Mr. Speaker, I thank you for the opportunity you are affording me to state a point of personal explanation.

It is with regret that I took cognizance of the interpretations which have been attached to certain words which I used during the Second Reading of the Republic of South Africa Constitution Fifth Amendment Bill.

It was not my intention to offend anyone. That has, in fact, never been the pattern of my life. Therefore, in the best tradition of Parliament, I should like to withdraw unconditionally the words which I used and to which exception has been taken.

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

1. (1) On page 5, in line 17, to omit “determined by the lessor” and to substitute:
   agreed between the lessor and the lessee
2. (2) on page 11, after line 9, to insert:
   (g) any legal costs due to an attorney in respect of professional services rendered;
3. (3) on page 11, in line 33, after “lease” to insert:
   , but does not include an attorney who acts solely in a professional capacity
4. (4) on page 13, in lines 55 to 58, and on page 15, in lines 1 to 5, to omit paragraph (c);
5. (5) on page 15, in line 56, after “bond” to insert:
   and the eventual cancellation of such mortgage bond
6. (6) on page 15, in line 58, after “fees” to insert:
   and any amounts due in respect of any sectional title scheme
7. (7) on page 17, in line 15, after “fire” to insert:
   , riot, civil disturbance, earthquake and loss of income
8. (8) on page 17, in line 39, after “fire” to insert:
   , riot, civil disturbance, earthquake and loss of income
9. (9) on page 17, after line 48, to insert:
   (ee) the costs actually paid or to be paid by the moneylender in respect of the preparation of any necessary contracts and the registration of transfer of any immovable property
10. (10) on page 17, after line 48, to insert:
    (ff) amounts expended in respect of fiscal charges, stamp and transfer duties;
11. (11) on page 17, in line 55, to omit “reasonable”;
12. (12) on page 19, in line 34, after “fire” to insert:
    , riot, civil disturbance, earthquake and loss of income
13. (13) on page 21, in fine 23, after “duties” to insert:
    and other amounts due to the fiscus
14. (14) on page 21, in line 51, after “fire” to insert:
    , riot, civil disturbance, earthquake and loss of income

The clause with which we are dealing now is perhaps the most important one of the whole Bill because it introduces a whole series of new definitions. It is those definitions which form the basis for the real changes which are being effected in terms of this legislation. One needs perhaps to draw attention to a few of them before dealing with the individual amendments that I have moved.

Firstly, the concept of including the credit card as part of a money-lending transaction is something which merits discussion. It is the definition of a credit card that makes it clear that this legislation is now also to apply to credit cards as such. One matter to which I should like the hon. the Deputy Minister to respond is the question of whether he does not think that a credit card would fall more properly under the definition of a credit transaction rather than under that of a money-lending transaction, because in the main the transactions which take place with a credit card are transactions which relate to the sale of goods, where the claim in respect of the purchase price is virtually, by some fiction, ceded to the manager of the credit card scheme. Therefore the manager of the credit-card scheme is really, in most cases, recovering the price of goods sold and delivered, or he is recovering the cost of services which have been rendered. The credit-card scheme as such, at the present moment, certainly appears to apply, in the minority of cases, to money which is obtained on the strength of the credit card. In the main it relates to a purchase of goods or to the rendering of services.

For that reason one should like to see a reaction to why it is really included under money-lending transactions rather under credit-granting transactions in this specific context.

The second point which arises is the question of whethet or not we are going to have a situation in which, in terms of this Bill, the whole concept of distinguishing, in some form or other, between natural persons and corporate bodies will be a concept which will now be completely wiped away once and for all. Other hon. members have made the point, in connection with this Bill, that small business does need protection but that large business does not need protection. At the same time, however, those who at least have the know-how to create a limited liability company, and do create such a limited liability company, one would assume have a certain amount of business expertise enabling them to enter into the market as such in a more sophisticated manner. Even though there may well be some degree of protection given to small businesses which are corporate bodies, one regrets, to a considerable extent, the lack of distinction between the natural person—which was one of the characteristics of the original legislation—and the corporate body.

That, for one, is a matter that gives one some degree of concern. The other matter to which I want to refer specifically is the question of the intermediary, and it does seem that the net has been cast rather wide in respect of what an intermediary is. One of the amendments I have moved is intended to exclude a certain category of professional person who is mainly concerned with this, but one would also like to hear a little more from the hon. the Deputy Minister about why the net has been cast so wide in respect of the intermediary in terms of this legislation.

I should now like to refer to the introduction of leasing transactions. Yesterday in the reply—and I am one of those who believes that leasing transactions should be included in the Bill—there does not appear to have been a satisfactory reply to those organizations, in particular, which have made representations that leasing transactions should, in fact, be excluded from the Bill. I do not advocate that, but I want to make it clear to the hon. the Deputy Minister that I believe that an adequate reply should be given to them.

I should now like to turn to the definition of a money-lending transaction—I think there are two points which are important and which should be looked at. Firstly, why should a transaction, in terms of which immovable property is sold on credit to a purchaser, and in respect of which there is to be payment in instalments, be regarded as a money-lending transaction? In the first place we believe that the sale of immovable property should not be in this Bill at all because there is no justification for it. The control of this is subject to a special piece of legislation which this House has already passed, namely the Sale of Land by Instalments Act, which is at present under review. This matter finds a better place in that piece of legislation than in this legislation. The second issue is that it seems to us that if it were to be included at all, it should be more correctly placed under the concept of creditgranting than under the concept of money-lending. By no stretch of the imagination can a sale of immovable property be regarded as a money-lending transaction. There is a fundamental difference between lending somebody money in order to buy immovable property and selling somebody immovable property for which he then pays in instalments.

The other matter to which I wish to refer is the question of so-called home improvements which are now covered on page 15 of the Bill in the proposed new section 1(m)(d) of the definition. Here again there is a clear distinction between a builder who builds for someone and who is rendering a service and the person who lends money so that somebody else can build. Here again this distinction is blurred, and it does seem to us that where there is a straightforward transaction involving a person who actually builds and who is the person who has rendered the service, that certainly does not appear to find its correct place under the money-lending category. Where money is lent in order that a building may be erected or that improvements may be effected to an existing building, that is quite a different situation.

I have not yet dealt in detail with my 14 amendments on this clause, but before dealing with them in detail perhaps the hon. the Deputy Minister will tell me which of them, if any, he is going to accept so that in respect of those which he is going to accept I do not have to unduly waste his time. Those he will not accept I shall perhaps have to go into in greater detail.

In regard to the definition of a principal debt, as the hon. the Deputy Minister will see, we have suggested certain amendments. However, the problem which arises is the one with which I should specifically like him to deal, and that is the problem which pertains to the inclusion of a transaction involving immovable property under the definition of a money-lending transaction. If that is in fact so, the issue that arises is who pays the costs of transfer, because quite obviously if there is an obligation on the borrower, in terms of the contract to pay for this … [Time expired.]

Mr. Chairman, I first wish to move the second amendment which is printed in my name on the Order Paper, as follows—

I think this is a fairly straightforward amendment. My reason for this is reasonably simple. This relates to a definition of “principal debt” and reads, in clause 1(p)(a)(ii), as follows—

It is, of course, quite possible that that money will not be paid by the moneylender, but by the borrower, and that it will be borrowed from the moneylender in order to pay. Therefore I simply wish to put in that simple amendment, and the clause would then read—

I think that it is quite straightforward. I do not see any reason to restrict this clause only to costs paid by the moneylender. There could also be costs to be paid by the borrower. If one does this, one consequentially has to move a further amendment. Therefore I move the third amendment which is printed in my name on the Order Paper, as follows—

I now come back to the first amendment I moved on this clause. In looking at it for the first time on the Order Paper this morning, I see that something must have gone amiss. I moved the amendment in question in connection with the definition of “leasing transaction” on page 11 of the Bill. My intention in moving this amendment is that I do not believe that leasing transactions, other than leasing transactions for the purposes of home use, private use or personal use, should be covered by the definition of a leasing transaction. What I am attempting to do in this regard, in other words, is to limit the leasing transactions covered by this legislation to leasing transactions in which the sum of money to be paid by the lessor to the lessee is not deductible for income tax purposes. I think that is relatively clear, and therefore I do not believe that I can actually move the amendment as printed on the Order Paper. I think that what one will have to do in this regard, is to move the following amendment—

My intention is quite clear in this regard. I do not think that the actual wording of the amendment as such is all that important, because I am reasonably certain in my own mind, from discussions we had in the Select Committee on this Bill, and from discussions we had during the Second Reading debate, that this amendment is not going to be accepted by the hon. the Minister and that it will be voted down and will fall away. I have very little doubt about that, but the intention with the amendment I have moved is quite clear. The intention is that this legislation will not cover leasing transactions in which the sum payable is deductible for income tax purposes.

Mr. Chairman, the hon. member for East London North moved an amendment and alleged that he did not have much hope of succeeding, and I think the reason for this is obvious. I do not think the aim of this Bill is to be an income tax Bill at all. The aim of this Bill is not one that concerns income tax and the effect thereof. It concerns finance charges and the disclosure and limitation thereof. The first amendment to which the hon. member referred, was the addition of the words “or the borrower”. I do not know whether the hon. the Deputy Minister is going to accept this particular amendment. Perhaps there is a chance of the hon. member’s amendment being accepted.

I should actually like to react to certain things which the hon. member for Yeoville said. In the first place, with regard to the owners of small and large businesses, we must first obtain clarity on the fact that it is necessary and right for the small businessman to be protected. In his Second Reading speech, the hon. member said that the owner of a small business must very definitely be protected and that he needs such protection. However, I cannot understand what the hon. member’s problem is in this regard, because I gain the impression that he is asking the hon. the Deputy Minister to say why the owner of a small business should in fact be protected, whilst he himself is completely in favour of protection for the owner of a small business, as he stated unequivocally in his Second Reading speech. It seems to me the hon. member has a problem about the difference between a small business and a large business. In his opinion large businesses should not fall under the limitations of this Bill. However, the question is: what is a large business enterprise?

In this regard one must state clearly that when one is dealing with a large business enterprise, one is not dealing with an organization that negotiates a money-lending transaction of between R100 000 and R200 000 as an important part of its business. This would only be a small part thereof. In the nature of things, one is dealing with an arbitrary measure here. There is an arbitrary line that one must draw between the transactions that one wants to control and those that one does not. One must draw a line somewhere, and in order to give significance to the legislation, it is essential that one should draw the line where it should at least have a far-reaching effect, and that is why we have this Bill.

The hon. member also gave the impression that he wanted an explanation as to why the legislation is being expanded with regard to an intermediary. There is no doubt that there was misabuse in the past with regard to an intermediary and the fees paid to him. If we argue about the question of whether the provisions of the Bill with regard to an intermediary should be expanded or not, we must ask ourselves the question whether there was misuse with regard to the fees payable to intermediaries in the past. If there was in fact misuse, it is true that the Bill must be expanded in order to put a stop to those misbuses. I think this is common cause and it is also clear from the evidence submitted to the Franzsen Committee that there definitely was misuse and that as a result of the much higher fees that were paid to intermediaries, the limitations which the Government envisages with regard to financing charges were exceeded in this way. That is why we have these provisions in order to extend the impact of the legislation with regard to an intermediary. I do not think that aspect needs further argument.

The hon. member argued about the definition of “money-lending transaction”. He was chiefly opposed to the definition of “money-lending transaction” in paragraph (c) which reads as follows—

This Bill is not concerned with the total purchase price as such, but it concerns the balance of the purchase price for which financing must be found in order to pay off the purchase price to the seller. That is why the Bill is therefore applicable to the outstanding sum of the purchase price only, i.e. the outstanding debt. The outstanding sum, the sum of money that the buyer can borrow from a financial institution in order to pay the seller, is a sum of money, and therefore there can be no doubt that this agreement should be defined as a money lending transaction. The same applies when the seller finances this balance of the purchase price at a specific finance charge.

Mr. Chairman, I rise on a point of clarification concerning two definitions, the first being the definition of “intermediary” as contained in clause 1(i), as follows—

I take it that this means that any person who is an intermediary as defined in the Bill, will be entitled to charge a lower rate of finance charges than a person who is a moneylender as defined in clause 1(1), which reads, inter alia—

1. (a) any person who is granting or has granted a loan of a sum of money …
2. (b) any person to whom, whether by delegation, cession or otherwise, the rights or the rights and obligations of a moneylender in respect of a money lending transaction have passed …

We have two definitions here, one defining a moneylender and the other defining an intermediary. If one studies the Bill, one will find that there are two rates of finance charges that can be charged, the moneylender charging a higher rate than an intermediary. There is one issue on which I want clarification. If a financial institution—and there are many of them which actually are moneylenders in their own right—lends money in participation bond schemes, then canvasses others to become participants in this particular scheme and then later on cedes its right as a moneylender to the participants, is this financial institution in the first instance considered to be a money-lender or an intermediary? I ask this because this is going to affect the rate of finance charges which they will be entitled to charge. I should like clarification on this.

Mr. Chairman, in the first place, to save time and to facilitate the discussion, I want to react to the hon. member for Yeoville and tell him that I am prepared to accept amendments Nos. 7, 8, 12 and 14 printed in his name on the Order Paper. I am afraid I cannot accept the amendments of the hon. member for East London North. I am not going to be caught by his motion that on page 11, in line 40, after “transaction”, to add the words “which sum of money shall be deductible for income tax purposes”. An amendment of this nature could mean that the leasing of television sets, for instance, would not give the small businessman the protection of the Act, and consequently I cannot accept it.

The hon. member for Yeoville mentioned the question of leasing and said that he was not very strongly opposed to leasing being included. He said that he actually has a neutral attitude towards it.

No, I want it to be included.

Then surely the hon. member and I agree on leasing. With regard to leasing, we must look at the principles of the legislation. What are the objectives of the legislation? The first objective is the limitation and disclosure of finance charges. The second objective is that the legislation must apply to any transaction where a debt arises, and a debt arises in leasing, and finance charges are levied on that debt, and that is why I am convinced that leasing should be included in the legislation. If one looks at the recommendations of the Franzsen Committee, it will be seen that they indicate what the position is in the USA. The Franzsen Committee also gives a full, well-motivated recommendation with regard to lease-lending and leasing.

I now come to the question that the hon. member for Yeoville raised with regard to credit cards, which have now also been brought within the ambit of the legislation. In this regard I should like to quote what the Franzsen Committee said about credit cards. They say (paragraph 137)—

Paragraph 139 of the Franzsen Committee’s report reads as follows—

I want to content myself with this finding of the Franzsen Committee.

The hon. member for Yeoville also raised the point that the ambit of the Act is now being enlarged to include companies, etc. too. If I remember correctly, during the Second Reading the hon. member also mentioned the fact that large companies do not actually need the protection. However, we cannot confine the protection to a natural person, because a small businessman or a small company is in fact nothing but a natural person and they really need the protection of the legislation. As I also indicated in my reply to the Second Reading debate yesterday, there are various smaller companies that do not have the necessary knowledge or expertise, to operate in this sophisticated market and hold their own there. That is why I believe that they need the protection of the legislation too. Since we want to protect the small business enterprise so that it can grow and since we have voted money in the budget for this objective, I think it is no less than right that we should grant protection to this facet of the business world, the smaller companies. To draw a distinction between large and small, is of course very difficult.

†As regards the hon. member for East London North, I want to point out to him, that, if the money is paid by the borrower, there is no debt, and it is therefore not applicable.

*The question of intermediaries was also raised by the hon. member for East London North and the hon. member for Amanzimtoti. In this regard I should like to quote from the Bill. I refer the hon. member to page 27 of the Bill. Subsection (10) reads as follows—

Then one also reads the following in subsection (11)—

This provides the answer. The point is therefore that an intermediary cannot collect money, finance charges, himself.

I want to thank the hon. member for Pretoria Central for the explanations that he gave here. I appreciate his contribution in this regard.

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

Mr. Chairman, I should like to react to a few of the remarks of the hon. the Deputy Minister. The first thing I should like to deal with is the question of the credit card. The change that is being brought about in this Bill by the inclusion of the credit card is perhaps the one that affects the public most because of the common use of credit cards. Therefore we should perhaps devote a little more attention to this matter. The hon. the Deputy Minister quoted from the report of the Franzsen Committee, particularly from paragraph 139, but paragraph 138 makes it very clear that the law as such does not regard the use of a credit card as a money-lending transaction. Let us look at page 82 of the report of the Franszen Committee, paragraph 138, and I quote—

What is strange that it is suggested that there are two different decisions in the Transvaal provincial division, when in fact the one decision that the hon. the Deputy Minister relies on as being different is the one that was upset on appeal. So obviously the Transvaal Provincial Division has consistently said that a credit card transaction is, in fact, not a money-lending transaction.

This matter becomes important if one looks at the representations that the clearing bank credit card divisions of the big banks have made. In their telex they raised the issue of the rate of interest that is charged. They regard that rate of interest, bearing in mind the administration costs in respect of small loans, as being inadequate. Obviously there would be a different rate of interest if this were, in fact, to be credit-granting. So I do not think, with all due respect to the hon. the Deputy Minister, that we can dismiss this quite so easily because it is actually a matter of principle that affects the whole credit card structure. I do not think that this matter has as yet been adequately canvassed. One of the reasons why we are sitting with these problems in the House now is because the matter was not properly canvassed in the Select Committee and one could not hear the evidence of the banks and the people connected with this. This creates a very big problem, as I see it.

The second point I want to make in regard to credit cards is that there is a scheme in existence that does not use a card at all. What happens is that one has a code number. One telephones the bank and the bank pays one’s electricity account, water account and a whole series of accounts, merely on the strength of a telephone conversation. To my mind that type of transaction is not adequately covered in this particular Bill. I should like the hon. the Deputy Minister to react to this, giving an indication of how one deals with this type of transaction. In what way is one covering this, because this entails using the credit card scheme without there actually being a credit card?

I should now like to come back, if I may, to my specific amendments. I am indebted to the hon. the Deputy Minister for indicating that he is going to accept some of them. It sounds impressive to say that he has accepted four, but he has actually accepted the same amendment in four different places. So it is only one amendment he is accepting for the whole bunch. I should like to deal with the specific amendments in an endeavour to persuade the hon. the Deputy Minister to agree to them.

Firstly, I come to the definition of “book value”. This is where the Select Committee bogged down, with the very first definition we debated. The present definition states—

The point is a very simple one. If it is contained in the agreement, it must be agreed to by the parties. It must not be a provision determined by one of the parties only. It must be agreed to by both parties. The amendment very simply states that this particular value must be “agreed between the lessor and the lessee”. It is to my mind obvious that one cannot have a unilateral determination when a matter should be agreed to by both parties. Then, the second amendment moved by me relates specifically to this issue of the intermediary. What I am actually seeking to achieve is to include, on page 11, after line 9, clarity about the fact that any legal costs due to an attorney in respect of professional services rendered will be excluded from this, because, quite obviously, if he renders these services they should not be included in this. This amendment which I sought to bring about, I believe, is now well-covered by the amendment the hon. the Deputy Minister intends to move himself. I am referring now to the first amendment appearing in his name on the Order Paper. What he is actually attempting to do here is to insert the same in another place. If his amendment is accepted, I believe, my third amendment will really be neutralized because the point will then be covered in that fashion.

My fourth amendment I have already referred to earlier. That is the amendment relating to immovable property. To this one I still have not received an adequate answer from the hon. the Deputy Minister or from anybody else. I am still waiting to be told why a sale of immovable property is to be regarded as a money-lending transaction. I must make it clear that it is utterly beyond me, because it seems to me to be fairly logical that there should be a difference between borrowing money to buy property and actually buying property. These are in law two inherently different transactions, and by no stretch of imagination can it be said—other than that Parliament can define anything to mean anything, should it want to—that a sale of immovable property is a money-lending transaction. I should urge the hon. the Deputy Minister to leave that and to let that be dealt with in the correct place, and certainly not in this particular definition.

My sixth amendment relates to the concept of a principal debt. Mr. Chairman, with your permission, I should like to withdraw that amendment.

Amendment No. (6) moved by Mr. H. H. Schwarz, with leave, withdrawn.

I now wish to move a slightly augmented amendment, as follows—

The reason why I do this is because the effect of the substituted amendment is the same. It does limit, however, the amount which should be included in the principal debt to an amount which is due to the body corporate. Allow me to explain what is intended here. If the asset which is pledged or mortgaged in this particular instance would be a sectional title as such, then, in order to protect that interest, the mortgagee would have to pay not only the rates and the taxes that are involved in the transaction, but if he does not pay the amounts due to the corporate body under the sectional title scheme, the security which he has is in fact jeopardized. We believe that with the advent of sectional titles, sectional titles should now be put in the same category with ordinary immovable property, and if there is any question that the security is jeopardized because the dues to the corporate body in terms of the Sectional Titles Act are not paid, the mortgagee should be entitled to recover that, and it should certainly not come out of the finance charges. It should be part of the principal debt. Therefore I have moved the augmented amendment in substitution for my original amendment No. 6.

My seventh and eighth amendments have been accepted by the hon. the Deputy Minister. Therefore I shall not motivate them any further. That brings me then to my ninth amendment. By moving this amendment I have indicated to the hon. the Deputy Minister that if we are to include immovable property under the definition of money-lending we should also include the cost of transfer. The hon. the Deputy Minister has said that he is including costs actually paid by the money-lender to a person who practises as an attorney, as a member of a professional company, etc., in respect of the preparation of documents, including the instrument of debt. We are also concerned, however, about the deed of transfer. That is not done by an attorney. It is done by a conveyancer. As a matter of fact an attorney cannot execute a transfer. It has to be done by a conveyancer. [Time expired.]

Mr. Chairman, with regard to the last argument that the hon. member raised, of course it is quite correct that an ordinary attorney cannot necessarily do conveyancing, but the amendment of the hon. the Deputy Minister reads—

It is definitely the conveyancer, the person who performs the transfer, who has to practise as an attorney, and I am sure that the definition does not necessarily exclude a company that also does conveyancing and that is a conveyancer in a firm.

