each is entitled to. Therefore I shall not say anything more about it. Nor do I intend launching into a long argument in this last week of the session. In my Second Reading speech I stressed the important matters. For example, I referred to the Explanatory Memorandum and gave a reasonable explanation of what was intended by the Bill.

Therefore I want to let this suffice and once again thank hon. members sincerely for their co-operation. I hope that in the next stages of the Bill, too, we shall be able to conduct a sober, brief, and concise discussion on this matter. The advantage of the Select Committee was that people could gain an insight into this legislation. They now know what it is about and are therefore in a position to discuss it meaningfully.

I just want to refer very briefly to the arguments advanced by the hon. member for Ermelo concerning clause 8. This is a matter in which I have a very strong personal interest and which in my opinion is in the interests of the country. He referred to the Orange River and the Berg River. A problem is perhaps being experienced to some extent as far as the Berg River is concerned. There are people in the Overberg who are saying that we are diverting water from the Theewaterskloofdam to other areas, whereas it ought to be diverted to their part of the world to be used for agricultural purposes there. Some of the water is used by the municipality of Cape Town, and the other water is used in the Berg River valley and surrounding areas. We shall have to approach this matter with great circumspection if the department is not to come in for criticism. Senior officials of my department and I conducted a discussion about the Orange River.

It seems pointless to me simply to allow the water in the H. F. Verwoerd Dam and the P. K. Le Roux Dam to evaporate because there is insufficient money available with which to tackle in, in good time the planned waterworks which will serve extensive areas and will require a major investment by the State, because we should rather make some of that water available to the farmers, in return for an additional payment, of course, so that at least they are not being unjustly benefited at the expense of the taxpayer. In my opinion this is a positive step in the right direction. It will result in development in a region where unemployment prevails and where development is necessary. This is a region which is stricken by periodic droughts. I therefore want to stress that I regard clause 8, too, as very important.

Mr. Speaker, I want to let this suffice and I just wish to convey my appreciation once again for the contributions by hon. members.

Question agreed to.

Bill read a Second Time.

Mr. Speaker, I move—

The Bill contains important and necessary amendments to the Limitation and Disclosure of Finance Charges Act, 1968.

A committee was appointed during August 1975, under the chairmanship of Dr. D. G. Franzsen, at the time a Senior Deputy Governor of the S.A. Reserve Bank, to inquire into and to report on amendments which have become necessary to the provisions of the Act as a result of changes in commercial practices or because of undesirable practices revealed by the administration of the Act. The report of the committee was laid upon the tables of both Houses of Parliament during June 1978. The Bill before the House, in the main, gives effect to the recommendations made by the committee. The Bill also contains amendments for effective application of the provisions of the Act and which have become necessary subsequent to the inquiry.

The measures set forth in the Bill will affect all moneylenders, credit grantors and lessors who levy finance charges in respect of a debt arising from a loan of a sum of money or a transaction in respect of which movable goods or services are sold or supplied. Consequently representative bodies in commerce including the different associations of banks, building societies and finance houses, the Association of Law Societies, the S.A. Agricultural Union and other organizations which will be affected by the proposed measures, were furnished with copies of the proposed amendments for their comments. The representations and comments received from these bodies and institutions were discussed in detail with their representatives, in order to remove difficulties which may arise with the implementation of the provisions contained in the Bill.

Hon. members will appreciate that when a measure such as the Limitation and Disclosure of Finance Charges Act is revised, it is not easy to introduce amendments which will satisfy completely the divergent needs of all the parties who are affected by the Act. Nevertheless, I am pleased to state that with the excellent co-operation of representative bodies, satisfactory solutions have been found for problems foreseen in the implementation of certain measures. The provisions contained in the Bill will also afford debtors reasonable protection and will allow credit grantors to carry on their business in an orderly manner at finance charges rates which are market related.

I shall limit my remarks to the more important provisions of the Bill. As from 1 April 1969 the provisions of the Act have applied to all money-lending transactions and also to credit transactions under which movable property or services intended mainly for personal, family, household or farming purposes, are sold or supplied. When the Act came into operation, money-lending transactions and credit transactions were the most important forms of credit granting in commerce, and the provisions of the Act were therefore applicable to the major portion of the credit which was supplied at that time by the traditional moneylenders and credit grantors. During the past decade significant changes have taken place in the form in which credit is made available to the public by credit grantors. For instance, banking institutions —the traditional moneylenders—have introduced credit card schemes and leasing facilities in order to satisfy the growing demands for bank credit by individuals and business concerns. Leasing transactions entered into by banking institutions, for example, totalled only R68 million at the end of December 1968.

Within a period of 11 years this type of business increased by more than R1 300 million with the result that the money value of leasing transactions conducted by banking institutions exceeded R1 400 million at the end of September 1979. Leasing transactions, like money-lending and credit transactions, are regarded now as normal banking business and as a recognized form of banking credit. Because both credit transactions and leasing transactions are substitutes for money-lending transactions, finance charges are normally levied on all these forms of credit. Consequently the Franzsen Committee found that the protection which the Act offers prospective purchasers of goods and services is weakened when such protection is applicable only to money-lending transactions and not to certain credit transactions. The committee therefore recommended that all credit and leasing transactions which are entered into in connection with the purchase and leasing of movable property and services, where the debt arising does not exceed a prescribed amount, should be brought within the ambit of the Act. Effect is given to this recommendation in the Bill.

As already mentioned, the existing provisions of the Act apply to all money-lending transactions irrespective of the amount borrowed. The Franzsen Committee drew attention to the fact that the provisions of the Act should not apply to larger transactions. Credit receivers who enter into larger transactions are usually in a stronger bargaining position, especially as they can make use of alternative forms of financing to provide for their needs, and therefore do not need the protection of the Act.

Hon. members will realize immediately that it is extremely difficult to determine an amount above which the protection of the Act is not required. The Franzsen Committee recommended a limit of R250 000 and held the view that all money-lending, credit and leasing transactions having a money value of more than R250 000, ought to be exempted from the provisions of the Act. The proposed limit is the same as that which was fixed by the S.A. Reserve Bank for purposes of deposit rate control.

After having given the matter careful consideration, it was decided that under existing conditions a limit of R250 000 would be too high, and that the provisions of the Act should apply only to money-lending, credit and leasing transactions with a money value of not more than R100 000.

I should like to admit immediately that the proposed limit of R100 000 is an arbitrary figure. Experience has shown, however, that smaller business undertakings and especially the farming community need the protection of the Act. I am aware of the fact that certain credit grantors, particularly general banks, hold the view that a limit of R100 000 is still too high. If the limit is set much lower than R100 000, a large number of smaller business undertakings and individuals, including farmers, will not enjoy the protection of the Act.

If cognizance is taken of the fact that the existing provisions of the Act apply to all money-lending transactions, I am satisfied that a limit of R100 000, as a starting point, is reasonable. The proposed measures empower the Minister of Finance to raise or lower the limit of R100 000 by regulation. An adjustment can therefore be made to the limit from time to time.

*Another very important aspect which is closely related to the proposed limit of R100 000 is the recommendation by the Franzsen Committee that the finance charges rates determined for the purposes of the Act should be market related, and that the rates should be adjusted in such a way as to take into consideration and be related to the general interest level or the “cost of money” in the South African economy. This approach is basically sound and should be used as a norm for the determination of finance charges rates for the purposes of the Act at all times.

The correct approach, from an economic point of view, in connection with the determination of finance charges rates is a policy which makes maximum competition possible and allows the general lending rate to be determined by supply and demand in the normal way. This policy is already being applied. For the purposes of the Act, maximum finance charges rates are determined. The maximum rates are normally somewhat higher than the prevailing rates at which credit financing is granted, and consequently enable credit dealers to determine the cost of credit for specific transactions through the interaction of supply and demand. At the same time, such maximum rates ensure that exorbitant finance charges rates will not be negotiated. In order to ensure that the prescribed rates can be adjusted in time when circumstances require it, the proposed measures empower the Minister of Finance to determine and adjust the prescribed finance charges rates by regulation, and to prescribe different rates for transactions of different money values.

In recent years, practises have arisen which have made it difficult even for credit grantors effectively to control the cost of credit. Especially in the case of a money lending transaction, the services of an intermediary are often used to act on behalf of the moneylender or the borrower. It then happens that such an intermediary, with or without the knowledge of the moneylender, recovers finance charges from the borrower on his own account, additional to the charges negotiated by or on behalf of the moneylender. Apart from the fact that the finance charges which an intermediary recovers from the borrower on his own account are not disclosed in the instrument of debt executed in connection with a transaction, the maximum finance charges that may be negotiated can easily be exceeded through this practice, especially if the moneylender is not aware of the remuneration received by the intermediary. Fees collected by an intermediary from a borrower are already classified as finance charges in terms of the existing provisions of the Act.

In order to ensure that the prescribed maximum rates are not exceeded, and that the total financing charges negotiated in connection with the transaction are disclosed to the credit receiver, the proposed measures provide that an intermediary is not allowed to recover any finance charges on his own account from a credit receiver, unless the finance charges are disclosed in the instrument of debt executed by the credit grantor and fall within the total limit. The proposed measure enables the moneylender to compensate an intermediary for services rendered by him in connection with a transaction. The position of professional persons such as attorneys and auditors acting on behalf of clients is not prejudiced by the proposed measures.

Another important amendment is the one contained in clause 10 of the Bill. This amendment relates to the method of calculation to be used in determining the outstanding finance charges under a money lending and credit transaction where the debtor pays a debt, which is being discharged in instalments, in one amount before the due date thereof. The existing method of calculation prescribed by the Act is generally considered to be unsatisfactory, and it was consequently deemed necessary to introduce a more equitable basis of calculation into the Act.

The proposed measure gives a creditor the right to receive finance charges up to the date on which a debt is paid in full, after proper notification of early payment by the debtor. The measures will be applicable to money lending and credit transactions where the principal debt and finance charges are being paid in instalments and where the principal debt at the commencement of a transaction does not exceed R50 000. Larger transactions are excluded because such transactions are normally financed with long-term funds.

Financial institutions have drawn attention to the fact that they enter into firm interest obligations towards depositors for fixed terms and that their position, in the light of the proposed extension of the provisions of the Act to all credit transactions, would be untenable if borrowers and credit receivers of large amounts were allowed, especially during a time of falling interest rates, to discharge their debts in one amount at any time before the due date. Users of larger credit facilities are able to determine in advance the period for which credit is desired, and it is not unreasonable to expect them to adhere to the conditions agreed upon with the creditor.

Business suspended at 12h45 and resumed at 14h15.

Afternoon Sitting

Mr. Speaker, the limit of R50 000 can be raised or lowered by regulation if experience shows that such an adjustment is justified. In the case of leasing transactions, the property that is being leased is often specially bought by the lessor to meet the specific needs of a lessee. Consequently, the lessor could be seriously prejudiced if a lessee were to terminate a transaction before the expiry of the lease. The proposed measures provide that the parties to a leasing transaction can arrange for the transaction to remain in force for the full agreed period.

†On the recommendation of the Franzsen Committee, the provisions of the Act which apply to money-lending transactions are made applicable also to the business carried on by pawnbrokers and to the financing of purchases of movable property and services by means of a credit-card scheme. The business which pawnbrokers carry on, and the financing granted by way of credit-card schemes, are in essence, money lending, and the provision of the Act should apply to such transactions.

The Registrar of Financial Institutions, who administers the Act, finds it necessary from time to time, in the interests of the users of the various forms of credit financing to which the Act refers, to approach the court for a decision in a dispute with a moneylender or a credit grantor concerning a matter to which the Act refers.

As the existing provisions of the Act do not empower the Registrar to approach the Court, the assistance of the Ministry of Justice was obtained, in the past, when a dispute was referred to court for a decision. Clause 20 of the Bill rectifies the position by empowering the Registrar to approach any division of the Supreme Court for a decision in the case of a dispute. Similar powers are contained in other Acts administered by the Registrar of Financial Institutions.

Mr. Speaker, in the well-known Crowther report, the following passage appeared—

This passage was quoted with approval in the report of the committee of inquiry which preceded this particular legislation. That particular passage is one which, I believe, is at the root and at the base of all legislation which is intended to control rates of interest or, as it is said here, to limit the finance charges as such.

The issue in a community such as ours is that there is not equality of bargaining power when it comes to the market place relating to finance charges. Therefore it is clear that there is protection required for consumers of all categories right across the spectrum of the community. In addition to that it is clear that one cannot have any form of reasonable equality in the market place if the parties are not informed about what the true facts are. That is of course the second leg of this piece of legislation, i.e. on the one hand to control and on the other hand to disclose. But we have had legislation of this nature on the Statute Book before, because, after all, this is only an amending Bill, and in fact we have had usury legislation going back for many, many decades in South Africa and we have had restrictions on usury going right back to biblical days. It is obviously necessary for the authorities to intervene in the market place in order to ensure that there is equality of bargaining power. Therefore the question which in the very first instance we have to put here is: What is the intention of this particular piece of legislation, whom is it designed to protect and does it protect the people who should be protected? As we see it, the essential requirement is that the consumer as such should be protected in relation to finance charges. It is with some regret that one has to say that there is inadequate protection in this piece of legislation in respect of the consumer, and it needs to be improved in that regard. In a moment I am going to give some examples of where this Bill has shortcomings.

Secondly, we believe that in so far as the small businessman is concerned he also needs protection. In this connection we have had a commission of inquiry which has illustrated, certainly in regard to the Coloured people of South Africa, that the small businessman in South Africa does need protection, that the small businessman is exploited in South Africa and that legislation is required in this regard. But we must then ask the question whether this legislation needs to protect the big businessman, whether it needs to apply to all business transactions or whether the Government has not abandoned its whole stance in regard to the operation of the market mechanism between businessmen who can operate and negotiate on an equal footing and whether it has now not cast its net far too wide in that in seeking to protect the consumer the Government is seeking to abandon some of the principles of free enterprise that it allegedly champions. I want to suggest right at the outset that there seems to be no reason whatsoever why major corporations which operate with each other, negotiate with each other and bargain with each other, need the protection of this legislation in regard to certain transactions. We do not understand why it has gone to the length to which this particular statute has gone, and we believe that that is one of the first things we need to tackle in respect of this matter.

There is some considerable dispute among the community at large as to what is meant by private enterprise when the Government speaks of private enterprise. I venture to suggest that much of what was said at the famous Carlton conference and much of what is said in the debates in this House in respect of private enterprise are in fact paying lip service to the concept and not implementing the concept at all. I want to ask the hon. the Deputy Minister how he can for example, justify imposing this legislation on transactions between big business corporations and how he can justify it as being related to his concept of free enterprise when at the same time the Government refuses to protect the consumer when it comes to rent control. There, Sir, are the champions of free enterprise who get up and say that one must have the market mechanism operating, but when it comes to this debate, then suddenly the market mechanism finds no place at all in this concept. I am not alone in saying this and I do not intend disclosing any secrets, because we had, and I shall come back to it in a moment, a Select Committee which sat in respect of this matter, a committee which in fact did not do its work, because it reported that it did not have the time to do so, and I shall come to that as well in a moment. The Select Committee received representations from prestigious bodies in South Africa, including the Association of Chambers of Commerce, and let me quote what they said in a telex to the Select Committee. They said—

While lip service is paid to the concept of free enterprise, this Government still intervenes when it comes to the real operation of the market system in big business. Yet they have the audacity to criticize others who, in fact, seeks to protect the consumer for advocating matters which they then say are contrary to the concept of free enterprise. I want to say right at the outset that this is one of the weaknesses of this particular piece of legislation, viz. that it does in fact not apply adequately to those who need protection and yet does apply to those who need no protection at all.

Let us now analyse some of the other principles that are contained in this legislation. Firstly, I think this piece of legislation must be one of the most complicated that has ever been put before the House. It is going to be interesting to see how it is debated. When I say that it is complicated, hon. members need not take my word for it. The Association of Law Societies made representations to the Select Committee, although they were not afforded the opportunity of giving oral evidence. They have the following comments to make—

If lawyers find it complex, how are the consumers going to find it? They continued to say that these different interpretations are likely to result in—

If lawyers say this, what will the layman say in respect of this particular situation? I want to suggest that one of the major criticisms of this piece of legislation is that it is too complicated, that it will not be understood by the consumer and that there are businessmen who are going to be adversely affected by it because of the complexity, and because that complexity is going to cause a tremendous increase in administration costs, an increase which is inevitably going to be passed on to the consumer. Whatever is done in terms of this Bill, it is only maximum rates which are stipulated and not minimum rates. There will now always be high interest rates, because of the higher administrative costs which are being created by this measure.

The next matter I should like to touch on is some of the new things which are included in this legislation. One of the major things that is being included, is the concept of the credit card. The commission which sat on this and investigated it, came to the conclusion that credit cards should in fact be included. We support the concept that a credit card is a form of extending of credit which is equivalent to the concept of credit granting or that of money lending. We believe it to be a form of credit granting, and we believe that it should be controlled and should be subject to this legislation.

One of the biggest causes of inflation.

However, one of the issues which is not being dealt with in this particular piece of legislation and one which the committee had a finding in terms of which they regarded it as being excluded, is the question of the discounts which are given to the financial institutions that issue credit cards by the dealers who supply the goods. The recommendation of the commission was—and I quote from page 85 of its report—

In this recommendation the crucial words are that this does not result in an increase in the price of goods. Is the hon. the Deputy Minister satisfied that the operation of the credit card system does not result, in many cases, in a higher price being charged? There are lots of places where if one goes with a credit card one is told that one cannot get a discount, but if one does not use a credit card and one pays cash, one can get a discount from the shop concerned. In other words, the realities of the situation is that somewhere along the line the consumer is still paying, because the dealer does not want to lose money. There is little doubt that the concept of excluding the discount means that in the long run, somewhere along the line, the consumer is going to pay extra. The only advantage which can possibly be said to exist, as far as the dealer is concerned, is, firstly, his payment is assured and he does not have to worry about giving the credit and, secondly, he may or may not be saved some expense in regard to the collection of the debt. So some discount can be given, but if it is large, then there is little doubt that somewhere along the fine the consumer is going to come out at the wrong end of the stick. I raise this issue because we regard it as being important. We believe that there should not be, particularly in inflationary times, a situation where the prices for the consumer goes up because of the use of credit cards.

Then I come to the issue of leasing. Originally it was a unique form of transaction, a new form of business. The issue is whether it should be included under control or not. There are different views. Obviously those who are concerned with the business, for example the banks and financial institutions, would prefer it not to be controlled, but from the consumers point of view it is obvious that it should be controlled. If it is, as we believe it should, it has got to be done in such a manner that it still makes reasonable business practices possible and does not hamper the ordinary business transactions that are concluded. I submit to the hon. the Deputy Minister that this particular piece of legislation has a fatal defect because it does not take into account that the majority of leasing has a tax implication and that one can have a situation, particularly in regard to a prior termination, which causes difficulties in regard to the whole Bill in so far as leasing is concerned.

Let me illustrate it in a number of ways. Firstly, at the present moment there is a considerable volume of leasing which is being done at very low rates to the lessee. The reason is that the lessor gets very substantial tax advantages out of tins type of transaction, in other words, the tax advantages are so important to him that he is really prepared to do this at a very low rate of interest. Examples were given to the hon. the Deputy Minister’s department and to members of the Select Committee; so they are well-known. With a prior termination, one can have the situation where a loss is sustained in regard to this type of transaction because of this position. Secondly, when a debtor is in default, all the lessor can claim is the low rate of interest that is stipulated in the agreement and nowhere along the line does it take into account that that low rate has been solely imposed because of the tax advantages that could be obtained. So the particular way in which this Bill has been drafted will assist the defaulting debtor, the man who should not be assisted, and it is discriminating against the lessor in this particular situation.

I want to appeal to the hon. the Deputy Minister to look again at the whole concept of leasing as contained in this Bill, because it is going to result in tremendous hardship for people in the leasing business. There is no reason why this should not be encouraged, because it is a method of financing which is part of the whole modern mechanism of the financing industry today.

I also want to deal with another principle, and that is the question of legal costs. We certainly do not believe that the consumer who pays his way, pays his instalments and pays his debts on due date should be burdened with higher finance costs because of the actions of defaulting debtors who cause litigation to be instituted against them and who cause untold administrative expenses in the business of the credit grantor, the moneylender or the lessor, whoever he may be. However, what this Bill does is to put a premium on a person being a defaulter. The argument that is advanced is that there must be a finance charge, which includes a whole series of costs which in the main relate to the collection of debts from defaulting debtors. It is argued that all these costs are included in finance charges. One therefore recovers these costs overall from the whole spectrum of debtors in South Africa. In this way one makes the man who pays his way and who is honest and honourable, pay his share of the costs which relate to those debtors who do not pay their way. There seems to us to be a completely incorrect approach to this question, because quite obviously the honest debtor who pays his way, should pay the lowest finance charges possible, whereas the defaulter should pay for those costs which are caused by his default. And yet, this particular piece of legislation makes inroads into the discretion of the courts to award costs, refuses to allow costs to be recovered in respect of an instruction to an attorney even to sue or to send a letter of demand before suing and encourages people to sue immediately without trying to recover the money without litigation. That is something which, with respect, we cannot possibly accept in these circumstances. We believe that the people who default should pay the costs resulting from those defaults and that the ordinary debtor should not be burdened with this. We also believe that the courts should be allowed to have full discretion in regard to what they do with legal costs in any piece of litigation.

I also raise the point with the hon. the Deputy Minister that many agreements contain arbitration clauses which do away with the necessity of going to court. There is no provision in this Bill to cover the situation in respect of arbitration. In an arbitration case a successful lessor cannot even be awarded his costs in terms of this particular Bill.

There are also other problems with regard to costs, many of which the Association of Law Societies has drawn attention to. The sale of immovable property, for instance, has been brought, for a reason with which we shall deal later on and with which we do not agree, into the ambit of this type of transaction. Not to include the cost of drawing up a deed of sale, not to include the costs of transfer and to expect those to be included in the finance charges, is to my mind ludicrous. Quite obviously the Bill needs to be amended in this regard.

While I am on the subject of the sale of immovable property, I want to say that perhaps the hon. the Deputy Minister will tell us why this has now to be brought in here and why it cannot be dealt with in terms of the Sale of Land Instalments Act in respect of which further amendments are anticipated. Why this should be included here is quite beyond us, and, in any case, we cannot understand why the normal costs of transfer, which should obviously be paid, are not provided for in this piece of legislation.

I also want to deal with the concept of prior termination of agreements. At the present moment there is a provision in terms of which there can be a 7,5% rebate, which everybody agrees is unsatisfactory. However, if a situation arises in which there are falling interest rates due to economic circumstances and not due to any action on any person’s part, and it then suits the debtor to terminate the agreement in order to get out of contractual commitments which he has, he can in fact terminate that agreement and take advantage of the lower rates, thereby prejudicing the credit grantor, the lessor or the moneylender. We believe that it is not a fair concept. We feel that where all the protection has been given, where one has the situation that one has contracted with all the information that one has to get in terms of the Act and has concluded the deal, that that deal should then be binding on one, and there should not be another way of getting out of it in the circumstances.

The other thing which one has to bear in mind is that in the case of, say, leases, it is possible to contract out of this provision and to provide that there should be no right of prior termination. But very many transactions are concluded in the business world where there is a combination of a lease, of a credit-granting transaction and of a money-lending transaction, all of which are part and parcel of one transaction, and if one is terminated the other still remain, whereas logically one should treat them all as one transaction. It is obvious that anybody should be allowed to contract in a manner that these agreements must be allowed to run out their full course.

The other principal issue which arises out of the question of prior termination is the need for novation. We believe that by requiring novation one creates unnecessary costs for the debtor and unnecessary administrative costs for the lessor or the credit grantor, as the case may be, and it should quite easily be possible, as is done in the case of some transactions in terms of this Bill, although not in respect of others, to deal with changes without completely having to novate the contract and enter into completely new contracts once again.

I now want to deal with the question of the finance charges itself. Here the principle, as I indicated right at the beginning, is that there should be some degree of control in respect of finance charges. I have indicated that usury legislation has been part of the whole existence of man almost since time immemorial. However, there are forces which argue against control and those forces are the forces which normally argue on the side of the hon. the Deputy Minister when he argues on behalf of so-called free enterprise. I want to quote what is said by the director of the Free Market Foundation in attacking the credit laws in South Africa. The following is attributed to him in the Business Times of the Sunday Times. He said the following relating to credit laws—

He is arguing that one should have no control so that the poor can be made almost, or certainly allowed, to pay higher interest rates or else they cannot obtain their loan. I reject that argument out of hand. The thing that disturbs me is that when one borrows a small amount of money one has to pay a higher interest rate than when one borrows a large amount of money. The argument, the logic behind this is readily understood, because obviously there is a greater administration cost in respect of a small loan in relation to the amount of finance charges that is recovered in relative terms than there is in respect of a large loan. But to suggest, as some of these so-called free marketeers are doing, that one must remove all restrictions in respect of the rate of interest which presently exist, is to my mind an antithesis of what is really required in this society. As I see the situation I regret that in respect of small loans the rate of interest has to be—I use the words “has to be” deliberately— higher than in respect of large loans because the administration cost which is involved. However, I would certainly oppose any concept in terms of which all restrictions in respect of interest should be removed.

The other issue which arises is the question of what happens in respect of interest from the time the loan has been agreed to until the loan is actually paid over and the delays which occur here. There has been a very substantial degree of abuse in respect of this matter in the past. What has in fact happened is that many moneylenders have made a potential borrower pay the full rate of interest from the date on which the loan has been granted even though the money was not physically paid over on that date. I think that the Bill endeavours to deal with the matter in an equitable fashion in the sense that there should be some credit given to the borrower, some allowance, for the period in which he does not in fact have the money even though it may have been set aside for him. But the issue is not adequately covered because there are still cases where guarantees are furnished and where money has to be deposited for these guarantees. In those circumstances one still has an inequitable situation arising.

A further issue, of course, is whether finance charges should really include all the costs of administration, investigation and matters of that sort. The 1967 Franzsen Commission advocated that costs of investigation and administration should be included in the whole concept of finance charges. A limit must, however, be drawn in respect of this. The question is what is to happen when there is default. As I have indicated earlier, I do not believe that the honest man who pays his way should be penalized by way of additional finance charges because other debtors do not pay by the due date.

One can go through this Bill at length and analyse in detail all the matters that are wrong with it. Already there are a large number of amendments to the Bill on the Order Paper. The position here is that everybody was aware of the fact that this particular piece of legislation was not a piece of legislation which could be easily debated in the House, but was in fact a classic case to be dealt with through a Select Committee. It was in fact referred to a Select Committee, but that was only done after it had been on the Order Paper for many weeks. It was done right at the end of the session. Then, when it came to the question of starting work on this committee, what took place? I think it is very important that we should look at this. The committee has issued a report which, by the way, has not even yet been printed or made available to all the members of the House. A majority of the members of the committee reported that the committee had given consideration to the subject matter of its inquiry and that—

That report has not yet been received by the House; it has not yet been debated by the House; it has not yet been considered by the House and is not even available for us in printed form at this moment in time.

What is the situation? I shall analyse it further in a moment, but before I do that, I move as an amendment—

I move that, because the reality is that everybody in the House agrees that this is a proper matter for a Select Committee, a matter which should be debated there. What happened? The moment we met in the committee it was agreed immediately to advertise and make public that we were sitting so that people would have an opportunity of making representations to the committee. What then transpired was that, despite the poor publicity given to that statement—and I blame nobody for the poor publicity—we immediately received representations. A detailed memorandum was received from the Association of General Banks, together with a request to submit oral evidence. A telex was received from the Association of Chambers of Commerce, to which I have referred earlier, asking for an opportunity to be heard. A telex was sent by an association of clearing banks that deal with credit cards, asking for an opportunity to be heard. Even though these prestigious bodies wanted to be heard, what was the response of the majority of members on the Select Committee? When I moved in the Select Committee that the request of the Association of General Banks to give oral evidence be acceded to, that was voted down. An amendment was moved to have them telephoned by the committee clerk and informed that they should submit further points they wished to raise to the committee in writing by Friday, 6 June. The committee, however dissolved itself on Thursday, even before Friday, 6 June, came along. That is what it did. Is that the kind of thing one does when one is in communication with such prestigious bodies, people who are concerned about such a matter? Does one do this kind of thing to them?

Mr. Speaker, on a point of order: Is the hon. member allowed to discuss the report of a Select Committee in this House before the report has been tabled?

Order! The hon. member is discussing the committee’s report which this House has already received. It was printed on 5 June.

Mr. Speaker, the hon. member alleged that the report was not available to this House, that the members of the committee had received a copy of a report, but that the report was not yet available to all the members of the House. That is why I asked the question.

Order! I have already said the report is available. The committee reported—

Therefore the hon. member is in order.

Mr. Speaker, may I just point out, for the hon. member’s elucidation, that the House has ordered the report to be printed, but the printed report is not yet available.

What is he trying to cover up?

The minutes, however, disclose what I have just said. That is the reality of the situation. That is the truth of the matter.

There was also a request by the Association of Law Societies to give oral evidence. What happened when I moved for that? Again an amendment was moved by one of the members on the Government side that—

So here we have the same thing, exactly the same thing. The committee, however, dissolves itself before the date on which it says people should make representations to it. That is not, however, all. Obviously the work should be done. The committee should sit during the parliamentary recess, because it is obvious that these prestigious bodies, which are concerned with this, want to give evidence. It is also obvious that there are dozens and dozens of amendments that need to be considered. When we move to sit during the recess, however, we are again voted down and the committee resolves—

There was never, however, any later stage, because the committee then dissolved itself. The “later stage” therefore never came to pass. When we met on 5 June, thinking that now the job should be done, we found that the Bill was to be reported back to this House without the committee having done the job for which it was appointed. That is the reality of the situation. Why? Because there is some magic about 13 June. For some reason or other the House must stop its work by 13 June. There is some magic about that date. What magic, attaching to that date, makes the House reluctant to sit beyond that date? So what do we do? The Select Committee unanimously decides that this House is the correct body to consider this measure. That Committee dissolves itself, does not do its job, does not present a proper report to this House, does not consider the amendments put before it, all because on 13 June we must all go home. I think that is ridiculous. It is nonsense. It is making a farce of parliamentary procedure. The truth is, of course, that there is a piece of legislation which affects not only the Association of Chambers of Commerce, not only the general banks, not only the clearing banks, but also affects the consumers of South Africa. Now, because Parliament suddenly has to adjourn, that piece of legislation cannot be presented in as good a form as it might have been if the Select Committee had done its job.

That, with great respect, is entirely unacceptable to us. This House can sit a little longer. Hon. members can stay a little longer, and the job can be done properly. Allow me to give an example. I made inquiries in order to try to find out what consultation there had been with organized consumer bodies in South Africa. The result was that not only in the Select Committee did we not have the opportunity of hearing anybody, but even before that there had been the minimum consultation with organized consumerism in South Africa, all that while consumers are fundamentally concerned with this particular measure. That is why we have no hesitation in saying that this measure must go back to a Select Committee. That Select Committee must do its job. This measure is a technical piece of legislation. In the words of the Association of Law Societies, it is a most involved and intricate and complicated piece of legislation, legislation which consumers will not really understand and which will create increased administrative costs. We believe that if Parliament does its job, it will not go home on 13 June, but will carry out its duties and present the public of South Africa with the type of legislation to which it is entitled.

Mr. Speaker, a few moments ago you ruled that the discussions in the Select Committee could in fact be discussed in this House. Consequently you allowed the hon. member for Yeoville to make use of the minutes of the discussions that took place in the Select Committee, although they have not yet been printed and made available to all hon. members of this House.

Whose fault is that perhaps?

Accordingly, Mr. Speaker, you will probably also allow me to speak from the Select Committee.

Order! I should just like to clarify the matter for the hon. member. What I allowed the hon. member for Yeoville to discuss is already generally known to all hon. members who served on the Select Committee. It does, in fact, form part of the report. The report has already been printed. The hon. member will note from Standing Order No. 169 that once the report has been printed the proceedings may be discussed in this House, although it may not necessarily have been made available to all hon. members.

Mr. Speaker, the main argument advanced by the hon. member for Yeoville was that this Select Committee of the House of Assembly did not have the opportunity to dispose of its work properly, and that this Bill should therefore be referred back to the Select Committee, so that it may complete its work properly at a later stage—during the Parliamentary recess, or next year, or whenever.

The hon. member for Yeoville maintained, with a great deal of to-do, that this Select Committee not had the opportunity of doing its work properly. I want to state here and now that there was only one person who made it impossible for that Select Committee to do its work properly. It was the hon. member for Yeoville. [Interjections.]

At the first meeting of the Select Committee it was decided that since it was already late in the session, the Committee would hold sittings during the sittings of the House of Assembly. There is nothing wrong with that. The Standing Orders stipulate that a Select Committee may sit during the sittings of the House of Assembly provided all the members of the Select Committee in question agree.

On a specific condition, yes. Surely the hon. member for Paarl knows that. [Interjections.]

At that meeting the Committee unanimously decided that it could sit in that way, but at that same meeting, the Committee’s first meeting, the hon. member for Yeoville objected to the Committee’s sitting during the sittings of the House of Assembly. The Standing Orders stipulate that the committee may then only sit provided all members of the committee are in agreement. Then the hon. member for Yeoville, very conveniently, and acting fully within his rights— I have no fault to find with that—used his veto to prevent the Committee from sitting and doing its work during the sittings of the House of Assembly. That is why the hon. member cannot complain now, for he was the only person to object to that committee sitting during the sittings of the House of Assembly to be able to complete its work properly. I am convinced that the Committee would have been able to complete its work properly if we had only been able to obtain the co-operation of the hon. member for Yeoville, but it was withheld from us. That is why the hon. member for Yeoville should be the last one to object that the committee did not have adequate time and to say that it should, accordingly, be granted more time.

But there is a reason why this Bill must be passed during this session. Earlier in this session Parliament passed a Bill introduced by the hon. the Minister of Commerce and Consumer Affairs. That Bill and the Bill before us at present are very closely bound up with one another. That Bill, which has already been passed by Parliament, cannot be proclaimed before this Bill has also been passed, and that is why this Bill must be passed now.

Whether it is good or not?

If, then, the hon. member for Yeoville makes it impossible for the Select Committee to complete its work properly, the House of Assembly is free to complete the work properly itself and to pass this Bill. That is why we are now dealing with this Bill.

However, I do not want to criticize the hon. member for Yeoville too sharply. I have a great deal of sympathy with him too, for he has very little assistance on his side and has to do all this work alone, or more or less alone. That is why I say that I have a great deal of sympathy with the hon. member. I am really sorry for him and he must please accept that I say this sincerely.

The hon. member said a great deal this afternoon about which I agree with him completely. The hon. member commenced by saying that it was simply true that even in our free enterprise system the State sometimes had to intervene to protect those people who could not help themselves. This at once calls to mind an occasion during this session when the hon. member for Yeoville said rather despairingly that he did not know whether one should always protect those people, for they made no contribution. The hon. member will recall that this was during the discussion of the Bill on the Old Mutual. At that stage he indicated that it was not always so pleasant to protect such people for very often they gave the State no cooperation in protecting them. I agree wholeheartedly with the hon. member that there are occasions in our free enterprise system when certain people do have to be protected by way of Government intervention.

My problem with the hon. member for Yeoville is that he assumes different guises on different occasions as it suits him. I am convinced, on the basis of points advanced by the hon. member in this House on numerous occasions, that he is a great champion—and rightly so—of the interests of the consumer, in particular the consumer who cannot look after himself. I do not blame the hon. member for Yeoville for assuming this guise, for there is considerable merit in that cause. However, what almost made me fall off my chair this afternoon was that immediately after having raised this point, he advanced that argument by the Chamber of Commerce in which they objected strenuously to the fact that the Government, which, through the hon. the Minister of Finance, was paying Up service to the principle of free enterprise was now introducing legislation of this nature.

You do not want to give them a chance by first listening to them.

As the saying goes: “You cannot have your cake and eat it.” One must decide once and for all what guise one wants to assume, and that, with all due respect, is what the hon. member for Yeoville must also decide now.

If one has to protect the class of consumer who cannot look after himself by means of Government action, the State must intervene. In that case the argument advanced by the Chamber of Commerce, which the hon. member quoted immediately after his first argument, has no merit.

The hon. member for Yeoville maintained with much ado that this was such an intricate piece of legislation, and quoted the Law Society in this regard. I concede that it is intricate, but for a person as intelligent as the hon. member for Yeoville, surely it is not so intricate. Then I want to add that this legislation has probably been thrashed out more effectively than almost all the other legislation before this House this year. It was done by the Franzsen Committee. After the Franzsen Committee had given those people, including the Chamber of Commerce, Banks, etc., a hearing, the Committee made the recommendations embodied in this legislation. Accordingly I have no option but to give this Bill my full support, for I concede that there are indeed people who are unable to look after themselves, and they have to be protected. I now want to ask the hon. member for Yeoville whether he wants those people on whose behalf he is so quick to intercede—and me too—to remain unprotected for another year?

But they are already protected.

Mr. Speaker, may I ask the hon. member a question? I want to refer the hon. member to page 124 of the Franzsen Committee report. Would he tell this House what consumer organizations testified before or submitted memoranda to that commission?

The fact of the matter is that everyone was invited to testify. All the consumer organizations were invited to testify. Once again, as was also said by the hon. member for Yeoville this is a case, of certain people being unable to protect themselves. All consumer organizations had every opportunity to testify before the Franzsen Committee. If they did not make use of it, is it the fault of this side of the House that they were not given a hearing? Surely one can only give a hearing to a witness who comes forward to testify.

Why did he himself not testify.

The hon. the Minister of Transport Affairs says that on behalf of the hon. member for Yeoville he could at least have championed the cause of his godchildren, the consumers, before the Franzsen Committee on their behalf.

I have said that the problem with the hon. member for Yeoville is that he assumes different guises on different occasions. In the first place he assumed the guise of the champion of the poor consumer this afternoon. In the second place he assumed the guise of the champion of the Chamber of Commerce, which contends that we are only paying lip service to the system of free enterprise and that we do not in actual fact believe in it. In the third place he assumed the guise of the champion of the attorney, for he was concerned about the cost aspect, but surely in clause 8(e)(i) and (ii) it is clearly spelled out that the court will deal with the cost aspect and will award the costs. Nevertheless, according to the hon. member the poor attorney is not afforded adequate protection. He is concerned about the poor attorney who will ostensibly not receive his share of the cake and will not be awarded adequate costs. [Interjections.]

The hon. member for Yeoville must pardon me for not giving further attention to him. Let me reiterate that I have a great deal of sympathy with him, for there are a number of Bills on financial affairs which are still to be finalized this week. He still has to study all of them, and that is why I do not want to criticize him too sharply.

What is more, he, too, is going to be kicked out of the caucus at some stage.

This Bill embodies only a few main principles. In the first place, where the old Act referred only to finance charges in respect of money lending transactions and credit transactions, leasing transactions are now being included in the ambit of the Act as well, as was so clearly spelled out by the hon. the Deputy Minister in his speech. Furthermore, another change is being made to the Act of 1968, viz. that whereas that Act applied these transactions to natural persons only, they are also being made applicable to business transactions by means of this legislation. The hon. member for Yeoville referred to that, but there is a very good reason why this is being done. The Erika Theron Commission found that business concerns operated by Coloureds are often saddled with problems when they have to negotiate financial transactions, and that is why they recommend that business transactions should also be incorporated in the Act. In addition, the Bill restricts the amount to which the legislation applies, to R100 000. Accordingly, all transactions involving finance charges above R100 000 fall beyond the ambit of this Act. I want to say, with all due modesty, that I believe that this amount ought to be higher. The Franzsen Committee fixed this amount at R250 000. I want to put it to the hon. the Deputy Minister for his consideration that he should consider very carefully whether this amount ought not to be increased.

As a result of the high rate of inflation we have had over the past decade, R100 000 is no longer a great deal of money. What can one buy for R100 000 today? No farmer can buy a farm for R100 000. If a farmer has to obtain financing to buy a farm but the amount is limited to R100 000, he is in trouble. That is why I want to put it to the hon. the Deputy Minister for his consideration that he should increase this amount. The Bill does provide that the Minister is authorized to increase or reduce this amount, but I should like to see an increase in the amount as stated in the Bill.

Another principle which is embodied in the Bill and to which I have already referred concerns the question of legal costs. I do not want to elaborate on that. All that remains to be discussed at this point is the question of the advanced redemption of debt which is paid in instalments. I really believe that adequate protection is being afforded the moneylender in this regard. After all, the Bill expressly stipulates that a borrower cannot within three months after negotiating a loan give notice to the effect that he wants to make an early repayment. He must then give an additional three months’ notice of early repayment of debt. In other words, the moneylender then has six months time in which to make other arrangements to invest elsewhere that money which is repaid by the borrower at an earlier date.

I believe that this Bill, which incorporates these few fundamental principles I have tried to explain, has a great deal of merit and that it is vital, because it is bound up with another Bill which has already been adopted, that it be passed during this session. I give it my wholehearted support.

Mr. Speaker, I am in total agreement with the hon. member for Paarl when he says that a large number of the provisions in this Bill are required today in order to protect the public. I should like him to know that we in these benches agree wholeheartedly with him.

However, the problem which arises in this debate, is the problem which the hon. member himself has pointed out just now, and that is that we are being rushed at this stage. The approval and passing of this Bill is required in order that those provisions of the Credit Agreements Act, which have been enacted earlier on in the session, may be put into practice some time in the future. These two pieces of legislation are interrelated and that is why hon. members on that side of the House are trying to push this legislation through the House. I hold no brief for the hon. member for Yeoville, but for the hon. member for Paarl to say that the hon. member for Yeoville has sabotaged this, I do not really think is correct.

He never said so.

I never said so.

He said the hon. member for Yeoville sabotaged the work of the Select Committee. [Interjections.] Mr. Speaker, if he did not use that word, I withdraw it, and say that he implied that the hon. member for Yeoville obstructed the work of the Select Committee. [Interjections.] Anyway, it is in Hansard and we can check it. However, I do not believe that the hon. member for Yeoville can really be blamed for this. All one has to do is to look at the Order Paper to see the long list of amendments now appearing on it. Surely this indicates that this Bill was really a Select Committee Bill. Hon. members on the other side of the House accepted this. That is why the Bill was referred to a Select Committee in the first place. If one looks at the minutes of the Select Committee for 5 June one sees that the following was moved—

It was quite clear to hon. members on the Select Committee that we did just not have the time available to us to give due consideration to all the facts and representations which had been presented to the Select Committee. That was the dilemma we found ourselves in, but now we are faced with a situation of having to come to the House to debate this Bill because the Government persists in pushing it through. I think this debate is entirely premature. As I have pointed out, this is a Select Committee Bill, and there are many details which still need to be thrashed out in a Select Committee before the Bill should be presented to the House. I feel that some of the representations which were made to the Select Committee are very important. We have had representations from the Association of Banks, the Association of Law Societies of South Africa and Assocom, among others.

We just did not have sufficient time to give due consideration to the representations submitted by these very prestigious bodies. I cannot agree with hon. members on the other side of the House who say that we can just ignore these representations, that it is not necessary to take them to account. I agree with the hon. member for Yeoville that this is a bad way to deal with legislation. Therefore I am afraid that we in these benches will have to support the amendment moved by the hon. member for Yeoville, despite the fact that we agree that this is important legislation. We would like to see it passed, but we do not believe that one should rush legislation like this through the House.

What is wrong with the legislation?

The hon. member for Pretoria West wants to know what is wrong with the legislation. The fact is that the Select Committee received representations from very prestigious bodies and people. They have objections to the legislation and surely it is the duty of the Select Committee at least to hear these objections and then to decide whether they are valid or not. I may disagree with the representations entirely, but can any hon. member on the other side of the House who sat on the Select Committee feel in his heart of hearts that he can just ignore all these representations? That is the gravamen of our whole argument in this regard.

I now want to turn to the provisions of the Bill. It has been said that the Bill is primarily concerned with finance charges which are paid by borrowers involved in any money-lending transaction. It has been said by an hon. member—it may have been the hon. the Deputy Minister or the hon. member for Yeoville—that these transactions have now been expanded into many forms of credit facilities, such as credit card systems and so on, which has complicated the whole business of the lending and borrowing of money. We accept, as has been said, that the ordinary man in the street must be protected as these credit facilities become more and more complicated. Therefore we as a party have no real objection to the principle that the details of transactions, details such as the raising fees paid, rates of interest and so on, should be disclosed and limited so as to protect the ordinary person from being exploited by the so-called loan sharks. There is no doubt in our minds that this is required. We accept that there will be many objections from many business houses, from banks, other financial institutions and so on. I believe that these institutions in the private sector who form part of the free enterprise system will say that they want as little Government control as possible. So we do have a conflict situation here, and it is up to Parliament, through the Select Committee, to decide just how far Parliament should go in protecting the public. As I have said, I believe the public should be protected. It is interesting to note, in the light of some of the objections we have heard from some financial institutions, that in the earlier consultations with the Franzsen Committee the private sector did not object to the main principle of the Bill. There were, however, a lot of details with which they disagreed. We must accept that the vast majority of money-lending transactions being conducted in South Africa today are being conducted by people who are honest and who conduct their affairs in a correct manner. We do, however, believe that, as has been said so often, there is a minority who have been termed “loan sharks”. We have to protect the public against these people. We must also accept that over the last six to ten years—and the hon. the Deputy Minister also referred to this—there has been a tremendous growth in the leasing and credit card business. This is another reason for a Bill of this type. The hon. member for Yeoville or the hon. the Deputy Minister referred to the Crowther Committee in the UK where people were also forced to investigate this matter because of the problems that were being experienced with the growth of credit facilities in that country.

The objections we received in the very brief life of the Select Committee relate primarily to two major considerations. The hon. member for Paarl also referred to them. The first one was that this Bill should not provide for the business house or company but should only be applied to natural persons. I would have liked to have heard the arguments of the business houses and the various associations on this point. I would have liked to have heard why they felt this way. We in these benches believe that the provisions should cover small businessmen and companies as well. However, I never had the opportunity of hearing their arguments on this point.

But I did give reasons.

Well, Sir, the hon. member gave reasons, but I would have liked to have heard from those people themselves.

The other major objection concerns the ceiling or upper limit of R100 000. I think that it was the Banking Association or Assocom who said that the limit should be R20 000. The Franzsen Committee, on the other hand, said the upper limit should be R250 000. As I have indicated, the business houses suggested R20 000. The hon. the Deputy Minister in his introductory speech said that the figure of R100 000 was an arbitrary figure. One can argue that it should be R75 000 or R150 000. I agree with the hon. member for Paarl that inflation has eroded the purchasing power of the rand. What can one really buy today in many businesses for R20 000? I know that in my particular business a couple of good tractors will cost R50 000 and one good haulage rig costs about R80 000.

A “couple” of good tractors?

The figure of R100 000 would be acceptable to me, but once again I would have liked to have had the opportunity to hear from the people concerned why they wanted it to be reduced to R20 000.

There is one query we in these benches should like to put to the hon. the Minister. I hope he will reply to it in this debate. I also have one major objection I should like to raise. Our query concerns paragraphs (i) and (1) of clause 1. This concerns the definitions of “intermediary” and “moneylender”. Are financial institutions who in the first instance provide money as moneylenders and who subsequently recruit other persons to participate in a participation mortgage bond and then cede the rights in that bond, entitled to raise finance charges as “moneylenders” as defined in the clause or are they “intermediaries” as also defined in the clause? I think this is an important query and that this matter needs to be clarified.

The major objection we have to this Bill relates to clause 3. This is the clause which allows financial institutions to charge interest before the cash is actually paid out to the borrower. That is to say, they charge interest from the date on which the loan has been agreed to but before the borrower has in fact received the money. We believe that this clause introduces a new principle which we consider to be not only dangerous but also undesirable. It is dangerous because it will open the door to many financial institutions, who today do not practice this bad practice, to charge interest before the person actually receives the cash. People are now going to feel that since they are legally entitled to do it, why not do it? We believe it is an undesirable provision because, after all, why should a person pay interest on money before he has, in fact, received it? I know it can be argued that the financial institution has to make the money available and therefore, having agreed to the bond, it has set aside money for the borrower. We do not accept that argument because every major financial institution today has money flowing in and out of its account daily. So we do not really believe there is a case to be made out for that.

It can also be argued that smaller moneylenders, e.g. attorneys, etc., may have to have the money available and do actually set it aside. We should like to submit, however, that the interest rate charged by those people is just that much higher, so as to take into account the delay period between the time it has been agreed to lend a person money and the time the money is actually paid out to a person when the bond is registered. We shall therefore oppose this particular clause, but I should like to hear the hon. the Deputy Minister’s reasoning on this issue.

I want to conclude by saying again that I believe that we are being rushed in regard to this piece of legislation. The hon. the Deputy Minister has introduced this measure, but we have not, as a Parliament, had the time to sit down and study it in the correct manner. There are people, however, who are directly involved since they are going to fall under the provisions of this legislation. They have lodged very serious objections to the Select Committee. We were not, however, given the time to hear them as I believe we should, in accordance with the democratic process. Therefore we have no other option but to support the hon. member for Yeoville’s amendment.

Mr. Speaker, the most important objection to this legislation raised by the hon. member for Amanzimtoti, who has just resumed his seat, concerns clause 3, which stipulates that interest may be made payable while the loan has not yet been paid out. This is no new principle in business practice. In virtually any lending transaction, by building societies or anyone else, interest is paid from a certain date, even before the money has been paid out. This is an established practice. All this legislation is trying to do is to prevent that interest from being levied at an unrealistic rate. At the moment there is no difficulty about levying interest at the rate at which the loan is granted. However, the proposed legislation stipulates that it will only be possible to levy the interest at a rate equal to the difference between the rate at which the loan was granted and the call deposit rate. In other words, it does in point of fact protect the consumer or the borrower.

The other real difference merely concerns the question of the hearing of evidence, an aspect which has also been raised by the hon. member for Yeoville. I should also just like to comment on a few points raised by the hon. member for Yeoville. What I found very interesting was that the hon. member for Yeoville said that this legislation should be aimed chiefly at protecting the consumer. That was interesting, for that is exactly what this legislation seeks to do. However, the hon. member said that the legislation did not grant the consumer adequate protection. I therefore sat and listened with great interest to hear in which respects he meant that the legislation did not afford the consumer adequate protection, as well as to hear his suggestions as to how to protect the consumer. But we did not hear a word about that. He then at once commenced to argue about why the large businessmen ought not to be covered by this legislation.

Harry is an expert on sweeping statements.

This is typical of the hon. member for Yeoville. He professes to be the champion of the small businessman and of the consumer. Meanwhile he is actually the man who speaks on behalf of the large businessman. [Interjections.]

The hon. member also had problems with legal costs. It is correct, as was indicated by the hon. member for Paarl as well, that the court surely has the discretion, even regardless of the letter of the credit agreement, to award costs, and specifically in accordance with the mentioned discretion of the court. The hon. member for Yeoville went on to argue about the question of the drafting of deeds of sale or of transfer fees in the case of transactions involving immovable property. Now the hon. member has, as it were, implied that the poor attorney is being deprived of his transfer fees and his costs for the drafting of the deed of sale, which is of course totally untrue. Surely the hon. member for Yeoville himself knows that what the arrangement amounts to in practice is that the buyer or the borrower normally pays the cost of the drafting of documents. This is in no way influenced by that provision. The prohibition will only apply when an attempt is made to add that cost to the principal debt. Surely it is unnecessary to do so. If the buyer of immovable property is unable to pay his transfer fees himself, surely the seller may still lend him that money, and it could therefore pass as a lending transaction and not necessarily as transfer fees or as the cost involved in the drafting of the deed of sale.