In regard to the hon. member’s argument on the credit card, that it is allegedly a money lending or credit transaction, I cannot quite follow the hon. member’s argument. In the Franzsen Committee’s report, on page 83, to which he also referred, it says specifically—

This is the whole problem, viz. that it was not a money-lending transaction in terms of the Act, and that is why the Bill is now providing that such scheme is in fact a money-lending transaction. What is wrong with that? The deficiency that existed and that was outlined by the verdict of the court is now being rectified by this Bill by providing that it is in fact a money-lending transaction. Paragraph 139 of the Franzsen Committee’s report reads as follows—

That is why I think it is a futile argument to say that there is a verdict that says it is not a money-lending transaction. The verdict was made in terms of the 1968 Act, but the 1968 Act is now being altered by the Bill.

The hon. member spoke here about a scheme where someone does not have a credit card as such, but a code number in terms of which he can authorize his bank to pay certain accounts. Of course, new forms of credit are always being created in practice, new ways of lending money, new ways of doing business, and it is not always possible for the legislator to make provision for all possible permutations of business in advance. However, the matter to which the hon. member referred, where someone does not have a credit card, but can give a code number to his bank and the bank then makes the payment, is to my mind nothing but a money-lending transaction. The definition of a money-lending transaction is the sum of cash that is really received by or on behalf of a borrower in terms of a transaction. Perhaps at a later stage, when the matter has already crystallised out clearly, the hon. the Deputy Minister will make the definition of a money-lending transaction a little wider by saying it is not only the money received by a borrower, but also the money that is paid out on his behalf. Something of this kind could cover the type of permutation which the hon. member spoke about.

Mr. Chairman, I am afraid the hon. the Deputy Minister has not clarified the point I made regarding the definition of “intermediary” and “moneylender”. I clearly understand what is meant by the new section 2(10), to which he referred and which states that—

The hon. the Deputy Minister then pointed out that subsection (11) reads that—

The point that I want to make, however, is that a money-lender is entitled to charge a certain rate for raising the funds, etc., which have been borrowed by a credit receiver or a borrower. An intermediary is not entitled to charge that rate. Is this not correct? If it is correct, we do have financial institutions that make a business out of supplying the funds themselves as money-lenders in the development of, for example, a participation bond scheme. Then, at a later stage, they canvass other people to become participants in such a scheme. According to the definition of a “money-lender”, however, it includes such a person who comes in and then has the money-lending rights ceded to him. The point I want clarified is whether the originator of the scheme then becomes an intermediary, because at the present time they are in this business because of the finance charges, etc., which they can charge at the higher rates as money-lenders in the first instance. This makes it viable. As I read the Bill, they are not entitled, under these amendments, to charge these rates, despite the fact that, as the Deputy Minister has said, subsection (11) reads that there is nothing prohibiting a money-lender or a credit grantor from paying an intermediary. The point is that he is only entitled to pay the intermediary a certain rate, which is lower than the rate the originators of these schemes are charging at present. This is now going to make the return from such a scheme no longer viable and sufficient for the people who originate these participation bond schemes.

Mr. Chairman, with regard to the question of whether a credit card scheme is a credit transaction or a money-lending transaction, I have already quoted what the Franzsen Committee had to say. The hon. member for Pretoria Central also pointed out that it is clearly stated in the legislation, in the proposed section 18A, that it is a money-lending transaction. I just want to point out to the hon. member that in the first place we are now amending the Act to put it beyond any doubt that it is in fact a money-lending transaction. I also want to point out that the verdict that was set aside on appeal, was set aside simply because the Registrar did not have locus standi. It is now being stated in clause 20 beyond any doubt. The Registrar is now being given locus standi.

I now want to deal with the various proposals of the hon. member for Yeoville, and begin with the question of the definition of “book value”. This was the first point that was raised by the hon. member for Yeoville. The fact is that the proposal amounts to book value having to be determined contractually by the various parties at the beginning of a leasing transaction. It is a fluctuating value which can only really be established at the end of the transaction, after five or ten years. Since the lessor is dealing with leasing, he is the best one to determine this value in advance. The measures, as further set out in the legislation, admit that it is a fluctuating value and that the rectification thereof takes place at the conclusion of those agreements. The truth is that it is not possible to determine the exact final value of the leased goods contractually at the start of such a transaction, but since it is the business of the lessor and he sometimes leases the same goods over and over again, he is in the best position to determine the book value, due to his knowledge of the leased goods and the anticipated lifetime thereof. It must be seen as a calculation in advance of the leased goods by the lessor.

The second amendment that the hon. member for Yeoville moved is—

With the addition of my amendment on “money lending transactions”, “credit transactions” and “leasing transactions” under the definition of “principal debt” the hon. member’s amendment is unnecessary. The right place to cover the position of legal costs, is in the definition of principal debt.

The hon. member said that his third amendment falls away. The hon. member’s fourth amendment is—

This paragraph defines a money lending transaction and it elaborates on a concept to include a debt upon which finance charges are levied, a debt that emanates from a transaction where fixed property is sold. The point is that if one sells fixed property on credit, on instalments, we must look at the premises of the Act once again. In a transaction where a debt arises and where finance charges are involved in that debt, it falls within the ambit of this legislation. The hon. member does not want the legislation to apply to such transactions. Surely the theme and aim of this Bill is very clear, viz. the limitation of finance charges. In the sale of fixed property, this legislation only applies to the outstanding debt. It can never be questioned that when property is sold and financing for it is lent by a banking institution, that it is a money-lending transaction. Just so, it is a money-lending transaction if it is financed by someone else, including the seller. I really believe that it is correct for this transaction to fall under this Bill.

The hon. member’s fifth amendment is—

“and the eventual cancellation of such mortgage bond”.

With all due respect, I think it is a somewhat hasty amendment. At the start of a transaction, the parties do not know what the eventual cost of cancelling a bond will be. The cancellation fee may only be payable over 20 or 30 years. Apart from this, there is not a single provision in the legislation prohibiting a money lender to lend money to a borrower in order to pay the cost of the cancellation of a bond. Possibly even more important is the existence of paragraph (aaa), page 8. No problem has been experienced with it thus far, and that is why I cannot accept the hon. member’s amendment.

I want to make a suggestion about the hon. member’s sixth amendment, that I do not have at hand yet, but that I listened to carefully.

†If the hon. member is prepared to change the words “amounts due” in his amendment to “compulsory charges”, I would be prepared to accept his amendment.

That is fair enough.

Does the hon. member then mind changing his amendment accordingly?

I shall do that right away.

I shall then accept it.

*I have already dealt with his seventh amendment. I have accepted his eighth amendment. Now I want to refer to his ninth amendment. I want to say that the hon. member for Pretoria Central gave a very adequate reply to the question of principal debt and credit transactions. Therefore I do not have to elaborate on what the hon. member said in this regard.

The hon. member’s tenth amendment reads as follows—

Subparagraph (iii) on page 15 of the Bill provides—

This includes all costs, therefore stamp duty as well. Subparagraph (bbb), in line 57, refers to taxes, other fiscal charges, etc. Apparently the hon. member has overlooked this provision.

No, not at all.

As far as transfer costs are concerned, the legislation does not prohibit a money lender granting the borrower a loan for the payment of such costs. The legislation grants a money lender the right to grant a loan for any purpose. The borrower can use a sum of money that he receives for any purpose, including the payment of transfer fees.

I now want to come to the eleventh amendment of the hon. member for Yeoville, an amendment that reads as follows—

This provision has been part of the Act since 1968. It is important that this word should be retained. During the Second Reading debate the hon. member referred to the Crowther Commission and quoted the following (Hansard, 2 June 1980)—

The whole aim of the Act and the proposed amendments would be frustrated if credit transactions were permitted to be made at any cost, regardless of whether they are reasonable or unreasonable. The existing provision serves an extremely important purpose, and since it is a measure that has been in existence for more than 10 years already, unfortunately I cannot accept this amendment of the hon. member.

Now I come to the hon. member’s 12th amendment, which reads as follows—

I accept this amendment. The hon. member’s 13th amendment reads as follows—

As far as this amendment is concerned, I want to point out to the hon. member that provision is being made for amounts due to the fiscus in clause 1(c)(iii)(ee) for taxes, other fiscal levies, etc. Therefore, the hon. member’s amendment is not actually necessary. I accept the hon. member’s 14th amendment. The hon. member for Amanzimtoti raised the question of intermediaries, particularly with regard to participation bonds. I think the principle at issue here, is that an intermediary may not receive a type of commission that is included in the finance charges prescribed by regulation. He asked where all those charges should be recovered from. If a money lender wants to pay commission to his agent, he can do so out of his own pocket but the fact is that the charges for the borrower must not be higher than the prescribed rates laid down by regulation in terms of the law. For instance, if a manager of a participation bond scheme loans money from his own funds, he is a moneylender and not an intermediary. If after that he sells his assets to individual participants, he is not an intermediary. It is then in fact a buying and selling transaction. At this stage I now content myself with what I have said.

Mr. Chairman, I will move my sixth amendment in the form in which the hon. the Deputy Minister has suggested, viz. to substitute the words “compulsory charge” for the words “amounts due”. I am happy to do so.

I want to come back to my first amendment which deals with the determination of the amount by the lessor. The Bill now reads “at the time of the conclusion of such transaction”, which means at the time the transaction is concluded and not at the end of the transaction. With great respect, I do not see the logic of the hon. the Deputy Minister’s argument at all, because if the parties have to determine it at the time when they conclude the transaction, it means that they should agree to do so and, if they do not agree to have that amount put into the agreement, the whole matter does not make sense. It is obviously a matter which is to be determined by agreement between the parties. The second question which arises from this is that it also relates, not only to the book value, but also to the present value of the book value, and that is defined a little later. I find it very difficult to understand why we do not here use the modern concept of a discounted cash flow basis and why we do use something which is rather difficult to understand. Everybody knows what a discounted cash flow basis is, and yet in the definition on page 15 of the Bill we have a complete casus omissus in respect of this matter.

The other issue I want to deal with again concerns my third amendment which relates to the question of the intermediary. It is utterly beyond anybody’s comprehension why an attorney, who acts solely in a professional capacity—that is all the amendment says—should be included under the definition of “intermediary”. If he acts solely in a professional capacity the question of finance charges does not arise at all. The other matter I want to come back to relates to my tenth amendment which seeks to insert certain words on page 17, after line 48. Here I must differ, with great respect, with the hon. the Deputy Minister when he says that the issue is covered. It is not covered, because if one looks at the definition of “principal debt” on page 15 of the Bill in subsection (a)(iii)(aa)(bbb) in line 57 where it reads “taxes, other fiscal charges and licence fees”, one sees that this is qualified by the prior words in subsection (a)(iii)(aa) which reads “where the money loan is wholly or partly secured by a mortgage bond over immovable property or a notarial bond over movable property”. That only applies where there is a bond. Further on in this provision there is reference to fiscal charges, stamp duty and transfer duty. This can arise in respect of shares and matters of that sort. It can also arise in respect of the buy-back situation which is covered in the definition of “money-lending transactions”. Allowance is not made for fiscal charges, stamp duty and transfer duty to be recovered in that case. Subparagraph (bbb) on page 15, to which the hon. the Deputy Minister referred, only relates to cases where there is a mortgage bond or a notarial bond. That is why I think that is to be dealt with.

As regards my eleventh amendment, if this amendment is not accepted, the effect will be that there can never be certainty in regard to what was agreed upon, because at any time afterwards someone can come along and say: “Two years earlier I agreed to something, but it was not reasonable and therefore it is not binding on me”. Thus, years later an agreement can be made wide open merely by saying that what one agreed to was not reasonable. That is not in the interests of certainty in business. It makes the whole matter inchoate almost indefinitely. When it comes to an agreement on the value of goods, the words used in the Bill are “reasonable value agreed upon”. It is therefore essential that one must agree. How it can be left open so that at a future date one can in fact say that one agreed to something that was unreasonable is beyond me. It can only lead to uncertainty in contracts and cause problems in the future. What will happen is that a debtor with no legitimate cause for complaint can suddenly come along years later and say that what he agreed to was not reasonable. That, surely, can not be the intention in legislation, as it leads to uncertainty.

Mr. Chairman, as far as the 10th amendment is concerned, I want to say that if it will make the hon. member for Yeoville happy …

Do you accept it? [Interjections.]

That is all that must happen, then I accept it.

As far as intermediaries are concerned, I just want to say that, when an attorney acts on behalf of a borrower, he is acting in his own capacity as principal and not as intermediary. Therefore his fees are a principal debt. This is what the law advisers have pointed out unequivocally in this regard.

I am sorry, but I cannot accept any more amendments. I think that I have been very accommodating towards hon. members in this clause. Furthermore, I content myself with the replies that I have already given.

Amendment (1) moved by Mr. H. H. Schwarz negatived (Official Opposition dissenting).

Amendment (2) moved by Mr. H. H. Schwarz negatived (Official Opposition dissenting).

Amendment (3) moved by Mr. H. H. Schwarz negatived (Official Opposition dissenting).

Amendment (1) moved by Mr. D. J. N. Malcomess negatived.

Amendment (4) moved by Mr. H. H. Schwarz negatived (Official Opposition dissenting).

Amendment (2) moved by Mr. D. J. N.

Malcomess negatived and amendment (3) dropped (Official Opposition dissenting).

Amendment (5) moved by Mr. H. H. Schwarz negatived (Official Opposition dissenting).

New amendment (6) moved by Mr. H. H. Schwarz agreed to.

Amendment (7) moved by Mr. H. H. Schwarz agreed to.

Amendment (1) moved by the Deputy Minister of Finance agreed to.

Amendment (8) moved by Mr. H. H. Schwarz agreed to.

Amendment (9) moved by Mr. H. H. Schwarz negatived.

Amendment (10) moved by Mr. H. H. Schwarz agreed to.

Amendment (11) moved by Mr. H. H. Schwarz negatived (Official Opposition dissenting).

Amendment (12) moved by Mr. H. H. Schwarz agreed to.

Amendment (2) moved by the Deputy Minister of Finance agreed to.

Amendment (13) moved by Mr. H. H. Schwarz negatived (Official Opposition dissenting).

Amendment (14) moved by Mr. H. H. Schwarz agreed to.

Amendment (3) moved by the Deputy Minister of Finance agreed to.

Clause, as amended, agreed to.

Clause 2:

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

Perhaps I should first of all motivate these three amendments. The first one is on page 27, line 6. The purpose of this amendment …

Mr. Chairman, perhaps I should interrupt the hon. member in an attempt to save time. I accept his amendments Nos. (1) and (2), whereas No. (3) is covered by the amendment which I shall move.

Mr. Chairman, that makes life much easier and consequently we can save a bit of time. May I just further raise a couple of points which arise in connection with clause 2, and to which I should like the hon. the Deputy Minister to react?

Firstly, in yesterday’s debate I raised this whole problem which is, to my mind, perhaps an unavoidable problem. It is nevertheless a problem which we should still try to solve in some way or the other. That is that it does appear that because the poorer people borrow the smaller amounts of money they appear to pay the higher rates of interest. If, in normal circumstances, the cost of administering a small loan is the same as the cost of administering a large loan, it is quite clear that the overheads could be more readily handled by the lender in the case of large loans. The social implications, however, of it always being conveyed to people that they who are the poor in the country have to pay the highest rates of interest is something which, I believe, is utterly repugnant. I referred yesterday to the attitude of the Free Market Foundation in respect of this very matter. I should like to repeat it because it is so important. I should like to hear the hon. the Deputy Minister’s reaction to what these people say. I quote what they have to say in connection with credit laws. They say these are particularly pernicious discrimination against the poor because the rich are lower risk borrowers and the poor cannot offer higher rates; therefore the rich get the credit. They also say that capital is diverted from the poor to the rich. I should like the hon. the Deputy Minister to agree with me that this is arrant nonsense, because if one has no control over interest rates and one allows the poor to bid up interest rates so that they desperately try to get the money without any control at all, one will have the greatest exploitation of the small man that one can possibly imagine. This foundation demands that there should be no control in respect of interest rates, and that is one of the things that has to be decided once and for all in respect of this whole issue. Therefore I ask the hon. the Deputy Minister to enter into this debate and to support us by saying that one cannot argue that it is a matter of free enterprise that there should be no control over interest rates where the poor and the underprivileged are affected so that they can outbid the rich and pay these exorbitant interest rates. That, to my mind, is a fundamental issue. Therefore it should be quite clearly stated what the Government’s attitude is to that. These people of the Free Market Foundation are speaking as though what they are saying is coming from the hon. the Prime Minister’s concept at the Carlton conference, viz. that free enterprise means that one must lift all these things, that one must not protect the poor and that one must allow them all to enter into this jungle. That, to my mind, is the real issue in respect of this matter.

Is the Government in favour—as it seems to be by introducing this measure—of the concept that one does not allow the poor to be exploited? Does the Government accept that there are social necessities for intervention and that such intervention must be in order to assist the underprivileged? I ask the hon. the Deputy Minister specifically to enter into this debate and make his attitude and the Government’s attitude in this regard absolutely clear.

Then I do also feel that there is a duty on me—whatever my own views on it might be—to mention here in the House that the clearing banks sent a telex request for certain answers to the Select Committee. To the best of my knowledge nobody has yet answered this request. I believe these people are entitled to an answer. They raise a series of questions, the first one of which relates to the matters of credit cards and natural persons. That we do not need to deal with. We have already debated them under clause 1.

They then raised the issue of whether ledger fees on credit cards should be permitted or not. I believe they should be told, not by me, but by the hon. the Deputy Minister, what the answer to that is. Secondly, they refer to the provisions of the proposed section 2(1)(a) and (b) and (c) in connection with loans within a period of three months. They say that this is impractical in relation to credit cards. I quote from that telex inquiry—

They request an opportunity of giving evidence in order to elucidate this matter further. Obviously they are concerned about it. They also make a point in respect of interest rates. I am sure the hon. the Deputy Minister has seen this telex. Therefore I do not want to repeat it in toto because I do not actually agree with it. People are, however, entitled to an answer when they make representations to a Select Committee. I believe this is the opportunity for the hon. the Deputy Minister of stating what the position is and of making it really clear what his attitude is towards the clearing banks.

The same comment can be made in regard to the general banks, and I do not want to read their lengthy memorandum on this as well. But, surely, when people are asked to make representations, when it is publicly stated that they could make representations to the Select Committee, and when they go to the trouble, as happened in the case of the general banks, of preparing lengthy memoranda in order to set this up, we should not find ourselves in a situation where all that happens is that nobody says a word to them. The committee is dissolved; they get no answer to their problems and they find themselves in a situation where they are up in the air. They will obviously be dissatisfied. I believe that the hon. the Deputy Minister should deal with these things publicly so that the public knows what the attitude is to the representations of the general banks and of the clearing banks.

Mr. Chairman, I just want to go back a little to what preceded this Bill. This Bill was preceded by a committee of inquiry into this matter, a committee that produced a report after representations had been heard from various persons and bodies. These representations that were addressed to the Franzsen Committee, were largely repeated in representations addressed to the Select Committee. I think if the hon. the Deputy Minister wants to inundate himself with arguments, he should just try to reply to all the arguments and representations addressed to the Select Committee here. The hon. the Deputy Minister can reply to what he wishes, but representations were submitted to the Select Committee that comprised several hundreds of pages. I think it is unfair of the hon. member for Yeoville to tell the hon. the Deputy Minister that he should now give an answer here to those people who submitted representations. I think the answer to those people who submitted representations, lies in another sphere. In the first place a conversation took place between them and the committee of inquiry, the so-called Franzsen Committee. In addition, there were various discussions between the banks of which the hon. member for Yeoville spoke and the Department of Finance. This covered a long period. The Department of Finance is also aware of the answers. I think it would really just be drawing out business here if the hon. the Deputy Minister were to reply to all these representations that we received, and I think the hon. member is perhaps being rather unfair in this regard.

Now I come to the question of the small and large loans. The hon. member for Yeoville made a few statements that I understand and agree with, and this means that I very definitely differ seriously with the hon. member for East London North, who during the Second Reading in this House yesterday, was proposing and requesting the exact opposite of what the hon. member for Yeoville is rejecting here out of hand. The hon. member for Yeoville quite correctly says that there are people who think that the Carlton conference means that the Government no longer has to protect anyone in this country and that the poor man and the man who is not at home in the financial world are to be cast to the wolves, because this is what the free market mechanism ostensibly means. He rejects that standpoint, and I think he is right in doing so. I think the hon. member for Yeoville is correct, but his standpoint in this regard in this committee today is in clear contrast to the standpoint of the hon. member for East London North, who wants there to be no control whatsoever.

It is a pity that as it happens larger finance charges must be paid in practice on small loans than is the case with large loans. There are various reasons for this. The hon. member for Yeoville mentioned this too. There is also the reason of finance charges and the fact that the poor man is often a poorer risk than the richer man. He has less security to offer to secure the loans, and this has an influence on the finance charges that are paid As I see it, the State’s standpoint in this regard is to grant the maximum possible protection within the market relatedness, which the matter has in any event.

Mr. Chairman, I should just like to seek clarification on the proposed new section 2(6) which reads—

The hon. the Deputy Minister has said that he agreed to the amendment of the hon. member for Yeoville, namely that the last section of this should read—

This provision limits the moneylender from tying into the principal debt premiums which exceed a certain value, namely the value which is required to be insured so that the moneylender may insure against loss of that property and so protect his investment. I assume that is what it is all about. I put it to the hon. the Deputy Minister, however, that the money borrower will no doubt want to insure that asset for its replacement value. He may even want to insure it against possible loss of profit, should the asset be destroyed or stolen. The clarification I want here is whether we are going to have two insurance policies, or are insurance companies going to arrange a special policy in terms of which the moneylender and the money borrower agree as to which portion of the value that had been insured for would be the moneylender’s responsibility. He would then be entitled to charge that premium against the principal debt. Are we going to have two insurance policies, or will the insurance companies now arrange a special policy which would take into account the indebtedness of the insured person?