Just like the hon. member for Amanzimtoti, the hon. member for Yeoville also made a great deal of the allegation that there had ostensibly been no opportunity for the various persons and bodies to testify before the Select Committee. The real fact of the matter is that these were all persons and bodies that had already had the opportunity to testify before the Franzsen Committee, and had in fact done so. They had even made written representations to the Franzsen Committee.

Except the consumers.

That is a very interesting remark which the hon. member for Paarl has just made. Why did the consumers not make representations? I shall tell the hon. members why. It is because the law protects the consumer properly. Why, then, should the consumer make representations?

What, then, was the idea of the Select Committee?

The idea of the Select Committee, I believe—I think this was the consensus idea among all the members—was to try to ascertain whether we could curtail the proceedings by ironing out the arguments there, so that it would be unnecessary to conduct them here. I think that was the idea of the Select Committee.

In that case why was that not done? [Interjections.]

Harry, it is because you do not want to co-operate.

The hon. member for Paarl furnished a full reply as far as that aspect is concerned. The hon. member for Yeoville made it virtually impossible for the Committee to proceed with its activities.

That is untrue.

When we said that we should continue with the proceedings, the hon. member for Yeoville said there was no time. But when we conceded that there was no time, the hon. member said: “Now let us proceed.” [Interjections.]

Surely you know that is untrue.

The economic life of the Free World, and consequently that of South Africa as well, has to a very large extent become a system of credit transactions. It is a fact that if the financial practice of the granting of credit were to be terminated, our whole economic structure would collapse in ruins and we would sink into the depths of depression. If credit transactions and the resultant essential financing measures are such an important foundation of the economic system, it is very logical that there has to be comprehensive legislation to control those matters. Now one may ask what is the fundamental principle and purpose of the principal Act, which is taken further in the Bill under discussion.

I think that in the main, that principle, as well as that purpose, stands on two legs. In the first instance it is to provide for new and altered trade practices. Since the coming into effect of the principal Act, two new trade practices in particular have made tremendous progress. In the first instance there is the convenient system of credit cards, the so-called plastic money, a system in terms of which the banks finance transactions by the mere production of a credit card.

This way of conducting business is rapidly gaining ground and is even vying with the tried and tested cheque book. In future this commercial practice is to be covered by the Act, because it is being incorporated in the definition of “moneylending transaction”.

The hon. the Deputy Minister has already referred to the increase in leasing transactions. What this amounts to is that over the past 11 years there has been an average annual increase of R120 million in leasing transactions from the banks alone. In terms of section 2(3), leasing transactions are specifically being brought within the ambit of the Act. Although this is by no means a new trade practice, credit transactions relating to immovable property and improvements to immovable property are in future to fall within the ambit of the Act and are to be defined as “moneylending transactions”. Immediately the question arises as to whether we are not changing the existing practice relating to immovable property transactions, and in doing so creating confusion. The answer is short and simple. The legislation does not change a single formality or existing form of contract relating to immovable property. All the legislation does is, for example, to prohibit an interest rate being charged which is higher than the prescribed finance charge rate, and the legislation stipulates that if any interest at all is charged, it has to be disclosed in the written deed of sale.

In the second instance, the principle and purpose of the Bill are to watch over the economic morality of persons and bodies as far as the conducting of business is concerned. The business integrity of many persons and bodies is above reproach, but there are also those that do not hesitate to take every opportunity of exploiting the public. Incidentally, this calls to mind a young fanner who came to complain to me that he was unable to borrow money to purchase breeding cattle, but that the same financial institution was nagging him to borrow money with which to buy a new motor-car for himself by way of a leasing transaction. The reason for that is simply that the finance charges involved in leasing transactions are not controlled.

These and other malpractices are now being curbed in two ways. Firstly, by fixing the maximum finance charges, and secondly, by stipulating that finance charges must in future be disclosed or made known in a written document. Arising out of this, certain questions arise as to what the legislation achieves and what it envisages. In the first instance—the hon. member for Yeoville tried to indicate this as well—we can ask: Does the legislation not interfere to such an extent that it will curb free enterprise?

Yes.

And the answer is no.

The answer is yes.

In the first instance, it is a recognized phenomenon throughout the world that maximum interest rates are pegged from time to time. This is a recognized phenomenon throughout the world. In the second instance, the tariffs for financing transactions that are determined, will be market-related, in accordance with the price of money at that specific juncture, and will be determined in such a way as to stimulate, and not damp, competition. In the third instance, adequate and realistic control of the price of money is a very important factor which could actively influence the level of inflation, to good effect.

Apart from the pegging of the finance rates, the Bill contains certain provisions which definitely favour the debtor and which give rise to the question: Are we not favouring the debtor unfairly at the expense of the moneylender, the credit grantor or the lessor? For example, section 3A stipulates that the debtor may repay the debt at any time after three months have elapsed plus three months’ period of notice, provided the principal debt is less than R50 000. Is the amount not too large, and does the prompt repayment of the credit to the credit grantor not place the credit grantor or moneylender in a difficult position which is to his disadvantage? The answer is that R50 000 is not an exceptionally large transaction at today’s values. The immediate repayment of loans is no unknown principle. It is done every day in our business world and we see it in the case of building society bonds which are repaid immediately, all indefinite period bonds with overdrawn bank accounts, hire purchase, loans on demand, etc. In addition the rate will be substantially market-oriented and fluctuation over such a brief period will probably not be significant. Besides, the opposite may also be true in respect of money which is repaid, although it may have to be invested at a lower interest rate. We find in practice that the two tend to cancel each other out.

Section 5(1)(e), as proposed, stipulates in effect that costs for recovery owing to default may only be recovered on the basis of legal costs incurred from the time the proceedings are instituted. What about the other expenses of the moneylender? In the past, the recovery of costs other than legal costs has been grossly abused. The cost was occasionally more than the value of the transaction. In the Franzsen Committee’s report, reference is made to the case of Greater Services Ltd. v. Du Toit. On page 65, hon. members will see that the borrower, to whom an amount of R54 220 was granted, was issued a summons for R116 121 after a few months. This was after only a few months. These things have been grossly exploited in the past, as I have now indicated, and must be curbed. Furthermore, the moneylender must refrain from conducting business if there is a poor risk. Quite apart from that the court, under the proposed section 5(1)(e)(i), has full discretion with regard to the awarding of costs, which will of course be done on a fair and reasonable basis.

Taking everything into account, I think that this is an excellent piece of legislation with a lofty purpose. This piece of legislation succeeds in its purpose and that is why I consider the legislation as having a proper place on the Statute Book.

Mr. Speaker, the hon. member for Namaqualand has seen fit to refer to a number of the provisions of the Bill in front of the House this afternoon. He has made out a reasonable case in that respect, but he has failed to react to certain other provisions in the Bill. He has, for instance, mentioned the situation as regards court costs. He has related an incident which is reported in the Franzsen Commission report. That is certainly a point. There is, however, another point to be considered in terms of this particular legislation and that is that one is now prohibited from claiming any costs in terms of this Bill before one has instituted legal proceedings.

What is the inevitable effect of this going to be? The inevitable effect is going to be that the first thing that any financial institution is going to do, when a transaction starts going wrong and money is not paid, is to go running to the courts or to its legal advisers with the view to institute legal proceedings immediately. This is obviously going to result in a tremendous amount of additional work, as well as a tremendous amount of additional costs. In the past, when one did not have to justify oneself in this matter, one started by writing letters, polite letters, and then not so polite letters. One then sent out blue notices.

And charged fees for them.

Some people did, but in fact this amounted to a fairly immaterial amount of money. Hon. members should not forget that there were actually costs involved in doing this. Some people charged fictitious costs, but what I am saying, is that the average, decent financial institution or trader did not in fact charge for these costs, or if they did, they charged very little indeed. Instead of going through this process, the first thing one is going to do is to get a lawyer’s letter or to institute legal proceedings, which is going to escalate costs tremendously, and I do not believe it is going to be to the advantage of anybody.

The other point the hon. member for Namaqualand made was that certain financial institutions “wil die publiek uitbuit”. Of course, that is perfectly true, but if the Act were not amended at all, the public would still be protected because what this Bill is doing is extending that protection to businesses and companies; in other words, it is taking out the provision which protects natural persons and it is covering all persons. It is widening it tremendously. The “public”, I would say, is not the business institution but the man in the street, who is already protected, so I do not think the hon. member has made out a case in that regard.

I want to get back to the Select Committee and the remarks made by the hon. member for Paarl. I think one must remind the hon. member of the size of the Bill before us. It runs to some 65 pages of extremely complicated legislation. He himself has admitted that it is extremely complicated and difficult legislation. When we had our first meeting of the Select Committee to discuss this Bill, we were told by him that he had been given the mandate to have the matter completed within a certain specific period of time.

He expressed his concern.

Yes. The hon. member for Yeoville reminds me that he himself expressed his concern that it could not be done in that period of time, but he had a mandate from a “kragdadig” Government, a mandate to the effect that it must be completed within, I think, not eight working days but eight consecutive days from the date of our first committee meeting.

That is right.

It was patently impossible to handle a Bill of this complicated nature in that period of time. It is quite obvious that, in rushing this legislation through at the end of a session, we are not doing the business community or the public in this country a favour. The whole exercise of having a Select Committee, as it has turned out, has proved to be purely a smoke-screen to the effect that “we did give various people the right to submit submissions to us but we have gone ahead anyway”.

When one looks at Bills of this nature, one must realize that while interference by the State in the operation of the free enterprise system is justified in certain circumstances, it should be handled with the greatest circumspection. I do not believe that this Bill qualifies in that regard. It does not qualify in respect of the norms that one would like to see applied, and, as such, I believe it is an unwarranted intrusion in many instances in the operation of such a free enterprise society. It is autocratic and it is bureaucratic and I believe that it is in conflict with the thoughts enunciated by the hon. the Prime Minister at the Carlton Hotel in November last year. Of course, this does not surprise me. During the course of this session we have seen many glaring gaps between what was said in the recess and what has been done in this session.

Give us examples.

We were told that these were not promises, but aims. The Government must have a squint because its aim seems to be very crooked. One of the few good results that this Bill might have is increased employment, because it will increase the work of our courts—I have already referred to this matter—and our legal profession to a marked degree. It will also increase the work of the printing trade, financial institutions and all sellers of articles which fall within the scope of this Bill.

I have called the Bill autocratic and bureaucratic, but why have I done this? First of all, I have done so because the department concerned has invited comment from a variety of bodies, particularly, of course, through the medium of the Franzsen Committee. They have consulted with these bodies …

Mr. Speaker, on a point of order: May the hon. member say “the aim of the Government is crooked”? [Interjections.]

It means you are cross-eyed.

Order! As far as I can remember, the hon. member referred to a squint in the eye and said that therefore the aim must be crooked.

Methinks the hon. the Deputy Minister protesteth too much.

For the moment the hon. member may proceed. I shall have a look at the hon. member’s Hansard.

Mr. Speaker, if it will help, I shall repeat what I have said. I have said that the Government must have a squint because its aim seems very crooked.

Order! I did not take it to mean that the Government was dishonest, but to indicate a roundabout way of getting at a thing. The hon. member did not mean it in a dishonest sense.

I did not mean it in a dishonest sense at all, Mr. Speaker.

All right. The hon. member may proceed.

What I simply meant, was that although it seemed to aim at one thing, it hit another target.

It aimed at Pietie and shot Wynand.

That is right. I want to get back to what I was saying before the hon. the Deputy Minister raised the point of order. As I have said, the department concerned had invited comments from a variety of bodies, particularly through the medium of the Franzsen Committee. They consulted with these bodies, but have they listened to them? I do not believe they have. They have been like our hon. Cabinet Ministers. They have listened carefully to representations to give a semblance of democracy and then did precisely what they intended to do in the first place.

The Select Committee was then appointed to take evidence. The NP members on that committee refused to hear oral evidence despite requests from no fewer than three bodies, three highly prestigious bodies as the hon. member for Amanzimtoti has said, viz. the Association of General Banks, the Association of Law Societies and Assocom. All three of these bodies wished to give oral evidence, and yet the NP members in that committee voted that oral evidence should not be taken from these bodies, the reason being the unseemly rush to get this legislation through before 13 June 1980, the deadline which has been set for the end of the session.

I should like to quote a few extracts from the submissions of the various organizations, because I believe they give one a picture of the Bill which is a very different picture to the picture that has been given by hon. members on that side of the House. First of all, I should like to quote from the memorandum of the Association of General Banks, as follows—

The same associations goes on to say—

You should rather have stayed in bed today.

If that hon. member knew what was contained in this Bill, I am sure he would have nightmares for the next two weeks. Fortunately for him, he does not know what is contained in the Bill. [Interjections.]

I have quoted what the Association of General Banks had to say. They obviously have a vested interest in this matter, and as such hon. members on the other side of the House may take the association’s comments with a rather large pinch of salt. Let us then turn to the representations made by the Association of Law Societies. Their only interest in this legislation is the fact that they are probably going to have to deal with it in the course of their normal professional practice. They are not likely to be involved to any large extent in money-lending transactions, credit transactions, leasing transactions, etc. Yet, the Association of Law Societies has the following to say—

They then go on to cite a number of reasons why they believe this is an incompetent Bill. The further say—

This I find particularly interesting and “kragdadig”—

Here we have the Association of Law Societies, which is a very big and respectable body, who have obviously made representations to the Department of Finance and who wish to continue making representations, but they are informed that the Department of Finance does not want any further comments on the Bill. How “kragdadig” can one get?

What is the source of that information?

The source of the information is the English memorandum submitted by the Association of Law Societies and it is contained on the first page thereof.

No, I want to know what the source of the association’s information is.

Obviously, the source of the association’s information can only have been the Department of Finance itself. The Department of Finance must have told them this. Is the hon. member suggesting that the Association of Law Societies would in a submission to a Select Committee give that Select Committee false information? That is what the hon. member is implying. I think that is a scandalous suggestion. I think the hon. member can do far better by keeping his mouth closed at this stage.

There is no indication that they received authoritative information.

I want to quote what the Association of Law Societies had to say further. They said—

All these comments have, as I have said, been placed before the Select Committee and yet the Select Committee has chosen to ignore it. The Select Committee has decided that it cannot act in regard to this Bill and the Government is proceeding with this measure despite all the adverse comments.

We have had in the Select Committee an avalanche of written submissions and yet the Select Committee throws up his hands in horror and says to Parliament: “We cannot do it.” This surrender, interestingly enough, was proposed by the hon. member for Walmer. One obvious move should have been made by the Select Committee and that is that the Select Committee should have continued until next session if necessary. This is important legislation. It is going to affect the commercial life of this country for a long, long period of time.

Parliament could have sat a little longer.

Yes, obviously Parliament could have sat a little longer. I think the Select Committee would probably have taken several months to complete its work. Obviously the Select Committee should have seen members of the various societies. We should have taken oral evidence from them and we should have weighed up that evidence. At this stage we have not had that opportunity. We have only had their written submissions and no oral submissions at all. I believe that, if the Government insists in forcing this Bill through despite all the adverse criticism to the Bill in its present state during this session, all the acclaim that has come the way of the hon. the Prime Minister for his championing free enterprise should be withdrawn, as it was only lip service.

What does this Bill do to which objections have been raised? First of all, it deletes “natural persons” from the original Act so that this Bill goes far further than was the original intention when the Act was first promulgated in 1968. The fact that one is extending control is, I realize full well, aimed at protecting the small business. There is a lot of merit in protecting the small business, but I think one must look at this matter a little further and a little harder. To start with, in the past the “natural person” has been protected. In so doing, one was, I believe, anyway protecting the vast majority of small businesses, because the small businessman does not normally go to the trouble and expense of forming a company to carry out his business operations.

Very often he does.

I shall come to that point. The small businessman predominantly trades in his own name and operates very satisfactorily without the benefits or disadvantages of having a company.

What is the position in respect of the small businessman who does have a company? He has had sufficient business intelligence to realize that he wants the protection of having a limited-liability company so that he can put a certain amount of capital into the enterprise and then, if the enterprise should go insolvent, he will only be responsible in terms of the original capital he invested and perhaps, if he had given any personal guarantees, which it is his right to give or not to give, he would be affected to that extent as well. In other words, he has availed himself of certain protection provided by the Companies Act. He is thus able to protect his own capital. Yet we now want to give him the further protection of this Bill. I can go along with this, but one has to couple to the thought of deleting the definition “natural persons” the idea of extending the amount involved in transactions up to a limit of R100 000. Seen together, these two steps are not wise at all. In view of the fact that the hon. member for Paarl obviously believes that the amount of R100 000 should be extended to R250 000, there can be no doubt that the Government and particularly that hon. member want to see the maximum control being exercised by the Government over all enterprise in South Africa bar none.

I come to our second problem with this Bill. Originally, this legislation only covered goods used predominantly for personal, family, household and farming purposes. That provision is now taken out and the Bill now covers absolutely everything. It covers plant, machinery, articles used for commercial purposes and for industrial purposes. It covers every possible usage.

The third aspect—and the hon. member for Yeoville referred to this—is the fact that leasing enters the picture for the first time. I should like to quote a few extracts of what has been said about leasing by the Association of General Banks. On page 12 of the memorandum there is the following—

The Association of Law Societies is even more scathing on the particular issue of leasing. I shall have to quote a fairly long extract about what the association has said because I believe it is very important. I quote—

And this is the crux of the matter—

We must bear in mind that I am quoting the Association of Law Societies of South Africa. In one instance the association says the result is clearly absurd, and one can only respect the association’s viewpoint: It is clearly absurd. The association also says it is quite clearly ridiculous in the context of a lease of this nature. This is evidence submitted on this Bill by clearly responsible bodies, and I believe that the hon. the Deputy Minister must take note of this. I believe he must give these people the opportunity to be heard in this matter, not just by his department, but also by hon. members of this House.

This brings me to the fourth item, which is the definition of “principal debt”. Once again this creates a fair number of problems in the view of the Association of Law Societies, and I refer hon. members to page 7 of their memorandum. I quote—

The inevitable result of this type of situation is that institutions such as building societies, which are at present charging interest at rates as low as 9% a year, are deprived of the right to recover, for instance, the minimal inspection fees which they charge in valuing the property. Another likely result is that such institutions will be forced to push up their rates of interest to recoup the irrecoverable costs they are incurring in relation to their lending business.

Yet, despite all this, the Government continues to force this legislation through this House. It continues to insist that, without proper time being devoted by this House to this Bill, this legislation must be forced through and become law this year. We have a perfectly good Act, the Act of 1968, which has been operating with success for a number of years. Now, in their haste, the Government are pushing through legislation which is going to create a tremendous number of problems.

I think one cannot do better, in concluding one’s speech on this particular legislation, than to quote once again the Association of Law Societies in their summing up—

When one talks of “unintelligible to the layman”, one has only to read a report in Business Argus of 7 June 1980. In this report by the Financial Editor, under the big black heading “Bill to Stop HP Kickbacks”, one reads—

I believe that this report in fact …

Order! The hon. member is not entitled to quote from a newspaper report dealing with a debate on a Bill under discussion in the House.

With respect, Mr. Chairman, this report is not dealing with the debate now being conducted in the House.

Order! The report is commenting on the debate in connection with the Bill before the House.

Mr. Speaker, it is not commenting on the debate. It is purely commenting on the Bill as published.

The hon. member may proceed.

I believe that this report is incorrect. Having read the Bill myself, I certainly did not come to the same conclusion. I believe that the clause the Financial Editor is referring to is the clause which forbids any person to obtain fees from the borrower or the lessor or the person who receives the goods in terms of a credit transaction. It does not prevent him from getting commissions from the banks concerned. Therefore, I believe this is completely incorrect reporting. It does show, however, the sort of problems that one has with this Bill and why it is so exceedingly complicated.

The last sentence of the Association of Law Societies’ comments on this gives, I believe, a very, very clear picture. They say—

Mr. Speaker, the hon. member for East London North must please not leave me now if I do not begin immediately to refer to what he said, because I think it is necessary to give him a little perspective and to bring him back to the basic principles of the Bill just so that he may understand the framework of the Bill before I refer to as many as possible of the remarks he made here.

You had better do it slowly. He is very stupid.

I do not think I agree with the hon. member for Roodepoort.

So I am not eligible for the President’s Council!

If the hon. member for East London North would give me an opportunity, I also just wish to come to his defence as regards the interjection by the hon. member for Roodepoort. I do not agree with the hon. member, because if I had agreed with him, I should not have expected the hon. member for East London North to stay here and listen to what I want to tell him.

The principal Act of which this amending Bill is an amendment has only two basic principles. Firstly, it concerns the limitation of finance charges, and secondly, their disclosure. The hon. member for East London North and the hon. member for Yeoville might as well also listen carefully now. There are two key concepts in this legislation which the hon. members must bear in mind. The first is the concept “principal debt”, the second is finance charges. If there is no principal debt there are no finance charges, and the Act does not apply. What is also important here is that with regard to the concept “principal debt” the Act imposes no limitation on the purpose for which a loan may be requested. It therefore limits the extent to which a money lender can expect specific extras from the borrower or the credit receiver to protect the risk to which he himself is subject. There is in fact only one main principle to the amending Bill at present before the House, viz. extending the ambit of the Act. The scope of the Act is now being broadened to include all money lending transactions, to which the existing Act also applies in any event, all credit transactions …

The definition of “money lending transaction” is being widened.

It is quite correct that the definition is being widened, but the concept “money lending transaction” applies to all money lending transactions and does not distinguish in terms of categories. I mention this specifically because I shall come back to a point made by the hon. member for East London North. This also covers all credit transactions and leasing transactions. Leasing transactions are being included within the ambit of the Act.

That is something new.

Of course it is something new. After all, I would not say it here if it was not something new. Even the hon. member for Yeoville ought not to expect that of me.

You are raking up all the old issues.

Order! The hon. member for Yeoville must refrain from making interjections.

I would appreciate it if the hon. member for Yeoville would give me a chance.

It is therefore important to note that the operation of the free market mechanism is not being restricted, nor is this envisaged by means of this legislation, because in terms of the Act all rates must be linked to the market. Indeed, paragraph 20 of the Franzsen report recommends—

To protect individuals or bodies in distress or in ignorance against ruthless exploitation surely does not affect the free market principle, but it does confirm an orderly, positive free market system. The hon. member for Yeoville also referred to the Crowther Committee and quoted a finding which amounts to being a finding that the man in distress cannot negotiate and is in fact a prisoner of the market.

To begin with I want to address myself to the hon. member for East London North and deal with certain remarks he made. The first point I wish to discuss is the inclusion of the concept “lease-lend” in the ambit of the Act. I do not think there is anyone who can dispute the fact that nowadays lease-lend is in our economy a recognized form of granting credit and the taking up of money. If this is so, then surely we must consider it. I refer to an objection advanced by the general banks that they are in a very competitive market as far as lease-lend is concerned. For that very reason—so they argue—it must not be brought within the ambit of the Act. Does the hon. member want to tell me that as regards money lending or credit transactions, these bodies are not operating in a tremendously competitive market? Surely that is not an argument. In fact, the hon. member devoted three-quarters of his speech to quotations from memoranda that formed part of various submissions, and he also referred to the memoranda of the Association of Law Societies, and quoted a long extract from it concerning what the position supposedly was with regard to construction equipment leased for a period of longer than three months. He stated that in such a case the Act could not be implemented, and that it would result in a ridiculous situation. However, the hon. member must distinguish between lease-lend which falls under the Act, financial leasing and an ordinary contract of lease, “operating leasing”. Surely no financing costs are involved in an operating lease.

That probably falls within the ambit of the Act.

No, the Act only applies when finance charges are in fact charged. That is why I said that the hon. member should listen. However, if direct rental is charged over a short term which does not bear relation to the life of the commodity, it does not apply.

Does the hon. member say that the Law Societies are incorrect in their allegation?

The hon. member asked me a question, and I want to tell him that they were in fact wrong. However, those aspects were discussed with the department and, inter alia, with members of the study group on the Government side, and after they had been discussed, the Law Societies were satisfied that their remark was incorrect. The hon. member should really do a little more research and not come and conduct a debate in the middle of June on the basis of a memorandum issued at the beginning of March. On top of that he wants to base his own standpoint on an incorrect assumption made three months ago.

Why did they submit it in June?

The hon. member may come and speak to me after this. It seems to me as if I am really unable to get through to him. Perhaps we could discuss the matter later. Perhaps the hon. member for Roodepoort was right.

Nevertheless there are a few other aspects in regard to which I think the hon. member for East London confused the House somewhat, which we should consider. The first aspect is that of legal costs. The hon. member must go and look at the evidence to see what malpractices occurred and what moneys were recovered specifically on the basis of the idea of legal costs. Even the cost of air tickets to fly from Johannesburg to Cape Town just to see whether the vehicle is still in a good condition before action is instituted, has been recovered from an individual under the heading “legal costs”. After all, such practices are indefensible. We must, therefore, investigate these matters.

Taking a further look at the question of legal costs, we find that the Franzsen report also deals with the matter fully in paragraphs 114 to 118. The hon. member can also go and look at the case of Santam v. Kellerman, 1978, in which the judge stated that the awarding of costs ought to be at the discretion of the court, and that it was the task of the Court to award costs. Nowadays, however, agreements are drafted in such a way as to specifically restrict the discretion of the Court, because the legal costs are determined in advance and the court has no say in the matter. The judge also stated that attention should be given to this aspect.

The hon. member also said that the Select Committee had an impossible task. I want to make the point that the Bill was referred to the committee before the Second Reading. In fact, hon. members did not once say that they disputed the principles of this Bill. The hon. member for Yeoville is known as a man who specifically supports the principles of this Bill. The question is: why does he oppose the Second Reading? Why does he not take a careful look at them in the Committee Stage? After all, it was not referred to a Select Committee after the Second Reading.

Would you support that?

No, I am not prepared to support that because I have made a reasonably thorough study of this legislation and I think I understand what is stated in this legislation better than the hon. member for East London North does, and I do not think the House owes it to him to appoint a Select Committee to clarify his brain for him. [Interjections.]

The hon. member for East London North also referred to the so-called autocratic behaviour. He said it was autocratic and bureaucratic. [Interjections.] The hon. member is not treating the department fairly. Negotiations have been in progress over a long period. Indeed, in the memorandum of the Association of Law Societies it is said that they have been conducting discussions about this matter since 1976, and various draft Bills have been submitted to them and also to all other interested parties. Comments were submitted, and where the comment was acceded to, the draft legislation was resubmitted to them. The last Bill was submitted to them on the basis that it incorporated all their objections and they were told that it was unnecessary to submit further comment. The department does not expect comment from them; it was sent to them for their information. On this basis the hon. member is slighting the department. I think he should really take the trouble to find out what is going on before making such a statement.

Unfortunately the hon. member for Yeoville left the House in spite of my friendly request. Nevertheless I am going to air the matter here, and perhaps the hon. member for East London North can give us a reply in this regard. Did the hon. member for Yeoville, at any stage since the appointment of this Select Committee … The hon. member is back. I am grateful. I shall repeat the question. Since the appointment of the Select Committee, has the hon. member attempted to influence any member of the Association of General Banks or any employee of any member at any stage to make a request to the effect that they wish to submit verbal evidence before the Select Committee?

It is unnecessary to persuade someone to do something he wants to do himself. [Interjections.]

I agree, but I want to ask again: Did he make the suggestion to any member of the society or to any employee or director of …

The hon. member wants to say that I …

Say “yes”, Harry.

Do not come along with such bloody nonsense.

Order! The hon. member must withdraw those words.

I withdraw them.

The hon. member is getting very upset and he is not prepared to reply to the question; accordingly I shall leave it at that.

He does not understand it. Say it a little more slowly.

The hon. member for Yeoville also said—I want to stress this again—that the small businessman also needs protection under the Act. Then he said that the big businesses could look after themselves.

You are opposed to the free market system.

No, I am far more in favour of the free market system than the hon. champion of social democracy.

You do not know where you stand.

That is not the point we are arguing about. The hon. member said that the small businessman also needed protection.

That is right.

Then, at a later stage, he said that in the nature of the matter, the rates charged for small loans would be far higher than those for larger transactions.

I am opposed to that.

The hon. member says he is opposed to that, but the legislation accommodates …

I said it in my speech. Did you not listen? Did you not understand me?

I fully understand the hon. member.

Order! If the hon. member wants to ask a question, he must ask the other hon. member whether he may, and then the Chair will determine whether he may ask it and give him the floor, but I cannot permit a debate from two benches.

I just wish to repeat that the hon. member says that the small businessman should be protected, and that it is unnecessary that large transactions be covered by the Bill. Then he says in the same breath that the smaller transactions are those in which higher rates will be charged in any event, whether the legislation applies or not. To me this does not make sense.

But that is not what I said.

Another aspect to which the hon. member referred is the arbitration procedure, which is supposedly impossible. The envisaged section 5(1)(f) in clause 8 refers to the instituting of legal proceedings. As a lawyer and a good advocate—I do not want to say “to my knowledge”, but according to what I have heard—he ought to know that the instituting of legal proceedings is also interpreted as arbitration proceedings.

Not in this legislation.

But surely it is unnecessary to spell it out in the Act?

Yes, it is necessary.

Oh, really, Sir, the hon. member is again putting me in a position which will cause you to upbraid me in a moment. The hon. member should please just confine his ideas to matters concerning which he does have firsthand knowledge. The hon. member also complained about the cost of the contract of sale and the deed of transfer. I think the hon. member for Namaqualand replied to him on that score very comprehensively and therefore it is unnecessary for me to say anything more about it.

I think that we in South Africa have a very sophisticated money market in which there are people who can deal with the provisions of this Bill. Under the circumstances this Bill, although a very complicated piece of legislation, is in my opinion a fine piece of legislation which fully covers the circumstances in which we are at present experiencing problems. I take great pleasure in supporting the Second Reading of the Bill in the conviction and belief that it will create a far better system for us and afford far better protection.

Order! I just want to draw the attention of hon. members to Standing Order No. 105 which provides that an hon. member may not converse aloud in this House or in the Committee. The hon. member may proceed.

Mr. Speaker, I just want to say that hon. member have not pointed to a single example of how the existing Limitation and Disclosure of Finance Charges Act has harmed the economy in any way. One could ask how the expansion and due inclusion of other aspects would suddenly bring the economy to a fall. I think that it will indeed be possible to institute the orderly credit proceedings that are envisaged. It is possible to point out arguments to hon. members, but it is certainly not possible to make them understand.

Mr. Speaker, in the first place I wish to thank hon. members for the contributions they made and for the trouble they took in this connection. In particular I should like to congratulate hon. members on this side of the House on the very thorough way in which they prepared themselves for the debate on this Bill and also for the positive approach which they displayed during this discussion.

What are we dealing with here? We are dealing with a Bill on the limitation and disclosure of finance charges. This is the crux of this Bill, and this is precisely what it deals with.

From the arguments of the hon. member for East London North I inferred that he is opposed to the limitation of finance charges. This afternoon the hon. member gave birth in this House to the great idea that if one limits finance charges, one is opposed to the free market system. That is, essentially, the argument which he advanced here.

He produced an infertile; idea.

One of the hon. members here has said that he produced an infertile idea—who am I to argue about that with the hon. member?

Surely there is consensus among us and we are not arguing about the fact that there are people who need protection everywhere in the country. I think that even the hon. member for East London North frequently needs protection in one form or another. That protection is being afforded in that we are limiting the maximum finance charges. Hon. members on that side of the House argued, however, that we would push up the costs by limiting the finance charges, but this Bill does not prescribe which finance charges a person shall levy; it merely lays down the maximum which he may levy. We are allowing free reign to the workings of the free market mechanism so that people may compete with one another. This will force interest rates and charges down. If the free market mechanism is able to choose its own course, surely there will in fact be competition. For that reason we are complying fully with the principles of the free market mechanism.

I wish to tell the hon. member for East London North that I really resent his saying that the Carlton conference was mere words. The Carlton conference was an outstanding event at which all the people of this country —Whites, Coloureds and Blacks, as well as people who are normally opposed to one another—produced a joint effort in the interests of our country. Now the hon. member for East London North wishes to imply that it was all mere words on the part of the Government. I think it is a disgrace. He did the country a disservice by making such an allegation. I think the hon. member’s one big problem was that he did not understand the legislation properly. I think the hon. member has difficulty with the interpretation of this legislation.

What is the next principle which is contained in the legislation? It is that the finance charges must be disclosed to the borrower, credit receiver or lessee. These must be properly disclosed to him, so that he can know what he is letting himself in for. The fact of the matter is that the legislation is absolutely essential. This legislation is in the interests of the public. Why do hon. members of the Opposition, who are always trying to imply that they are the champions of the public and the consumer, not give this legislation their wholehearted support? Why are they not trying to place the legislation on the Statute Book as quickly as possible for the sake of the consumer? If they are honest and sincere in their intentions with the consumer, they ought to do everything in their power to support the legislation, but now they are trying to delay the legislation.

I shall indicate why this legislation is necessary. We appointed the authoritative Franzsen Committee to look into this matter. Who does not know Prof. Franzsen? He is a man of status who is held in high esteem in this country, particularly in financial circles. In addition he had a strong team to support him. They recommended that we should bring this legislation before the House.

In 1977. Almost three years ago.

I wish to quote from the report of the Franzsen Committee. They said—

Why have you been putting it off for three years already?

Mr. Speaker, the hon. member for Yeoville must please show me the courtesy of listening to me, as I listened to him. The report states—

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

Mr. Speaker, I shall give the hon. member an opportunity to ask a question later.

[Inaudible.]

The hon. member for Yeoville must not be so touchy. We have known one another for 15 years now, and I know what his weaknesses are. I am not trying to annoy the hon. member, but he must contain himself a little. It is not necessary to always want to talk about everything and always make interjections. I know the hon. member is there, and I see him. He must just remain calm.

You must not be insulting. Just answer my question.

The report went on to say—

Sounds like Western Bank.

And then those hon. members still wish to delay this legislation. This legislation is before this House on the recommendation of the authoritative Franzsen Committee. I could also quote from the verdicts of other judges. With reference to a lease-lending case the judge concerned said—

Listen to what else he had to say—

The Franzsen Committee began its investigation on 4 August 1975 and reported on 21 October 1977. On pages 124 to 126 of the report one finds an impressive list of persons who were consulted and who gave evidence. On page 124 one sees that, with The African Bank of S.A. Limited heading the list, 31 bodies gave written evidence before the committee. On page 126 one finds that 16 bodies gave oral evidence. The Franzsen Committee produced an absolutely well-considered and responsible report, one which certainly, especially in view of the comments of the judge which I have just quoted, deserves the serious consideration of the Government.

The hon. member for East London North, who apparently did not do his homework, alleged that the Department of Finance was no longer prepared to listen to the further representations of these organizations. I do not wish to find myself involved in a dispute on this matter. I just wish to quote what the Association of Law Societies wrote to the Department of Finance on 2 May 1980—

Now the hon. member for East London North is not even listening. He is caucusing on the hon. member for Bezuidenhout’s political demise in that party. He is not listening to me.

Harry, they are still going to kick you out too.

I wish to say that the comment received pursuant to the report of the Franzsen Committee was discussed in detail by the Office of the Registrar with the representatives of the bodies concerned. A further draft Bill was drawn up in order to eliminate expected practical problems. The draft legislation was once again made available to the bodies concerned for comment. Further discussions followed. Again further adjustments were made, and a final draft Bill, after scrutiny by the State law advisers, was then submitted to the bodies in question.

I should like to refer to some of the objections. The main objection to this measure which was advanced by the general banks and Assocom was concerned with the amount of the principal debt which is protected by the provisions of the legislation, viz. R100 000. They say that that amount is too high. The Franzsen Committee, however, is of the opinion that all transactions up to R250 000 should be protected. By way of information I wish to mention that the hon. the Minister of Finance granted a personal interview to representatives of the general banks and Assocom on this proposal of the committee. After very serious consideration an amount of R100 000 was decided on. I wish to state categorically today that I do not know of any measure that was before this House in regard to which there was greater in-depth consultation with interested parties than there was in the case of the amending Bill which is now before this House. Every possible attempt was made to draw up a practical measure which would be in the public interests and which would ensure that credit granting takes place in an orderly fashion.

I come to the hon. member for East London North again. He said this legislation was an interference with the workings of the free market mechanism, owing to the fact that the finance charges rate was being limited. I wish to repeat, and emphasize, that it is a maximum rate which is being laid down. It is necessary, as we can see from the report of the Franzsen Committee. The market mechanism is being allowed to operate freely. There are various bodies, for example banks and companies, which specialize in one or another of these forms of credit, money lending, lease-lending or leasing, and of course there is competition. This is not a minimum rate which is being laid down; it is a maximum rate which is being laid down, and they must manoeuvre within the limits of that maximum rate.

I wish to thank the hon. member for Randburg sincerely for his contribution. He pinpointed the crux of the amendments and explained the widening of the scope of the legislation very clearly. As indicated by the hon. member, and also by the hon. member for Namaqualand, lease-lending is a form of credit granting, as are credit cards. Credit cards are a form of money lending transaction which is expanding at a tremendous rate. It is a modern method of financing. Surely one cannot control only one part of finance charges, and not the other part.

The hon. member for Yeoville raised a point in connection with the discount which is granted to the issuers of credit cards, the manager, as defined in the legislation. I am looking into this matter urgently. Possibly we could discuss the matter again during the Committee Stage.

I think the hon. member for Randburg replied adequately in connection with the question of legal costs.

The hon. member for East London North said this legislation was very complicated. He said it was technical legislation. I readily concede that. It is probably among the most complicated legislation which has ever been before Parliament. However, the hon. member had sufficient time to study the legislation. If the hon. member had read the report of the Franzsen Committee—and this matter has surely be broached here on many occasions in previous debates—he would already have learned a lot. He need only have done the necessary reference work. In any case, the legislation was read for the first time on 25 April of this year. I honestly think that the hon. member had sufficient time. The hon. member said “This is unwarranted interference” on the part of the Government. He may call it “unwarranted interference” on our part if he wishes, but the Government cannot allow people who need protection to be exploited by people who are perhaps unscrupulous, who really have more knowledge in this field and who take advantage of people who are in trouble, people who are hard up, people who have no more options open to them and who have to borrow money. That the Government will not do. In fact, the hon. member for Yeoville agrees with me. Consequently he said—and I shall come to him in a moment —that he agrees with me in principle. But I think the hon. member for Yeoville and the hon. member for East London North differ in principle so fundamentally with one another on this matter that I want to suggest that they should first have a chat to one another after the debate this evening. Apparently they are speaking in support of two separate standpoints as far as this legislation is concerned.

They must first hold a special caucus. [Interjections.]

They must hold a special caucus, yes. The hon. member for East London North is totally opposed to this legislation. The hon. member for East London North referred to this legislation as “unwarranted interference”. But what did the hon. member for Yeoville say about this legislation? He said: “There is no equality of bargaining power, and therefore protection is necessary. It is necessary for the authorities to intervene.” The hon. member for Yeoville said “It is necessary for the authorities to intervene.” He said: “There is no equality of bargaining power, and therefore protection is necessary.” I wish to put it to the hon. member for Yeoville—and I seldom differ with him—that I am in full agreement with him in this case. But I wish to say that the hon. member for Yeoville must create an opportunity, at some time or other, to provide the hon. member for East London North with a little guidance, to enlighten him a little, and to make him understand that there are certain people who do in fact need protection. I suggest that at the next caucus of his party the hon. member for Yeoville should take the hon. member for East London North to task a little. Do hon. members know what happened? The hon. member for East London North repudiated the hon. member for Yeoville here today. [Interjections.] The hon. member for Yeoville said this legislation was absolutely essential. He said: “Protection is necessary. There is no equality of bargaining power.” At the same time the hon. member for East London North said that this measure was “unwarranted interference”. He asked: “Is this legislation necessary?” Then he went on to say: “The Government is turning South Africa into a socialist country with this legislation.” [Interjections.] The hon. member for East London North did in fact say that. It is recorded thus in Hansard, and he cannot extricate himself from it. [Interjections.]

The hon. member for Yeoville stated a standpoint for which I have a great deal of respect. In fact he has demonstrated time and again that in that party he does not allow himself to be dictated to by the hon. member for Houghton and others. He is a person with an independent standpoint. [Interjections.] Now there is one more thing I want to say. It is that the hon. member for Yeoville showed that he was an honourable man, who will not allow himself to be intimidated into adopting a standpoint which he knew was not in the interests of South Africa. [Interjections.]

Just like Japie.

I really wish to thank the hon. member for Yeoville very sincerely for his support, during the Second Reading, of the principle of this legislation. We may differ on the details. That one can understand. My wife and I also differ on the details of many things, but in principle we stand by one another. [Interjections.] However, I really wish to emphasize this major difference in approach, this great philosophical difference, this radical difference between the hon. member for East London North and the hon. member for Yeoville. The hon. member for East London North said: “With this legislation the Government is turning South Africa into a socialist country.” On the other hand the sensible hon. member for Yeoville said: “There is no equality of bargaining power, and therefore protection is necessary.” I really wish to thank the hon. member for Yeoville once again for saying this. [Interjections.]

The hon. member for East London North alleged here that it was not necessary to protect business concerns. However, I wish to refer the hon. member to the Supreme Court case of Western Bank Ltd. v. Sparta Construction Co. I am just mentioning this in passing. We speak so often of the small business undertaking, the small businessman. I therefore wish to put it to the hon. member for East London North that we do not wish this country to be taken over by just a few big companies. We do in fact wish to protect the small businessman and the small business concern. That is also why we are protecting them in terms of the present legislation. The hon. member said that he had not had sufficient time to study this report. I am sorry, but I believe that even if the hon. member had had more time, he would not have gotten much further progress than he did today.

The hon. member for Amanzimtoti was a serious disappointment to me today. I wish to talk to him today like a father to his adopted son. [Interjections.] He must not allow himself to be taken in tow by the PFP. He does not belong with them. He should not allow himself to be influenced by them. I do wish to concede, however, that the hon. member was perhaps in a very difficult position, but he must be careful of one thing. He said he supported the legislation, but he did not want us to pass the legislation. He raised two standpoints here today, and I did not find them very exemplary. However, I hope that there is room for improvement, particularly if the hon. member for Durban Point could speak to him.

I come now to the hon. member for Namaqualand. He spelled out the principles in the legislation extremely well, and did so very neatly. One can see that he had put a lot of study into it. The hon. member defended the question of the charging of finance charges from the date on which a mortgage loan is granted to the day it is paid. He pointed out that this is a standing practice, and that all this Bill is doing now is to impose certain limitations on the interest which may be charged until the borrower has the full amount in his hand. I wish to thank the hon. member for his contribution.

I come next to the hon. member for Paarl. I wish to avail myself of this opportunity to extend a particular word of thanks to the hon. member for Paarl, a very senior member of this House and a person whom I consider to be a very good expert in the field of finance. For years he rendered great service in this House as chairman of the Committee on Public Accounts, and I wish to thank him for having agreed in the first place to act as chairman of the Select Committee on this legislation. I also wish to thank him for the trouble and for the attempts which he made to obtain consensus on this matter. He raised a very serious matter here by pointing out that the Franzsen Committee had recommended the amount of R250 000 in respect of the scope of the Act, and that in this legislation we are only going as far as an amount of R100 000. Other hon. members on this side of the House also brought this matter to my attention. Consequently I am a little concerned about this amount of R100 000. In the existing Act, in respect of agriculture and in respect of personal and domestic purposes, there is no restriction on the amount which will fall under the scope of this legislation. Now, although we are extending the Act to leasing transactions and various aspects, we are reducing the amount to R100 000. I am concerned, having regard to the tremendous escalation which is taking place, particularly in the prices of properties, that R100 000 may perhaps be a little too low, and if one of the hon. members feel, particularly the hon. member for Paarl, like placing an amendment on the Order Paper, I shall give favourable consideration to an increase in this amount.

I just wish to make a few general statements in respect of this amending Bill. The hon. member for Yeoville, if I understood him correctly, said that the public cannot be protected because they will not understand the legislation, because it is too complicated for the public to understand. I do not underestimate the intelligence of the public as he is doing. This kind of legislation has a way of making people careful, and it is very interesting to note that if a person feels that he has been wronged, one will find that he has heard of such persons and bodies as the Office for Financial Institutions, the Registrar or the Minister of Finance, and they are consequently very quick to write a letter to tell you that they are being wronged. The hon. member for Yeoville must not underestimate the intelligence of the public. They will understand this legislation. I can also assure him that this legislation is going to work. The hon. member for Yeoville raised many points. He discussed the question of the tax implications, etc., and I want to tell the hon. member that we can profitably consider many of these matters during the Committee Stage. I wish to inform the entire House that I shall, during the Committee Stage, consider with an open mind any constructive contribution which could lead to an improvement of this legislation. In this connection I shall allow myself to be guided by the merits of the arguments. I give hon. members that assurance. In respect of finance charges the hon. member said: “There are forces against control”. What the hon. member overlooked or misunderstood here is that a minimum rate is not being charged, particularly not on a smaller transaction. I wish to emphasize once again that we are only laying down the maximum rate in this legislation, and not a minimum rate. It is understandable when one borrows a small amount one has virtually the same administrative procedure and costs as in the case of a considerably larger amount. Surely that goes without saying. Surely there are minimum costs in connection with the lending of such money, and that is why there has to be a differential interest rate. What we are in fact doing by means of this legislation is to look after the little man who borrows a small amount, so that he will not be improperly exploited. That is what we are doing here. One must make provision. If one were to enforce the same interest rate and the same finance charges which apply to a loan of R1 million to a loan of R100, no one will be interested in lending R100, for then they will make nothing out of it. No one lends money or does business out of charity. That is what we must bear in mind.

I state here with a clear conscience that everyone involved has had enough time to study this legislation. I did everything possible on my part to obtain the co-operation of the Opposition in this connection. I showed them this Bill even before it was generally available, in order to try to gain the cooperation of everyone. I made a specific officer available to them long before the time. I said that if they were amendments or serious problems, they should be reported to the officer concerned so that we could discuss the matter and see whether we could not come to this House with an agreed measure. One does not wish to turn this matter into a political issue, because it effects the entire nation. I am sorry that there are hon. members on the opposite side of the House who wish to turn this matter into a political issue. I do not think it is very responsible of them. The hon. member for Yeoville said that the “consumer organizations” had not testified in this connection. Surely the Franzsen Committee issued an invitation to everyone. The hon. member need not be concerned about the “consumer organizations”. We are coming to Parliament with this legislation, inter alia, on behalf of the “consumer”. That is whom this entire Bill is concerned with. That is after all the crux of the matter. If we had not wanted to protect the consumer we would not have drafted this Bill. However we are introducing legislation here for the very purpose of protecting the consumer, and the Franzsen Committee told the consumer that he could come and give evidence, but no one came forward. I take it amiss of the Opposition for not having appeared on behalf of the consumers before the Franzsen Committee. If they had been really in earnest about the position of the consumers, surely they ought to have appeared before the Franzsen Committee. They should also have availed themselves of my offer and have discussed matters with the department and made proposals as to how this legislation could have been improved. But they did not do so and they must not reproach me in this regard. Now I am coming to Parliament with this legislation, inter alia, for the sake of the consumer and for the sake of order in this country.

The hon. member for East London North that we were doing private enterprise a disservice with this legislation. If we wish to sell free enterprise, the operation of the free market mechanism, to other people in this country then we must protect private enterprise against those individuals who exploit the system and who exploit people in terms of that system, for in that way the system is discredited. That is why one has to apply the brakes to ensure that this system is not discredited. In this way everyone will subsequently accept that it is a good system.

Mr. Chairman, in the Second Reading debate I raised the problems relating to the relevant definition in this clause and the hon. the Deputy Minister said that he thought there was some merit in the matter and that he would give consideration to it, but the problem arises that, because of difficulties which exist in respect of the existing wording, the effect of which is changed by the new wording, it is not really possible to move an amendment at this stage. However, I think it is necessary that we should at least debate whether in fact there is merit in the arguments about these problems we have advanced in the Second Reading debate. I should like to suggest to the hon. the Deputy Minister that there should be two definitions rather than one, the first a broad definition and the second a narrower definition. The broad definition could probably be along the lines of the existing definition of “armaments”, a purposefully wide definition so that the activities of Armscor, its subsidiaries and the people associated with it, could cover whatever was necessary for defence purposes. In other words, even though materials were in themselves not armaments in the true sense of the word, but were necessary for a defence effort, they could be covered by the broad definition so that the functions of Armscor would not be restricted but could cover everything that was necessary for a defence purpose. Secondly, there should be a narrow definition which would pertain to armaments proper, in respect of which the restrictions on publication and the necessity for secrecy would be applicable. In other words, to give an example, if we have a secrecy provision, it is obvious that that should relate to, say, aircraft, bombs, ammunition, weapons and matters of that sort, while in regard to the productive capacity which might include everything that is necessary for the Defence Force, things such as the equipment that is needed, vehicles of a non-military nature, equipment for housing and all those sort of things, we would not seek to restrict publication or apply secrecy unnecessarily. That is the dilemma which is now being created because there is only one definition and that definition is so very wide. The difficulty which exists is that by now amending section 3 of the principal Act, which relates to the control of armaments, both in respect of exports and internal dealings with these armaments, we are seeking to control a whole variety of matters in respect of which control is actually unnecessary. This also applies to clause 4, which proposes the insertion of a new section 11A, in terms of which we are seeking to restrict publication in respect of a whole series of matters about which there need be no secrecy whatever. I want to appeal to the hon. the Deputy Minister to consider during the recess whether the definition of “armaments” should not be divided into the two sections which I have suggested.

Mr. Chairman, I move the amendments as printed on the Order Paper in the name of the hon. member for Wonderboom, as follows—

The amendments are obviously improvements, and for that reason there is no need for me to motivate the amendments any further.

Mr. Chairman, in reply to the hon. member for Verwoerdburg I should like to intimate that I am prepared to accept the amendments. I think that disposes of that matter.

As far as the ideas of the hon. member for Yeoville are concerned, I think I pointed out during the Second Reading that he had understanding for the situation of our wanting, on the one hand, to phrase the definition of “armaments” as widely as possible in order to accommodate the largest possible number of items and operations within the framework of the legislation, and of our wanting, on the other hand, to ensure that we would not act in a way which would restrict the private sector and the private entrepreneur who might, on the one hand, be engaged in research on his own or who might, on the other hand, be a prospective contractor or even an existing contractor to Armscor. Consequently I am able to give the hon. member for Yeoville the assurance that we share his sentiments to a considerable extent. We shall, therefore, look at this during the recess and if we feel that the restrictive aspect is too narrow and might frustrate the objectives of the Bill, we shall come back to this matter at a later stage. The hon. member said that for the rest he accepted the situation.

Amendments agreed to.

Clause, as amended, agreed to.

Clause 3:

Mr. Chairman, the proposed section 4D is designed to enable the hon. the Minister to obtain information in order to be able to exercise effective control over the export and marketing of armaments. We have no problem in this regard. But the definition of “armaments” in clause 1(a)—and now I am coming back to the argument previously raised by the hon. member for Yeoville—gives the hon. the Minister powers which he certainly did not envisage. I am now referring to the proposed section 4C as well. The proposed section 4C, as it stands, will penalize certain persons whereas it is not the object of this legislation to penalize those people. Consequently I move as an amendment—and I apologize for sending it to the hon. the Minister at this late stage—

If, for the sake of my argument, I omit the superfluous words, the proposed section 4D reads as follows—

Suppose we have a situation of an individual or an undertaking being engaged in development work in connection with, for example, a certain type of reinforced steel, glass or other material and that it were to come to the attention of the department before that individual had completed his development work that the metal, glass or other material could in fact be used for armaments for defence purposes. In that case, if the hon. the Minister were to issue an instruction requesting that the relevant information be disclosed to the department, we would have a situation of the person concerned, who might have spent a large amount of money on the development of the metal, glass or other materials, having no choice but to hand over the information. If it were to be used subsequently he would forfeit the compensation, profits or revenue which he would have received had he been able to patent that know-how. For this reason I should like the hon. the Minister to consider inserting a provision that the person concerned will not forfeit the rights in respect of the product to which he would have become entitled under the Patents Act. In other words, my amendment seeks to protect the individual or the undertaking that has made a great deal of progress but has not completed the work, so that he may in fact derive the revenue he would have derived had he completed the work.