Mr. Chairman, the companies may have any mutual arrangements. Everything that can be included, is provided by the Act. Beyond that they can make their own arrangements. If the money lender, the credit grantor or the lessor wants to take out additional insurance, he simply has to notify the lessee, the credit receiver or the borrower. However, if he wants to pay it himself, it is his affair. They can make any arrangement, as long as they do not exceed the provisions of the Act. However, what we want to avoid, is what happened in the past where someone made a loan for a period of 10 years. A policy is issued for the full amount and the premiums that will be paid over those ten years, are included in the principal debt. Finance charges are levied on moneys which the borrower did not take possession of or use for his own benefit, but that will in future be used by the credit grantor or the money lender for the payment of the premiums for that policy. In other words, there were cases where people were actually paying as much as R1 500 per annum in interest on that portion of the principal sum that was used for the payment of premiums. Of course this is an absolute malpractice.

With regard to the question of the hon. member for Yeoville, I just want to say that I am not quite a computer. However, I can react to many of the questions that many of the people submitting representation asked. I just want to raise one point. The door of the Registrar for Financial Institutions is always open to the business world. We are continually consulting with them. They are our clients. We are continually holding discussions. We try to govern by way of consensus and not by shunting people around unnecessarily. There is continual dialogue between the financial institutions and my department.

As far as the specific question of the hon. member for Yeoville on credit cards is concerned, I just want to say that ledger fees cannot in any event be permitted in the case of credit cards because this paves the way for malpractices. I want to put it very clearly that ledger fees will not be permitted. As far as the objections of the managers of credit card schemes to the intervals for money that is stated in clause 2, it will be noted that special provision is being made to change the intervals. If the credit card schemes experience problems, they can approach my department and I will give this my favourable consideration if they can submit substantial arguments. Our motive is not to inconvenience the public or to complicate the use of credit cards, but rather to simplify it, and that is why I shall adopt a very sympathetic attitude towards real objections and problems. I shall approach them with an open mind.

The hon. member for Yeoville argued here on the various sums that are loaned at differing rates of interest. The hon. member asks why higher finance charges are allowed on smaller loans and why the maximum finance charge that is asked, is lower for larger loans than for smaller loans. He asks whether the motive is that the poor man, the man looking for a bit of money, has to pay more than the rich man who is borrowing a great deal of money. Money is in fact a commodity too. It also has value. The cost of it finds a place in the working of the free market mechanism, and that cost is determined by a good number of factors, for instance the size of the loan, the portion that administrative costs comprise, the risk attached, the cost of money that is borrowed by the credit grantors, the moneylender or the lessor, etc. If we give differentiated rates of finance charges in legislation, it does not mean that we condone a poor man, the one with a small loan, paying higher interest than the man who takes a large loan. This is not the point at all. When it comes to smaller loans, loans that may have a higher risk, a moneylender may be prepared to lend money in such a higher risk case, provided that the finance charges are higher, because his risk becomes higher. If we fix our interest rates artificially low, we are not helping the poor man. I want to put it very clearly, because if a man is a risk, in the nature of things the moneylender is going to ask for a higher interest. If we prohibit the moneylender to ask higher interest rates, he will simply not be prepared to make money available to that smaller man. Furthermore, a small lender is not always a poor man. There may be people who simply need a small loan. I have every sympathy with the needy people. I want to state this clearly. This is exactly why we are coming to this Parliament with this legislation, to protect the public, poor or rich. Everyone must be protected. There must be fairness and justice. These rates that we are establishing for different sums of money—we say this very clearly in the legislation—may not be artificial in order to favour one group of people or another. They must be market related rates. Certain rates are established for certain loans in the market. They are determined according to the working of the market mechanism. We must accept this as a guideline, take it into account and reconcile it with the realities of the situation that we are dealing with. However, I just want to emphasize that if we are going to establish artificially low rates of interest on small loans, it will simply not be worth while for the moneylender, due to the administrative costs involved, and therefore that type of loan will simply not be available to the small man.

I should like to thank the hon. member for Pretoria Central for the very fine contribution that he made here with regard to this clause. I want to content myself with this.

Mr. Chairman, I understand the problem—and I have posed it myself—in respect of the low interest rates, but the matter to which the hon. the Deputy Minister did not react and upon which the hon. member for Pretoria Central did touch, is this contention by the Free Market Foundation that we are moving around in a complete jungle in respect of this and that the only way in which the poor man can get money is that he must be able to outbid the rich man for it. The issue as to what is the role of the State and the role of private enterprise seems to my mind to be important, and that is why I have asked for a Cabinet Minister to deal with it. I appreciate the support of the hon. member for Pretoria Central in respect of this issue, but I think we should really like to know where the Government stands on this particular issue.

The other matter to which I should like to return, is the question of insurance. The hon. the Deputy Minister has accepted my amendment, but there is one other issue I should like to raise with him, and that is that it is possible to obtain group insurance cheaply for the kind of security that is often looked for. However, due to the present way in which this is structured, it does seem that grave difficulties are experienced by the credit grantors in seeking to make that group insurance available. If group insurance can be offered on competitive and cheaper terms, it can sometimes be quite attractive as a means to cover this kind of situation. Whereas I am not moving any amendment in that regard, I should like the hon. the Deputy Minister to ask the office of the Registrar of Financial Institutions to go into the question as to whether it is not possible to have a form of group insurance, approved of by the Registrar’s office, so as to make it clear that it is offered on competitive terms and on a realistic basis and that at some stage in the future we are going to amend the Act in order to cover this kind of situation. At this stage I do not want to go any further than that, because I think it is not really practical to seek to amend the Act in this respect at the present moment.

Mr. Chairman, I merely rise to move the amendments printed in the name of the hon. member for East London North on the Order Paper, as follows—

1. (1) On page 27, in lines 7 to 16, to omit paragraph (c);
2. (2) on page 27, in lines 43 to 68, and on page 29, in lines 1 to 20, to omit subsections (10) and (11).

Mr. Chairman, we have been looking at the question of group insurance at low premiums. At this stage it is not yet acceptable, but we remain open to persuasion. If anyone should come forward with a scheme which could satisfy the Registrar of Financial Institutions, and we are sure that there will not be any abuses as in the past, we shall look at it.

I wish to tell the hon. member for Edenvale that unfortunately I cannot accept the amendment which he moved on behalf of the hon. member for East London North.

Amendment (1) moved by Mr. H. H. Schwarz agreed to.

Amendment (1) moved by Mr. B. B. Goodall negatived.

Amendment (2) moved by Mr. H. H. Schwarz agreed to.

Amendment (2) moved by Mr. B. B. Goodall negatived.

Amendment (3) moved by Mr. H. H. Schwarz negatived.

Clause, as amended, agreed to.

Clause 3:

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

Before saying anything else I will wait for the hon. the Deputy Minister’s reaction to these amendments.

Mr. Chairman, I shall accept the first amendment of the hon. member for Yeoville, but I ought really to set the condition that he withdraw his second amendment. I now want to give the hon. member the opportunity to motivate his amendments. As I said, I am prepared to accept the first amendment, but unfortunately I cannot accept the hon. member’s second amendment.

Mr. Chairman, one is grateful for small mercies, and I am indebted to the hon. the Deputy Minister for accepting the first amendment. I want to briefly try and convince him of the merit of my second amendment. I believe there should be certainty, and I have tried to make this point to the hon. the Deputy Minister previously. In the situation which exists at present, what happens is that if there is a delay, in regard to the registration of a bond for example, we have a situation that as long as the debtor writes a letter in which he draws attention to the fact that there is a delay and that he is being prejudiced by it, he need not do anything more for the next ten years, and there is uncertainty right until the end, when the final amount of money has to be paid, about whether or not there is any claim in this regard. If the hon. the Deputy Minister does not like the fact that a person should sue within six months of the objection, let us try and settle it that he can sue within 12 months or 18 months. This thing might go on forever, and certainly it seems to me that it is unfair to the mortgagee that he should be left in this open-ended position forever. I therefore want to appeal to the hon. the Deputy Minister for certainty in relation to this. If he thinks six months is too short, let us try and settle for 12 months so there can be finality within that period. It must not be left over. Mortgage bonds with a building society can last for up to 20 years, and for that period of 20 years the building society does not know whether one day the debtor is going to come along and say that the building society’s attorney delayed it.

I want to give an example. It may be that by the time the bond comes to be paid, after 20 years, the attorneys who originally dealt with it are dead, or they have left their practice, the people employed by the building society have left and nobody can prove anything. That is why one should deal with this. It may be said that there are ordinary rules of prescription, but when there is a set-off it lasts indefinitely and the ordinary rule of three or six years in respect of oral or written contracts does not apply. I therefore appeal to the hon. the Deputy Minister to try and help us to create certainty in this field.

Mr. Chairman, I am pleased that the hon. the Deputy Minister has indicated that he will accept the first amendment of the hon. member for Yeoville, because it sounded reasonable to me. One knows from experience that it often happens that a money-lender has to supply a guarantee and he is often a private person whose guarantee is not acceptable to the other bodies and persons involved. It is therefore a reasonable amendment. I am just somewhat concerned that the amendment, as it reads at the moment, could perhaps leave room for abuses in that the body or person lending the money, e.g. a bank, could also furnish the guarantee and may then, by some trick or other, invest the money with itself and in this way obtain a high rate of interest.” I do not believe that such an interpretation is possible, but it would, perhaps, have been clearer if the amendment could have read that the person who furnishes the guarantee may not be the money-lender himself. However, I am prepared to leave it at that, because I do not think that the interpretation which I have just given is a reasonable one. Unfortunately, however, one does come across unreasonable people in this connection.

I want to confine myself chiefly to the second amendment of the hon. member for Yeoville. Although we agree with the idea that clarity should be obtained, the clause does not change any aspect as far as clarity is concerned. The proposed new section 2A(3), with which the hon. member’s amendment is concerned, really concerns the proposed new section 2A(2) which merely shifts the onus. In other words, even if those provisions did not exist, the money-lender would still, right at the end of the term, have to prove that he was entitled to that money. All that is happening now, is that the onus is being shifted. It is therefore not a question of there now being less certainty as a result of the provision which has been introduced here. The intention is merely to protect the borrower. After all, he cannot be aware of the facts at the disposal of the money-lender in regard to whether there has been an unreasonable delay or not. For this reason the legislator has seen fit to provide that the borrower merely has to make an allegation, after which the onus of proof shifts to the money-lender. This could be unfair to the money-lender. After a long time, and after he has conducted many transactions, he may suddenly be confronted with such an allegation. To protect him, and to ensure that the borrower will not come forward with such an allegation merely because it suits him, but will choose his options in time, there is the provision that he should give notice within 12 months of his intention to make such allegations. To my mind this in itself constitutes sufficient protection for the moneylender.

The most important objection to the amendment of the hon. member is that he now wants to impose an obligation on the borrower to institute proceedings. We all know that it is not easy to engage in litigation. Consequently the claimant is usually in a weaker position than the defendant in a case where doubt exists. One hesitates, in such circumstances, to embark on litigation. The hon. member now wants to compel the borrower to embark upon litigation. He now seeks to force the person whom he usually wishes to protect—that is to say, to judge from his other statements— to embark upon litigation. Consequently this in itself is unacceptable to me.

In his proposed amendment the hon. member also makes the assumption that the borrower would necessarily suffer a loss and that he must institute a claim in order to recover that loss. It is not true that the borrower would necessarily suffer a loss. All that would happen would be that he would not have to pay a certain amount of the money which the money-lender claimed from him. This is entirely different to suffering a loss. Because he does not, therefore, suffer a loss, I am even more strongly opposed to his being compelled to institute proceedings. It will be sufficient for him to defend himself against any claim which could be brought against him. For these reasons the amendment is not acceptable to me and I believe that it will not be acceptable to the hon. the Deputy Minister either.

Mr. Chairman, I just want to tell the hon. the Deputy Minister that, in the fight of his acceptance of the first amendment moved by the hon. member for Yeoville, we shall be supporting this clause. You wifi recall, Sir, that during the Second Reading debate I motivated our reasons why we were opposed to the clause. However, as I have indicated, we shall now support the clause.

Mr. Chairman, with regard to the first point made by the hon. member for Albany I can give him the assurance that the office of the Registrar of Financial Institution will keep an eye on those people.

I think the hon. member replied very effectively to the hon. member for Yeoville. He did it very thoroughly, motivated his case well and furnished reasons as to why we are unable to accept the second amendment. Indeed, our motive is to protect the small man. In contrast, what the amendment of the hon. member for Yeoville envisages is that the borrower has to institute proceedings within six months in order to recover the loss he has suffered. This proposal is not acceptable to me. The hon. member knows that such a small man, who is after all the person we are seeking to protect, will not institute such proceedings because of the costs involved. Because of the cost of a court case this measure will be a dead letter for most ordinary house-owners.

I may just point out that if a borrower should have to recover his loss by means of legal proceedings, subsection (2) affords him practically no protection. No problems were experienced as regards the implementation of the measure when it was discussed with bodies and persons such as the Association of Building Societies. I do not regard the amendment of the hon. member for Yeoville as an improvement and therefore I cannot accept it.

I appreciate the support of the hon. member for Amanzimtoti and I thank him for adopting the standpoint he did.

Amendment (1) agreed to.

Amendment (2) negatived (Official Opposition dissenting).

Clause, as amended, agreed to.

Clause 4:

Mr. Chairman, I shall accept the amendment of the hon. member for Yeoville as printed in his name on the Order Paper, but I regret that I cannot accept the amendment printed on the Order Paper in the name of the hon. member for East London North.

Mr. Chairman, I merely rise to say thank you to the hon. the Deputy Minister and to move the amendment printed in my name on the Order Paper, as follows—

Amendment agreed to.

Clause, as amended, agreed to.

Clause 5:

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

I should like to motivate these two amendments briefly because this is quite an important clause.

The basic concept contained in the clause is to interfere with the normal contractual right to decide that a particular transaction is to last for a particular period of time and to give either a lessee or a borrower the opportunity to cancel such a transaction at an earlier date than that which he has agreed to in the contract itself. There are later provisions which deal with the financial implications of this.

There are really two major issues. If this legislation is intended to protect the small man, then it should really protect the small man and therefore the amount involved should be limited, as we indicate, to an amount of R25 000. It is all very nice to talk about inflation, but R25 000 is still to the small man in South Africa an awful lot of money and there are not very many transactions that he can enter into for that amount of money.

In respect of the other transaction it is quite clear that the ordinary contractual position as between people should apply. Here there is one very real prejudice which exists. If in fact we live in an era where interest rates could be falling, then someone like a lessor, a credit grantor or a money lender entering into a transaction can commit himself to a transaction for a certain period of time on the strength of a contract, but when interest rates fall, then the lessee or the borrower can say that because he can get better terms elsewhere, he intends cancelling the transaction and giving back the money.

The argument may well be that where one has a large institution which mainly finances itself by means of short-term money, there is no great prejudice, but as the biggest bankers or anybody in banking or in the registrar’s office will testify, the greatest danger in banking is to borrow short and to lend long. In this very situation there may well be long-term commitments into which financial institutions have entered.

We are, however, not only legislating for financial institutions; we are also legislating for ordinary lenders. We are legislating for the widow who puts her money into a particular mortgage, and for people of that sort. There should be certainty in regard to it and one should not be able to say: Right, because interest rates fall, I am going to terminate the transaction and get a better deal elsewhere. There should be some degree of certainty in regard to contracts and that is why I have moved the amendments.

Mr. Chairman, we are faced here with the old problem of how wide the scope of the Bill should be. We are also faced with the problem of how wide the net should be cast to exercise control over certain monetary transactions. Here we have furthermore seen the basic difference between the approach of hon. members on this side of the House and hon. members on the other side. Hon. members on the other side argue that the net should be cast over as small an area as possible, that its scope should be as limited as possible, while hon. members on this side of the House contend that the scope of the net should be bigger.

Exactly where that line should be drawn is an arbitrary question, as I said earlier. However, to make the scope of this legislation so limited is actually to make it a meaningless measure. If one wants control and one wants that control to be effective, one has to extend the scope of the legislation somewhat. In today’s financial life and circumstances, and with today’s prices, an amount of R25 000 or R50 000, of even R100 000, is not a great deal of money. When a person is farming and he needs financing, and he has an asset of R100 000— it may not be a net asset of R100 000, but an asset of R100 000—this is by no means a large amount of money, so it would be very unfair to exclude such a person, who may also be struggling, from the protective measure contained in the Bill.

For this reason, I believe that the amendment of the hon. member for Yeoville, which is intended to narrow the scope of the legislation, should not be accepted by the Government. It would severely limit the effect of this Bill. According to evidence given before a commission, there are people who have suffered because of the abuses that occurred in the past. These are people who have lost virtually everything. They are the people who can be assisted in terms of the provisions and the control which exist at the moment. Therefore I sincerely hope that the hon. the Minister will not accept the amendments of the hon. member for Yeoville.

Mr. Chairman, the first amendment of the hon. member for Yeoville would indeed have some merit if the problem he outlined here were to arise. However, I think it is also important that one should take into consideration the amendments which are printed on the Order Paper in the name of the hon. the Deputy Minister of Finance and which, I take it, he is going to move. I am referring specifically to the hon. the Deputy Minister’s first amendment, to the effect that the period in the proposed section 3A(1)(a) can be extended by regulation. If there should be a tendency of falling interest rates in commerce, therefore, the hon. the Minister could intervene at once and extend the period of notice in order to remedy the situation. I do sympathize with the problem, but on the other hand, I believe, our money market is already so refined, under normal circumstances, that it can accommodate this provision, and that it is in fact to the benefit of the consumer, whoever he may be.

As regards the second amendment moved by the hon. member for Yeoville, I am afraid that this may create an opportunity for a large money loan to be linked to a small credit transaction, which is entered into on the same date, and that this method may be abused by unscrupulous exploiters to derive the maximum benefit from the transaction, thereby making it difficult for the small man really to benefit from what is envisaged in this Bill.

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

In terms of these amendments, adjustments can be made timeously—this is the point—if experience shows that a concession is called for in respect of bigger transactions. To begin with, I am not prepared to reduce the amount of R50 000. The point is that these proposed provisions authorize the Minister to adjust the amount by way of regulation. If, after the commencement of this legislation, it appears that R50 000 is too high, steps will be taken to reduce the amount. This is an undertaking which has already been given to the general banks, and I should like to repeat it here.

In respect of the second amendment moved by the hon. member for Yeoville, I just want to say that his provision is not acceptable. Of course, this matter only applies where debt is being paid off in instalments. As far as this early payment is concerned, section 6 of the existing Act already provides for that. It has already been accepted in principle that people may pay the debt before the due date and it is already being done. In the proposed section, I suggest that the limit be set at R50 000, while in the existing section, which deals with transactions entered into before the commencement of these amendments, the amount is quite unlimited.

It was not applicable to companies.

Very well, it is not applicable to companies, but I want to point out to the hon. member that money loans were in fact applicable to companies.

The proposed measure in line 22, on page 37, enables lessors to specify in the agreement entered into in connection with a lease transaction that the transaction shall remain in force until the expiry of the term laid down in the agreement. This is a provision from which lessors derive considerable advantage. The proposal of the hon. member for Yeoville is to the effect that when a lease transaction on the same date is linked to a money-lending transaction or a credit transaction, such a linked transaction has to be dealt with in the same way as a lease transaction.

I do not want to say any more in this connection and I want to tell hon. members that I am not prepared to accept any further amendments.

At the same time, I want to thank the hon. member for Randburg and the hon. member for Pretoria Central for their support of this clause.

Mr. Chairman, I am sorry that the hon. the Deputy Minister does not see his way clear to accepting these amendments. I just want to deal with the second amendment briefly. There are in practice, and I am sure that the Registrar is aware of it, people who do a composite package financial deal on the basis of which some is leasing, some is hire-purchase and some may be money-lending, and the thing is tailored to meet the particular requirements of that particular type of transaction. We are talking here, not about washing machines or motor-cars, but about the industrial type of transactions which take place, where there is part leasing, part hire-purchase, and part money-lending, as defined. If the right exists, therefore, to terminate one part of it and leave the other one hanging in the air, it creates an impossible situation, because those transactions are really just one. When one enters into this kind of transaction, it seems utterly illogical that one should be able to say that because a part of it is leasing, one cannot terminate the other part because it is one integral transaction. It does seem to me to be unreasonable to turn this amendment down. The argument of the hon. member for Randburg that unscrupulous people could take advantage of leasing transaction is, with respect, only in relation to the right to terminate before the agreed date. It does not affect interest rates or anything else, except the right to terminate. Therefore there cannot really be exploitation in this regard at all. The case of falling interest rates is the one that applies to the first amendment, and it does seem here that one can take advantage of people.

On this particular issue the Select Committee had various memoranda by the general banks, which are in this business, presented to it. They set out, in some considerable detail, what the acquisition costs and the penalties are that they may have to bear as a result of such early termination. One of the examples they gave, was that in relation to a transaction which involves R10 000, payable over 30 months. If one took a rate of 18% in that case, the effective rate would, in fact, be less than 18%, because the setting-up costs are R300 in such a transaction. Therefore the effective rate in that case would only be approximately 15,513%. If there were to be a prior termination in regard to this type of transaction, it is obvious that the banks, in those circumstances, would get the short end of the stick. They also make a point which I think is important and perhaps underlines what I tried to say in regard to falling interest rates, by saying the following—

They then give a series of examples and quote what it, in fact, involved in this. I do not think the matter is quite as easy as hon. members have tried to imply. The issue is not, as the hon. member for Pretoria Central said, that a line has to be drawn but that it is unclear where it should be drawn. I do not think that there is any difficulty about drawing the line. The purpose of the State is to assist people to ensure that there is equality of bargaining in the market place and to stop exploitation. Protection of the small man, the man who may be at a disadvantage and the unsophisticated man, therefore, all that is the function of the State. If the Government believes in free enterprise, however, business enterprises should be allowed to negotiate, to operate in a market system, and therefore there is no difficulty about drawing the fine at all. It is merely a question of whether one is applying a principle of free enterprise, on the one hand, and the principle of equality in the market place and the protection of people who need it, on the other hand.