Mr. Chairman, the hon. member for Wynberg sent me his amendments only a few minutes ago. It is a pity that he did not do so earlier on or did not come to discuss with me then. This places me in the invidious position of having to decide to which rights he was referring. If the hon. member had referred to section 79(8) of Act 57 of 1978, I would have known for certain that he was talking about compensation. However, the hon. member referred to the Patents Act in its entirety, and somewhere there may be an obscure section which is affected by the proposed new section 4D. The hon. member’s argument was primarily concerned with the question of compensation, if I understood him correctly. If it does in fact concern compensation, it is inherent in this legislation that if it does not repeal certain provisions, the provisions of the Patents Act remain. I can give him the assurance that our law advisers indicate that this legislation does not repeal the Patents Act. If the hon. the Minister uses information obtained by him for purposes covered by the Patents Act, compensation has to be paid. Any amendments may be ex abundati cautela. The hon. member for Johannesburg North can tell him what that means. If the hon. member confirms that he was talking about compensation only, I am able to give him the assurance that the matter has indeed been considered. The law advisers point out that the matter remains unchanged. The provisions of the Patents Act are not repealed and the two pieces of legislation do not contradict each other. I should like to hear the hon. member’s argument so as to get an indication of what rights in the whole of this long Act he has in mind.

Mr. Chairman, my argument naturally concerns compensation in particular. Let me try to state my point once again. Let us suppose that a company is engaged in a process of manufacturing a new type of hardened steel, for example. Let us suppose that this process has not yet reached a point which allows of its being patented. They may possibly have completed 90% of the work involved in the process. Having perhaps spent as much as R20 million—or whatever the amount may be—on the development of the particular material at that stage, it becomes known that they are engaged in such a process. When that point has been reached the hon. the Minister approaches that company and informs it that he should like to have the information since he wants to use that process. However, the process has not yet been patented. If the department were to complete the work and were to use the work previously done by the company, the company could possibly lose its entire investment in the development of the product. Consequently the object of my amendment is to ensure that they will in fact receive the compensation which they would have received had they completed and patented the process. As I read the Bill it does not make any provision anywhere for compensation at that stage.

Mr. Chairman, in that case it would be more appropriate for the arguments which the hon. member for Wynberg has just advanced to be advanced during a discussion of the proposed section 4C(1)(b). I dealt with that argument during the Second Reading. The hon. member for Durban Point and the hon. member for Benoni put questions in that regard and in replying to them I referred them to the common law principle of wrongful enrichment in cases of the Minister intercepting half-completed processes, for example, and then having them completed himself, something which is altogether unlikely. It is an improbable situation but we may use it as a hypothesis for the purposes of our argument. On the one hand the common law principle of wrongful enrichment will arise in such a case. On the other hand, however, I may refer hon. members once again to Steyn’s Uitleg van Wette and to a whole series of cases mentioned in the book, cases from which it is clearly evident that a presumption exists that in the event of the State taking something, compensation should be paid, unless explicitly provided otherwise. There is a whole series of rulings in favour of this.

I see that the hon. member for Johannesburg North is nodding his head in agreement. Consequently the example quoted to me by the hon. member for Wynberg comes under a specific provision. The amendment moved by him relates to the Patents Act with reference to a patent of which the Minister of Defence has knowledge and which is subsequently requested by him in terms of section 79 of the Act concerned. So my reply is that we have considered this problem of the hon. member for Wynberg. We do not want a situation to arise such as the one he has in mind, i.e. of a person appropriating a patent without paying compensation for it. My legal advice is that the proposed section 4C, which the hon. member seeks to amend by means of his amendment, does not contradict the existing Patents Act. It is not in conflict with that Act in any way. It is not being repealed either. Consequently an amendment of this nature is not necessary.

I should like to give the hon. member the assurance, however, that we have considered this facet. I personally saw to it that it was discussed fully. I requested a discussion in depth on this point, and this is the reply I have received. Consequently I do not believe that we should accept an amendment precipitately, one which, with respect, would be more relevant to another provision, as I said during the Second Reading.

Mr. Chairman, if I may, I should like to indicate to the hon. the Deputy Minister that there is more to this reference to the Patents Act than merely the question of compensation, because he will bear in mind that the patentability of the article may well be affected by disclosure prior to the lodging of the patent application. Therefore, I should like to suggest to him that the department might perhaps again have a look at the whole question during the coming recess, the whole question about the effect of a disclosure of a patent to the Minister, pursuant to such an order on the right to patent it subsequently in a case when there has been a prior disclosure of the novelty of the invention. I should like, however, to leave it at that, because I think it is a highly technical matter. Perhaps it is not possible to solve it this afternoon.

I should like, however, to come back to the main issue of this clause, which is the issue that causes me concern. That is, as I indicated during Second Reading, that we support the control of arms dealings. We support the control of weapons dealings for the purposes of export from South Africa. I depart from that in no way, because it is necessary to do so. I do think, however, it is very important that we should not seek now to project ourselves world-wide as an arms exporting nation who wishes to export arms. As was pointed out during Second Reading, I think the real reason why we are perhaps in the exporting business is because the economies of scale may require it on account of the necessity to produce arms for the defence of South Africa. Suddenly to create the image that we are an arms exporting nation and that we really are in that business from choice, I believe, might not be in the national interest of South Africa. I would rather see South Africa projected as a nation that wants to provide food for the world, that wants to provide the real essentials of living to the world, than to see it portrayed to the world as a nation that wants to be in the arms business. I think we are controlling export because we do not like the arms business. We are controlling exports because we have to manufacture in order to deal with the economies of scale. I think it is important not to project the incorrect image of South Africa. The tragedy of the world is that nations who need to import food, know-how and something to take them out of the underdeveloped stage are the very nations who are importing arms in this world. Statistics show that more than 80% of all arms which are imported into any country in the world are actually imported into the Third World countries and underdeveloped nations of the world. Where they should be importing food and know-how they are actually importing arms. That I think is highly undesirable in this world, and that is why we believe that the control of arms exports and the projection of the correct image of South Africa are also vital.

I again want to repeat, because to me it is of such fundamental importance, that under no circumstances should the slightest chance be taken in regard to the export of our arms for the sake of earning foreign exchange, however important that is, if as a result of the export of those arms there is a possibility of them getting into enemy hands or any possibility that the information from an examination of those arms could be used to the disadvantage of our forces. That is why I again want to make an appeal at this opportunity that we must take no chances in respect of this matter. The strictest control has to be exercised. The political implications must be considered and the implications for the defence of South Africa must be considered before we sell arms to anybody in this world.

Mr. Chairman, I understood the hon. member for Yeoville to say that we should not proceed with the amendment of the hon. member for Wynberg on the understanding that we consider whether the Bill in fact meets our objectives. We do not intend to deprive anyone of his rights. If a patent is involved, the intention in the Patents Act should be the overriding factor. I think that is a reasonable understanding. We have no other objectives in this regard and I wish to place this on record very clearly. On that understanding, therefore, I leave that subject at that.

As far as the rest of the argument of the hon. member for Yeoville is concerned, I want to repeat once again that the fact that we are taking control in this measure of the export of arms surely is a very clear indication that we are doing so for various reasons. One of the main reasons is to prevent the unbridled development and export of arms, which may be detrimental to South Africa. On the other hand it is a fact that the matter of manufacturing and exporting arms is progressively becoming an instrument in the hands of the State, as part of its foreign policy and relations and of international politics. Without going into any detail we should consequently take control in this regard as well. As regards the matter of arms which may fall into the hands of hostile countries, it is of course a fact that one of the objects of control is to prevent this from happening. Consequently I can give the hon. member for Yeoville the assurance that there is no need for him to over-emphasize this point. We are fully aware of the dangers inherent therein.

Amendment negatived.

Clause agreed to.

Clause 4:

Mr. Chairman, as in the case of Clause 1, I rise once more to move the amendments printed on the Order Paper in the name of the hon. member for Wonderboom, as follows—

1. (1) On page 9, in line 4, after “supply,” to insert “marketing,”;
2. (2) on page 9, in line 15, after “supply,” to insert “marketing,”.

As in the previous case I think that these amendments, too, constitute improvements. For this reason I shall not motivate them in detail.

Mr. Chairman, I again briefly want to make our position clear on this clause. In so far as we are concerned, we are completely content to accept that there should be restrictions on publications that relate to true armaments. But if it goes beyond that it does not have our approval. Therefore, as clause 1 will be looked at again, we hope that the problem in regard to this clause will also be solved and that there will be no restrictions which are not necessary in order to preserve true secrets which relate to true armaments in that sense of the word.

Mr. Chairman, I just wish to indicate that I am prepared to accept the amendments moved by the hon. member for Verwoerdburg. For the benefit of the hon. member for Yeoville, I also confirm in the spirit in which I replied to the same point during the Second Reading debate, that on the one hand, we want to discourage the provision of information, while on the other, we certainly do not want to discourage the free movement of private initiative. We shall look at the clause in that spirit.

Amendments agreed to.

Clause, as amended, agreed to.

House Resumed:

Bill reported with amendments.

Bill read a Third Time.

Mr. Speaker, subject to Standing Order No. 56, I move—

Mr. Speaker, the hon. the Minister appeared to be fairly upset after my speech during the Second Reading debate. I think he felt very sensitive because I accused him of letting the egg industry get into a mess. The facts of the matter are that things are not very happy in the egg industry at the present time. Whether that is the fault of the hon. the Minister or of the Egg Control Board I do not know, but I think that we would be doing a disservice if we agreed that everything in the egg industry was happy.

The hon. the Minister has come to Parliament with this Bill, which, as far as it goes, is a very temporary stop-gap measure for something that needs far more serious medicine, because, as I have said, the egg industry is not in a happy state; it is in disarray. I believe that the controlling Act, in its entirety, mitigates against the interests of all parties, the producers and consumers alike, while protecting the interests of the few, namely the big monopolies which I named in the Second Reading.

We, in these benches, believe that one could, under certain circumstances, do without control, but one has to have control unless particular existing circumstances are changed. As long as one has big monopolies operating without any restrictions at all, one has to have control. The trouble has been that the control has been inadequate in that at one stage far too many permits were granted so that one had a tremendous oversupply of eggs, which we still have. The hon. the Minister of Agriculture and Fisheries did say that one had to keep up to 15% in the pipeline to ensure a full supply for the local market, but on many occasions the position has been far worse than that, and the hon. the Minister knows it. He knows that at one time the consumer was financing a tremendous overproduction which was dumped outside of South Africa because far too many eggs were being produced.

Eggs-ported!

He was doing an egg dance!

Egg-citingly!

I request hon. members to refrain from the humour that beset us during the Second Reading.

Eggs-actly!

I shall attempt to proceed from there. The control in the past has not been adequate. The hon. the Minister is trying to rectify the situation, but I do not believe that he will rectify it until he is prepared to use the newly constituted Competition Board to look into the egg industry and see whether the monopolies that do exist in the industry are desirable and in the public interest. We are in a situation where something over 40% of the total egg industry is in the hands of three parties, and this also hides other links to the big producers in that in many instances many so-called small producers are in fact entirely in the hands of the three big producers who supply them with feed.

We had a debate earlier in the session about vertical integration in agriculture. Well, I believe that the situation in the egg industry is one on which the hon. the Minister could perhaps do a little experimentation.

Egg-speriment!

Egg-sperimentation!

Yes, a little egg-sperimentation!

He must be the egg-spert on that.

I think that, if the hon. the Minister is prepared to take action against the monopolies, he should ensure that they do not gain more control—in fact, I think a certain quantity of control should be taken away from them. They should not be allowed to own the percentage of the egg industry that they do own.

Egg-cellent suggestion!

I realize that this particular Bill is a move in that direction and that the small producers are still, to a certain extent, protected while it is the intention, I presume, to cut the permits of the big producers. What I suggest to the hon. the Minister is that, if he is prepared to control these monopolies, he could try to see whether complete decontrol in the egg industry would not result in a much better situation for the small producer who, I believe, is getting a very bad deal at the moment …

A raw deal.

… because he is still, in spite of controls, beset by the monopolies which are bedevilling the whole pricing structure in the egg market. This is the case throughout the agricultural industry. I believe that controls have been reduced in many instances because of monopolistic practices. Until the hon. the Minister and the Government are prepared to control those monopolistic practices, we are inevitably going to have a control board. However, once they are prepared to take major action against those monopolies—the preventing of monopolies is, after all, what free enterprise is all about—we are inevitably committed to control. My request to the hon. the Minister is therefore to give consideration, instead of this stop gap measure which is not going to solve the problem, to taking major action against the monopolies in terms of the Maintenance and Promotion of Competition Act and then to institute decontrol.

Mr. Speaker, last week the hon. member for Orange Grove said that I lacked courage and had made a mess of the egg industry. But he now comes with a different attitude altogether. I cannot understand why he says that he is in favour of the measure, but also feels that we should consider decontrolling the industry.

The hon. member talked about the three majors who have the monopoly in the industry at the moment. I have already told the hon. member in a previous debate that these three major companies produce 43% of all our eggs. However, this is the only agricultural industry where we have a situation like this. The hon. member says there are monopolies right through the agricultural industry today.

The meat industry.

Not in the production areas, although this may be the case in the distribution areas. Amongst the farmers, however, there are no monopolies. The same applies in the case of maize, wheat, wine, or any other agricultural product. We are talking about the control of production and not, for example, about the retailing of meat. As a matter of fact, I think there is enough competition in the meat industry. However, we are not discussing this product now. The main problem is that this hon. member never attends any agricultural congresses with me. Has he ever attended a poultry farmers’ congress? Will the hon. member make this type of speech in front of the poultry producers of South Africa and ask for decontrol? That would lead to a mess. What did we achieve by having this Act? We had an export loss of more than R9 million, which has now been reduced to just over R1 million.

How did it ever get to R9 million?

I told the hon. member on a previous occasion that it happened because I did not have the power at the time to tell poultry farmers not to sell their permits to large companies. I spelt the whole situation out, and I know the hon. member for Mooi River appreciates the problem. We did not want to hurt the small farmer and made the permits transferable. I agree, however, that the consumer had to pay a levy of three cents per dozen to cover our export loss. I have tried to prevent this, and our export loss has been decreasing and will continue to do so in future. But we have to have a surplus production of between 10% to 15%. Permits are issued, but one never knows beforehand how many eggs the new types of hens that are introduced are going to lay in the following year. As it is, a new variety of hen is being introduced. Farming is a very competitive business and new techniques are frequently introduced. That is why new types of hens laying more eggs are being introduced into the industry from time to time.

In conclusion I wish to thank the hon. member for his support of the measure and that he was willing to grant me stages.

Question agreed to.

Bill read a Third Time.

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

House Resumed:

Bill reported with an amendment.

Third Reading

Mr. Speaker, subject to Standing Order No. 56, I move—

Mr. Speaker, during the Second Reading I said that no legislation on wine and spirits in South Africa could be discussed without the KWV being involved in the discussion as well. I also said that the KWV had gradually obtained a firmer grip on the liquor industry. Furthermore I said that with the amalgamation of the KWV, Distillers and Stellenbosch Wine Farmers we had created a situation where a very powerful cartel had been formed in the industry. I maintain that this cartel is not to the advantage of the industry or the wine producer.

In reply to the opinions I expressed the hon. member for Ceres pointed out in his reply that he differed with me completely. Nevertheless he went so far as to say that this new company’s present share of the wine market was as high as 76% and that its share of the spirits market was as high as 74%. He went on to say that there were 69 co-operatives and 38 estate wine owners and that the competition with a further 25 independent wholesalers would ensure that we would not have a monopolistic situation in this industry. Just as the hon. member for Orange Grove did in regard to previous legislation, I want to tell the hon. the Minister that this phenomenon is becoming increasingly dangerous in agriculture today and that we are becoming increasingly concerned about the creation of bodies which develop into monopolies in practice, and that in the long run these monopolies are not going to be to the benefit of the primary producer.

I want to use this Third Reading to bring this point to the attention of the hon. the Minister because I know that he and some of his colleagues, the hon. member for Malmesbury in particular, have in recent months expressed very strong opinions on this danger in the agricultural industry. Accordingly I want to bring it very urgently to the attention of the hon. the Minister that in the months which lie ahead we shall have to subject this trend in the industry which we are now discussing to very careful scrutiny.

Mr. Speaker, when we debated this matter during the Second Reading debate, I tried to satisfy the hon. member for Wynberg. I think that he sees the cartel which he referred to in a very one-sided way. I tried to indicate on the previous occasion that the establishment of CWD or Cape Wine had rectified three fundamental problems in the wine industry. Beer, wine and spirits interests were effectively separated within the same group on the wholesale level. The fact that they had not been separated had been a major problem to the wine farmer and the wine industry in South Africa. Secondly, the increasing strategic importance which the wholesale trade had acquired in the retail trade was halted for the future and the wholesale and retail trade were separated from each other. The third aspect which was rectified, is very important. For the first time the wine farmer obtained a voice and a joint say in the marketing of his product in the wholesale sector. He never had that say in the past. I pointed out to the hon. member that there was no monopoly in the wine industry, in spite of the figures he mentioned. He must take my word for it when I say that since beer and wine interests have now been separated from each other on the wholesale level, it will be far easier for a wholesaler to enter the wholesale wine sector in future. One can enter the spirits industry with an investment of R100 000, whereas one needs a far larger investment to enter the beer industry. Therefore it is financially far easier for wholesalers to enter the wine industry. I see no future danger for the wine farmer or the consumer in the establishment of Cape Wine.

Mr. Speaker, I should like to give the hon. member for Wynberg the assurance that we realize the problem of monopolies. As Vice Chairman of the KWV, the hon. member for Ceres is fully aware of what could happen with monopolistic conditions if they are not co-operative. The hon. member for Malmesbury also participated in a discussion in which our concern was clearly expressed. If 100 or 200 farmers in an agricultural co-operative join forces to be able to have bargaining powers, this is often considered a monopoly. However, the 100 or 200 members have a say in their business. That, writ large, is what the KWV is. According to the new dispensation a member of the KWV has a say in the retail trade as well, and this has its advantages. One could find a co-operative degenerating into an organization which has lost touch with its members, but then the members must throw out the board of directors. I am aware of the fact that the hon. member is concerned about monopolies which are not in the interest of the small producer, and that is the person we want to retain in agriculture.

I want to thank the hon. member for Ceres and the hon. member for Wynberg for the fact that we were able to dispose of the wine legislation in such a fine spirit. I read in the Bible recently that if you have problems with your stomach, you should drink a little wine.

One could even consume it with the eggs.

If one eats a few eggs afterwards, one is “dead right”.

Question agreed to.

Bill read a Third Time.

Mr. Speaker, I move—

Nothing that has happened since this Bill was first introduced, has changed the attitude of the official Opposition towards its contents and effects. In fact, the more the Bill is discussed and the more its effects, both on the press and the public, are considered, the more we believe that our opposition to this Bill is justified and we will therefore vote against the Third Reading.

There is no doubt that the Bill will impose impossible restrictions on the right of the Press to report police activities and the activities of others if they are in any doubt whatsoever as to whether those activities are connected with terrorism as defined. There is also no doubt that, notwithstanding the good intentions which the Minister proclaimed, namely that he will endeavour to apply the Bill selectively and that he will show compassion towards the families of those who may be detained or arrested, the Bill will enable the police to throw a cloak of secrecy over vital aspects of the actions of the Force, something which is highly dangerous in society. There is also no doubt that the Bill is deeply and bitterly resented by the Press and by other concerned and responsible South Africans who fear these further inroads.

What is significant in all this, is the manner in which the legislation has been handled from the start by the Government. The Government appears to have been unaware of the consequences when the Bill was introduced initially, and it seems to be totally unconcerned about the effect of the amended Bill which is now before the House. Because of this and the Government’s stubborn determination to proceed with the measure, there has not only been widespread disquiet in South Africa, but the Bill has drawn highly adverse comments in many parts of the world. This is certainly no good advertisement for South Africa. The Government has been almost casual about its implications.

What reasons have we had from Government benches to justify this measure? The principle argument has been that, because the security of the State may be threatened, the Minister or the Commissioner shall be the sole judge as to what news about terrorist activities and police activities in connection therewith, can be published by the Press. This is the old, old story. Use the words “security of the State”, or otherwise “terrorism”, and you will get away with almost anything. That is what the Government speakers have been trying to do in trying to justify this Bill. The hon. member for Pretoria East went so far as to ask the question of us both during the Second Reading and in the Committee Stage: Which do we regard to be the most important: the freedom of the Press or the security of the State? Of course, the two concepts are not mutually exclusive. There is no reason at all why the State’s interest should be impaired as a result of allowing the Press to report certain police activities. The answer, as I said during the Second Reading and in the Committee Stage, is not to legislate in this manner, but the answer is to do what the Minister himself says he embraces, and his Department embraces, and that is to involve the police in much better co-operation with the Press, co-ordination of activities and negotiation with the Press in order to establish what is in the interests of the country and what is not. [Interjections.] Nobody has given an indication of where the Press has been irresponsible in situations of this kind. What is needed is consultation with the Press and collaboration with the Press and developing the best possible understanding with the Press in matters of this kind.

The Government has used as argument in support of this Bill the fact that the Bill is based upon the recommendations of the Steyn Commission. This is simply not so. The Steyn Commission, when it tried to recommend an amendment, did so in terms that were much more restricted, much more lenient, than this Bill. It referred to police operations instead of police actions as in the Bill and it also referred to information which may be of use to any personal or organization participating in terrorist activities. The Bill does not do that. In no way did the Steyn Commission indicate that it wanted a black-out of the fact of people being detained or arrested. This Bill does these things. It goes far beyond the recommendations of the Steyn Commission and it goes far beyond the spirit of the Steyn Commission. There is no doubt that the effects of this Bill will be to stifle Press reporting over a wide range of matters which are in the public interest. Because of this Bill and the penalties for which it provides newspapers will tend to be ultra cautious and their operations will be greatly impeded. The hon. the Minister has denied this. He has said that this is not an attack on the Press or on the rights of the Press. He has said that all a newspaper has to do, all a newspaperman or a newspaper editor has to do, is to pick up a telephone and telephone either the Minister or the Commissioner of Police to check whether or not an item can be reported. Surely, the hon. the Minister knows how a newspaper operates. How can a newspaper which is trying to beat a news deadline, work on this sort of basis? It places the newspaper in an entirely impossible situation. If they were able to take this sort of action or to get a quick answer—which is doubtful, because the hon. the Minister and the Commissioner have other things to do apart from sitting waiting for a newspaper to ’phone them— then, even in regard to the powers given under the new section 27C(1)(a)(i), concerning the constitution, the movements, the deployment or methods of any member or part of the Force engaged in any action, the Press, if it were to seek information in that regard, would have to do with one specific thing. How do they operate, however, in regard to the situation provided for in the proposed section 27C(1)(a)(iii), which refers to any person or group of persons against whom any action referred to in the previous subparagraph is directed, or in relation to any action by such person or group of persons? How do they get a decision on that? How are they to know whether what they are seeing or what they are reporting on relates to any action or actions against which any police action, as defined, is being directed?

They can ask.

How do they know whether that will fall within the definition? How can they possibly know it? If, for example, a Press man observes a group of people marching up Parliament Street, for all he knows, they may be involved in a peaceful protest. How is he to know, however, that they are not people against whom the police are acting in terms of the Terrorism Act? It places a newspaper reporter in an impossible position.

By the same token the effects of this Bill will not only apply to terrorist activities as referred to in section 2 of the Terrorism Act, but—and we discussed this the other day—it will also deal with those covered by the General Law Amendment Act. Again the same principle will apply. How then is a policeman or a Pressman on the spot to know the difference between whether the activities engaged in fall within the ambit of the General Law Amendment Act or whether they fall within the ambit of the Terrorism Act?

What is actually happening here is that this is a blanket ban on the reporting of police activities, be it with the permission of the Minister or the Commissioner of Police.

We believe this is dangerous in so far as the public is concerned because the police can operate in conditions of secrecy. We believe it is dangerous as far as the freedom of the Press is concerned. We believe this is a thoroughly bad Bill and we will offer it, as we have done, our total opposition and vote against the Third Reading.

Mr. Speaker, in the course of this Third Reading stage we are now examining the effect of this legislation in retrospect. In his first reaction to the publication of this Bill, the hon. member for Musgrave arrived at certain conclusions. They were, of course, wild conclusions. He proclaimed those conclusions of his, as well as his reactions to them, and caused them to be published far and wide. Now, under the present circumstances, he cannot, of course, accept the sound arguments which have been advanced from this side of the House. He committed himself too deeply to his criticism of this Bill to do that.

Nor has the hon. member for Musgrave cast any new light on his and his party’s objections to this Bill in the arguments which he raised here this evening. In the assessment of this Bill we must first satisfy ourselves again by determining whether what is being done here agrees in essence with the Steyn Commission’s recommendations. We and the hon. member for Musgrave differ on the interpretation of this Bill read in conjunction with the Steyn Commission’s recommendations. We say that it agrees with those recommendations in essence and we say that actions and operations conducted by the Police in their struggle against the phenomenon of terrorism, as it is manifesting itself under the present circumstances, are just as essential as when the Defence Force takes action against an enemy. The Steyn Commission accepted this motivation of the Police evidence and came forward with this recommendation.