Mr. Chairman, section 6 of the existing Act already provides for the early payment of an unlimited amount, as I have already said, in the case of money loans and in the case of companies as well. The representations mentioned here by the hon. member for Yeoville were received from the general banks before this amendment had been printed in my name on the Order Paper. Let us take a look at this amendment, which is printed in my name on the Order Paper—

My second amendment reads as follows—

In the first place, for individual transactions there is a limit of R50 000, which is surely an improvement on the position that used to apply. In the second place, if it should cause any disruption, the Minister has the power in terms of this provision to extend those periods of notice in order to give banks more leeway. I think it is quite clear that this is a right which already exists, and I do not think we should spend too much time arguing about it.

The hon. member for Yeoville foresees in his amendment that “on the same date” a lease transaction may be finked, inter alia, to a money-lending transaction or a credit transaction, i.e. where different transactions have to remain in force until their expiry, even if the lease transaction is in connection with a television set that is being leased, for example, and is only a minor component of a mortgage loan of R30 000, for example. When we take cognizance of the generous concession in respect of measures for borrowers and credit receivers, we see that the amendment is not acceptable. In particular, we should be on our guard against introducing a measure which can be used by the money-lenders once again to deprive the borrower of the right of early repayment of money by means of a linked transaction. That is all I want to say. I very much regret not being able to accept the amendment.

Amendments moved by the Deputy Minister of Finance agreed to.

Amendments moved by Mr. H. H. Schwarz negatived (Official Opposition dissenting).

Clause, as amended, agreed to.

Clause 6:

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

I shall just wait for a reaction from the hon. the Deputy Minister before I motivate it.

Mr. Chairman, I am sorry, but I cannot accept the amendment.

Mr. Chairman, in this clause the concept of leasing has been introduced, which creates a completely different situation in regard to the recovery of finance charges in the case of a default or deferment of payment. Let me illustrate this very simply. It is clearly established that in respect of many of the leasing transactions, the rate which is charged is extremely low because the lessor or finance house receives the benefit of the tax concession, of the investment allowances and of the initial allowances. In those circumstances there are many examples of there being virtually no finance charges at all. In other words, one may do a deal at, for example, 1% or 2% because the tax advantages are so attractive to the lessor at that stage. So what happens? If there is a default, in terms of this clause all that can be done is that he can claim finance charges for the defaulting period at the same rate initially stipulated, but he no longer has a tax advantage to cushion the low rate he charged in those circumstances. So the effect of introducing leasing transactions is that it actually pays the debtor to go into default. It pays him not to pay, because the stipulated rates are so small that there is no penalty whatsoever if one does not pay on the due date. I regret therefore that in this case we feel very strongly that an injustice is being done. One cannot have this, we are prepared to assist in the protection of people where protection is needed, but one has to be fair to the finance houses as well. This is utterly unfair to them and of advantage, not to the ordinary person, but to the defaulting person, the person who does not fulfil his obligations. This does not appear to be an equitable provision without this rider and this amendment.

Mr. Chairman, there is one idea running through this Bill like a golden thread, and that is the idea that the finance charges stipulated when the transaction is entered into can never be exceeded. This offers the security that the hon. member for Yeoville asked for.

The principle outlined in this clause is not a new one, but an old principle which has long been contained in the existing Act. All that is now being done is to extend that principle to leasing as well. Earlier during this debate, and in the debate on the Credit Agreements Bill, sufficient reasons were advanced for the extension of this provision to leasing. The principle which is now being extended to leasing is not a new one, so I cannot see any reason why the golden thread running through the legislation should be broken in this particular respect. But then I do not know whether I understood the hon. member for Yeoville correctly. The way I understood him, he said that the lessee was initially going to pay finance charges at a very low rate because he was also going to enjoy income tax benefits.

No, it is the other person …

Surely the person enjoying the income tax benefits is the person who is leasing the item.

No.

This person deducts the rent he is paying from his income for tax purposes. Surely the lessor does not receive any income tax benefits. Therefore it goes without saying that the person who is leasing the item will be prepared to pay higher financing charges because he is going to receive additional benefits in the form of income tax benefits. However, perhaps the hon. member and I do not quite understand each other on this point. In my opinion, however, no justification can be found for this principle, which is recognized throughout the Act, to be thrown overboard in the isolated case of leasing transactions and for any distinction to be drawn between leasing transactions and the other transactions already covered by the Act, and for that reason I do not see my way clear to supporting the hon. member’s amendment.

Mr. Chairman, the hon. member for Albany rightly pointed out that it is a firm principle in the legislation on the disclosure of finance charges that the finance charges stipulated when a transaction is entered into may never exceed the prescribed maximum. The hon. member for Yeoville has now proposed that this should in fact happen in the case of leasing transactions. Such an amendment would frustrate the whole purpose of the legislation. I just want to add that we do not interfere with the conditions previously negotiated between the lessee and the lessor, except for prescribing the maximum finance charges, not the minimum finance charges. One point I want to make quite clear is that if people want to take risks with low rates, they are doing so on their own account. The second point I want to make in this connection is that arrangements can be made for a transaction to remain in force until the date of its expiry and for finance charges therefore to be levied up to the end. Therefore I am sorry, but I cannot accept the amendment moved by the hon. member for Yeoville to clause 6.

Mr. Chairman, I first want to reply to the hon. member for Albany. With great respect, he has not understood the tax position. The position is that in a situation in which one buys certain articles, particularly goods which are used for the purpose of manufacturing in terms of the Income Tax Act, there are initial allowances and investment allowances which go to the lessor, not to the lessee. That is quite clear. It stands in the Income Tax Act. If the hon. member would like to see it, I shall gladly show it to him. It stands there in black and white. This year’s Income Tax Bill also contains a reference to this. It is the lessor that gets that benefit, not the lessee. The question of the deduction of instalments is a separate thing as far as taxation is concerned. I am talking about the initial allowances and the investment allowances. The hon. the Deputy Minister has not dealt with that either. He ignored that factor. He says that if people want to do business at low interest rates they do it at their own risk. In other words, he is saying that people should charge high interest rates, should ignore the tax concessions which are given and forget what market related conditions are.

The whole concept, as I understood it and as the hon. the Deputy Minister put it and we were told in the Select Committee, is that this Bill is intended to ensure that the rates are market related. I want somebody in this House to tell me whether, when one enters into a leasing transaction and the tax concessions are taken into account by the lessor and the rate is lower because of that, it is a fair, just and equitable thing that when a man is in default he should continue to pay that low rate, because the tax concessions then become immaterial. I should like somebody to deal with that point. I want to ask the hon. the Deputy Minister to deal with this point. I have always understood that when a person is in default and when a person pays interest a tempora mora from the time of delay, there is a different situation. The law before the Limitation and Disclosure of Finance Charges Act was introduced, made it very clear that where a person was in default it was not interest that was being paid, but it was a penalty that was imposed. In fact, the credit card companies originally argued that when they were not operating on credit, but merely said a person should settle by the 25th of the following month, the penalty that was then imposed was not interest or finance charges, but a penalty for not paying on the due date, and the court upheld that. The Act was then amended in order to change that position and turn it into the same rate as that for the initial transaction, but when the Act was amended leasing business was never included. It has nothing to do with it at that stage. Now a new concept is being introduced with regard to leasing, and the legislation is not being adapted to make it equitable. I am sorry, but this is quite unacceptable to us.

Mr. Chairman, I should like to deal with the objection of the hon. member for Yeoville. As I understand it, his objection is that in terms of the provisions of the Income Tax Act, the lessor receives certain tax concessions if he makes certain investments. For example, a finance house may lend money to motor vehicle manufacturers or lease new equipment to them for the manufacture of cars or for increasing the South African content of the cars, and for this the lessor receives a certain investment allowance. The fact that he receives the investment allowance means that he can deduct the amount he has invested in this way from his taxable income as an expenditure, so he receives a tax benefit in this way.

Not the whole amount.

There are two aspects of the hon. member’s argument that I cannot understand. Firstly, his argument is expressed in general terms. His amendment has not been drafted to eliminate a specific problem which he believes may arise. The amendment is expressed in general terms and reads as follows—

In other words, the hon. member is throwing the principle of the Bill overboard in respect of leasing transactions. He does not restrict the legislation in his amendment in order to cover a specific problem. His amendment violates the whole principle of the Bill, and that is that the finance charges should be disclosed at the beginning. I cannot understand the hon. member’s problem. If the lessor has made an investment, he has already received the tax benefit. The lessee now cancels the contract and returns the money to the lessor.

It is not cancelled. The person is in default. The clause under discussion refers to cases of default.

That is quite correct. When a person is in default, I cannot understand how this can be prejudicial to the lessor, for surely he has not lost his tax benefit. In what way has a lessor lost the tax benefit he gained if the lessee fails to pay an amount?

Now we find the position on the part of the lessee. The money the lessee has received he has received for specific purposes. He is a person who falls in the category of people who are being encouraged by the State to invest. That is why there are tax benefits attached to it. He is being encouraged to proceed with his manufacturing activities or whatever. Now I just ask myself: If he does not pay, will he still continue his manufacturing activities? I cannot understand where the problem of the hon. member for Yeoville lies. Does it lie on the side of the lessor or does it lie on the side of the lessee? If the lessee does not pay, surely it is quite clear that the whole amount can immediately be claimed. If he is in default, he has to pay the full amount to the lessor immediately. If the lessee fails to pay …

Mr. Chairman, may I ask the hon. member a question?

Just allow me to finish my sentence. If the lessee fails to pay, how can the hon. member say that the lessee will then continue paying the low interest rate on the finance charges? How can the hon. member advance that argument when it is clear that when the lessee fails to pay, the total amount can be claimed? Now the hon. member may ask his question.

If in fact one has a transaction in respect of which one instalment is six months overdue and there is a low finance charge rate of, say, 1% on the lease because it is a tax-based lease, does the hon. member think that that instalment for the overdue period should bear interest at the rate of only 1% or at the prevailing interest rates?

If that is the hon. member’s problem, I just want to tell him that he has not covered it in his amendment at all. His amendment completely changes the principle of the Bill. If the hon. member had come up with a specific amendment to cover a specific problem, I am sure the hon. the Deputy Minister would have considered it in a different light. However, the hon. member has produced an amendment which in my opinion is completely contrary to the whole principle of this legislation. Therefore I cannot support the amendment at all.

Amendment negatived (Official Opposition dissenting).

Clause agreed to (Official Opposition dissenting).

Clause 8:

Mr. Chairman, in order to save time, I want to indicate at once that I am prepared to accept the three amendments printed on the Order Paper in the name of the hon. member for Yeoville.

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

1. (1) On page 39, in lines 47 and 48, to omit “shall not have regard to” and to substitute “may disregard”;
2. (2) on page 39, in line 53, after “before” to insert “the instructions to institute”;
3. (3) on page 39, in line 55, to omit “instituted” and to substitute “given”.

I thank the hon. the Deputy Minister for indicating his acceptance of them.

Amendments agreed to.

Clause, as amended, agreed to.

Clause 10:

Mr. Chairman, in the absence of the hon. member for East London North, I move the amendment printed in his name on the Order Paper, as follows—

Mr. Chairman, the hon. member’s amendment is not acceptable to me, but I do accept the two amendments printed on the Order Paper in the name of the hon. member for Yeoville.

Mr. Chairman, I thank the hon. the Deputy Minister for accepting the amendments printed in my name on the Order Paper and I move them as follows—

I just want to say a few words on this. Despite the fact that we have not moved other amendments on this clause, it seems to me that problems are going to arise from this. To save time I may just point out that the hon. the Deputy Minister knows what the objections are of the banks and what their attitude towards these things is. I think some very real problems exist in regard to this clause. In the spirit of the hon. the Deputy Minister having accepted the amendments, I certainly shall not waste further time.

Amendment moved by Mr. B. B. Goodall negatived.

Amendments moved by Mr. H. H. Schwarz agreed to.

Clause, as amended, agreed to.

Clause 13:

Mr. Chairman, I move the amendment printed in the name of the hon. member for East London North on the Order Paper, as follows—

Mr. Chairman, the hon. member for East London North has tried hard, and I accept the amendment.

Mr. Chairman, on behalf of the hon. member I should just like to thank the hon. the Deputy Minister.

Order! The amendment is now that of the hon. member for Edenvale.

Amendment agreed to.

Clause, as amended, agreed to.

Clause 15:

Mr. Chairman, I move the amendment printed in the name of the hon. member for East London North on the Order Paper, as follows—

Mr. Chairman, I am afraid I cannot accept the amendment. I am very sorry, but in all fairness, the costs of repairs have to be divided according to the contract.

Amendment negatived.

Clause agreed to.

Clause 19:

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

1. (1) On page 63, in line 47, to omit “R100 000” and to substitute “R50 000”;
2. (2) on page 65, in fines 3 to 5, to omit subparagraph (ii);
3. (3) on page 65, in fines 6 to 10, to omit subparagraph (iii).

May I just say a word about the amendment printed in the name of the hon. member for Mossel Bay on the Order Paper? I do not see him present at the moment. I merely want to say that I regard his amendment as a breach of faith towards the people who have been negotiating with the Office of the Registrar over some considerable period of time and who are not aware that there are any plans to do any such things. The hon. the Deputy Minister suggested yesterday that he might favourably consider such a thing, but I just hope he would not. I hope, in fact, that the amendment will not be moved because I think it would be a breach of faith. I think one will at least have to give these people an opportunity of making representations in regard to this as it is something entirely new and has not been taken into account in the representations. Had they had the opportunity of making representations, they could perhaps have persuaded the hon. the Deputy Minister not to agree to such a thing.

I now want to motivate what I have moved. I believe in the first place, as we have argued repeatedly, that this is a measure which is designed to protect the small man. I think R50 000 covers the small man. I think larger transactions should be left to the free-enterprise system in order to deal with them. The situation is one which can readily be negotiated from time to time.

Business suspended at 12h45 and resumed at 14h15.

Afternoon Sitting

Mr. Chairman, I regret that I was unable to be here before business was suspended. However, I had to attend a commission meeting. Therefore I should now like to move the amendments printed in my name on the Order Paper, as follows—

1. (1) On page 63, in fine 47, to omit “R100 000” and to substitute “R200 000”;
2. (2) on page 63, in line 57, to omit “R100 000” and to substitute “R200 000”.

The proposal by the hon. member for Yeoville that this amount should in fact be reduced would in my opinion largely frustrate the object of this Bill. The fact is that abuses occurred with regard to this kind of transaction in the past, abuses which this legislation now seeks to prevent. However, if we were to limit the scope of the Bill to such an extent that it would only be applicable to transactions of less than R50 000, I submit that we should in fact be allowing the really major abuses to continue. The fact is that in recent years, the price of land and of virtually all goods has risen considerably. If a limit of R50 000 were laid down in this Bill, therefore, only the smaller transactions would actually be affected.

As regards the proposal that we increase this amount to R200 000, I want to point out that under the existing Act, there is in fact no restriction whatsoever with regard to the amount. To limit the scope of the Act to transactions involving less than R200 000, therefore, already amounts to a great restriction. The Franzsen Committee actually recommended that this limit be fixed at R250 000. I therefore believe that the limit of R100 000 laid down in the Bill is already a concession to the approach of the hon. member for Yeoville, in the sense that an attempt is made to find a realistic and fair amount. However, I want to allege respectfully that this amount of R100 000 is too conservative to achieve that object. It would be only too easy for those who want to circumvent this measure artificially to increase the value of the transaction to more than R100 000, whether by involving more goods in the transaction or by loading the transaction with finance charges in some way. This means, therefore, that in the case of a transaction with a real value of R80 000, for example, this value can be artificially increased to bring it up to R101 000, for example. Then the transaction is beyond the scope of the Bill.

To prevent this, I propose that the more realistic limit of R200 000 be laid down to ensure that it will in fact be only the very big transactions which will be outside the scope of the Bill, the big transactions where one can assume that the parties are sophisticated enough to realize the implications of the transaction, or if they do not possess that degree of sophistication themselves, they will obtain the necessary advice in this connection. That is why I have moved my amendments.

Mr. Speaker, I should like to speak in support of the amendment moved by the hon. member for Mossel Bay. The report of the Franzsen Committee appeared in a period when money was in relatively short supply. Since then, the position with regard to the supply of money has to a large extent improved, but at the same time, the inflation rate has risen enormously. Therefore I want to suggest with all due respect that since the committee recommended, during a period when money was scarce, that the limit should be R250 000, the hon. the Deputy Minister really should consider the possibility of raising the limit. Furthermore, it is also striking that in 1926 as well as in 1968, when the original usury legislation and the principal Act in this connection were before this House, it was decided every time to extend the scope of the legislation originally introduced. I want to suggest with all due respect that when we look at what we are really concerned with here and at the principles as laid down at the bottom of page 15 and at the top of page 16 of the Franzsen Committee’s report, those same principles apply in this case.

Furthermore, I should like to draw attention specifically to paragraph 39 of the report, on page 22, where the following is said about the question of extending the scope—

Whether one is concerned here with a natural person or a company is irrelevant, I believe. In any event, when a real need exists, I do not think the argument that a company which is a contracting party has a better knowledge of the matter is a valid one. When it comes to really big transactions, I do not think it is going too far to say that one may even find a money-lender who may require the man to form a company in order to qualify for that money. These are really things which happen in the money market every day. Therefore I want to repeat that I support this amendment, and I also want to ask the hon. the Deputy Minister seriously to consider accepting the amendment.

Mr. Chairman, the amendment of the hon. member for Yeoville seeks to reduce the amount in the Bill by R50 000. The amendment of the hon. member for Mossel Bay, on the other hand, seeks to reduce the amount of R250 000 recommended by the Franzsen Committee by an amount of R50 000. In this sense, he is already accommodating the amendment of the hon. member for Yeoville. However, since the hon. the Minister has the power to change this amount by regulation, I want to predict that, in the spirit of co-operation that prevails here today, we should reach concensus by splitting the difference and accepting the amount of R100 000 in the Bill.

Mr. Chairman, I want to begin by saying that I am not prepared to accept the amendment of the hon. member for Yeoville to the effect that the amount be reduced to R50 000. I should just like to point out that in terms of the existing Act, the amount is unlimited in respect of those matters covered by the existing Act, i.e. personal, household and agricultural transactions. Now the scope of control is being extended, and the Franzsen Committee recommended that an amount of R250 000 be accepted. Representations were made to the hon. the Minister that this amount be reduced. The hon. the Minister then undertook to reduce the amount to R100 000. The representations came from the general banks and Assocom. Because the hon. the Minister has committed himself to the amount of R100 000, and this is the argument advanced by the hon. member for Yeoville as a reason why I cannot accept the amendment of the hon. member for Mossel Bay, I want to use the same argument as a reason for not being able to accept the amendment of the hon. member for Yeoville. It cuts both ways. My personal inclination, however, is to increase the amount to R250 000, but there is no reason for me to do so at this stage.

The hon. member for Roodepoort also seriously advocated this. The hon. member for Paarl also asked for it, and there has been strong pressure from this side of the House that we should increase that amount to R250 000. I want to state categorically here today that the first time an offence comes to my notice after today where this restriction of R100 000 is exceeded, I shall immediately, in terms of the powers conferred upon me by section 15, increase that amount to R250 000 or R300 000, depending on how serious the offence is. That is all I want to say.

Mr. Chairman, it appears that in respect of this amount we are in some kind of a bargaining session, where, on the one hand, there are people who are asking for an increase and, on the other hand, people who are asking for a decrease. The hon. the Deputy Minister, ably supported by the hon. member for Randburg, is trying to keep to the centre of this figure. The problem which exists, however, is that the banks as such never accepted the amount of R100 000 as being the correct figure as the top figure. Their view was that the figure should be even lower than the figure I have suggested. Their recommendation was—and it was contained in the documents which were submitted in writing—that the figure should be no more than R20 000. The hon. the Minister has the power to adjust this figure, but what we want is some kind of commitment that, in the absence of abuse, the figure certainly will not be increased, and if it is demonstrated that it is not necessary to have the figure as high as R100 000, we would expect the hon. the Deputy Minister to agree to a reduction of this figure. In other words, he has the power, in terms of the Act, to move the figure upwards or downwards, and therefore we believe that he should use that power in order to indicate quite clearly that if there is abuse, he will move it in one way or the other, but if, in fact, there is no abuse, he will move it downwards. That is really what we want to hear from the hon. the Deputy Minister here today. The basic point which appears to be forgotten is that, in so far as the borrower is concerned, the mistake that is made is that he does not shop around to see where he can get the cheapest money. The reality is that, particularly today, when interest rates are at a very low level in South Africa, many people are borrowing money, buying goods on hire-purchase, or leasing property at rates which are too high because of their inertia to shop around. The appeal that is made here today is that people should not take the first loan that is offered to them, but should shop around at the financial institutions and should see whether the free enterprise system really works in order to ensure that they get the most competitive terms.

There is one last thing which I think needs to be mentioned. The system still exists whereby finance companies give kick-backs to dealers in respect of deals introduced to them. In other words, when a man wants finance for his motor-car, the finance house, because it is so anxious to get the business, and to get it at a high rate, is prepared to give the garage a kick-back, which should really go to the purchaser of the motor-car, the consumer. I think people should be alert to this and should see whether there is a kick-back, and they should try to get the best deals for themselves, which they are not doing at the moment.

I would like to debate the second and third amendments with the hon. the Deputy Minister. The present situation is that if the second amendment is not accepted, I can hire a motor-car from one of the car-hire firms to use for a period of time and may thereafter, on another short lease, wish to have the same motor-car, but I cannot get the same motor-car again because the provision in lines 3 to 5 on page 65 of the Bill will prevent me from doing so, because the provision reads—

That seems to me to be a situation which is undesirable because it really interferes with ordinary car hire business, which this Act is not intended to deal with. The third amendment is, on page 65, in lines 6 to 10, to omit subparagraph (iii). The provision requires payment to be made—

In other words, if the hon. the Deputy Minister hires a car in Cape Town, which he is fortunate enough not to have to do, he would not be in a position to tell them to send him an account when he returns the car. He has to pay before or on the date of the expiry of the lease, i.e. when he gives the car back. That is not a satisfactory arrangement, because very many people in these circumstances arrange that the accounts are sent to their businesses, companies or homes. To provide that there must be payment before the expiry of the lease seems to be highly impractical from a business point of view. I accordingly ask the hon. the Deputy Minister to at least reconsider the second and third amendments.

Mr. Chairman, I thank the hon. the Deputy Minister for his assurance that he will reconsider the amount if there are any indications of the position being abused. There is only one thing that worries me in this connection, and that is that a difficult position may arise with respect to the onus of proof. I consequently suggest that the hon. the Deputy Minister should in his own discretion consider increasing this amount, for if he is only going to increase it when it has been proved that the lower amount of R100 000 has been abused, it may create the problem that some party first has to go to court to prove the abuse, which may not be easy. Meanwhile, the hon. the Deputy Minister’s hands will be tied, while he knows perfectly well, on the basis of his own information, that the limit has to be raised. I ask the hon. the Deputy Minister to give favourable consideration to this proposal.

Mr. Chairman, I thank the hon. member for Mossel Bay. I am not committing myself to waiting until it has been proved in a court that there has been an abuse. As soon as it comes to my notice that such behaviour is going on, that there are people who are up to no good above the amount of R100 000, I shall not hesitate to increase that amount to R250 000 at once.

The hon. member for Yeoville asked for the amount to be reduced to R50 000. For the information of the hon. member I quote from paragraph 104 of the Franzsen report, the paragraph dealing with the case of Greater Services (Pty) Ltd. v. Du Toit—

I just want to point out to the hon. member that in this case, too, an amount of more than R50 000 is at issue.

I have been very accommodating with regard to this Bill, but I am afraid I cannot accept the second amendment of the hon. member for Yeoville either.

Mr. Chairman, in view of the hon. the Deputy Minister’s undertaking I withdraw my amendments.

Amendments moved by Dr. H. M. J. van Rensburg (Mossel Bay), with leave, withdrawn.

Amendments moved by Mr. H. H. Schwarz negatived (Official Opposition dissenting).

Clause agreed to (Official Opposition dissenting).

Clause 20:

Mr. Chairman, I accept the amendment of the hon. member for Yeoville to clause 20.

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

I should like to thank the hon. the Deputy Minister for accepting this amendment.

Amendment agreed to.

Clause, as amended, agreed to.

House Resumed:

Bill reported with amendments.

Third Reading

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

Mr. Speaker, we have just completed the Committee Stage on a Bill which is fundamentally a Committee Stage Bill, because it is a Bill of a technical nature which is, as we have indicated, one that should have been referred to a Select Committee to be considered. The history of the Bill’s reference to a Select Committee, and coming back from the Select Committee without the Select Committee having done its job, is an aspect which we debated during the Second Reading stage. The only thing I want to add to what was said then is to deal with the suggestion made by the hon. member for Paarl that we obstructed the Select Committee by using a veto to stop the Select Committee from sitting during the sitting hours of the House. That is not a correct statement of fact. At no stage did we exercise such a veto. What we asked for, and did not get in a satisfactory form, was an undertaking that if we were required to be in the House to take part in the debates in the House, we could do so and the Select Committee would not sit while the debates were on in which the two members who represented the official Opposition were involved. That also affected the hon. member who represented the NRP on the Select Committee in exactly the same way. There was quite obviously legislation before the House which we were obliged to attend to and which we could not escape attending to by being involved in a sitting of the Select Committee. We cannot allow the suggestion made by the hon. member for Paarl to stand unchallenged on the record, because his suggestion was quite incorrect.

The events during the Committee Stage have clearly demonstrated that a Select Committee should have been appointed to consider this measure. If one looks at the situation from this side of the House, if I count correctly, some 18 amendments were accepted. On top of this the hon. the Deputy Minister also moved a number of amendments. It is therefore quite clear that this was a Bill which was by no means perfect when the Committee Stage was taken, and this Bill is still not perfect now that the Committee Stage has been disposed of. Therefore we regret that this measure has been rushed through and that we have not had ample opportunity, in the Select Committee, of debating the issue. We do not believe that this was the correct approach. We also think that it was wrong that persons who wanted to make representations and who wanted to be heard and to put their case, were not heard, were not afforded the opportunity of giving evidence before the Select Committee. To publicly state that the Select Committee would receive memoranda by a certain Friday, and then to terminate the work of the Select Committee on the Thursday, is to my mind not the kind of picture that Parliament should present to the public. Even though we disagree with many of the proposals which the people who wanted to make representations wished to put forward, we certainly stand for their right to make those representations and to be heard before their business interests are adversely affected. It makes no difference that there was a committee in 1977, because the reality is that since 1977 this legislation has been in the pipeline, and it is utterly illogical that in the last few weeks of this session of Parliament it should suddenly be rushed through. It has been demonstrated quite clearly, from the debate during the Committee Stage, that this is a complicated piece of legislation, so complicated that members of the public are going to require lawyers to deal with it, and the lawyers themselves have said that it is tremendously complicated. What greater proof do we need? Here we have a piece of legislation which is going to affect the everyday lives of very many thousands of South Africans but which is presented in so complicated a form that no ordinary person can work his way through it? We regret that it is being presented in this form. We think it could have been presented in a much more simplified form so that members of the public could understand what they are actually dealing with. If one does not understand what the law is, if one needs advice every time one wants to make a purchase, it cannot be a good law, because good laws are supposed to be simple and capable of being understood by anybody. To our minds it is utterly wrong to present the public with a piece of legislation as complicated as this is.

Furthermore, this piece of legislation fails to draw the balance correctly between the interests of the consumer who has to be protected and the free enterprise system to which the Government pays lip-service. It is quite clear that on the one hand there is still not adequate protection for the consumer and on the other hand people who are able to look after themselves in the market place, the big corporations and the companies, are being restricted and the free enterprise system cannot operate correctly. To my mind that is not a satisfactory position in our community. If we believe in free enterprise, we must allow free enterprise to operate where it can. However, if one wants to protect the consumer, one must have legislation which will protect the consumer as such and one must not use the same piece of legislation in order to deal with big business. That is utterly illogical. The consumer is the person to be protected and this Bill goes wrong in that it does not draw the balance between the needs, the requirements and the protection of the consumer on the one hand and the operation of the free enterprise system on the other hand.

There are still matters in the Bill in respect of which I want to forecast today that either the hon. the Deputy Minister or the hon. the Minister will come back to the House to propose amendments to them. The situation in regard to legal costs has not been adequately settled. The situation in regard to the early termination of agreements and rebates has, likewise, not been satisfactorily settled. The whole question of leases, too, has still not been satisfactorily settled. I have little doubt that it will not take very long before the House again has to deal with this legislation.

We want to make it quite clear that we believe that people should be protected against the unscrupulous people who seek to take advantage of them when it comes to the question of borrowing money and of obtaining financial facilities of any kind. The man who needs protection is the ordinary man in the street. In that regard, with great respect, the hon. the Deputy Minister has been unable to convince us that the balance between the protection for those people and the free enterprise system has been satisfactorily achieved. That is why we enter this Third Reading debate with a high degree of regret that, while this should have been a piece of legislation which should have gone through unanimously and concerning which we should all have been able to tell the public that those who need protection are now adequately protected, we have instead a highly complicated piece of legislation which does not achieve the balance we think it should achieve.

Mr. Speaker, the hon. member who has just resumed his seat, said the Bill should have only been addressed to the “ordinary man in the street” alone, the people who need protection, and that the problem with the Bill is that it is also aimed at the businessman. I cannot understand the hon. member for Yeoville easily, especially not after having had to listen to him over a period of two days. As recently as yesterday he said (Hansard, 9 June)—

Now he comes along and says that the problem with the Bill is that it also enters the sphere of the businessman. Yesterday he put the matter differently.

Yesterday he also quoted from the Crowther report as follows—

However, today he is singing a different tune, just to show that he differs. Now he says: “The free market system must be allowed to operate wherever it can.” The hon. member for Yeoville is completely inconsistent.

I should like to congratulate the hon. the Deputy Minister on this Bill that he has piloted through the House. The hon. member for Yeoville himself said, and memoranda that were submitted to the Select Committee put it clearly that the Bill is a particularly complicated piece of work. The attorneys said in their memorandum that it is a particularly complex and complicated Bill. The hon. the Deputy Minister—I believe everyone will agree with me—has really shown that he is fully in control of this subject and of the Bill and has a thorough knowledge of it. He has definitely given very strong indications of his competence during the course of dealing with the Bill.

The hon. the Deputy Minister may feel happy about the Bill, because he is its author to a large extent. The Franzsen Committee referred to the hon. the Deputy Minister when he was still a private member of the House. In the first place I am referring to paragraph 149, page 90, of the Franzsen report. First of all the problem is referred to—

Furthermore, it was pointed out that moneylenders and credit grantors that enter such schemes, usually receive commission on the policies, and this contributed towards money lending becoming an extremely expensive matter. The committee continues as follows on page 93 of the report—

The hon. member, now the Deputy Minister of Finance, is then quoted as follows—

When he was still a private member, the hon. the Deputy Minister made a request in the House for the legislation in question to be reviewed so that the practices to which he referred could be eliminated. Little could he know at the time that he would be the very man to pilot the legislation through the House a few years later. I am sure that hon. members on this side will agree with me that we should congratulate the hon. the Deputy Minister on the culmination of his activities in 1975, on the way in which he has fulfilled his task in the House as well as on the way in which he dealt with the matter.

Mr. Speaker, I believe every party represented in the House is in agreement that this is an extremely important piece of legislation, especially as far as the man in the street is concerned. I think it has been said before that because the credit facilities now available in South Africa are becoming more and more sophisticated as each year goes by and more and more people are availing themselves of these facilities, it is essential that the relevant legislation is taken under review. I think in broad principle we in this party are in agreement with the Bill. In fact, I said so during the Second Reading debate.

We opposed the Second Reading of the Bill for two reasons. There were one or two clauses to which we were opposed, but primarily we opposed the Second Reading because Parliament had not given those people who had made representations to the Select Committee an opportunity to be heard orally. I think we made our stand very clear in that regard, and for that reason we opposed the Second Reading of this Bill. It has been said, however, that this is essentially a Committee Stage Bill, and during the Committee Stage many of the arguments put forward by the various people who made representations to the Select Committee have been discussed here. As has been said, some 18 or more amendments have been accepted by the hon. the Deputy Minister. In addition we have put to him the points on which we wanted clarification and we are happy to say that he has satisfied us in this regard. In addition he has also accepted an amendment to clause 3. That clause gave us a great deal of concern, but in accepting the amendment moved by the hon. member for Yeoville the hon. the Deputy Minister has cleared up some of the problems we have had with this Bill.

Because of this we have decided that we will support the Bill at Third Reading.

Mr. Speaker, in the first place I want to convey my hearty thanks to hon. members who participated in the discussion on the Third Reading of the Bill for their contributions. I also want to thank all other hon. members who participated in the debate earlier on, in the Second Reading and in the Committee Stage of the Bill.

Mr. Speaker, you will probably allow me just to address a special word of thanks to the hon. members of the NP who serve on the finance group of the caucus who spent many hours and days studying this very complicated legislation and sacrificed a great deal of time in order to make a thorough study of this legislation. I want to thank those hon. members very heartily for the sacrifices that they made.

Then there is also another point that I should like to state very clearly. I am not aware of other legislation in which more attempts have been made to offer the private sector and outside bodies the opportunity to state their standpoint. I want to state this here clearly and categorically. There is little legislation in regard to which so many opportunities have been given to the private sector and to the public to give evidence. There was an authoritative committee under the chairmanship of Prof. Franzsen, who together with several knowledgeable people, undertook an in-depth investigation into this matter. As you have heard yourself, Mr. Speaker, this matter has been under way since 1973. Once again, I want to put it very clearly that I want out of my way to accommodate the Opposition in this regard. I even agreed against my will to appoint a Select Committee, because I was afraid that proper use would not be able to be made of that Select Committee and that it would then be laid at my door that there had not been sufficient time. There was more than enough time. I want to state that very clearly.

My motive in appointing this Select Committee was to create an opportunity for us to identify the points of difference only and see whether we could not reach consensus on them, in order to save time in the House and to conduct a more meaningful debate here. Now, however, the hon. member for Yeoville is making political capital of it. It really disappointed me that the hon. member for Yeoville tried to make political capital out of it.

The hon. member for Yeoville is making a big mistake. He is sitting on two stools now. On the one hand he is making a plea for the consumers, and on the other he does not want me to obtain the powers through this legislation to take action effectively. I shall show this very clearly later on. Furthermore, the hon. member for Yeoville says that this legislation is too complicated for the public to understand. I want to say now that I really do not share his opinion that the public is so stupid. I really do not share the hon. member for Yeoville’s opinion that the public is so stupid.

I am sure that the principal Act was just as complicated. The principal Act was probably even more complicated. In fact, I have shown here from the Franzsen Committee’s report how conflicting verdicts were delivered on the principal Act, and how matters were even taken as far as the appeal court. Now we are trying to obtain more clarity on this legislation. Those who are guilty of offences in this regard, take note of this legislation. The fact that they take note of this legislation, is inter alia one of the facets in which the protection for the public is to be found. We really want to protect the public. We want to offer the public protection as soon as possible. However, now the hon. member for Yeoville is arguing with me that we should first refer this legislation to a Select Committee once again, and only grant the necessary protection next year. We are so concerned about the protection of the public that we are not prepared to wait any longer to offer the public this protection, despite the hon. member for Yeoville’s pleas that they should be left unprotected even longer.

Who is playing politics now? [Interjections.]

Mr. Speaker, the hon. member for Yeoville was the one who started playing politics. I am a politician myself. Therefore I cannot but react in kind back. I believe one should return blow for blow.

Moreover, the hon. member for Yeoville also said that we are simply paying lip service to the system of free enterprise. He also alleges that we are short-circuiting the operation of the free market mechanism by means of this legislation. Once again I want to explain what this legislation is actually about. Nowhere in the legislation do we aim at curtailing or preventing the operation of the free market mechanism. All that this Bill is doing, is to lay down the maximum finance charges that must be asked, and below that maximum the free market mechanism can do as it wishes. Competition can continue below that level. Experience shows that where the maximum rate is laid down, mutual competition and the operation of the free market mechanism force it to drop further. If we in South Africa want to do one thing, if we want to sell the system of private ownership, the capitalist system, the system of free enterprise, we must see to it that there is no exploitation in the name of capitalism. Then we must not allow naked capitalism in South Africa, but we must put the stops on the system to such an extent that it will not lend itself to exploiting people who do not know any better. This is all that is behind this legislation.

The hon. member says “We must protect the small man.” Now I ask him: Why should I drop the amount from R100 000 to R50 000? It is really a very small man today who wants to borrow a mere R100 000. After all, R50 000 is no longer a large sum. R50 000 is no longer money to every small businessman in this country. The hon. member for Yeoville asked me to protect the small man. However, at the same time he says I must protect him as far as R50 000 only. One cannot adopt two standpoints. In politics one must have one standpoint and one must stand by it. The hon. member for Yeoville must make a decision now. Is he for or against the small man? I think it is fair if I conclude that the hon. member for Yeoville does not want to protect the small man, because he does not even want to accept the sum of R100 000. He wants me to decrease the sum to R50 000. I honestly hold it against the hon. member for Yeoville that he is opposed to the small man to such an extent that he opposes me when I want to protect him.

You will live with this forever, that R100 000 is nothing.

It is really not fair of the hon. member for Yeoville to adopt that standpoint. The hon. member says he does not have clarity on many things, and I had seriously hoped that the hon. member would state unequivocally in the Third Reading today where his party stands with regard to this legislation. Where do they stand with regard to the protection of the public and of the consumer? If one is in politics, one must not have secret standpoints. One must not have two standpoints; one must have one standpoint and promote it.

The NRP opposed certain points, but in the end they said that they support the legislation. We know the NRP is for the protection of the public. There is another matter here in regard to which I should like a reply because I have not yet received one. The hon. member for East London North said “This is unwarranted interference” and “Is this legislation necessary? The Government is turning South Africa into a socialist country with this legislation.” Now I am asking the hon. member for Yeoville directly: Does he agree with the statement of the hon. member for East London North? [Interjections.] Just for the record, let us look at what the hon. member for Yeoville said. He said: “It is necessary for the authorities to interfere.” He said: “There is inadequate protection for consumers in this legislation.” The hon. member says there is too little protection for consumers in this legislation. I do not want to put words in anyone’s mouth, but in all fairness I want to know what that party’s standpoint is.

Kick them out.

The hon. member for East London North says: “This is unwarranted interference.” He says: “The Government is turning South Africa into a socialist country with this legislation.”

[Inaudible.]

I want to hear no more of these stories. I want to know what that party’s standpoint is with regard to this.

You should be on Broadway.

The hon. member who has just made an interjection there, already has many domestic problems and I give him another one to solve in their caucus today. The hon. member for Yeoville said unequivocally that he is in favour of this legislation in principle. The hon. member for East London North said we are turning South Africa into a socialist State. I really thought that the PFP would at least tell us during the Second Reading where they stand in this regard. I shall be very pleased if they tell us at a later stage what their standpoint is.

Then I want to say thank you very much to the hon. member for Pretoria North for the friendly words that he addressed to me. Maybe they are undeserved. I also want to thank the hon. member for Amanzimtoti for his friendly words.

In conclusion I want to say that the Government came to Parliament with a measure which is basically aimed at obtaining order in our financial world. The objectives of this legislation are twofold viz. to limit the finance charges asked of the public for credit and to lay down a maximum for them, and in the second place to ensure that the public—i.e. the buyer, the borrower, the lessor and the credit receiver—will know what finance charges are being recovered from them. This is the main principle, viz. that they must be limited and disclosed. Secondly this legislation provides the sum of the principal debt. In other words, people cannot simply add anything to the principal debt, such as insurance levies and intermediaries’ fees and then levy finance charges on that. It was necessary to enlarge the ambit of the existing Act to include credit card schemes too, because this is a type of credit that is assuming tremendous proportions. I say once again that the Government is not opposed to this. On the contrary, we are not doing anything by means of this legislation to obstruct the operation of such schemes. We just want to see that there will be order.

Lease lending is another factor that is beginning to assume tremendous proportions. It is a new form of financing, a new credit form that has developed. We are in favour of it, but we just want to make sure that there will be order. The premise of this legislation is to protect the public, the consumer, but—and I want to emphasize this—we are providing leeway for the operation of the free market mechanism. This is the other crucial point. We are simply laying down maximum rates, and not minimum rates.

Finally I thank hon. members in the House for their patience.

Question agreed to.

Bill read a Third Time.

Mr. Chairman, I had hoped that I would not have to say very much on this clause, but unfortunately in his reply in the Second Reading debate the hon. the Deputy Minister saw fit to quote from the report of the Viljoen Commission on Penal Reform in support of the introduction of the Makgotla system. I say that that was very selective quotation indeed, because I have refreshed my memory since the hon. the Deputy Minister spoke and there is no doubt whatever that the Viljoen Commission came out very strongly against the introduction of the Makgotla system and against giving it authenticity and jurisdiction over the people in the urban areas. I think it is necessary, since the hon. the Deputy Minister quoted from the report of the commission, that I give my selected quotations, the only difference being that I am quoting the conclusion at the end of the commission’s summing up of the evidence given before it, and therefore the conclusion it reached having weighed up that evidence, whereas what the hon. the Deputy Minister was quoting was partly from the evidence given to the commission. I quote from paragraph 3.2.19 on page 40—

I might point out that it is not only children that can be chastized by the kgotla, but also males up to the age of 30 may be given corporal punishment which is generally administered in public by the kgotla courts. The commission goes on to say—

That is what the commission found, and it went on to say that it was quite clear that the relationship of the kgotla to the police is largely an adverse one, in other words an antagonistic relationship as far as the police are concerned. The report continues in paragraph 3.2.22 as follows—

I cannot understand how it is that the hon. the Deputy Minister actually quoted from the Viljoen Commission report in order to substantiate his claim that the Makgotla should be legalized.

I am against it, my party is against it, the Viljoen Commission was against it and I might say that Brig. Visser had some very hard words indeed to say about the Makgotla in 1977 when he publicly condemned the system after witnessing a Makgotla court session. He was the commandant in charge of the police in Soweto in 1977. He said—

I cannot think of any stronger condemnation of the Makgotla system than that.

Mr. Qoboza, the editor of Post, who also should know the feelings of the people in Soweto, stated in an editorial—

That is what we are trying to do.

I do not see how the hon. the Deputy Minister can say that that is what he is trying to do. Who are the judicially trained people among those who put themselves up as candidates for the kgotla courts? Why does he not leave the implementation of law and order in the hands of properly trained people? The community in Soweto is by and large an urbanized community. It does, of course, contain migrant workers, people who live in compounds and who go backwards and forwards between the tribal areas and the urban areas, but there is also a large, settled urban population in Soweto. There are 101 000 family houses in Soweto. Those houses are not occupied by tribal people, migrant workers or contract workers, but by families, stabilized urban people. They do not go along with this sort of rude, crude justice which is meted out by the kgotla under the guise of administering tribal law. In particular we are objecting to the imposition of corporal punishment, which is degrading and humiliating and which can be administered long before these people even have the right to appeal.

You just have to be less paternalistic and then you will know what is going on.

Paternalistic? I wonder what could be more paternalistic than giving a beating to a grown man. If that is not paternalistic …

That is their way.