Furthermore the legislation provides that no police action may be published, nor any action in respect of the person against whom the police are operating, nor what the police are doing in connection with such a person, nor what the police are doing in cooperation with the Defence Force or with the Railway Police. We say that all of these things in reality determine what could be useful to the terrorists. That is why this provision in the Bill is essentially the same as the recommendation in the Steyn Commission report.

We go on to argue that the phenomenon of terrorism, as it is manifesting itself at present, as it manifested itself in Silverton, in the Carlton Hotel and in other circumstances, has made it necessary for the State to use all the power at its disposal to eradicate this evil. The safety of the public, the security of the State and the security of everything one could think of in connection with this matter, is the most important consideration in one’s approach to terrorism. Therefore, specifically to overcome the problem which the hon. member for Musgrave has, the liaison division of the S.A. Police has been placed at the disposal of the Press in order to be of assistance to the Press and to facilitate the flow of information. That is why I think that the objections which the hon. member for Musgrave has just reiterated here, carry no weight. He has advanced no new arguments which could convince the Government that it is making a mistake with this legislation.

That is why I should like to recommend that the Third Reading of the Bill be passed.

Mr. Speaker, during the Third Reading, in which we discuss the legislation in its final form, I should like to refer to something which the hon. Minister said during the Committee Stage. In a rather snide way the hon. the Minister referred to me as the “expert on Elsies River” and asked me in a snide way what I knew about Elsies River and whether there was anything new I could tell him about Elsies River. I would have thought that it would, in the first place, have been my duty as a member of this House to bring to the hon. the Minister’s attention any circumstances which came to my notice, of the nature of those which I did indeed bring to the hon. the Minister’s attention, so that he could act on them. For that very reason I informed the hon. the Minister of what I had seen in Elsies River and that is why I specifically asked the question which I put in this House in connection with the loss of weapons and equipment, to which the hon. the Minister furnished me with a reply on Friday. Now, however, snide references are being made to the “expert on Elsies River”. I am afraid that by doing so the hon. the Minister is displaying exactly the type of dangerous attitude we warned against in our opposition to this Bill.

The hon. the Minister is showing a tendency to want to have a monopoly on the observation and distribution of news concerning the conduct of the police under such circumstances. The hon. the Minister is revealing irritation at the fact that I observed the events and brought them to his attention and that they subsequently came to the notice of the Press as well. I would in all sincerity have thought that the hon. the Minister would have reacted favourably to the information I gave him. For that very reason I have no doubt that the results of this Bill can only be detrimental.

At our urgent request the hon. the Minister once again enumerated examples of what the police wished to achieve, and what the hon. the Minister himself wished to achieve by means of this legislation. Firstly he spoke once again of police operations in which confidentiality was necessary. He said that if, for example, they were to arrest a member of a certain group in Nelspruit and another member of that group in Pietersburg, they did not want a member of the group in Louis Trichardt to get to hear about it. In the first instance I am once again unable to understand how the hon. the Minister could have a problem with something of this nature. Is the hon. the Minister suggesting by means of this legislation that it is impossible to maintain confidentiality within police ranks, and particularly in the sophisticated type of units dealing with these matters? I cannot accept that. It is very difficult, if not impossible, for me to accept something like that.

How can there be secrecy if something like that happens in front of many people?

Now my next problem follows. If something of this nature happens among a number of people, as the hon. the Minister himself said, is the mere fact that the Press may not publish it now, going to preserve the confidentiality of that operation? Not at all, for every other form of communication is still being allowed in terms of this legislation. Any person may inform any other person by telephone or in any other way that certain things have happened. However, this prohibition applies only to publication.

The other example furnished by the hon. Minister is the question of armaments. He said that the operation and existence of equipment and armaments of the Police Force should be confidential. Once again we can accept this. However, for years the Defence Force and the Police Force have managed to keep these things confidential without such legislation.

But you have just voted in favour of it.

I want to state the point again that any terrorist organization which in any way launches sophisticated operations or operates judiciously in any way, finds it easy to obtain the details of those things in any other way, if the confidentiality in the Police Force has not been properly preserved in the first place. It is very easy for them to ascertain that. I cannot accept that an organized terrorist organization cannot acquire information on armaments just as easily as a journalist. Furthermore I want to say that I still believe that the hon. the Minister can to a great extent rely on the co-operation of the Press in this regard.

I must just add here that I am at times amused, particularly when it comes to defence matters, by the number of times the hon. the Minister of Defence and persons dealing with these matters say that the details of armaments should be kept secret. However, when it suits those people politically, they are very keen to announce new weaponry and give explanations as to how it works, how effective it is, etc. This too, is simply a political question. That is why, once again, one wonders how convincing these arguments really are.

I want to say in the first instance that the effect of this Bill on the confidentiality of police operations or operational plans will be insignificant. It will be insignificant because the Bill does not in the first place prohibit disclosure, but only publication, and in the second place, I cannot accept that confidentiality does not exist among units or individuals who are engaged in combating terrorist operations. I cannot accept that they cannot keep something a secret for a few hours, or, if necessary, even for a few weeks if it is expected of them and they themselves know that it is in the interests of that operation.

Furthermore I want to say that the effect of this legislation will be extremely damaging to Press freedom, and to the extent to which the public is informed. Towards the end of white rule in Rhodesia, during its last few years, Mr. Ian Smith of Rhodesia also passed extremely strict legislation on the grounds that the public morale would be kept high if the people did not know how badly things were going. We know today what misery that plunged Rhodesia into.

Does the hon. member think that we are in the last stage?

Business suspended at 18h30 and resumed at 20h00.

Evening Sitting

Mr. Speaker, we have more or less come to the end of the Third Reading of the Police Amendment Bill. I think that every hon. member of this House will agree with me that we are rather disappointed that the hon. member for Musgrave and the hon. member for Green Point, whom I do not see here now—he will probably turn up later …

He will not be here this evening.

The hon. member for Musgrave, the official Opposition’s chief spokesman on police affairs, has this evening once again succeeded in proving one thing, viz. that he finds himself hamshackled. He finds himself in the quandary that he really cannot argue in a patriotic way. His problem is that he does not realize that any Government, whether it is the governing NP or the PFP, of necessity has the duty of ensuring that national security, that internal security has to be preserved. The hon. member is saddled with the problem that he has as co-speaker a party compatriot who says that at one stage the Government in Rhodesia passed certain very drastic Press legislation because it thought that it could protect the Whites in that way. I do not think that the hon. member for Musgrave who is a veteran politician, would say something like that, for it means that the hon. member for Green Point is equating the situation in South Africa, and the situation of the Whites in South Africa, with the situation of the Whites in Rhodesia. Surely this is not true. [Interjections.]

Is this then what the Opposition would really like? Do they really want the situation of the Whites in South Africa to become analogous to the situation of the Whites in Rhodesia? Surely it can never be made analogous. I think the hon. member for Musgrave will have to have a few quiet words with the hon. member for Green Point, for if this is what the Opposition sees as South Africa’s future, then I am afraid that the hon. member for Musgrave, via the hon. member for Green Point, does not see a great future for the Whites in South Africa.

However, that is not what this Act is concerned with. It is concerned with the preservation of internal security. Because of this and because the hon. member for Musgrave does not want to react to the one question which one primarily asks …

I did.

No, the hon. member did not. He was never prepared to reply to the one question, viz. what is primary: The fact that certain things may be published or the fact that you are going to protect your fellow-man? What is primary: The right to know or the right to be protected? The hon. member never replied to that.

[Inaudible.]

No, the hon. member evaded that question and never got round to it. Nor did the hon. member’s co-speakers get round to it either. I want the hon. member for Musgrave to listen to me, for I am speaking to him. I want him to remember one thing, i.e. that each one of us in this House has certain responsibilities. Each one of us will have to fight an election again. Consequently I want to ask the hon. member whether he would be prepared to tell the voters of South Africa from a platform that he supports Press freedom rather than their protection. He does not have the “guts” to do so. The fact of the matter is simply that this Bill does not involve a muzzling of the Press, but fundamentally the safeguarding of the people of South Africa.

Mr. Speaker, we have come to the end of a debate that has taken up a great deal of the time of this House. It has been a very interesting debate in which certain clear standpoints have been identified by hon. members on this side of the House as well as by hon. members of the official Opposition. I thank my hon. colleagues for their support of the Third Reading as well. I also thank hon. members of the other parties for their contributions.

As far as the official Opposition is concerned, I shall deal with the speeches made by the hon. member for Musgrave and that of the hon. member for Houghton. The hon. member for Houghton as well as the hon. member for Sea Point have offered their apologies for their absence. Although the hon. member for Green Point offered his apology, I am unfortunately unable to omit to reply to his standpoints. I do not think the hon. member for Musgrave will take it amiss of me. If he wishes, the hon. member for Green Point can simply react further to my reply at a later stage in another debate, here or in public.

That hon. member said a few things this evening which I cannot simply allow to go unanswered. In the first instance he took it amiss of me for referring to him rather cynically the other day in this House as “the hon. member for Elsies River”.

Hear, hear!

The hon. member knows very well why I called him that. He said here this evening that it was his duty and right to convey to me what he observed as a member of Parliament. Of course that is true. He has that right. He did in fact convey some of his observations to me, but he knows that he did not convey all his observations to me. Why did the hon. member not tell me in the discussion which he and the hon. members for Musgrave and Houghton held with me in my office that he had seen one of the constables lose his revolver, that he knew where it was and that he would help to find it? I was not told that. The hon. member knew about it, but why did he not tell me that if it is his duty to furnish me with information? Mr. Speaker, several days after that, on 6 June 1980, he put the following question to me in Parliament—

1. (1) Whether the police found any firearms or other equipment to be missing during or just after the action taken against demonstrators in Elsies River on 29 May 1980; if so, what fire-arms or equipment;
2. (2) what steps have been taken to recover the fire-arms or equipment?

Why did the hon. member not put his cards on the table? He can reply to me later, if he wishes. This is not the way to report something to me if he considers it to be his duty as a Member of Parliament to report such things to me. I appreciate his coming to see me, and I told him so. Furthermore I conveyed some of the information he gave me to the head of my department. But surely this is a very serious matter. If one is aware of the fact that a policeman has lost his fire-arm, surely one must report it. Under what circumstances did he lose it? He lost it when he had to pursue law-breakers under the most difficult circumstances, over fences, and so on. Afterwards he discovered that he had lost his revolver and then the hon. member came and put questions to me about it in this House. Surely this is not the conduct of an MP who does his duty.

Expel him from the caucus.

There hon. members have the answer. The hon. member also said that the police were supposed to be disciplined people and he could see no reason why the police could not keep a secret. He could not see why they could not keep it to themselves that a person had been arrested. Consequently he saw no reason why there had to be legislation to protect the police in this respect, for they could protect themselves by keeping the arrest a secret. Surely I have already told the hon. member that people are not necessarily arrested in secret. Often people are arrested in a busy street or among a group of people. Often they are arrested in the presence of other people in a hall or at the scene of the incident. Consequently it is not a secret. Often they are even arrested in the presence of Pressmen. So there is no question of the police being able to keep it a secret among themselves. The hon. member also said that he could not see the need for the legislation since the police and the Defence Force had managed without the legislation for years. He asked why the legislation had to be introduced at this stage.

The hon. member is a lawyer and knows that section 118 of the Defence Act has already been discussed in this House and also that section 118 of the Defence Act provides that certain information may not be published without permission. These are the same fundamental powers that are now being requested for the police. However, the hon. member came forward and said very sanctimoniously that the Defence Force and the police had managed without it all these years. What really hurts one a little is that the hon. member referred so naïvely, arrogantly, reproachfully and sarcastically to the fact that the hon. the Minister of Defence did on occasion deem it necessary to make certain information on our weapons public. He was sarcastic about that. He suggested that we used the announcement of the fact that we had perfected the Russian Stalin organ for party-political purposes. He said that if we announced to the world that we had a better cannon than was to be found in the rest of the world we were doing so for party-political purposes. We must therefore not feel proud about it. This is the attitude the hon. member has adopted to State security matters in South Africa on behalf of his party.

Finally, the hon. member said something which really takes the cake. He was saved by the bells for the suspension of business when I wanted to put a question to him about it. He was comparing our position with that of Mr. Ian Smith during the last few years of his rule in Rhodesia when he deemed it necessary to introduce stringent legislation. Just when the hon. member wanted to go further and I rose to ask him a question in this regard, he was saved by the bell. He can reply to this on another occasion. The hon. member did tell me that he could not be present this evening, but I hope he accepts that I have every right to reply to the points raised by him in this debate.

The hon. member for Musgrave repeated a few matters which he had already raised during the Second Reading and which were to a large extent repeated during the Committee Stage. Naturally I do not want to go into all the arguments again.

Why is he now seated in that seat?

That is simply the path which is followed when he is on his way out. From that seat the next step is out of the party. [Interjections.]

That is the suicide seat. [Interjections.]

However, the hon. member said a few things I wish to react to. Unfortunately I did not take comprehensive notes, but what it amounts to is that there is no support whatsoever on the part of the Press for the principle involved here. I am not going to make a long debate of this by quoting to the hon. member from leading articles in English- and Afrikaans-language newspapers which objected strongly to this Bill. The one point I do want to single out and to which I object most strenuously, whether it comes from the official Opposition or from a newspaper editor in South Africa, is the statement that people can simply disappear off the streets without anyone knowing about it. This is an accusation which has been made during the past week still in certain leading articles. [Interjections.] During the Second Reading debate I repeatedly explained how it was no longer possible today since there were statutory provisions prohibiting this and since there were administrative provisions which prevented this from happening, provisions which were introduced by the Minister of Justice and the Minister of Police. They have been in effect for the past few years now. In practice things are being done in such a way that this type of message simply cannot be conveyed in our country any more. It can no longer be said to the rest of the world that people in South Africa simply disappear off the streets without anyone knowing where they are or what had become of them. Consequently a message of this nature can no longer be conveyed, whether it originates from the official Opposition or from a newspaper editor. We cannot afford such an absolutely false message to be conveyed. The people who keep on saying this, whether by way of publication or by way of speeches, are saying this knowing that what they are proclaiming is false. We can no longer live with that. We cannot afford that accusation being made while all of us in this House ought to know by now that it is not the position.

The hon. member tried to make one particular point. He asked how the Press was supposed to know what legislation a man was being charged under. What is important, is the fact that the procedure in accordance with which it will work in practice, as I explained it, creates a problem. The newspaper editor has information, there is a deadline at which his newspaper has to appear, and consequently he is under time pressure to publish. It is now being said that it is unfair to him to expect that he should first make a number of inquiries before being able to publish. However, in all due responsibility I want to ask the hon. member a question. Which is the most important of the two?

†Which is more important, the news editor’s deadline or the security of the State? Which is the more important of the two?

Why should there be a conflict between the two?

There is no conflict. It is not a question of a conflict.

*The fact of the matter is that the man has to ensure that his information is correct, and he has the channels for establishing that. The channels are there. All possible efforts are made, and will continue to be made, to improve the channels. That is why there is liaison committee between the police and the Press to keep open and improve the channels in terms of the agreement between the two. That is why negotiations are also taking place with the NPU in order to improve those channels. Consequently the channels are there. All the man has to do is to obtain confirmation for his information. If he is unable to obtain confirmation of his information in time for a specific edition of the newspaper, I am very sorry, but in such a case I consider the security of the State of far greater importance than a particular edition of a newspaper. It cannot simply be published in the next edition.

The hon. member for Houghton and a few hon. members raised the same argument which was raised by the hon. member for Musgrave and with my reply to that I should like to suffice as far as this debate is concerned. The hon. member for Houghton made the point that the provisions of section 21 of the Law Amendment Act are in keeping with the provisions of section 2 of the Terrorism Act. Therefore if a person is arrested in terms of section 21, the same prohibitive provision applies as is being requested in this legislation with regard to section 2 of the Terrorism Act.

†That was also the argument which was advanced by the hon. member for Musgrave.

[Inaudible.]

Furthermore, the hon. member for Houghton also asked: How has this department managed to get along without laws like this in the past?

*I should just like to tell that hon. member briefly that it is specifically because we have been experiencing such problems over recent years that I decided to come to Parliament with this legislation, because circumstances really justify it.

I now want to come back to the first matter which was broached here, viz. sections 21 and 22 of the General Law Amendment Act and sections 2 and 6 of the Terrorism Act. I just want to refer to these in general, for I do not think that this is an appropriate time to become involved in an intricate and wide-ranging legal argument here. We have security legislation, whether it be the General Law Amendment Act, the Terrorism Act, the Internal Security Act or any other Act, which contain duplicated aspects. Some of the provisions of the one Act can be brought home in just the same way within the provisions of another Act. However, I want to confine myself to these two particular Acts and say that it is true that section 21 of the General Law Amendment Act can be brought home under the wider provisions of section 21 of the Terrorism Act, but the General Law Amendment Act is the Act which is more concerned with acts of sabotage, which could, of course, include terrorism. The intention with section 2 of the Terrorism Act was specifically to widen the scope of the aspects so that there could be greater clarity with regard to the committing of terrorist acts. I readily concede that a person could in fact be arrested and detained in terms of section 22 of the Act owing to offences which are absolutely consonant with an infringement of section 2 of the other Act. This is true, but this Act states expressly that we are dealing with the Terrorism Act, that we are dealing with operations in terms of the Terrorism Act and no other Act. I specifically withdrew the reference there to section 22 of the General Law Amendment Act, in other words, this Act deals only with the Terrorism Act, only with operations in terms of the Terrorism Act. It is only in terms of these provisions that this Act will be implemented. That is why I say that this is a question of liaison between the Press and the police. The police must and will at all times ensure that the correct information is conveyed to the Press at the earliest possible date. This is a question of liaison between the Press and the police. In practice there will be liaison with regard to operations for the combating of terrorism in which the police are involved. I do not want to take the matter further at this stage, except to tell the hon. members for Musgrave and for Houghton that the Rabie Commission is, in accordance with its wide terms of reference, giving attention to all security legislation. In the nature of things, the Rabie Commission will also give attention to this legislation in accordance with its terms of reference. I am not conveying this request to the commission. This is a normal outcome of its terms of reference. If the commission comes forward with a more sophisticated procedure in its recommendations I shall welcome it. If it is possible to suggest more sophisticated practical methods in those recommendations, I shall welcome it, but owing to the urgency of the circumstances in which this country finds itself at present, there has been and there is no opportunity to refer this legislation to the Rabie Commission for consideration. I said this during the Second Reading debate and I say it here again this evening during the Third Reading debate. That is why I am in future going to try to cope with this situation in our country to the best of my ability and to the best of the police’s ability by means of this legislation as I introduced it to this House. I repeat that if the Rabie Commission recommends more sophisticated legislation and procedures, I shall welcome it. I content myself with that.

Mr. Speaker, may I ask the hon. the Minister whether he can give the House any indication of when the report of the Rabie Commission is anticipated—only a general indication?

Mr. Speaker, unfortunately I do not know that. All I do know is that the Rabie Commission is trying to finalize its work in the shortest possible time. However, when the year is drawing to a close and the Rabie Commission has not yet foreseen a fixed date early next year, it would probably not create embarrassment if I as the responsible Minister were to suggest by way of advice to the hon. the Prime Minister that an interim report in connection with certain legislation could appear. Personally I would welcome it.

That is why at this point I reiterate the basis on which this legislation is to be implemented, which I stated during the Second Reading stage and the Committee Stage. I outlined to hon. members the attitude which we were going to adopt in future. I also said why this legislation must now be passed by Parliament, i.e. due to the urgent circumstances in which we found ourselves. In the circumstances I thus have no hesitation in asking that the Bill be now read a Third Time.

Mr. Speaker, I move—

The object of this Bill is to effect a general increase in compensation payable in terms of the Occupational Diseases in Mines and Works Act, 1973. The announcement in this year’s budget speech of relief measures for social pensioners inter alia, entailed that the position of mine and works employees who suffer from occupational diseases as well as of those persons who run the risk of contracting such diseases, had to be examined. This Bill consequently makes provision for a 10% increase in all benefits with effect from 1 July 1980 and includes monthly pensions, special awards and one-sum benefits payable on 1 July 1980, or which become payable after that date.

I wish to remind hon. members that a similar adjustment to this compensation was also made with effect from 1 October last year. That means that since September last year, the compensation has been increased by more than 20%. In addition it should be borne in mind that the basic benefits as well as the additional amounts of money which are paid out in consequence of adjustments, are exempted from any form of taxation.

The maximum monthly pension of R183 which was payable up to and including 30 September last year, will amount to R223 with effect from 1 July this year, and last year’s one-sum benefit of R13 200 for a first-degree certification, is now being increased to R15 972. Persons who, after 1 July 1980, are found to be suffering from a compensatable disease in the second degree will, against this background, receive a one-sum benefit of R23 958 instead of the amount of R19 800 that was payable up to and including 30 September 1979.

The further increase of benefits by 10% is within the means of the State Account from which special awards and pensions are paid, and it is also within the means of the accounts of mines and works owners from which one-sum benefits are allotted.

Mr. Speaker, it is provided in terms of the Occupational Diseases in Mines and Works Act that benefits payable to beneficiaries in terms of the Act shall in fact be provided for on what one might describe as a suspended basis. In other words, the benefits and awards are provided by statute to be payable at such a time as the beneficiaries will qualify. This means that, unlike some other salary improvements, or social benefits, the provision has to be made by statute from time to time and it can be increased as time goes by as the value of the award to beneficiaries becomes eroded by inflation.

We believe that as long as this method of administering awards and benefits in terms of the Occupational Diseases in Mines and Works Act is applicable, this is the only sensible way to do this. We certainly have no objection to the fact that the additions, increments and improvements brought about by this amending Bill should in fact be implemented, because this does no more than to bring these awards into line with the benefits which have accrued to other workers in terms of the various provisions which apply to them in their cases.

Without wishing to argue the case, I wish to point out that in the past we have frequently referred to the discrepancy which exists between the Occupational Diseases in Mines and Works Act provisions on the one hand and the provisions with which the Workmen’s Compensation Commissioner deals on the other, particularly in an industrial age where there is a good deal of overlapping in the kind of work done, in the kind of injuries sustained or diseases suffered in consequence of industrial accidents or industrial occupations. The time must surely be approaching when these two different approaches should be reconciled in our legislation. That, however, is not for tonight. Tonight we are only asked to approve this increment in the benefits and special awards by some 10%, which is consistent with the increments which have been awarded in other State occupations, in other similar occupations and in other industrial occupations. Therefore, we have no objection to this Bill and have pleasure in supporting it.

Mr. Speaker, I am merely rising for a few moments to avail myself of this opportunity in the first place of thanking the hon. member for Constantia sincerely for the support he has pledged for this legislation. In the second place, on behalf of this side of the House, I wish to express our sincere thanks and appreciation to the hon. the Minister of Mineral and Energy Affairs for the increase of 10% for mineworkers suffering from occupational diseases.

I made a plea during the discussion of the hon. the Minister’s Vote that we should not merely pay lip service when we discussed the mineworkers but that we should give them some tangible benefit. It now appears as though the hon. the Minister heard my plea. Consequently, without being long-winded, I wish to thank the hon. the Minister sincerely. I am very grateful that these benefits will be paid from 1 July and not from 1 October as was the case last year. This means, as the hon. the Minister was right in saying, to give only one practical example, a one-sum payment of almost R400 more for second degree certification. I think this would be a good thing if one takes into account that we have to cope with inflation and that we are dealing with these specific people; and in referring to them, I like to call them our economic soldiers in South Africa. They are people who do great work under difficult circumstances for the development and expansion of our economy in South Africa. Consequently, I wish to repeat that it is my pleasant privilege to thank the hon. the Minister sincerely.

Before resuming my seat, I wish to tell the hon. members of the PFP that this is how a speech ought to be made at this stage of the session: “Short and sweet.” I am now longing for the Free State, so those hon. members must stop talking so much now.

Mr. Speaker, naturally, we in the NRP will be supporting this measure before the House. In fact, we asked for this during the debate on the Vote of the hon. the Minister earlier this session, and we also raised it during the discussion of the Vote of his hon. predecessor last year. I think it would be amiss of us if we were not to say, a little bit like Oliver, that we feel that it could be a little bit more. Although the hon. the Minister referred to the fact that there had been a 10% increase on 1 October last year, and we are now having a further increase of 10%, what he perhaps did not mention was that we passed the legislation empowering that 10% increase in May or June of last year. So, in fact, there was quite a long time lapse before it became effective. I do not need to add that inflation in South Africa last year was of the order of 14%, so that the increase which was given in 1979, the first increase since 1977, was in fact not even keeping pace with inflation. The hon. the Minister has a slight smile on his face, so he probably agrees with my reasoning.

I have tried to establish the size of the actual fund from which these benefits are paid, and I know that in terms of section 77 of the Act, the facts are made known to the hon. the Minister, but they are not tabled and they are not available to us. In mentioning that we in these benches should like to see the increase to be of a greater order, I wonder whether the hon. the Minister could not give us some idea of the size of the fund and what its annual disbursements are. He could also perhaps give us some idea of the extent to which the fund is growing, if it is in fact growing, and I assume that it is. I ask this, because in many cases the base lines from which the monthly pensions are calculated are fairly low. As far as we are concerned, the increase could be a lot better than 10%. I think that, if we had these figures, we could look at them and assess them. It might therefore be in order that we ask him that, when attention is given to this matter in future, any increase should at least be in line with the inflation rate over the period for which the adjustment is made.

Having made those few remarks, I must say that we shall naturally support the Second Reading. We are grateful for what the pensioners will be getting, but I should like to make the earnest plea that we should in future at least tie the increase to the inflation rate over the period for which we are providing that increase.

Mr. Speaker, I should like to thank all hon. members who have participated in the discussion, for their support for the legislation. I must say, however, that I did not expect anything else, since I know that the hon. members share my concern for the plight of these people, and that they would therefore support me in an effort to improve their lot. A special word of thanks to the hon. member for Welkom, who utilized the little time at his disposal to reiterate his serious concern for the mineworkers whom he knows so well and whom he also represents here.

In connection with the few points raised by the hon. member for Constantia and Berea, I wish to state in the first place that I have already instructed that we should take an in-depth look at this legislation during the recess. I am inclined to agree that in view of the rationalization effort that is under way, it would be fruitful to consider how we, too, should adapt ourselves to a rationalized Public Service. In the second place, we in the Department of Mineral and Energy Affairs are also in the process of looking into the rationalization of our legislation. So it can be expected that we shall come to this House with fairly comprehensive legislation on these matters and possibly also on other matters. If we have the legislation ready in time, it will be introduced during next year’s session. I think many of the matters that have been raised tonight, could then be discussed in greater depth.

In connection with the strength of the fund—I do not have the figures with me at the moment—I just wish to tell the hon. member for Berea that in the process I satisfied myself as to what the fund can bear, and consequently I specifically mentioned in my Second Reading speech that the fund could cope with these increases. However, I shall also keep in mind what he said and we shall consider the matter. I think it is a matter that we could really discuss much more profitably in the discussion of my Vote next year rather than to conduct a long debate here now on something that is in reality an incidental matter.

With these few words I thank the hon. members for their support.

Question agreed to.

Bill read a Second Time.

Bill not committed.

Bill read a Third Time.

Mr. Speaker, I move—

The measure now before the House is, as hon. members will note, a very brief one, and therefore I do not want to weary hon. members unnecessarily by giving a lengthy explanation.

Of importance, however, is the Government’s initiatives that have been announced to make South Africa with its distinctive population structure a stable and safe country for all its inhabitants. In its effort to realize this ideal for all its peoples, the Government has also announced steps aimed at improving the living standards and circumstances in areas such as Soweto as quickly as possible. One need only consider the housing and electrification aspects to which intensive attention is being given at the moment. The Government has also found it necessary to take special steps to establish channels for guidance, advice and the financing of business undertakings, depending on the nature of the projects and the preparedness or capability, or otherwise, of the private sector. It has accordingly been decided to involve the IDC, the Industrial Development Corporation, for this purpose. However, at the moment the corporation can only operate in the sphere of industrial development and the measure under consideration is therefore aimed solely at enabling the IDC, too, to establish business undertakings or to assist therewith in future in areas approved by the Minister.

At the same time active attention is being given to the rationalization of State corporations, but it will be readily appreciated that finalizing this task is going to take a considerable amount of time. It is however to be expected that decisions taken in this connection will affect the nature and scope of the functions of the IDC and accordingly the measure at present before the House must be seen as a bridging measure which will quite probably disappear from the Statute Book at a later stage.

Mr. Speaker, as the hon. the Minister of Industries has pointed out, one of the objectives of this amendment Bill is to enable the IDC to help develop Black businesses in areas like Soweto. We in the PFP have absolutely no objection whatsoever to the concept of helping Black businesses. In fact, as we have pointed out, if we want Blacks to be prepared to protect the free enterprise system, we must allow them to share the fruits of that free enterprise system. Normally we would indeed welcome any measures which are taken to help with the development of Black businesses, but we have severe reservations about the vehicle which is being used to bring this about. The IDC was established in 1940 in terms of Act 22 of 1940 mainly to assist with financing new industries and for the expansion, better organization, modernization and more efficient functioning of existing industries. It was very clear that the whole idea behind the IDC was that it would be involved essentially in industrial undertakings. In fact, if one looks at its expertise and its experience, one sees that that has been in the field of industry.

This Bill considerably widens the scope of the activities of the IDC. I appreciate that the essential intention with this Bill is, as the hon. the Minister has pointed out, to help develop Black businesses in areas like Soweto, but once this Bill is passed, the powers available to the IDC will be considerably increased. It will allow it to enter into areas where it was never intended to operate. The proposed section 3bis, for example, reads in part—

These are very wide powers indeed. We in these benches are concerned at the extension of the scope and activities of public corporations and enterprises. The whole thrust of the Carlton Hotel conference was in fact to reduce the role of the State and to encourage the role of private enterprise. This very Bill seems to be moving away from that trend and also against the concept of rationalization of activities. We already have bodies in South Africa which have the necessary expertise and experience in developing Black businesses. In fact, I think hon. members of this House will accept that the development of a Black business requires skills and understanding which are considerably different from those involved in establishing normal businesses. At the moment there is, for example, the Corporation for Economic Development whose objective it is to provide financial assistance to Black businessmen, entrepreneurs and industrialists. At the moment this corporation promotes economic development in the homelands. I think it would be much more logical to allow this organization, which has this experience and expertise, to help develop Black businesses in the Black urban areas of South Africa. We in these benches believe that this would be much better than increasing the scope and the activities of the IDC. Already concern has been expressed in South Africa about the role of public corporations, and if one looks at the Statistical Economic Review for 1980-’81 and one looks at gross domestic fixed investment, one sees that between 1969 and 1979 the gross domestic fixed investment by the private sector increased by only 24,8%. However, during the same period the gross domestic fixed investment by public corporations increased by 359%. Admittedly the base was lower, because the amount for public corporations was R286 million in 1969.

There is another point which arises also and that is that with the present shortage of skilled labour in South Africa, it is essential that we should try to eliminate as much duplication as possible. We have a shortage of people in the highly specialized areas and therefore we believe that we should use what we have in organizations like the CED to help develop the Black areas rather than create a new team in an organization which was not established for this particular purpose. I therefore move as an amendment—

Mr. Speaker, I find it tragic that the hon. member for Edenvale deems it necessary to move an amendment here which, basically, will only result in a discussion, if one really wants to go into the merits of the matter, of the functions of the EDC as against those of the IDC, so as to pay attention to this essential aspect.

The arguments which the hon. member advanced in motivating his amendment are, first of all, that the IDC is involved in the industrial field whereas we have here a development which allows it to enter the field of business and service undertakings as well. Ever since 1962 the IDC has had a division for small industries which, as regards managerial techniques, etc., very closely resembles the idea of the small business undertaking. Since 1962, assistance to the value of R20,7 million has been furnished to 502 small industrial undertakings, and more than 200 factories to the value of more than R12 million have already been established in decentralized areas. I consider it a logical development to allow the IDC to do this work. As a result of the Bill at present before the House, the activities of the IDC are being augmented by another branch within its area of jurisdiction, viz. the power to acquire, establish or carry on any business or financial undertaking, to provide capital, in whatever form, and—most important, in my opinion—to furnish expert advice, information, and guidance. I consider it a good thing that the IDC, in particular, is being used to provide this service which at this stage is extremely important and indeed essential, as the hon. member for Edenvale said.

In a paper at a seminar arranged by the Johannesburgse Afrikaanse Sakekamer on 1 May this year, Mr. J. J. de Bruin, senior manager of the IDC said, inter alia, that the experience of the IDC indicates that the small industrialist, the one man concern, has no problems with management but that next to entrepreneurship, management is probably the most important element for growth. He also said that the greatest management problem was to be found in the very fact that the growing industry has to switch over from the management set-up of the one man concern to a functional management set-up, or from a functional management set-up to a conglomerate where people are so much concerned with expansion that in fact they cannot keep pace with the demands of management. This Bill also makes specific provision for special attention to be given to this matter, too. Since they have the background and experience in this specific field, I do not feel that this amendment can be supported.

The hon. member pointed out that the IDC will be 40 years old this year. In fact, 1 October is its anniversary. It is interesting, too, to note that it has only received share capital amounting to R27 million from the State. The last time money was received was in 1954, but with this amount it has to date provided financing to the extent of R726 million, which in my opinion is indeed an achievement. When the activities of the IDC are expanded by this legislation, I hope the IDC will continue with its good work in the areas which the hon. the Minister will designate. I am glad that he explicitly referred to Soweto, because that is an urgent priority. I hope the hon. the Minister will have the opportunity to designate this area as soon as possible and that we shall then wait to see what results from the De Waal report regarding the rationalization of the corporation, when the report becomes available. I take pleasure in supporting this legislation.

Mr. Speaker, I rise to tell the hon. House that we shall be supporting this measure.

Very loyal of you.

The hon. member for Bryanston says it is very loyal of us. I find it rather strange that the official Opposition should be opposing this measure. I have only been in this House since 1974, but I believe that for many years in the past the Opposition has appealed to the Government to allow the IDC to become involved in certain areas where it could assist Blacks. This Bill now provides for the IDC to assist Black entrepreneurs in places like Soweto, where there is a great need, a tremendous need, to project those people into the free enterprise economy. So I cannot understand the hon. member for Edenvale saying that this is going to compete with the private sector because the IDC is going to be geared to assist Black entrepreneurs to set up their businesses and become involved in the private sector. Surely this is what we all would like to see happen.

There is one question I should like to put to the hon. the Minister, and I hope he will answer it. Does he envisage that once the IDC has these powers, it will be able to assist Blacks in areas other than areas such as Soweto. For instance, there has been much Press publicity of late about the Johannesburg central business district being opened to all races. Does the hon. the Minister envisage the IDC assisting Black entrepreneurs in various business enterprises within, let us say, the Johannesburg central business district?

I do not believe I can agree with the hon. member for Edenvale when he says that this is going to result in a duplication of effort and personnel. After all, if a job has to be done, someone has to do it, no matter whether he is employed by the IDC or the EDC. What is at issue here is whether the Economic Development Corporation or the Industrial Development Corporation should do it. I cannot see why there should be an argument in this regard.

The one is industrial and the other is commercial.

The hon. member for Orange Grove says one is industrial and one is commercial. However, I believe the Economic Development Corporation has had a tremendous amount of experience in working in the homelands, whereas the IDC has had even more experience in areas which are not homelands. I therefore think they are very well equipped to assist in this regard.

There is one other question I should like to put to the hon. the Minister which I should like him to consider for a moment. The proposed section 3bis. provides that “the corporation may in any area designated for that purpose by the Minister, establish or acquire and carry on any business or financial undertaking”. I should like to ask the hon. the Minister whether or not he thinks it is a good idea that the Minister should have the power to designate an area in which the IDC can become active. Would it not be better rather, to have the State President designate a particular area which means it would be a cabinet decision? I ask this question because I believe that there should be co-ordinated planning within the Government Service as a whole, and I do believe that it should be more than just one Minister who should consider whether or not the IDC should move into a particular area. I just put this thought to the hon. the Minister. Having said that, I repeat that we will support this measure.

Mr. Speaker, the hon. member for Randburg regards our amendment as being tragic. Tragic indeed, I think, it would be if we did not take steps while there was time to check the creeping socialism which in fact is and has been evident in the case of our State corporations. To say this is not to decry the valuable role which the State corporations have played in South Africa in many fields. However, it became necessary some years ago to draw attention to the fact that South Africa was allowing the role of State corporations to become disproportionate in relation to the extent of private enterprise participation in the growth of South Africa. This was not an idle precept. It was in fact one which caused so much concern that it called forth, amongst other things, an appeal by Dr. Wassenaar in a book called Assault on Private Enterprise for people to take stock of what was happening and to check the steady growth of creeping socialism, as he described it in his book. He compared it with the situation, the kind of paralysis, that has crept up on the British economy and has to a large extent taken the spark plug out of private enterprise in Britain. It is perfectly possible and reasonable to say in South Africa that, while paying due tribute to the Industrial Development Corporation and other State corporations for the important role they have played in the development of the South African economy, nevertheless the time has come for us to ensure that a balance is maintained between private enterprise and its role in the economy on the one hand and the dual role of State corporations on the other hand.

We have before us this evening a Bill which extends the role of the IDC. The IDC is believed by many economic observers to be proceeding beyond the borders of its original charter and to be extending its activities beyond the original industrial intention. There is no question that the time is approaching when firm boundaries should be drawn as regards the legitimate field of activity of the IDC and the threatening encroachment by the IDC which has even extended to buying shares and participating in private enterprise.

The hon. member for Randburg will know that there was justifiable cause for concern, and that it was one of the reasons for this book. The hon. member for Amanzimtoti goes even further. He says that the Industrial Development Corporation has more skill in urban enterprises or urban industries and less skill in the Black States. In this connection I should like to quote to him from this book—

I am not saying these things are bad in themselves, but they do illustrate the steady growth and the steady encroachment by the IDC in a whole series of fields, including the Black homelands, and into a whole lot of activities which are not truly industrial, but which move into the business sphere.

We all agree that, in South Africa, it is of vital importance to inculcate in the minds of the growing Black bourgeoisie a respect for private enterprise, an interest in participation in private enterprise, confidence in private enterprise as against socialism, for the conduct of economic growth in South Africa.

This book states that the IDC was created and given a charter to deal with the industrial growth, the renewal of industry and the greater efficiency of industry in South Africa, but not at any stage was it intended that the IDC should in fact participate in business and service enterprises. It certainly did so in the Black homelands, and that was a cause of criticism. What are we doing this evening? We are legitimizing the growth and the penetration of the IDC into business and service operations. It may well be that if the IDC were the only available instrument, that we could take the risk of altering the fundamental charter of the IDC to conduct these further operations. Is it, however, the only enterprise? Are there not private enterprises such as—in the case of a community like Soweto—banks, insurance companies, investment institutions, foundations etc., which could provide the kind of activity in respect of small businesses and of management training, all of which were referred to by the hon. member for Amanzimtoti? Of course, these things are necessary. Do they have to be taught by the IDC? Why is the IDC to be the chosen instrument?

We believe that there are other organizations which are associated with private enterprise, organizations which, we believe, are essential in the further growth of the Black community in its economic aspirations. If we are going to teach private enterprise as the means to an end, do we need to use State corporations to teach this lesson to the emerging Black business section?

Quote one example, please.

Why do we not use private enterprise to demonstrate the ability of private enterprise to produce the dynamics which are needed in a new economic growth situation?

Why did they not do that in industry?

The IDC certainly played its role in industry. Private enterprise has also played its role in industry. What we have to consider this evening is whether it is right that in introducing a growth factor, the spark plug of the Black economy, we should introduce them more and more into a close association with private enterprise as it is practised in South Africa or whether we are going to employ the State corporations, which, I think, have largely played their role in South Africa and are not, in my view, the ideal teachers, and certainly not the kind of organization which, at this late stage, should have their charter expanded to include business and service operations.

I think that we agree with the intent behind this Bill; we wish to see these skills taught. We also wish to see the financial and technical aid given. There is no difference between us on this issue. Where we hesitate very much, and this is also the grounds of our amendment, is that we do not believe that it is now the time for State corporations to be used to teach the new Black economic communities the skills which are needed for their own economy. We believe that an imbalance already exists in the economy of South Africa in that the State corporations have proceeded too far and have taken too large a slice of the economy, and we believe that as far as the new Black economic communities are concerned, that there are major political and economic reasons why they should be brought into closer association with the free enterprise system. When we talk economics, when we talk politics and when we talk about the growth of the Black people in our society and the role they must play, everybody pays lip service to the importance of bringing them into closer relationship, into closer friendship if you like, with private enterprise. Yet here we have the opportunity, but we do not do it.

I support the amendment proposed by the hon. member for Edenvale.

Mr. Speaker, one pities the Opposition when they are unable to see when that which they have been calling for all these years has now become necessary within a short space of time so as to achieve what we have been telling them all these years is the best: In other words they are utterly short-sighted. They did not listen carefully to my Second Reading speech either, when I said clearly that this measure was intended as a temporary measure at a time when our rationalization was to unite all the various corporations, even those of different States and different peoples—exactly what the hon. member for Constantia asked for. Some corporations have had 10 years and more to fulfil their functions in such a way that they could achieve success, but they have not succeeded in doing so. In our diagnosis of the economy, we have come to the conclusion that the time has come for the one corporation which has really come of age, which really has the human infrastructure, which really has the expertise, the finance and the ability to furnish guidance, to be harnessed to assist the others in pulling together as one team.

†I must tell the hon. member for Edenvale that although the main task of the IDC was initially and up until now the promotion of industries, and although at the meeting of 22 November it was felt and brought out very clearly that there was going to be co-operation between the private sector and the Government as such, this measure does not in any way take away anything from what was said at that time. It is just one way of reaching the ultimate goal.

The wrong way.

This is also encouraging private enterprise, but what kind of private enterprise? We are encouraging private enterprise in those parts of the cities where the Black people five and where they have been waiting for years and years for corporations, banks or other financial institutions to come and aid them.

It does not say anything about that in the Bill.

Where there is a dire need we have at last decided that the IDC is the only corporation with the expertise to get all the other corporations together in order to forge a link between them, but in the meantime it should at least be given the right to broaden its activities where there is a dire need for business undertakings, but not for industrial undertakings. That is the case in the Black areas, especially in Soweto. As hon. members know, the Government, with the initiatives it has been taking since last year, has to get some of these undertakings off the ground, and the IDC is the ideal corporation for doing that. That is why I am putting forward what is really a temporary measure, for a year, 13 or 14 months. It might take a longer or a shorter time until we have rationalized the various corporations and until we come to a conclusion about that and round it off. Then we can, of course, take another course. We could decide that the IDC has another duty and other functions. The IDC itself realizes that it has come to a period in its financial development where it should now perhaps be the father of all corporations and help other corporations to co-ordinate their activities and get a more equitable distribution of the industries and business undertakings in South Africa. That is what I meant when I said that this actually was a measure which, in a year or two, we may be on the Statute Book any longer.

*I believe the hon. member for Randburg is quite correct when he says that one should adopt a positive approach towards development. It is a fact, although these hon. members did not realize it, that the small business undertaking has been supported for years. It is virtually impossible to distinguish between the small business undertaking and the industrial enterprise. The IDC has been doing it for years.

The hon. member for Amanzimtoti has requested that the State President should rather have the say.

†But he knows that the State President, as a nominal head, is advised by his Cabinet Ministers. They decide what to advise him.

That is exactly what we mean.

They decide on that. This measure was decided on by the whole Cabinet. Therefore it would be ill-advised of me to just issue permits left and right for people to open business undertakings in all these areas.

*I can vouch for it that the idea behind this is an honest one. For that reason I do not consider the hon. member’s amendment appropriate. It is paradoxical. The hon. member would also like to help the Black people to get their business undertakings off the ground, particularly in the Soweto area. Where are the private bodies? Where are the IDC and all the others which should have helped them in the past year? The hon. member wants to assist them to get off the ground. If the hon. member wants to help them to get off the ground, he should support this legislation. Once this legislation is in force, and the rationalization of the State corporations is completed, we shall have a new dispensation in which these things will progress in a natural way.

†There is a real necessity here. The hon. members have my assurance that my commission is not going to extend it all over. It is meant only for those areas, for instance Soweto, in which we have a great need for the development of business undertakings. Soweto is actually the only area that I have in mind at the moment. Therefore the Opposition should support this Second Reading as it was supported in the Other Place. We want to go on with the good work the hon. the Prime Minister has started.

Question put: That all the words after “That” stand part of the Question.

Question declared affirmed and amendment dropped (Official Opposition dissenting).

Bill read a Second Time.

Mr. Speaker, I move—

The Companies Act, 1973, provides for a Standing Advisory Committee on Company Law. It is the function of the advisory committee, among other things, to make recommendations to the Minister from time to time in regard to the Act which appear to the committee to be advisable. Recently I re-appointed the existing members of the advisory committee for a further period of three years and I should like to avail myself of this opportunity to thank the advisory committee for the valuable work it has done over the past six years and is still doing. The amendments to the Company Act as proposed in the Bill were recommended by the advisory committee in pursuance of representations submitted to it for consideration during 1978 and 1979.

I now want to deal with the most important principles contained in the proposed amendments to the Act. The proposed amendments refer, in the first instance, to certain company names, and in the second instance, to certain functions performed by the Companies Registration Office and, in the third instance, to the liquidation and judicial management of companies.

As far as company names are concerned, the Act provides, inter alia, that a name that is not undesirable may be registered annually as a defensive name. When, as is the case at present, application is made every year for registration of such a name as a defensive name, application must also be made in advance every year for the reservation of that name. It has been argued in representations made to the Registrar of Companies that repeated applications for the reservation of a name that is already registered, are unnecessary. It is therefore proposed to amend the Act in such a way that the registration of a name as a defensive name may be renewed from time to time for a period not exceeding one year, without its being necessary to re-apply for the reservation of the name. However, the Registrar will be empowered to order that a name, the registration of which has been renewed, be changed, should the name appear to be undesirable or calculated to cause damage.

Furthermore, the statement “Incorporated Association not for Gain” shall be included in and be subjoined to the name of certain associations. Representations have been received in which it was maintained that the Republic’s foreign trade was being adversely affected because some people abroad did not understand the meaning of the statement concerned. It is proposed to amend the Act so that the statement “Association incorporated under section 21” may be used, but it will not be required of existing companies to change their names should they prefer to use the existing statement.

As far as the functions of the Companies Registration Office are concerned, I wish to point out that in terms of existing legal provisions, the fees payable in terms of the Act when returns and forms are submitted must be reviewed from time to time. In fact, the intention is to do away with the fees at present payable when certain forms are submitted. This will mean that the reference to prescribed fees in certain sections of the Act will have to be deleted and that certain adjustments will have to be made to the provisions of the Act relating to the payment of additional fees when forms are sent in after due date.

The Act requires that every company shall have a registered office and postal address in the Republic and that the Registrar shall be notified of the situation of the registered office and of the postal address, as well as of any change in such situation or such address. The situation at present is that in the case of a change, notice has to be given before the change takes place. The advisory committee found that the existing provisions relating to the registered office of a company were being used by certain companies with the object of prejudicing their creditors, and accordingly recommended that the Act be amended to provide that at least 21 days’ notice of a change be given and that a change in the situation of a registered office or of the postal address of a company should not take effect unless due notice of the change has been given to the Registrar and he has recorded the particulars thereof. I want to stress that the disclosure of this information that is prescribed by the Act relating to a company performs an important role in protecting real and prospective shareholders as well as creditors of a company. However, it appears that despite repeated reminders, some companies are very lax in submitting the prescribed returns and documents to the Registrar. The matter was considered by the advisory committee and the chairman of the committee also discussed the matter with the Attorney-General of the Transvaal. As a result of those discussions the advisory committee recommended that the provisions of the Act in terms of which the Registrar or a member or creditor of a company that is in default in submitting the return or document to the Registrar may apply to the Supreme Court for an order directing the company or any officer thereof to submit the relevant document, be amended as set out in the amending Bill.

However, further objections to the clause as it stands have been received. Accordingly the matter is being referred back to the advisory committee and I have already moved an amendment in the Other Place to delete clause 7.

†I now turn to certain proposed amendments to the Act affecting the winding-up and judicial management of companies. By virtue of the existing definition of “Master” in the Act, a Master of the Supreme Court only has jurisdiction in respect of a particular company if the registered office of that company is situated in the area of jurisdiction of that Master. However, a court has jurisdiction in respect of a company if either its registered office or its main place of business is situated in the area of jurisdiction of the court. It appears from representations submitted to the advisory committee for consideration that proceedings in the courts are hampered when the Master having jurisdiction in the area of jurisdiction of the court is not the Master having jurisdiction in respect of the company. In order to remove this difficulty, it is proposed in this Bill that the Act be amended so that the Master having jurisdiction in the area of jurisdiction of the court in which the application in terms of the Act is brought, shall have jurisdiction in respect of the company cited in the application.

The liquidators of companies allege that they often have difficulty in communicating with persons who prior to or at the commencement of the winding-up of a company were directors or officers of the company. Any insolvent whose estate is being sequestrated is required by law to keep his trustee posted with his current address. The advisory committee has considered the representations by the liquidators and recommends that the Act be amended appropriately in order to impose on persons who were directors or officers of a company prior to or at the commencement of its winding-up, an obligation relating to their current address similar to the obligation in that connection which applies in respect of insolvents. <

The proposed amendment among other things make provision that, if it is found that a director or an officer of a company being wound up has in fact changed his address but has failed to notify the liquidator of the company of such change, the director or officer will, in order to escape a conviction upon a prosecution, be compelled to justify his default. The advisory committee stressed that, if this is not to be the case, the proposed provision would be ineffective.

Under the existing provisions of the Act, the provincial liquidator of a company may, under certain circumstances with the permission of the Master concerned, terminate a lease under which the company is the lessee. The liquidator of a company may do so only with permission of the creditors of the company. It is recommended by the advisory committee that the Act be amended in order to allow the liquidator of a company to terminate such a lease with the permission of the Master concerned at any time prior to the holding of the meeting at which the liquidator is able to obtain instructions from the creditors of the company. Moreover, the liquidator of a company may, if he is of the opinion that the assets of the company should be sold and is unable to obtain the formal permission of the creditors of the company for that purpose, apply to the court for such permission. The advisory committee has found that an abundance of these applications is a source of annoyance to the court and recommends that the Act be amended to empower the Master to grant such permission prior to the holding of the meeting at which the liquidator is able to obtain instructions from the creditors of the company.

As to the judicial management of a company, the Act among other things provides that, when an order for the provisional or final judicial management of a company is granted by a court, the order shall contain directions as to the rate of remuneration of the provisional judicial manager or the judicial manager, as the case may be. In practice, it is very difficult for any court to fix the remuneration of a judicial manager at the time of the hearing of the application. Usually the court orders that the remuneration of the judicial manager shall be fixed by the Master concerned. The advisory committee who has considered representations by judicial managers in respect of the matter, recommends that the Act be amended to empower the Master in all cases from time to time to fix the remuneration of provisional judicial managers and judicial managers.

The creditors of the company under judicial management whose claims against the company arose before the granting of the judicial management order, may resolve that liabilities incurred by the judicial manager shall be discharged in preference to all unsecured claims against the company. It appears that in the case of the judicial management of a company such resolution is practically always taken. However, representations were received in which it was strongly urged that the Act should be amended in order to enable a provisional judicial manager to call the meeting at which such a resolution could be taken more expeditiously than presently is the case under the existing provisions of the Act. It is claimed that in the absence of such a resolution the task of the provisional judicial manager and the judicial manager is hampered considerably. The advisory committee has considered the representations and has recommended that the Act be amended to enable a provisional judicial manager or judicial manager of a company to call the relevant meeting by 10 days’ notice to every creditor whose address is known to him and by notice in one or more newspapers. Furthermore, it is proposed that, when the meeting is called by the provisional judicial manager, the claims of the creditors of the company shall, for the purposes of voting, be determined at the meeting to the reasonable satisfaction of the provisional judicial manager.