Whose way?

How do you know that?

The hon. the Deputy Minister must be very careful, or he is going to make the same mistake that the hon. the Minister of Posts and Telecommunications has made. [Interjections.] He must not say things such as “that is the way they think”.

But it is the way they think. [Interjections.]

The community in Soweto consists …

You will have to withdraw that.

For whom? For you?

Oh, dear. What a rude and bad-tempered little man that is.

You will have to think a bit faster.

Think faster.

Yes. It would be even better still if they did not think at all and did not speak at all. There is no such thing as “that is the way they think”.

They think in such a crude way.

“They” are the community in Soweto and in the other urban townships.

You only know what is going on in Soweto.

Well, Soweto is the largest Black urban area and it is the one I know best. I want to know whether or not the hon. the Deputy Minister is not bearing Soweto in mind when he is speaking of handing over these powers to the kgotla courts and legalizing them in Soweto itself. There are over a million people in Soweto, and as I have said, they range from third generation urban-born Blacks with absolutely no tribal links at all, and with their own Western urban way of life, right down to migrant workers who have come to Soweto for the very first time.

You do not know the Black people.

This Government has no business whatsoever in this field. I say this in view of the recommendations of the Viljoen Commission on penal reform, the views of Brig. Visser, who knows more about the people of Soweto than that hon. member and I do, and certainly the opinions expressed by the editor of Post who knows more than any of us about what the people of Soweto want. We are against this and shall vote against this clause.

Mr. Chairman, whatever the hon. member for Houghton has to say about the merits or the demerits of the kgotla system, is quite irrelevant at this stage, because we are dealing here with a principle that was decided on many years ago. In fact, in 1927 this principle was decided on …

For tribal Blacks, not for urban Blacks.

For tribal Blacks, yes. In 1977 this was extended to urban Blacks in terms of the Community Councils Act. All that is being done in clause 1 now, is to consolidate this with the principal provision. My submission is that the merits or demerits of this are absolutely irrelevant at this stage.

However, I do want to take issue with two statements made by the hon. member for Houghton. The one statement she made was that now there is the imposition of tribal law on the urban Blacks. This is not so. This has been the position for ages. It was legalized in 1927, and again in 1977. We are merely consolidating those measures.

What are you talking about? You are absolutely wrong.

I should also like to point out to the hon. member for Houghton that this is quite voluntary. There is no compulsion whatsoever on the Black man in the urban areas to go to those courts or for the community councils, for that matter, to accept these tribal courts. However, I do want to take issue with the hon. member on the two very derogatory remarks she made. She had the audacity to refer to an hon. Minister who this morning had to retract what he said. But she herself made most derogatory remarks about the Blacks when she spoke about kangaroo courts and a crude form of justice.

She is a kangaroo herself. [Interjections.]

She made derogatory remarks, thereby belittling the cultural assets of other people. I think she should be censured for that. I support this clause.

Mr. Chairman, the hon. member has raised the objection that in her view, I had read a selected portion of the Viljoen report to suit my standpoint. I wish to tell the hon. member that she has evidently done the same. She has evidently used her selected portion to state her point of view. What we are doing by means of this legislation, is exactly what I quoted. We are not in the process of legalizing the type of kgotla which the hon. member referred to. We are legalizing the Black Customary Law that has developed over many years. In point of fact we are obviating the irregularities that used to be committed by the kgotlas, by making this measure applicable in the urban areas. As I said during my Second Reading speech, at this stage we cannot go so far as to say that all Black people in the urban areas are now so sophisticated that we should, now summarily dispense with this Customary Law that has developed over the years. We simply cannot do so. These are the demands by the Black people in the urban areas, and consequently we are trying, by means of this legislation, to place this on a sound basis. What we are basically doing, is to remove the measure from one Act and insert it in another Act. The hon. member must now say which of the two she wants.

I do not want either of them.

Mr. Chairman, I understand that you are giving an opportunity to a member of each party to state their attitude with regard to clause 1, which means that we are actually restating our attitude with regard to the Bill. I think the matter has gone rather further than it was really intended. I want to make it quite clear that as far as we are concerned, what is contained in this clause is an established principle in the Community Councils Act decided upon a previous occasion. This provision is being taken from the Community Council Act and transferred to the Black Administration Act where, in our opinion, it more properly belongs. I want to make it quite clear that when we support the clause as such, we are supporting the consolidation into the Black Administration Act of a provision which appears in another Act where it at this stage improperly belongs. The question of what happens in the kgotlas and that sort of thing is, as far as we are concerned, not properly a subject for debate in this House at all. Our attitude is therefore that we will support this clause.

Clause agreed to (Official Opposition dissenting).

House Resumed:

Bill reported without amendment.

Mr. Chairman, section 157 of the principal Act provides that the Minister may, without obtaining the sanction of both Houses of Parliament, grant a loan not exceeding R200 000 to a private person for the establishment of a water scheme, for example a dam. In the Select Committee we deliberated on the desirability of increasing this amount from R200 000 to R400 000. The majority felt that owing to increases in costs, inflation, etc., it would be acceptable to increase the amount from R200 000 to R400 000. We on this side of the House did not place an amendment on the Order Paper in this regard, but I do wish to ask the hon. the Minister whether he would be prepared to consider not increasing the amount from R200 000 to quite so much as R400 000. We feel that the increase in the amount is greater than the increase in the costs of establishing such projects, and that it is also more than one would expect taking the rate of inflation into account. Consequently I ask the hon. the Minister whether he could not arrive at a more acceptable amount, somewhere between R200 000 and R400 000, that would satisfy us and would nevertheless not entail his having to come back to the House with applications for loans for the establishment of water schemes, applications that would make unnecessary demands on the time of the House.

Mr. Chairman, I have a problem as regards the request by the hon. member concerning this matter. I set out very clearly in the White Paper what the problem was with these matters. If the hon. member had read the White Paper, he would have noticed that the total amount involved is not very large, whereas provision has indeed been made for a large percentage of applicants. The limit is, at present, R200 000. It entails that the consideration of some of the applications has to be held in abeyance until the approval of Parliament has been obtained. We are all geared to report on how funds have been utilized, but if one has a process that has an adverse effect on efficiency in the sense that during the course of the year one has to advise many applicants that the amount involved is in excess of R200 000, then they have to wait. I could indeed consider increasing the amount to R300 000. It could perhaps work for a year or two, but after that one would again be saddled with the same problem.

I wish to tell the hon. member in a spirit of sincere goodwill that this is not acceptable to me, since I am fully aware of the problems in connection with this matter. I receive requests from Members of Parliament and various communities, and there is a build-up of irritation towards the department. If one tells them that there are certain legal provisions and that we have to wait for Parliament, they ask why we do not amend the Act; they want to know why they must sit and wait until Parliament has granted its approval. They also wish to know whether we could not report to Parliament at a later stage.

Although I should very much have liked to accept the proposal by the hon. member, I could not act in a way that would not be in the interests of effective functioning. I think it would be just as effective if the department were to report on this in its annual report. The annual report is tabled in Parliament and then full details are available to hon. members concerning the number of applications received and what amounts in loans have been granted to respective applicants. In my view, it is just as effective as reporting in another way or continuing with the system in terms of which Parliament has to give its approval in advance.

I do not wish to dwell on this any further or argue the matter any further, but I think if the hon. member would look at the figures in the White Paper, he would agree with me that it is fair to deal with the matter in this way. In any event, Parliament receives a report on the matter in the form of the Department’s annual report.

Mr. Chairman, I wish to thank the hon. the Minister for the proposal that such works will indeed be mentioned in the annual report, but I require a little more clarity. Would it be possible to report in detail in an annual report on works in excess of R200 000—it could even be R300 000; I am merely giving an example—but a figure that is still lower than R400 000?

With all due respect to the hon. the Minister I regard a work that exceeds R200 000 but does not amount to R400 000, as being nevertheless a major work, since a great deal of money is spent on it. Would it be possible to report in detail in the annual report to a certain extent on those works that do not exceed R400 000, but which are nevertheless in excess of R200 000, so that those who are interested could refer to the annual report to see what the money has been spent on? We are asking for a little more detail than is normally published in the annual report regarding each work per undertaking.

Mr. Chairman, I should like to support the hon. the Minister in his submission that the figure must remain at R400 000. This is the fourth time since I came to this House that this amount has been increased. I think it is merely indicative of the manner in which building costs and general construction costs have been going up and up. In many ways this is really a formality that has gone through. As the hon. member for Wynberg says it is merely those who are interested who will really go into the figures in order to find out how much has been spent. I am prepared to bet right here and now that there are hardly two or three hon. members in this House who have ever bothered to look at those figures and to satisfy themselves about what has actually happened.

I believe that what we are dealing with here is a matter which properly comes before Parliament. I do believe, however, that to give a great amount of detail and to put the department to considerable expense —because it does take time and money to prepare this kind of thing—will not really serve any useful purpose. There is a Select Committee dealing with Irrigation Matters, a committee to which White Papers are referred, and I am quite certain that any hon. member who is also a member of the Water Affairs Study Group of his party will be able to get any information he likes on this. Besides, the department is also always available to answer questions. I do believe, therefore, that the figure of R400 000 is the proper amount which should be set here, and I also believe it is open to any hon. member to find out for himself at any time about any other amounts that are below that figure. It is merely an indication of how costs have gone up if one bears in mind that what one can buy for R400 000 today one was able to get for R50 000 when I first came to this House. I think that is really what we are talking about—the escalation of costs and the depreciation of the value of our money.

Mr. Chairman, I should like to thank the hon. member for Mooi River for his contribution. He is someone with a sound knowledge of the problems connected with Water Affairs etc. He has taken an interest in Water Affairs over a period of many, many years, and he certainly knows what he is talking about. I should like to thank him for his positive approach to this measure, and also for his suggestion to the hon. member for Wynberg.

It is difficult, however, to reply now to the question of exactly in how much detail we should report. I did, however, take note of what he has said. I can also assure the hon. member that we will report this with some degree of detail so that hon. members who are interested in the subject could have an idea of what it is all about. I also want to support the hon. member for Mooi River in his submission that, apart from himself, very few hon. members ever really take the trouble of studying the report in detail. It is, of course, a lengthy report too. It contains many figures and some detail.

I shall, however, certainly see what I can do in connection with the hon. member’s suggestion. I also undertake to find out from the department whether this is possible. Personally I do think it is possible and that it should be done in that way.

* Having said that, I wish to conclude. I gladly give the undertaking that we shall supply the details asked for in the annual report, and once again I wish to express my appreciation to the hon. member for Mooi River.

Clause agreed to.

House Resumed:

Bill reported without amendment.

Bill read a Third Time.

Mr. Speaker, I move—

Mr. Speaker, unfortunately the hon. member for Orange Grove is ill this afternoon and has asked me to express his regret that he is unable to participate in this Third Reading. However, it does afford me the opportunity of making a few comments, and also of resolving one or two matters which are still at issue between the hon. the Minister and myself, matters arising from his comments in the Second Reading debate and in the Committee Stage of this Bill.

This Bill of 19 clauses contains a number of provisions to which we have no objection and which, in fact, we think are improvements on the present situation, but there are certain clauses which arise directly out of the road transportation boards and the National Transportation Commission’s awards of last year which resulted in court cases and which therefore have led the hon. the Minister to introduce certain clauses, and more particularly clauses 4, 5 and 7. We have certain reservations about clauses 4 and 7, and we have expressed them. There is the question of limiting those who may appeal, and also the question of allowing an automatic increase of fares, within the limit of 10%, as petrol prices go up. We are unhappy about these, but nevertheless, as we explained in the Second Reading debate and in the Committee Stage, we accept them against the background of the Bill as a whole.

Clause 5, however, is a clause which makes the Bill unacceptable to us. Clause 5 is the one which prejudices commuters in favour of the bus companies. It is the clause which says that if a determination for news fares is made, and if there is an appeal to the courts to have these fares reviewed, or for the procedures to be recommenced, those fares shall continue to be of effect, even if a prima facie case has been made to the court that there has been an irregularity or an improper procedure which could have prejudiced the commission or the board in its findings to the disadvantage of the general public. Therefore the public will have to continue to pay higher fares, even if in the end it was proved that the board’s judgment was wrong and that those fares were unnecessarily high. As the hon. the Minister conceded in the Committee Stage, while one can recoup money, or redress the harm or damage done to a company by giving it an increased subsidy or an ex gratia payment, what one cannot do is to remedy the harm that has been done to the masses of consumers over a period of time. This is the difficulty which we have.

How do you remedy the reverse?

The hon. the Minister is, in fact, considering doing that—and he said as much—as far as Putco is concerned. When there was a court action which suspended the fares, he gave them a subsidy of R1 million a month. That is what he said. That was a remedy. Whether it is desirable or not, is another matter, but there is a remedy. However, when it comes to the commuter, those 10 cent, 15 cent, 30 cent, 40 cent and 50 cent fares which have been paid, there is no way of redressing the wrong which has been done to the commuter over that period. We find this unacceptable. It is important that this debate has taken place, and today is taking place, against the background of the trigger issue of the events in the Cape Peninsula now, i.e. against the background of a bus boycott. That is the one consequence of what has taken place, and this Bill is the other consequence of what has taken place. I believe it is appropriate that the hon. the Minister should use this occasion to spell out what the Government intends doing to resolve this bus boycott. I think the hon. the Minister must tell the House what he intends to do, other than just this negative measure.

If you will act more responsibly.

I shall make certain positive proposals. It is no good hurling abuse at the Opposition. The fact is that the bus boycott is disruptive of private lives and of business activity, creates social tensions and tensions between the commuters who are boycotting and the police and the authorities. It is a bad situation. Against the background of this measure, we believe that the hon. the Minister must say, on this occasion, what he is going to do, in a positive way, to overcome the problems. It is not good enough for the hon. the Minister to hurl abuse at the Opposition, and particularly the abuse he hurled at me. That was quite unnecessary, quite superfluous and quite extraneous to the problem which arises out of the handling of transport affairs by his department. The hon. the Minister criticized me for having said, in a newspaper, that I would raise this matter at the earliest opportunity and that I had, in fact, failed to do so on 16 May when the matter was considered in this House. I should like to tell the hon. the Minister that I am not inclined to run away from issues. The situation was that a debate took place in the Senate Chamber on the Friday after Ascension Day. Early that morning I went to see the hon. member for Orange Grove, prior to that debate, to explain that my presence was required in this House. I gave him my notes and he raised this matter and discussed it with the hon. the Minister in the Senate Chamber. So it was raised there and the hon. the Minister responded. I tried to raise the matter during the Committee Stage, but I was ruled out of order and told that the Third Reading was appropriate. Therefore I am raising it now. That is the first issue. It was raised previously, on my behalf, by other hon. members, the hon. member for Green Point and the hon. member for Orange Grove.

The second point concerns what I was supposed to have said. The hon. the Minister makes a deduction, from a Press statement, that I had inferred that there were no subsidies whatsoever paid by the Government in respect of bus fares. That is a completely incorrect deduction. The whole article reads—

We were talking about subsidies in respect of new bus fares which were to come into operation. Nobody has argued that there are not subsidies for the railway commuters, in respect of old bus fares. What I argued, was that I was going to raise the issue of subsidies in order to deal with new bus fares. Those new bus fares had only just been announced and were going to come into effect in a short while. I believe that, even on what the hon. the Minister has told this House, I was completely entitled to raise this because, in the course of the Transport Vote, he said that the subsidies for City Tramways—that was in March—had not yet been decided. I asked him whether he could tell us more precisely whether he was giving R1 million a month for Putco, what amount he was considering and whether he would tell us more about this. The hon. the Minister said—

But how can I give the hon. member the amount of the subsidy before the fares have been announced?

In other words, at that stage, in March, there was no subsidy in respect of City Tramways for this purpose. Let us look at what the hon. the Minister said in the House during the Transport Vote on 16 May.

*The hon. the Minister said the following in the Other Place, after the new busfares had been announced. (Standing Committee, col. 105)—

In other words, on that date, 16 May, when I issued that statement, and when the hon. the Minister reacted to it, he stated in the Other Place that the National Transport Commission would still consider that application.

†So I am quite entitled to assume, on the basis of his own statement, that the specific subsidy to reduce …

You made a statement before I did.

And I was correct. I said that I was going to call for subsidies to reduce the bus fares and the hon. the Minister said that the National Transportation Commission would consider such subsidies. That is what he said. Is that correct? Did the hon. the Minister say that the National Transport Commission would still consider it? In other words, I was 100% correct. No amount of bluster on the part of the hon. the Minister is going to retrieve his position.

I want to make a few constructive suggestions to the hon. the Minister in the light of the difficult situation that exists as far as the bus boycott in the Cape Peninsula is concerned. I believe that the hon. the Minister has a national responsibility. It is not just a Cape Peninsula bus boycott, but is a matter of national concern. In general, I believe that the Government must accept that bus commuting has become an necessity of life in South Africa. Just as all kinds of other amenities, bus commuting has become an essential amenity of life, especially for those people who, very often against their will, live a considerable distance from their place of work. In these circumstances, because it is an essential amenity, the Government has a responsibility to see that commuter services are available and that they are available at fares that are within the ability of the commuters to pay. This is absolutely essential. The services are required and the fares that must be paid must be within the ability of the commuter to pay.

The company, as happened in the case that gave rise to these two particular clauses in the Bill, asked for an increase in fares at a level which, in terms of its accounting procedures, will allow it to operate the service at a reasonable profit. That was the basis of its submission to the Government or to the National Transport Commission. That may be a reasonable request on the part of a company that makes a reasonable profit, but the reality is that the fares, in order to produce that profit, are beyond the ability of the commuters to pay. This is where the Government must step in. The hon. the Minister knows that the fares in the Cape Peninsula, in relation to the wages received, are causing the commuter to pay an abnormally high proportion of his weekly pay-packet in fares. I shall provide some examples. There is an assistant at an institution in the Sea Point constituency, getting R82 a month in addition to certain other “perks”, who has to pay R35 of that R82 in the course of the month to travel between Sea Point and Mitchell’s Plain. There is a father, mother and two children who were in District Six and whose parents now live on the Woodstock-side of District Six. It costs R10 for the family to visit the grandparents on a Sunday. If one takes the combination of increased fares and increased distances to work, school and other facilities, one sees that it is totally beyond the means of many of the people who are required to use those services.

In his speeches the hon. the Minister referred to the clip-card which is obviously a device for trying to reduce the fares for those people who use them consistently and regularly. However, it has certain limitations, e.g. it includes a minimum use of five return fares per week, in other words if a person gets a lift home from work, that person is disadvantaged, or if a person does not travel to and from work five days a week that person is disadvantaged. I am not decrying the attempt to solve the problem, but it only solves part of it. It does not deal with the casual users, the pensioners, the persons who do not travel to and from work five days a week or the person who only requires the bus for one-way travel and catches the train in the opposite direction.

I want to put it to the hon. the Minister that there are certain things that should be done, or which he should contemplate doing, in respect of the Cape Peninsula where the bus boycott is in force, a situation which gave rise to the particular provisions of this Bill.

Just repeat your last statement.

I want to suggest certain courses of action open to the hon. the Minister in regard to the issue which gave rise to the boycott. The boycott arose out of the events of last year, and certain provisions of this Bill also arose out of those events of last year.

What evidence have you got for saying that?

That was the whole tenor of what the hon. the Minister said. The reason for the Bill was the Roberts case. The hon. the Minister admitted in his speeches that this Bill arose from the court interdict of last year. Bus companies suffered damages over a period of time, and this Bill is in order to remedy that situation. The hon. the Minister said that there were three bus boycotts last year. He mentioned those three bus boycotts and said there were five court orders or pending court orders, and the result of these circumstances has led to clause 5 of this Bill.

I want to try to be constructive in this regard, because we are all concerned about the situation that has developed. The first alternative, the simplistic one that is being advocated by some people, is for the hon. the Minister to just take over the bus companies and run them as he would do the Railways, or run them as a public utility company. Let me say that there is no assurance that this will lead to a more efficient service, or necessarily to reduced bus fares. That is point number one, and I put it on one side.

The second one is the one the hon. the Minister has been resorting to in part, and that is to provide subsidies or tax incentives to the companies to enable them to operate their services and to make reasonable profits at fares which the commuters can afford. In this connection I want to make some specific proposals. My first proposal is that there could be a further exemption of bus companies from fuel taxes and fuel levies. This is one thing that could take place. There is already a reduction of something like 10 cents per litre which is being granted to public transport companies, but nevertheless there are still taxes and levies paid by the bus companies which could be further reduced in order to reduce their operating costs.

Secondly, I believe that provision should be made for writing off the cost of new vehicles in the same way in which industrialists are allowed to write off the costs of their productive equipment in a very short space of time. That would be an incentive and would relieve a burden on the bus companies.

The third alternative is to increase subsidies. These are the three financial alternatives that can be adopted.

I want to make another suggestion to the hon. the Minister, one which I would really like him to examine very seriously, and that is that a financial mechanism be provided, in the form of low-interest loans, to assist public transport companies to replace their vehicles in due course. I raise this, because what is happening at the moment, and happened in the particular case last year which led to the court injunction, is that the company is allowing, as an annual cost, not the actual cost incurred by the company during the year, but a cost based on an inflation depreciation of the value of the vehicles. In other words, since 1974 the company has been allowing for an inflation depreciation-type of finance accounting. It has written up the cost of its vehicles to a replacement cost and has not retained it on its books as an actual cost. It has assumed a 10-year life for each of the vehicles, and as a consequence it has debited the annual costs each year with one-tenth of future replacement costs. This would be a prudent way of financing and of accounting for an ordinary private company, in that it is building into its reserves sufficient money to replace the equipment which is already in its possession. In this case, however, the company has been building up, out of annual income received from fares paid by commuters, vast reserves to replace those assets at some future date. That is what it has been doing. In effect it has been building up reserves out of current revenue in order to meet a future situation. The current fares, the fares paid out of current wage rates, are not related to the current costs of the company, but are related to anticipated future replacement costs in that company. The fact is, therefore, that today’s commuters are being required to pay for tomorrow’s buses. They are actually travelling in tomorrow’s buses and not today’s buses. Today’s commuters are being required to pay, out of pre-inflation wages, for the post-inflation cost of replacement of these vehicles.

I want to analyse the effect, the impact, of this. First of all I want to ask whether this is a large factor in determining the fares in the Cape Peninsula. How large is it? The bus companies own Tollgate Holdings’ annual report will reveal how large it could be. The Receiver of Revenue does not allow this type of inflation accounting for tax purposes. He allows a normal depreciation rate. The difference between inflation depreciation and the normal depreciation allowed by the Receiver of Revenue means that in 1978 the company had to write back into its costs an amount of R3 900 000, and in 1979 it had to write back an amount of R3 800 000. This was the difference between the inflation depreciation and the depreciation allowed by the Receiver of Revenue. One could assume, because it has other activities, that at least R2 million to R2,5 million of that money which was written back was actually in respect of City Tramways and the operation of bus services in Cape Town. City Tramways applied for an increase last year, and when it came again this year it applied for an aggregate increase of R5,5 million. That was the amount of the increase it asked for. Its book show that it was writing back at least R2 million to R2,5 million each year on account of this inflation depreciation accounting. This means that one could in fact, if one did not have this type of inflation accounting—I am not criticizing the company for doing it, but I am looking at it from the point of view of it providing public utility service—contemplate reducing the average bus fares by anything from 30% to 50%. That would roughly be the situation.

How does one overcome this? A prudent private company would naturally have to allow for the replacement of its assets. On the other hand, is it appropriate that when it comes to commuting, which is a national necessity, a requirement and a fact of life, given the circumstances and the places in which people live, that the bus users of today should have an extra 40% added to their fares in order to pay for the replacement of those buses tomorrow? We believe this could be remedied. I put it as a very serious proposal that the National Transport Commission and the hon. the Minister should have a Loan Fund out of which they could give loans to bus companies and other operators of public transport so that they could replace their vehicles by way of low-interest loans and not by way of increasing fares before that money is actually required. We believe that if the Government would consider setting up such a Loan Fund so that the books could be run on the basis of actual cash and cost structures, and not future anticipated depreciation, it would be a very valuable aid to reducing bus fares in this area.

There is a problem and the hon. the Minister must concede this. Here we have a public company in the private sector, fulfilling a public responsibility, and it is receiving subsidies, at the taxpayers’ expense, from the Government. So, there are three factors concerned. There is the company, the commuter and the Government who are all involved in this. Is the hon. the Minister completely satisfied that everything has been done to see that there are no defects and that he, the bus company, the National Transport Commission and the public have full confidence in each other? I, as a Capetonian, do not like to have a situation where there is running tension between the public and the bus companies. I do not like to contemplate a bus boycott or tension every time there is a rise in bus fares. This is a question of confidence, and I believe that a commission, consisting of the National Transport Commission and representatives of the Department of Finance should go into the matter to completely satisfy themselves that the operations, monitoring, profit margins and accounting procedures are of such a nature that it would justify and still be reasonable to give subsidies to a company which in the end converts part of those subsidies into profits for their shareholders.

I have analysed the problem as we see it. I hope that the hon. the Minister realizes that he has a problem on his hands. There is this three-way interplay, between the three interested elements. There has developed over the years a lack of confidence. I believe that the only way in which the hon. the Minister can remedy the situation is by seeing that an in-depth analysis is made by independent experts in order to restore confidence. In addition, it is essential that the hon. the Minister should give a pledge to the House and to the people of this country. In so far as public transport is a necessity of life and a large percentage of the transport costs arise directly out of Government policy because of the displacement of people and their resettlement very often far from their place of work, we believe that because of the tenseness of the situation the Government must give an assurance that it will find a way of seeing that bus services can be operated— if through private companies, then at a reasonable profit margin—at costs which enable the ordinary person to pay the fare without having too large a slice taken out of his weekly or monthly pay packet.

Mr. Speaker, there is probably nothing nicer than having to reply to the hon. member for Sea Point, for he is one of those people who make statements without having thought about them in advance. For almost 20 minutes now he has been discussing the problem with bus transportation and the problems of bus passengers. Now I want to ask the hon. member: What is the “starving wage” which the “commuter” receives and which the hon. member has already referred to 100 times in this House?

I never used that phrase once.

The hon. member pointed out that the people in Sea Point said their employees R83, while those employees paid R35 for their bus transport. He also used the two furthest possible poles in his example, viz. Mitchell’s Plain and Sea Point.

I shall tell you who pays them that salary.

Wait a moment. The hon. member believes that R136 is a “starving wage”. The PFP’s whole idea is that all non-Whites should receive a minimum wage of R136. If one now has the situation where the people of Sea Point pay only R83 and that the worker pays R35 for bus fare, this amounts to a sum of R118. In other words, in that case the worker is still R20 worse off than the amount which the hon. member for Sea Point advocates should be paid to them by other people, but when the PFP has to pay, it pays only R83.

He is a Government employee.

Wait a minute. It is not true that any Government employees are earning R83 per month. The hon. member must not hide behind a blush. The people of Sea Point want the taxpayer to pay extra for bus fares for their servants. Why is it not possible for the people of Sea Point themselves to pay the bus fares of their servants? The hon. member pointed out that it is the people of Sea Point who are paying R83 per month. [Interjections.] What a shocking state of affairs! It is quite evident that over the years the PFP have wanted subsidized service from the Government for the commuters while they are paying their servants a starving wage.

*Their attack is entirely to their own advantage and not to the advantage of the bus passengers. On a later occasion I shall suggest to the hon. the Minister that a person who employs a servant or worker will have to pay the cost of his transport. Then we shall soon see where the hon. members get their arguments from.

The hon. member for Sea Point is even trying to advocate “inflation accounting” on behalf of a bus company. The hon. member does not know that a bus company can do leasing. In that way it obtains all the tax benefits. However, hon. members are avoiding the issue, for they want the Government to be the cause of bus boycotts, but meanwhile they know just as well as anyone that the fault does not lie with the transport.

†When we come to inflation accounting, it is absolutely impossible to say that only bus company A should be allowed to use it. All the companies should be allowed to use it. If that is done, where on earth shall we find ourselves? How can we possibly decide that as from tomorrow they can use inflation accounting? It is quite impossible when it comes to the ordinary day to day work of such companies. Say for instance that we should allow such accounting and next year they have to buy buses, what will then happen to fares? Immediately there will be an increase of 40% or 50% in the fares for the next year. Who will be required to pay for those fares? Will it be the ratepayer who could be a widow or an old-age pensioner? In the way the PFP wants to give away, every person in this country, be he Black, White or Brown, with a little bit of substance will have to pay in order to get people to places where they should in any case not be working.

*If one wants a servant one must pay for it. I think it is a disgrace that the hon. member has said here that the people of Sea Point pay R83 per month. Can you imagine—R83 per month! It is a crying shame! It is a crying shame to think that people get a servant to come all the way from Mitchell’s Plain, knowing that the servant has to pay R35 per month for transport alone. Although this is the position, the hon. member nevertheless lays a charge at the Government’s door. I think this is a disgrace.

The hon. member should really—this is the least he could do—make an appeal to the people of Sea Point, of Pinelands, to pay at least the starvation wage which we hear about in this House every day. They believe that a starvation wage is R136 per month and I agree with them. It is indeed a starvation wage if one looks at it in certain respects. Why is the allegation made that it is a starvation wage as soon as the Government has anything to do with it, but when it comes to their own pockets, the people are not prepared to pay more than R83 per month? Quite apart from that R35 goes to transport.

And then Helen probably has a “nannie” as well.

When one rises in this House, one must not apply double standards. Over the years I have informed this House of what my findings have been on the basis of investigations I undertook on the Cape Flats. A person working in the vicinity of Philippi is paid far less than one working in the northern suburbs. I indicated the facts year after year. In the southern suburbs— the predominantly …

Prog areas.

Yes, in those Prog areas they are paid far, far less than in Bellville, Welgemoed and such places. Black people wrote reports which I quoted in this House and said that a domestic servant in the northern suburbs receives up to R5 per month more than one in the Sea Point area. This is important. When one discusses transportation in this House one must realize that this is an extremely thorny subject, particularly when it comes to ordinary bus transport. This is in fact one of the major problems in the world. Why does it remain a problem? Precisely because energy is becoming more expensive every year. While we are speaking here now, the oil exporting countries are negotiating on a possible further rise of $5 per barrel in the price of oil. For that very reason it remains an almost constant increase, and makes it very difficult for everyone in the transport industry to remain in that industry.

That is why it is also true that people who want to make use of other people’s labour must be prepared to pay for it. Consequently I believe that we should get away from the idea that the Government must subsidize everything. The Government cannot subsidize the wages of domestic servants, as was requested by the hon. member for Sea Point. We must get away altogether from the idea of subsidies for the transport of people to places where they do not belong. Accordingly, a person who would like to employ a servant from Mitchell’s Plain must be prepared to pay that servant’s transportation costs from Mitchell’s Plain to his place of employment.

Mr. Speaker, this debate has now continued over a period of many, many weeks, and I believe this subject has really had a full thrashing, if I may use that expression; especially as far as clause 5 of the Bill is concerned.

The hon. the Minister is fully aware of the fact that we have welcomed the provisions of all the clauses in this Bill, with the exception of those of clause 5. We believe that in this Bill there are included many provisions that are going to expedite the processes of administration of the various road traffic boards and the commission. Therefore we have welcomed it. The hon. the Minister saw fit, however, not to change clause 5 during the Committee Stage. For this reason we are going to oppose the Third Reading of this Bill.

We have heard the hon. member for Sea Point and the hon. member for Langlaagte speak about clause 5, and, as I said during the Second Reading, I think it is incumbent upon all concerned in the transportation of people, especially commuters, to recognize and accept their responsibility in this regard. The matter of the employer has again been raised here today, and I believe that employers do have a responsibility to ensure that those in their employ are in fact receiving fair wages. If the transport costs of their employees travelling to and from work erode their income to the extent that we have heard here today, I do believe something is radically wrong. I believe it is very simplistic to say the employer must then simply raise his employee’s wage to the level which would accommodate transport costs. If every employer was forced to pay his employee’s transport costs, I believe, a lot of employers, especially those who employ domestic servants, will do away with their employees. Then we would have an unemployment problem on our hands. This is therefore not as simplistic as hon. members have made it out to be.

I do believe the bus companies have a responsibility here. I think one of their prime responsibilities is to ensure that their buses operate as efficiently as possible, because inefficiency raises costs. I also think they are entitled to a fair profit. I do not think that anyone in this free economy society will begrudge a company’s making a fair profit. The question, however, I should like to put to the hon. the Minister is the following. Is he satisfied that the profits which they are making are in fact fair profits?

I shall answer that question if the hon. member will first tell me what he considers to be a fair profit.

The hon. the Minister asked me that question during the Second Reading.

Quite correct.

We can all play with figures. The hon. the Minister himself, when he wears his hat as Minister of Railways, applies the principle of inflation accounting. Recently he increased the Railway’s rate of depreciation so that he can form capital out of revenue in order to pay for replacements and for expansion. When we talk about a fair profit, what exactly are we talking about? The hon. the Minister points to his pocket. What he means by that is that when all the figures have been sorted out there is still spare money in the pocket.

That is right.

I do know that various Government departments, and this hon. Minister was Minister of one, the one which is now the Department of Industries and of Commerce and Consumer Affairs, regularly review the prices of many of the products which are administered by the department. Therefore the hon. the Minister himself is very well aware of what a fair profit can be. On the one hand I think the hon. member for Sea Point suggested that one way by which the Government could assist the bus companies—and he gave a few examples—was to remove the fuel taxes and fuel levies and the taxes on certain items. He then went on to say that the Government could allow the bus companies a greater depreciation rate. Did I hear him correctly? Then, if I heard him correctly, he went on to say that he objected to the fact that inflation accounting was putting up the …

I did not object. I said this was a factor and that the Government should overcome it.

I do not believe we can overcome basic economic facts, and a basic economic fact of life is that if one provides a service that service is going to cost a certain amount of money and someone has to pay that cost. Even if the Government removed the levies or the taxes which bus companies presently have to pay on their fuel, spare parts, etc., it will mean that the Government will have to obtain revenue from other sources in order to cover those losses. Therefore I believe that any reduction or removal of levies or taxes is just another form of subsidy. I think the removal of these levies and taxes could lead to a lot of malpractices in that unscrupulous bus owners could then use that privilege to obtain fuel and spares for purposes other than just the transporting of passengers. Therefore I do not accept the hon. member for Sea Point’s views in this regard. I think a subsidy is a subsidy and if there were tax concessions, to my mind, it would just be another form of subsidy.

I do believe, as I have said, that the bus company itself has certain responsibilities in this regard. The Government also has a responsibility, and I want to stress this. I am very pleased to see that since the Second Reading, all through the Committee Stage, the hon. the Minister stressed the amount of money by which the State is at present subsidizing public transportation. But I have not seen these figures being given the publicity in the media to which I believe they are entitled and which is warranted. I think the public should be made aware through the media of just how much it is costing South Africa to subsidize public transportation. The figure for bus services alone is R76 million. There is another R70 odd million for rail commuter services. The total rail passenger services are subsidized to the order of R485 million. The question the public of South Africa has to ask themselves is: Just how far can we expect the Government to continue to subsidize transportation? Someone has to pay for it. Should it be the taxpayer? There is another section of the community which says that taxes are too high. This is therefore a very difficult problem. I believe that we all have to accept our responsibilities in this regard and I think the transport users themselves have certain responsibilities. One has to pay one’s way in life for any other service which one obtains. We should not allow the idea to be developed in this country that transportation has to be cheap, and that the general public are entitled to free or cheap transportation and that it is a right. Where it is being subsidized, it is a privilege, and they should realize that.

Politicians too have a responsibility here. I think too many politicians are using transportation as a political football today. I believe that we heard it in the House this afternoon from the two members who spoke before me and who made light of this whole matter and started to play a little politics with something which, as I have said before, is a potentially explosive situation. It is for this reason that we opposed clause 5, because we appreciate and accept that public transportation, in the minds of commuters today, especially Black and Brown commuters, is a very sensitive subject. We know that there are many bus boycotts. We know that there are activists and agitators who are exploiting people in this regard. We know that many commuters are finding the high cost of transport extremely difficult to bear, and we sympathize with them. I am very concerned—and here I warn the hon. the Minister again—about the consequences of clause 5, should a case ever arise where an appeal succeeds after the public have been forced to pay the higher tariffs. That is why we object to this Bill. We are very much afraid that the people who have been exploiting the commuting public will use such a situation to create a very explosive situation. It is because of this that we shall be voting against the Third Reading of the Bill.

Mr. Speaker, you will permit me to apologize to the hon. members who were the guests of my department at Saldanha on Saturday, for not having turned up myself. I think the reasons for my not having been there are known to them.

I should like to start where the hon. member for Amanzimtoti left off and say that we in this House have a responsibility in respect of this matter, a sensitive matter. The hon. member for Amanzimtoti stated another important point with which I agree. He said that in spite of all the efforts we had made to make the information in respect of transport subsidies public in a direct and indirect way, we had not succeeded in doing so. I think the hon. member is correct in adding two and two together and getting four, viz. that certain people in this House and certain media are no longer pleading the cause of underprivileged people, but playing politics. The best exponent of this game is the hon. member for Sea Point. He can argue and accuse me as much as he likes, but words have a meaning. I shall leave it to this House to judge whether the conclusions I have drawn from what the hon. member has said are justified, and whether the hon. member has simply been misleading the public. The hon. member for Sea Point stands by the report in The Cape Times. I shall quote the whole report. I shall also read out that extract which he quoted in quotation marks. [Interjections.] After all, the hon. member is not responsible for the conclusions other people draw from what he had said. I quote—

I have been given notice. It is very interesting that this report appeared on 16 May. The Transport Vote was discussed on the same day. I do not know what the deadline was, but it stated that the hon. member for Sea Point was going to raise the matter that same day. I quote further—

Correct.

Just give me a chance. This is still a summary of what the learned gentleman said.

Sounds very good.

Yes, Satan’s words often sound good, too, particularly when they are not comprehensively proclaimed in the passage.

The report quotes the hon. member’s words—

Only one meaning can be attached to these words, viz. that the Government does not subsidize any transport in the urban areas. [Interjections.]

Nonsense.

The hon. member can whine as much as he likes. [Interjections.] Would the hon. member please keep quiet?

When he made this statement he knew that subsidies in respect of urban transport were being paid. If words have any meaning, then this statement of his means that subsidies are not being paid, for he did not ask … [Interjections.] The hon. member has made his speech. Surely he cannot make more than one speech during the Third Reading. He said that the least the Government could do was to subsidize mass transport. Surely only one meaning can be attached to that, viz. that the Government was not doing so at that stage; otherwise his English does not mean the same as mine. There is nothing innocent about the hon. member’s conduct, nothing. His conduct is wilful, his conduct this afternoon as well. He must not be startled now by the Frankenstein of unrest which was also caused by his conduct. [Interjections.] Just give me a chance.

If the cat has kittens is it our fault?

If the cat has kittens, at least they look better than you. [Interjections.]

The hon. member for Amanzimtoti said that we should try to get the information through. I pointed out to this hon. House what happened in the case of one publication in Cape Town, its reporting and its introductory comments on the whole question of bus tariffs. I have not yet heard the hon. member for Sea Point commenting adversely on this publication’s despicable actions. The hon. member went on to say that it was important that the public’s confidence in the Transport Commission and in the local road transportation boards should be restored. I agree with him, but where is the best place to demonstrate this in practice? I maintain that the people who make the rules within this hon. House in accordance with which people outside this House have to function, are the obvious persons to do so. What happened here? If the hon. member was in earnest about his pious sentiments, why then did he not in the second place take the hon. member for Green Point, his colleague, to task, for surely his speech was in fact a deliberate attempt to undermine the public’s confidence …

Mine?

The speech of the hon. member for Green Point. Is the hon. member not even listening to what I am saying? Why did he not take him to task about the fact that his speech during the Second Reading debate …

Told the truth.

… amounted to nothing but a blatant undermining of confidence in the local road transportation boards and in the National Transport Commission? Why not? To restore confidence in these bodies? No. Bring me any bandwagon and the hon. member for Sea Point will climb on it. On the subject of confidence, something which I consider important, the hon. member for Green Point commenced his speech by saying—and hon. members will recall this—that the local road transportation boards, the National Transport Commission and my department looked upon the rights of the passengers of services with contempt. I just want to ask the hon. member for Sea Point: Was this an effort to instill confidence in these institutions and in the people who have to serve the institutions, or was this intended to break down and undermine confidence?

I maintain that the hon. member evaded a further responsibility, for I did not hear the hon. member for Sea Point taking any people to task about the wages which he alleged were being paid to the people who work in Sea Point.

That is in the public sector, not in the private sector.

Is the hon. member alleging that people in the public sector are being paid R82 per month?

Yes.

Will the hon. member bring me the evidence?

Yes.

I should like to see it. I should like to know what people in the public sector are working there in his Sea Point constituency. But the fact of the matter is that if what he said is true, surely he should have addressed himself to the people who are paying the wages. That, however, he does not do.

I want to tell hon. members that I have received no representations from any association which represents the interests of the underprivileged people, whether Coloured or White, on any provision in this Bill. It surprises me that they would turn to a person who has no influence in this House to come here and put their standpoint. But I did receive representations. Of course I received representations on the whole question of bus tariffs, but I did something about them, in spite of what the hon. member for Sea Point is proclaiming. Precisely in order to retain confidence in these institutions I announced various steps. They are on record. I had the financial affairs of bus companies investigated by independent cost accountants long before the hon. member for Sea Point or any other member asked for it. Not only did I have this done in respect of City Tramways, but also in respect of Putco and others. I do not want to take up the time of this House by mentioning the names of these people. For what reason did I have this done? I had it done for only one reason, and that was to ensure that a proper equilibrium is maintained between the interests of the interest groups that are involved in public transport services. We went even further. As a result of the fact that efforts are being made by some of the media to undermine confidence in the local transportation boards—this is being done for political purposes and for no other purpose—the National Transport Commission considered City Tramways’ application itself and took it out of the hands of the local road transportation board.

I want to reiterate that I am not a person who conducts a vendetta against newspapers, but if we examine the fact that in the editions of the Argus on one day, 31 mistakes were made in respect of the tariffs, I say that surely this is a public disgrace if we proceed from the standpoint that we have a duty to inform and that other people have a duty to be informed. This is how we use it. I do not understand how the concepts of morality and ethics of people, who moralize to others every day, drive them to use the Press as a democratic institution to break democracy.

Surely the Government instituted an investigation into the whole question of urban transport. Surely the hon. member for Sea Point knows this. The hon. member also knows that there is a White Paper on the report, which is known as the Driessen report. What is more, the hon. member knows that there is an Urban Transport Act which is directly related to that.

I was referring specifically to the Cape Peninsula.

I am sorry, but I cannot make laws for the “Cape Peninsula”. Do we not have a responsibility to other parties as well? Do we not have a responsibility in respect of the funds we spend on behalf of the public? Do we not have a responsibility in respect of the funds which are collected from people for the provision of services in this country? Let us examine the scope of what is happening with transport services in this country. I said that it is estimated for this year that at the total cost, the deficit on the Railways passenger service will amount to R485 million. I went on to say that when subsidies were paid on urban transport for the first time in 1970, the amount was approximately R193 000. I also said that under the Transport Vote this year a direct subsidy amount of R76 million was being budgeted in respect of road transport alone. Furthermore I said that the amount that the Government was paying the Railways in respect of the re-settled areas amounted to R70 million this year. This gives a total of R146 million as direct subsidization by the State for the sake of the person using passenger and bus services. Furthermore the hon. the Minister of Finance agreed that the Railways would be relieved of the payment of interest on that part of the loans that had been negotiated for the establishment of passenger services. This amount is estimated at R171 million this year. In other words, quite apart from what the Railways will lose even now on the basis of total costs, the contribution of the Exchequer is therefore R146 million in the form of direct subsidization and then there is a further R171 million as a result of the termination of the payment of interest. Has the Government discharged its responsibility in this specific regard or not? Why is it not possible for us to get these facts stated? This is part of what is happening in the Cape. Let us not bluff one another here. In the first place the facts are being suppressed so that the agitation can remain motivated. Furthermore the facts are being distorted in order to achieve the same effect, and some of us in this House are taking part in this. I have said before, and I want to reiterate today, that we should not try to use the institutions of democracy to destroy democracy itself under the protection of democracy.