*In conclusion I wish to mention that the proposed amendments to the Act will also result in adjustments having to be made to the provisions relating to sanctions and offences.

Mr. Speaker, right at the start I should like to associate myself with the comments made by the hon. the Minister of Commerce and Consumer Affairs about the advisory committee. I think all would agree that they had a difficult task and have, in fact, done their job relatively well. We on these benches shall be supporting the Bill, and therefore I do not intend to make too many comments on it. There are, however, a few points I should like to raise.

Clause 2 of the Bill allows for the registration of a defensive name and the renewal of such a name on an annual basis. I should like to ask the hon. the Minister to have a look at this. With the passage of time, it might only be found necessary to renew the name every three or five years, because it does take time and effort for companies to renew a defensive name annually.

This brings me to clause 3(2) which states—

We on these benches would like to make it clear that our support of this legislation should in no way be seen as sanction for retroactive legislation, which in principle we are very much opposed to.

In clause 4 mention is made of the fact that the term an “Incorporated Association not for Gain” shall not be used, except in certain cases, i.e. where companies were registered before the Companies Amendment Act came into force, and that they will be referred to as an “Association incorporated under section 21”. This is not a big point, but I always thought that the term “Incorporated Association not for Gain” was, in fact, very descriptive. Amongst these organizations one often finds those which rely on public funds and those which do social welfare work, and also retirement associations. I think that when it came to fund-raising the term “Incorporated Association not for Gain” was very descriptive of the whole nature of the activities of the organization concerned.

The hon. the Minister spent a lot of time on the question of liquidation and judicial management. This is, of course, something that became relatively prevalent in South Africa from 1975 to 1978-’79, when liquidations and judicial managements were one of the few sectors of the South African economy that did, in fact, boom. One just hopes that this is, to some extent, a case of closing the stable door after the horse has bolted and that these particular provisions will not be needed quite as much in the future as they have been in past years.

With those comments, let me say that we shall be supporting the Bill.

Mr. Speaker, I thank the hon. member for Edenvale who has with positive comments supported this Bill on behalf of his party. I just wish to refer to several aspects, and I should like to do this very briefly. In the first place, I refer to clause 7 that was rejected in terms of an amendment in the Other Place. It was somewhat disconcerting to see this in the Bill in the first place. Discretionary powers were vested in the Registrar. What it amounted to was that a fine which he determined could under certain circumstances acquire the force of a sentence. What also troubled me was that I was not able to trace any record that the Registrar had ever attempted to avail himself of the procedure to acquire the necessary order in court. The provisions as they read at present could mean that creditors and members could be deprived of their right of access to the courts. Finally, Sir, I do not think that a fine should necessarily have the same effect as a court order.

The amendments in respect of clause 9 are of a positive nature and in my opinion they are also necessary. I think the provision with regard to a period of six months before the commencement of the winding-up process could impose a serious burden on any director or officer who leaves the employ of a company, and who is then in fact compelled to try to take continual cognizance of what is happening to the company, while he no longer has any interest in it. That provision would have imposed an unnecessary burden on them. According to my information, the problem of liquidators in general is that they only experience problems in respect of changes of address by persons who were directors or secretaries of the company at the time of the commencement of the winding-up process.

Clause 10 contains the new principle that the liquidator may, prior to the date of the first meeting, terminate a lease with the consent of the Master, and also that he may sell certain goods. The present procedure is regulated in terms of the provisions of section 386(5) which stipulate that a court order has to applied for every time, as a result of which attorneys and advocates made a great deal of money, and creditors had to sacrifice many of their dividends in the process. These provisions are now creating an informal procedure. Apart from the question of costs, there could also be savings in respect of rental which could otherwise have formed part of the claims, and in the form of depreciation in the case of specific goods that have to be sold.

The deletion of the word “provisional” in clause 10(a), which amends section 386(2), may appear confusing at first sight but if one were to look at the definition of “liquidator” in section 1, one would observe that it also includes a provisional liquidator.

Sir, positive amendments are being embodied in this Bill, and consequently I have pleasure in supporting it.

Where are the Progs?

They are holding a meeting at Delmas!

Mr. Speaker, as the hon. the Minister and the hon. member for Edenvale have said, the amendments which are being proposed are the result of nearly two years’ work by an advisory committee. The hon. the Minister has said that they have done a good job, and we are inclined to agree with him. There is no doubt that the amendments proposed will result in many improvements in the Act. These have been referred to at length by the hon. the Minister, and they will serve to streamline the duties of those who have to administer the Act in the future. Therefore these changes are welcome. There is no doubt that the amendments to be brought about by clauses 10 and 15 will lead to a saving of time and money on the part of those involved in the liquidating of companies. This is also to be welcomed.

I also believe that some of the improvements proposed in this legislation are going to assist the courts in some respects, and this is a good thing. For instance, there are in clause 9 provisions which will ensure the notification of changes of address of those involved in companies that are being wound up. This will now become a requirement of the Act and if those concerned do not comply, certain penalties will be brought to bear. I am sure that this will prevent many of the so-called “disappearing acts” by directors or officers of companies being wound up which causes an awful lot of problems. There is therefore no doubt that these provisions will assist the courts in this regard.

Having said these few words, I should like to tell the hon. the Minister that we on this side will support the Bill.

Mr. Speaker, it is this type of legislation that makes one realize that the standing committees appointed to go into certain matters, are doing valuable work. The standing committee that was concerned with the amendment of this legislation, has been engaged in this process for the past two years. It is for that reason that we were able to reach so much unanimity in connection with this Bill in this House tonight. It was because the amendments embodied in this legislation had been so thoroughly considered and discussed with the private sector before they were introduced here. Consequently, I wish to state that this method of preparing legislation contains two very important aspects. The first of these is the continual investigation undertaken by these committees with regard to envisaged amendments. They are thoroughly investigated and scrutinized. Moreover, continual practical experience naturally entails that amendments to legislation become necessary. These standing committees are constantly taking these things into account. On the other hand, there is the continual consultation between the standing committees on the one hand and the private sector, the legal profession, the courts and the Master of the Supreme Court on the other. I think the value of these standing committees lies in those two facets. This is something which, I believe, could also be kept in mind with regard to other legislation in future.

As far as the present legislation itself is concerned, there is such a great measure of unanimity that apart from legal men, hon. members may perhaps wonder how long it took us to reach unanimity on this. I find it gratifying that clause 7 of the Bill was negatived in the Other Place, because in that clause there were problems with regard to certain of the bodies. Furthermore, the amendment of clause 9 as effected in the Other Place, now also brings that clause into fine with the old section 363(2)(b) as well as the old section 297G of the principal Act. The effect of this is that one can no longer advance the argument—as was the case in terms of the original Bill—that uncertainty existed and that the factor of mens rea would most probably have had to be determined by a court decision before clarity could be obtained about that.

I believe the amendment is a good thing. I also believe that we now have far greater clarity on this matter. There is one clause to which I should like to refer, however, and that is clause 15. In the proposed new section 434A(2) which is to be inserted in the legislation by means of clause 15, we find the following, on page 13, in fine 28—

Personally I would have preferred that we should have used the word “may” instead of the word “shall” in that context. However, it has been explained to us why the word “shall” is absolutely essential and why it cannot be replaced by “may”. I should of course have preferred to have it otherwise, but under the circumstances I am not going to argue about this any further. However, I do find it a pity that it could not be amended in that way, since it could now of necessity entail that the Master will, on every occasion, have to institute some degree of investigation to determine in what way the person concerned has performed his functions.

I believe, however, that the legislation in the form in which we have it before us at present, is a practical one that could be to everybody’s advantage. Consequently I wish to associate myself with the previous speakers who have pledged their support for this Bill.

Mr. Speaker, there is now such profound agreement among us that what I really wish is that we should keep on agreeing with one another even longer. [Interjections.] I should like to thank the hon. members on the opposite side, as well as other hon. members, sincerely for their support of this Bill.

This is the sort of legislation that is the result of regular liaison with professional and private interest groups. In this respect, we have the standing advisory committee, which considers problems that arise, then consults with the department and with other legal men, and in due course presents its submission to us. In this way we get some of the very best examples of legislation that is actually formulated by the public itself, legislation that comes into existence in cooperation with involved, as well as with the public.

I have taken cognizance of the reservations which certain hon. members have. However, not one single hon. member feels strongly enough about his reservations to move any amendments to the legislation. So I do not believe that they really have such serious reservations. It is true that one wonders why a defensive name should from now on be renewed annually. If one realizes, then, that there is indeed a measure of discretion in the authority of the Registrar to change a name, it does appear that a person could possibly be compelled to renew that name annually. A defensive name is actually a name that is not used. It is reserved by the holder thereof so that nobody else can use that name. So there are sometimes reasons why certain decisions are made, and decisions are also made when a name becomes undesirable. He may cancel that name within a year. The question of retrospective legislation is always something that no one likes, but in this case we have to do with a decision which the Registrar made in good faith, in the conviction that the law was in order and to have new cases now of people who suffered an alleged injustice a year or two ago, would not have been in order, and consequently the legislation has been made retrospective. Companies have ascertained that by inserting the phrase “nie vir wins”— “not for gain” referring to a company incorporated as such—they encounter problems abroad. These aspects are not understood abroad. I do not know why. They do, however, understand “not for gain”. Consequently, where there is a long description that such an association or company does not operate at a profit or does not make a profit, the words “incorporated in terms of section 21” are inserted. I just wish to explain to the hon. member why some of these changes have been made.

I also wish to refer to the hon. member for Randburg, who made a positive contribution and yet who spoke mainly on sections that are no longer in the Bill. Perhaps he had prepared himself to get at me on those sections, but I saw to it that they are no longer in the Bill. So the hon. member can thank me. We have reached consensus as usual, and if there is a mistake, we rectify it, even though it may already be contained in print.

I just wish to mention by the way that somewhere in the Bill there is a spelling error that gave rise to an amendment which appears on the Order Paper. It was put down as “recommend” while it should be “recommended”. This will be rectified during the Committee Stage.

The hon. member for Amanzimtoti was in agreement with us. Actually he only dealt with improvements. Consequently there is nothing I can say to him apart from agreeing with him.

The hon. member for Vasco dealt, in particular, with the good work of the standing committees, committees one encounters to an increasing extent in the world of commerce and industries, and that are of inestimable value. Personally, I find them of even greater value than others. One needs these people to give one practical advice so that one may be able to measure that advice by academic wisdom, principles and knowledge. So, for example, we have the Trade Practices’ Advisory Committee and also this Advisory Committee as far as the companies Amendment Bill is concerned, which regularly give us advice and regularly assist us in placing sound laws on the Statute Book.

I feel that with these few words I have said enough, and I thank all the hon. members once again.

Question agreed to.

Bill read a Second Time.

Committee Stage

Clause 10:

Mr. Chairman, as the hon. the Minister has correctly said, the word “recommended” is purely a typographical error, and although the hon. member for East London North had an amendment to this effect, I shall not move it. I take it, from what the hon. the Minister said, that it is not necessary, because it is purely a printer’s error.

I have, however, another difficulty with clause 10, and I should just like to mention it to the hon. the Minister. The motivation for this clause, as outlined tonight by the hon. the Minister, and as put to him by the advisory committee, is that the liquidator of the company may, if he is of the opinion that the assets of the company should be sold, and is unable to obtain the formal permission of the creditors of the company for that purpose, apply to the court for such permission. The advisory committee has found that the abundance of the applications is a source of annoyance to the court, and recommends that the Act be amended to empower the Master to grant such permission prior to the holding of the meeting at which the liquidator is able to obtain instructions from the creditors of the company. I accept the advisory committee’s recommendation that it may be a source of annoyance to the court, but I do not think the court really gets annoyed when applications are made to it, because that really is the function of the court. I think, however, that there is another reason why this could be amended, namely that applications to the Supreme Court are expensive and often take a long time, so that there are delays. Therefore I think, for the purpose of cutting out the expense in litigation, one could support the motivation.

Normally speaking, however, the sale of assets, or part of the assets, of a company which is in liquidation, or which is being wound up, is a very important step to take. When one sells the assets of that company, it is fundamental to see to it that that sale is not to the prejudice of creditors. Therefore, normally speaking, when an application is made to the court to sanction the sale of an asset or assets of a company—and maybe its main asset—the court normally issues a rule nisi. All creditors then have an opportunity, on the return date, to object to the rule nisi or not. If they are not prejudiced, they do not object, and if they are, they object. Now we are taking away the function of the court, and the opportunity for creditors to object if they are prejudiced, because now we give the liquidator the opportunity to go to the Master. The Master can, in terms of the proposed new subsection (2A) of the Act— that is the second part of clause 10 of the Bill—grant that permission. Normally speaking, he would act in terms of section 386(1)(d)—

That is the sort of meeting we are obviating now, because before a meeting in terms of section 386(1)(d) is called, he goes directly to the Master and we cut out that meeting. That means that nowhere do creditors now have an opportunity to object, if they want to, to the sale of the assets. Firstly, I think the hon. the Minister will know from practice that the liquidator is normally appointed by the creditors who have the most votes. Therefore, the liquidator is often appointed by the main creditors. What may be in the interest of main creditors, however, is not always in the interest of all the other creditors who are minor creditors. It often is to their detriment. Therefore one has to exercise a balance. Such a liquidator, who is appointed by the main creditors who have the largest claims, may be very much under the influence of those big creditors to the detriment of the small creditors. The big creditors make the application, and the small creditors do not know about it. That is the first difficulty.

The second difficulty is that he has to apply to the Master to sell. It is not defined how he is going to sell. He may apply to the Master and say he wants to sell out of hand. That sale out of hand may prejudice the creditors as well. I think, however, that we can safeguard the position very simply. I do apologize for a late handing in of my amendment, but as a result of the rush of legislation upon us, there has been no other time. It is a very simple amendment and I am sure the hon. the Minister will have no difficulty in readily grasping the amendment. On page 11 of the Bill, in line 53, in clause 10, we have the words “… recommends to the Master in writing accordingly, stating his reasons for such recommendation.” So he is now asking for permission from the Master, recommending that the asset or assets be sold. All I want to add after that is “… after having given seven days’ notice in writing to all known creditors”. Then at least we have the opportunity …

Is that clause 10?

Yes. It is the last word of the proposed subsection (2)A, in line 53, the word “recommendation”. So the proposed subsection will read—

I propose that the following words to be added: “… after having given seven days’ notice in writing to all known creditors”. I ask the hon. the Minister please to consider that in the interests of creditors. I move my amendment accordingly—

Mr. Chairman, the hon. member’s amendment is rather unexpected. In reality it amounts to nothing more than a time limit which he wants because certain people may object; but who could object? Surely it is not the people who have a preferential right. In the proposed subsection (2)B, it is stated very clearly, after all, that in the event of a preferential right—

Therefore, as far as I am concerned, it is not necessary to insert this time limit. To my mind it does not entirely solve the problem.

Mr. Chairman, as the hon. the Minister correctly says, that is covered under the proposed subsection (2)B, whereby the creditor has the right. I am talking about the concurrent creditors who have got no credit, but whom the sale of an asset or assets may prejudice. Very often there may be creditors who are able to get together. The main asset of a company may be a certain business and they may want to get together to make a profit out of that business, instead of its being sold out of hand or by public auction. This is for the concurrent creditors, not for the preference creditors.

Mr. Chairman, I am afraid it is unpractical in a certain sense, since this is actually intended to apply to preferential creditors and sometimes a long period has to elapse before that meeting is convened. I think the amendment by the hon. member is unpractical.

†In legislation of this kind we try at least to accommodate everyone. I am not prepared to consider an amendment now, but I shall ask the advisory committee to have a look at this. The hon. member did mention this here, which is part and parcel of the whole process, namely that we should all contribute to the legislation in some sort of way.

Amendment negatived.

Clause agreed to.

House Resumed:

Bill reported without amendment.

Bill read a Third Time.

Mr. Speaker, I move—

It will be possible for hon. members to deduce from the long title of the Bill at present before the House what we are trying to achieve, but I should like to say a few words about it and explain certain aspects further.

Control of the supply of electricity in South Africa is regulated by the Electricity Control Board in terms of the provisions of the Electricity Act. The position at the moment is that for the purposes of the Electricity Act, community councils are not regarded as urban local authorities, with the result that those councils cannot supply electricity except under licence or permit issued by the Electricity Control Board. Community councils are localized authorities similar to municipal authorities, and it is regarded as impractical for the Electricity Control Board to control the supply of electricity within those areas. The same position prevails in the case of the South African Development Trust, namely that that body can only supply electricity within its trust areas in terms of permits or licences issued by the Electricity Control Board.

†In practice this means that the Electricity Control Board at present determines the tariffs for users of electricity within the area of jurisdiction of the community councils and the S.A. Development Trust. In addition to the fact that this procedure gives rise to administrative red-tape, it is regarded as undesirable that these bodies should also fall under the control of the Electricity Control Board with regard to the fixing of tariffs for electricity distributed within their own areas. I think hon. members will be in agreement with me on this score.

The measure under consideration consequently will extend the autonomy of the community councils and the S.A. Development Trust by allowing them to fix electricity tariffs for their consumers. It is accordingly proposed in the Bill that section 1 of the principal Act be amended in order to provide for the inclusion of community councils in the definition of “urban local authority”. Consequential to this amendment it will be necessary to amend section 39 in order that any reference to the “administrator of the province”, in the application of subsections (1), (2) and (3), shall be construed as a reference to the Minister as contemplated in section 1 of the Community Councils Act, 1977—in other words, the Minister of Cooperation and Development.

It follows, therefore, that the Electricity Control Board will only fix the tariffs at which the community councils and the S.A. Development Trust buy their electricity requirements from their large suppliers. In future these bodies will then be able to supply electrical power within their own areas at tariffs fixed by themselves.

*What is more, inter alia, no department of State or the South African Development Trust may generate and supply electricity in terms of section 23 of the Electricity Act except on the authority of a licence or a permit, if the quantity of electricity to be supplied in this way exceeds one gigawatt hour per annum. Because of the increasing number of undertakings in Trust areas that exceed this statutory limit—at the moment there are over a hundred—and the resultant increase in the number of applications for and the taking out of licences or permits, together with the handling of applications for tariffs to be adjusted accordingly, a considerable administrative burden has been placed on both the Department of Cooperation and Development and the Electricity Control Board whereas, from a practical point of view this is in fact not necessary.

It is therefore considered desirable to deal with this situation by amending section 23 of the Electricity Act so that the Departments of State and the Development Trust will be relieved of the obligation to take out licences or permits in terms of the Electricity Act if they receive the power from an authorized electricity supplier for use in the areas referred to in Act 38 of 1927 or the areas of the Development Trust. However, the proviso remains in force in respect of any other case.

Mr. Speaker, I trust that hon. members will support me in passing this measure which has become necessary due to changed circumstances and in the interests of more effective administration.

Mr. Speaker, we readily accept that this measure is indeed necessary in view of the changed circumstances. One realizes that the local management boards have new obligations, that they are modernizing their areas and that it will be as well to make the whole set-up more streamlined, particularly with regard to the accumulation of applications for licences to distribute electricity, to which the hon. the Minister also referred. However I should just like to hear from the hon. the Minister whether the Electricity Control Board is fully satisfied. As far as I can deduce, the Electricity Control Board has played a key role in the control of the supply of electricity, to avoid overlapping or conflict, and in general to ensure that electricity is supplied in accordance with a generally accepted system. If it was necessary in the past to issue licences for the distribution of electricity, it is somewhat strange that it is now no longer necessary to do so. Whereas in the past one wondered why specifically the Electricity Control Board had to be requested to issue licences in every case and why it had that duty of control, I should like to know how circumstances have changed to cause this supervisory task to be taken away from the Electricity Control Board at this point. Apart from this request for an explanation, we support the legislation. We see it as a general improvement, but nevertheless I should be grateful if the hon. the Minister were to clear up this point I have raised.

Mr. Speaker, I want to thank the hon. member for Constantia for his support for the legislation. The hon. member put a question to the hon. the Minister in connection with the control, and I am sure the hon. Minister will furnish him with an appropriate answer.

The hon. member for Wonderboom would have liked to take part in this debate, but he is in his constituency this evening and it is therefore my privilege to support this legislation on behalf of this side of the House. In his Second Reading speech the hon. the Minister explained the legislation fully, and I just want to say briefly that as I see it, the supply of electricity to all the cities, towns and residential areas is at present the responsibility of the White local authorities and statutory bodies. Through the implementation of this legislation, the distribution of electricity to cities, towns and residential areas of other population groups can now be controlled by, for example, the community councils, the S.A. Development Trust and departments of State on the same basis as in the case of a local authority. Therefore, as I see it, in the first place, they can purchase electricity in large quantities, secondly, they can distribute electricity themselves, for example by developing and constructing networks and negotiating contracts in this connection, and thirdly, even by generating power themselves, subject to certain restrictions as stipulated in the Bill and as announced by the hon. the Minister, and in the fourth place they can even determine tariffs. This responsibility and right that they are obtaining, in my opinion imposes a major obligation on this institution to afford definite co-operation and to do something positive in regard to the training of artisans in this connection, particularly when it is recognized that the maintenance of such networks at this stage can be and ought to be entirely their responsibility. I think that this is an aspect which cannot be sufficiently stressed. I should like to support this legislation.

Mr. Speaker, I rise to tell the hon. the Minister that we in these benches will be supporting this Bill. I do not know whether many people realize that this is the second Bill before the House that is going to make quite a big change to the lives of the people living in Soweto. The first was the one we discussed earlier on involving the IDC, and now we have one that is going to define Community Councils such as that of Soweto, in the same manner as a White urban local authority.

We must speed up things.

The hon. the Minister says we must speed up things. I am very pleased to hear him say that … [Interjections] … because they have been dragging their feet and their thought processes for too long now.

They have been thinking too slowly.

Not me.

This legislation will not only enable the people of Soweto to have electricity, which is going to change their whole life-style in Soweto, but it will also give them some say in how the electricity affairs should be administered, e.g. the setting of tariffs, etc. We in these benches believe that this is long overdue. It is very welcome, and we therefore take great pleasure in supporting it.

Mr. Speaker, I thank the hon. members for supporting this Bill. The hon. member for Constantia has certain misgivings concerning the general system, planning, etc. I spoke to my particularly competent colleague, the Minister in charge of energy affairs, a week ago and he is still dealing with legislation but at this stage the issuing of licences is still exactly as it was. Control is still in the hands of the Electricity Control Board as it was in the past. Things may change in future, but that is not the situation at the moment.

The hon. member for Klerksdorp once again emphasized some important aspects of this energy sector in South Africa, which we cannot value too highly, because it supplies 22% of our electricity requirements in South Africa today.

I also thank the hon. member for Amanzimtoti for the support he has given the Bill in such a particularly economical way.

Question agreed to.

Bill read a Second Time.

Committee Stage

Clause 2:

Mr. Chairman, the only reason why I have asked that we have a Committee Stage is that the hon. the Minister failed to give me a reply to a perfectly straightforward question during the Second Reading debate. Clause 2(b) provides for the insertion of subsection (3A) in section 23 of the principal Act. The proposed subsection (3A) provides that if any Department of State or the South African Development Trust supplies electricity to any person, to other persons within the areas contemplated in section 25(1) of the Black Administration Act, 1927, or section 21(1) of the Development Trust and Land Act, 1936, it shall be exempt from the provisions of subsection (1). Provision is made in the principal Act that persons who acquire electricity for re-distribution shall do so under license if the amount of electricity so redistributed exceeds a certain amount. In terms of the proposed new section 23(3A) an exemption is allowed in the case of certain authorities, including the South African Development Trust or any Department of State when it supplies electricity to these Black areas. My question is a simple one. Since the exemption applies in the case of these authorities, but not in other cases, and since the justification for insisting on licenses in the other cases has always been that the Electricity Control Board should oversee and co-ordinate the general supply of electricity, the question is why in this particular case that supervising and co-ordinating activity is no longer necessary and whether the Electricity Control Board is satisfied that in this particular case the conditions differ in such a way that the overseeing and coordinating function is no longer necessary. We are not opposed to what is contemplated in the Bill, but there appears to be a certain inconsistency, and we ask for no more than a clear explanation of why this should be so.

Mr. Chairman, in cases such as these we are really concerned with Community Councils, which are in fact local authorities. In other cases the Electricity Control Board allows these authorities to perform certain distributional functions. They are entrusted with responsibilities and it is accepted that these people will carry out those responsibilities satisfactorily. This is accepted in respect of Community Councils, in respect of the South African Development Trust and in respect of certain departments of State. If the Council accepts this, I have to accept that they are satisfied that there are safeguards in respect of the further distribution of electricity. They are satisfied in the cases mentioned here, but not in other cases.

Mr. Chairman, my question is, in fact, why they are satisfied. I cannot see the difference, because in the first instance we are dealing with a department of State, or with the South African Railways and Harbours Administration which provides other bodies with electricity and which needs a licence for doing this when more than a certain amount of electricity is supplied. But now we come to the case envisaged in the proposed subsection (3A). In this case a licence is dispersed with. All I am asking, is what the difference is and how a department of State could be compelled in the one instance to have a licence for the distribution of electricity while in the other instance this is not necessary. I accept what the hon. the Minister says, viz. that the latter have competent people who will see to it that it is done correctly, but surely in the first case it may also happen that there are competent people to supervise. I cannot exactly see what the difference is. I am actually seeking information rather than raising an objection.

Mr. Chairman, the reply actually remains the same. The request, as embodied in the Bill, is one which emanated from the Electricity Control Board with the object of bringing about a decrease in their work. Moreover, it is a limited request, limited to these bodies, and they are satisfied that they will be able to perform the test in a satisfactory way.

Clause agreed to.

House Resumed:

Bill reported without amendment.

Bill read a Third Time.