I want to issue a warning to this House. This is most probably the last opportunity I shall have to discuss this matter this session. I want to ask the hon. member for Sea Point a question. He must not be angry with us because a clique hijacked his party from under him. It is not we who did it.

He is the foreman of the clique.

No, I am addressing myself in complete earnest to the hon. member for Sea Point. When he was the Leader of the official Opposition, he was written off because he was not a “killer”. Surely that is true.

Now he has become a “stabber”.

He had to go because he was not a “killer”. Then they sent us a superman.

Super Boot!

No, a superman. I shall come to the “boot” presently. There is a competition in progress on the opposite side to see who is the toughest. They are trying to convince people that they have made the find of the century, a find which no one has been able to discover in 32 years.

Van Zyl, they say you are “Mighty Mouse”. [Interjections.]

I do not allow Die Burger to write my speeches, nor do I write their leading articles. But the hon. member for Sea Point and the hon. the Leader of the Opposition do. I read in the newspapers what they are going to say before they have made their speeches. After all, he has never said anything new here. Sir, I want to link this to something. The hon. member for Sea Point said that social peace in this country was important. I want to tell him that it is more important than his party or mine.

[Inaudible.]

He says that that is correct. In that case I want to ask him to behave himself accordingly. I have given the facts and, when I make a mistake, I say: “I am sorry. I gave the wrong facts.” Surely the fact of the matter is that what the hon. member said in The Cape Times was not true.

It was true.

He can go and sing that song to the hon. member for Houghton. I maintain that, if words have any meaning, the newspaper report is not true. Secondly I want to ask the hon. member why he does not rebel against the fact that we cannot get the facts published.

Which facts were not published?

I pointed out that in one day’s editions of The Argus there were 31 mistakes in which tariffs were stated to be higher …

Did you make a correction available?

I issued a statement in which I furnished the correct facts. But does the hon. member condemn the fact that the wrong information was published?

[Inaudible.]

Does he condemn that fact?

I have not yet seen that report, but if it was wilfully stated incorrectly, then I condemn it.

If it was not wilful and the hon. member’s attention is drawn to it, as I am doing now, does he in that case condemn it as well?

Then it is unfortunate.

Surprise, surprise, then it is unfortunate! I cannot get the hon. member so far as to accept his responsibility as a member of this House. This is in fact the cardinal problem we are facing. That is the party which withdraws itself from the actual process of decision-making. That is a party which withdraws itself but nevertheless often uses this House to lend momentum— the hon. member can kick up as much of a fuss as he wants to about this—to extra-parliamentary actions taken to bring about change in this country. He must not use the legislation to play a political game of that nature.

No person is being deprived of his right to appeal in terms of this legislation. There was a right of appeal against the substantive decision as to what the tariffs must be to the National Transport Commission, and there still is today. No change has been made to that right. The courts had and still have a right in specific circumstances to review any process of the National Transport Commission or the local road transportation boards. All that is being provided in the clause in question is that the decision of the local road transportation board or the commission remain in force until the court has given a final decision. Surely such a decision can and therefore will be obtained in a short space of time.

Surely Mr. Rommel Roberts was not a commuter, or was he? I ask the hon. member for Sea Point—he was terribly involved—whether Mr. Roberts was a commuter. No, he was an instrument.

Yes.

The hon. member for Pinelands confirms it.

He is a community worker. Of course he is concerned.

I think he should be concerned because of what he created. I think the hon. members should be concerned at what they are creating in this country. I think it is high time they become concerned.

*The hon. member for Sea Point said that we should decrease this exceptionally high tax, but to this day he has not yet told us what the high tax is. He said we should make it possible for the bus companies to borrow money. The necessary loans must be negotiated for this purpose. But I do want to point out to him that if he wants to discuss a subject he should at least make sure of the facts. I think he should go and read the Driessen report. That report implies certain things. For many reasons we shall have to revise the urban transport systems completely as far as infrastructure and services are concerned. Consequently the Government has already made a start in that regard by means of the creation of metropolitan boards for transport. The matter we are now dealing with is included in that. The Government has accepted that in respect of the creation of the necessary infrastructure 60% of the cost will be borne by my department as from 1981-’82. It has been decided that the same will apply in respect of the purchase of vehicles for two demonstration projects.

There are other persons and bodies who also have a responsibility as far as community services are concerned. In this regard I am referring to the urban local authorities. It is so stated in the report and all of us accept it.

Finally, I want to point out that in the past year I have succeeded in obtaining a concession from the Treasury. Apart from the R146 million, I obtained R171 million in respect of passenger services. This is an interim measure. The fact of the matter is that we have accepted that the transport companies and the Railways must be compensated for those transport services which are provided by them at a tariff level which is lower than or equal to cost.

Mr. Chairman, I was wondering whether it would not be advisable for clause 1, which includes the new title Vice State President, to stand over until after clause 5 has been considered as clause 5 deals with the establishment of this office.

If the hon. member wishes the clause to stand over, he must move accordingly.

Mr. Chairman, in the circumstances I move—

I now put the clause.

Mr. Chairman, as this clause is merely an amendment to a heading in anticipation of the establishment of the post of Vice State President in clause 5, we shall object to this clause but reserve our views on the question of a Vice State Presidency until we come to clause 5.

Mr. Chairman, I am sorry that the hon. the Minister has forced us to debate a mere title to a chapter instead of the substance of the creation of the post of Vice State President. We support the creation of this post and we would like to have debated it logically against those who are opposed to the creation of the post, but it cannot be debated in the form of a mere title which has no substance and no content. It is quite impossible to carry on any logical debate simply on a title in a heading. However, I merely want to place on record that when we come to clause 5, which deals with the creation of the post, we shall debate it. [Interjections.] We have no objection to the creation of the post, but it would have been much better if we could have dealt with it when it comes to the clause dealing with the creation of the post. Therefore we shall not oppose clause 1, it being merely a change in a title.

Call it the last post.

Clause agreed to (Official Opposition dissenting).

Clause 3:

Mr. Chairman, this clause flows logically from the proposals to abolish the Senate because formerly the qualifications for the holder of the office of State President were similar to those required for membership of the Senate. However, in relating it in terms of the amending clause solely to the House of Assembly, one is deleting the provision that this person should be at least 30 years of age. In other words, the qualifications for a Senator include the qualification that he should be a person of 30 years of age or older, whereas if one, in terms of this Bill, relates the qualification solely to the House of Assembly, no age provision whatsoever would apply.

The clause as it stands would mean that a person of 18 years of age could become the State President. The first thing that we think should be remedied is the provision providing for a minimum age of 18 years. We believe that the age limit of 30 years is a reasonable age limit for the person who is going to hold the office of State President in South Africa.

The second qualification for election to the House of Assembly which is suggested in this Bill is that this person has to be a White citizen. Qualification for the House of Assembly involves being a White citizen of South Africa. While this does not flow from the recommendations contained in the report of the Schlebusch Commission, we believe that it is an appropriate time for this Parliament to consider whether it cannot get rid of the provision which debars a person of any race other than the White race from being the State President of South Africa. As I understood the draft proposals of the Government put to the people of South Africa in 1977, the Government itself removed the obstacle to presidency in respect of Coloured and Indian South Africans. This we understood from the Government and from the declarations by Ministers. Mr. Vorster said in this House that in terms of NP policy the State President need not necessarily be a White person, although he suggested that as long as the NP was in power and dominated the electoral college, the State President was likely to be a White person. So we believe that this is an appropriate occasion for this House of Assembly to get rid of the race concept built into the qualifications for the presidency. To give effect to this, I should now like to move the amendment printed in my name on the Order Paper, as follows—

1. (a) is at least thirty years of age;
2. (b) has resided for at least five years within the limits of the Republic;
3. (c) is a South African citizen in terms of the provisions of the South African Citizenship Act, 1949 (Act No. 44 of 1949).

Order! I am unable to accept the amendment moved by the hon. member as it is in conflict with a principle of the Bill as read a Second Time.

Mr. Chairman, could I address you on your ruling?

I have given my ruling.

Mr. Chairman, could you, for the purposes of clarification, explain in what respect it is in conflict with the principle of the Bill?

I have given my ruling. As far as I am concerned, the contents of clause 3 have been accepted in the Second Reading, and the amendment of the hon. member is in conflict with the principle as contained in that clause.

What principle, Mr. Chairman?

I am not prepared to argue this point with the hon. member.

Mr. Chairman, I am honestly not trying to argue with the Chair. I am asking for some clarification concerning your ruling because it is anything but clear at the present time.

I have given my ruling and I stand by it.

But, Sir, it is extremely unclear and obscure.

Mr. Chairman, on a point of order: I do not think the hon. member is entitled to say that a ruling given by the Chair is entirely unclear. If the Chair gives a ruling …

Order! The Chair has given its ruling.

Clause put and the Committee divided:

As fewer than 15 members (viz. Mr. B. R. Bamford, Dr. A. L. Boraine, Messrs. D. J. Dalling, I. F. A. de Villiers, C. W. Eglin, B. B. Goodall, J. F. Marais, P. A. Myburgh, Dr. F. van Z. Slabbert, Mrs. H. Suzman, Messrs. R. A. F. Swart, S. S. van der Merwe, H. E. J. van Rensburg and A. B. Widman) appeared on one side,

Clause declared agreed to.

Clause 5:

Mr. Chairman, we in the official Opposition will oppose this clause, as we are opposed to the creation of this new statutory post of Vice State President.

There are four basic reasons why we are opposed to the creation of this post at this stage. The first reason is that there is an ommission on the part of the Government. In our opinion the Government has not effectively discharged its responsibility to motivate the creation of this new post. We cannot say that it would be abnormal in a republic where there is a president to have a vice-president. It is quite clear that he could, in certain circumstances, stand in for the State President in the event of the illness or absence of the State President. He could take over some of his responsibilities, although in terms of this clause he is not required to take over any of the formal responsibilities of the State President. Rather, it is his prime function, in terms of this clause, to be chairman of the President’s Council.

We have had a State President in South Africa since 1961 and I do not think there has been any indication from the Government to the people of South Africa that the State President has found it impossible, difficult or intolerable, through pressure of work or other reasons, to fulfil his function and his responsibilities effectively. There is provision for someone to act on his behalf in the event of the absence of the State President. There is the President of the Senate, in the first instance, and also the Speaker of the House of Assembly. So there has been provision for supplementing the office of State President on those occasions when he is not available to carry out his responsibilities himself. In the first instance, therefore, the Government has not persuaded us of the necessity of having this new post against the background of the performance of the various State Presidents in South Africa over the past 19 years.

The second reason why we oppose this clause and the creation of this new post is that it is quite clear from the clause that the Vice State President is to be an integral part of the President’s Council. Not only is he to be the 61st member of the President’s Council, but he will also be the chairman of the President’s Council. To the extent that we disagree with the establishment of the President’s Council, a matter which will be debated further under clause 17, we are also in opposition to the creation of the special post of Vice State President, a post the holder of which will enjoy considerable status in South Africa, primarily so that he can fill the post of chairman of the President’s Council.

Thirdly, we believe that the creation of the post of Vice State President is an example of White unilateral constitution making. It is an example of the unilateral constitution making and the creating of constitutional structures against which the members of the PFP who were members of the Schlebusch Commission objected during the discussions of the commission. In that regard we stated very clearly in our minority report—

What does that mean?

In the circumstances we believe that any new statutory bodies which are brought into being at this stage should clearly be interim in nature.

It is quite clear that the Vice State President will occupy an important position of status in South Africa. This position will not only be created by a statute of Parliament, but this position is determined by an amendment to the Constitution of the Republic of South Africa. The Vice State President becomes a new part of the constitutional structure of South Africa. He will not only preside over the President’s Council, but he will also be the Acting State President on such occasions as the State President is not available. We believe that it is entirely inappropriate at this stage that the White Parliament or the White Commission should be proceeding to introduce this new element in the Constitution of South Africa before we have sat down and reached agreement on this post with the members of the other racial communities in South Africa. As we see it, the State President, and with him the Vice State President, is the first citizen of our country. He should be the symbol of our South African nationhood and he should be a unifying factor in the political life of our country. Where at this stage we are adding to the present structure a new Vice State President who by law has to be a White person and will be elected by an all White Parliament, we believe this is going to place the accent once again on the racial connotation of the presidency which is already embodied in the Constitution of South Africa. We would have hoped that in setting up new structures and new important posts like this, this would have been an occasion for us to get Black, White and Brown people together in order to reach agreement both on the post itself and on the functions attached to it.

Our fourth objection is based on the fact that we do not believe that it is appropriate that the Vice State President should automatically be the chairman of the President’s Council. We say this for a number of reasons. Prime amongst these is that the President’s Council, in terms of its composition, will be a body consisting not only of White people. While Blacks are to be excluded, the President’s Council, which is going to deliberate and come to decisions, will consist of people of the White, Coloured, Asian and Chinese groups.

Are they not good enough?

We believe it is inappropriate that the White Vice State President elected by the White Parliament should be imposed on the President’s Council which is going to be largely a multiracial body. We would find it offensive if we as members of some new elite and prestige body were to find that from outside a group which was not as representative as we were and which belonged to only one section of the South African nation were to elect a person and impose him on the multiracial body as the chairman of that body.

Furthermore, we believe that the fact that the Vice State President is also going to be chairman of the President’s Council is going to alter radically the status and image of the presidency in South Africa. To date the presidency has stood above party politics. To date the State President has not become involved in the political debate or the political arguments in the country, but now the intention is that we should have someone who is the Vice State President and who will be seen acting in tandem with the State President, someone who acts for the State President on certain occasions. This individual is going to be put in charge of a body which, by the very nature of its responsibilities and its deliberations, is going to go to the heart of the political dispute in South Africa. It is going to become involved, through subcommittees, in planning, planning which involves the whole impact of the Group Areas Act on South Africa. It is going to become involved in community relationships, relationships which go to the heart of the Mixed Marriages Act and of apartheid in South Africa. It is going to become involved in constitutional dispensations, which go to the heart of political representation. It is also going to become involved in economic matters and in economic systems which also go to the heart of the economic debate in South Africa.

Therefore we are going to take a man who is only a heart-beat away from the Presidency, a man who has the title of Vice State President of South Africa, a man who will be seen acting in tandem with the State President, and we are going to make that man the chairman of a body which, by its very nature, is going to have to deliberate over the most contentious and the most devisive factors in South African politics. We believe it is going to bring the whole State Presidency as an institution into the political arena. No longer will the State President then be seen as a man who is separate and aloof from party politics. The State President, together with the Vice State President, will inevitably become part and parcel of the party-political disputes and of the interracial conflict and confrontation in South Africa.

We believe, on the basis of the evidence before us, that this post is unnecessary. We believe that to create another post to an exclusive White person elected by White people at this specific time is most unfortunate, and we believe that to make this man the chairman of a council which is going to discuss the most delicate and the most devisive political factors in South Africa, is wholly undesirable. For these reasons we have no hesitation whatsoever in rejecting this clause.

Mr. Chairman, I find the logic of the hon. member for Sea Point rather strange. A few minutes ago the official Opposition voted against one clause because they objected to changing the constitution unilaterally. Now they are opposing this clause because they object to changing the constitution without consultation with other groups. Nevertheless, not long ago they voted to change another clause unilaterally in this very Parliament. They voted in favour of changing the basic structure of Parliament. They voted to destroy the structure of this Parliament, which now comprises the State President and the House of Assembly. They voted to change the basic structure unilaterally, as a White Parliament. Now they object to changing the constitution because, as they allege, it is being done unilaterally. I do not, however, want to become involved in that argument.

I want to deal with the substance of this clause. With the abolition of the Senate, for which this House has just unanimously voted, the office of the person who acts in the stead of the State President will no longer exist, and if the State President is incapacitated or unable for any other reasons to perform his duties someone will have to act in his place. In the previous succession it would be the Speaker of the House of Assembly. That, of course, is all right. There is no problem if the State President is absent from his post for a few days. If the State President should, however, be incapacitated for a long period, the picture would look somewhat different. We have already had the case of a State President-elect becoming ill and remaining incapacitated for many months. In that specific instance the State President-elect died before he could even be sworn in as State President. If the State President were not available, the Speaker would have to act in that position, and it could be for a long time. We believe that it is only right and logical that there should be somebody else available to act in that capacity. That is one of the reasons for the creation of this post.

The other reason is that he would be chairman of the President’s Council. I do not want to argue about the President’s Council at this stage. We shall do that in some detail during the discussion of clause 34. However, dealing simply with the gap, the vacuum which will now exist, we believe there should be somebody to fill it, and because that somebody who must fill it and who may act as State President would then be part of this Parliament, comprising the President and the House of Assembly, it is logical that he should be a person who can be a member of this Parliament. We have just determined that in the previous clause when we voted on it. All the other arguments which the hon. member for Sea Point raised were that he should not necessarily be a member. It was a continuation of the argument on clause 3. We accept that if we are going to have a person as an acting State President, a person who will be part of this Parliament, it is logical that this Parliament should elect such a person and that he should be a person who is qualified to be a member of this Parliament.

What you are saying is that he should be White.

This Parliament is White. That is a fact.

That is a fact, but do not clothe it in rhetoric.

That is the problem with the official Opposition. They try to ignore facts. The other reason for the creation of this post is to be chairman of a body on which Whites, Coloureds, Asiatics and Chinese can sit together and meet with Black South Africans around a table and debate and deliberate over a new future and a new constitution for South Africa. That is the purpose of the State President’s Council. It is to deliberate and to consult in creating a new constitution and a new future for South Africa. The President’s Council flows from the work of this Parliament and we see no reason and no bar for a person …

Where are the Indians going to turn with their problems?

This blind obsession with what is not there, instead of trying to get it there, is the difference between us. We are trying to create machinery which will change the structure of South Africa so that the Blacks, the Indians and the Coloureds will participate. The PFP is so obsessed with opposition that it is prepared to try to destroy any chance of the creation of a body and an atmosphere in which all the peoples of South Africa will, in fact, be able to work together. This is the basic difference between us. Let them go on. History will curse them if they succeed … [Interjections.] … in destroying one of our last chances to get round a table, with all the people of South Africa, to try to negotiate together a new future for South Africa.

The hon. member for Sea Point talks about “we”, “we”, “we”.

He is a big “we, we”.

The royal “we” perhaps. That hon. member did what I want to do now. If the minutes of the Commission of Inquiry on the Constitution were to be published, I would suggest that they would read as follows—

Then it would go on—

In other words, the hon. member for Sea Point opposed it, but the hon. the Leader of the Opposition did not, the hon. member for Bezuidenhout did not and the hon. member for Sandton did not; they voted for the office of Vice State President. They argued only over the method of his election, but they voted for the post. Now the hon. member for Sea Point comes here with a royal “we” to express the unanimous opposition of that party. I hope the hon. the Leader of the Opposition will stand up to deny that he, the hon. member for Bezuidenhout and the hon. member for Sandton voted for the Vice State President to be the Chairman of the State President’s Council.

We, the representatives of this party, supported it then and all of us support it now. We believe that one has to fill the vacuum created by the disappearance of the President of the Senate.

Finally let me add that we have heard this “holier than thou” argument that because the Vice State President and the State President will be involved in controversy and politics, the PFP does not want such an office and the Speaker must act as State President. Who is more involved in controversy and debate than the Speaker of this House? Who is more part of the machinery of difference, of opposition and of conflict …

Now you are reflecting on the Speaker.

… but who would dare suggest that the Speaker ever at any time becomes part of the controversy, that he becomes tainted with the controversy, that he becomes unfairly part of the political process? He is respected and accepted, not only in his office, but also in his person, as an impartial Speaker of the House. The House has its fights and arguments, but that does not taint the Speaker. Why should it be otherwise with a Vice State President? [Time expired.]

Mr. Chairman, I should like to deal with two arguments raised by the hon. member for Durban Point. The first is where he argues that because the Vice State President could be the Acting State President and the State President is part of Parliament, it is important that the Vice State President should be able to be elected to Parliament. I understood that was his argument. In terms of our existing constitution the State President, the Senate and the House of Assembly shall constitute Parliament. Section 11 of the Constitution provides—

In our present constitution there is provision for a person who is not a member of Parliament to become the Acting State President. As the hon. member will know, there was a time when the Chief Justice of South Africa acted as the Officer in Charge administering the Government. It was then the constitutional equivalent of the Acting State President. Then we had the Chief Justice brought in, and I do not think there was any complaint by anybody that the Chief Justice under certain circumstances acted as the Head of the State on a temporary basis. So I believe that that argument of the hon. member is a very thread-bare one indeed.

I want to get the record straight at this stage. After the hon. member had said that if certain minutes were one day published, he then proceeded indicating what those minutes were, but he did not indicate what the voting was. The paragraph which he read …

That was on 25 April.

… was a summary of a discussion. He should read the paragraph entitled “Vice State President standing over”. The question as to whether there should be a Vice State President stood over. It was without in any way accepting the principle of having a Vice State President that subsequent discussions ensued.

It was only the method of his nomination or election that was at issue.

Order!

The decision was that the question of having a Vice State President should stand over. I then want to refer the hon. member to page 40 of the minutes if they are never published. There one reads the following—

During the division four people voted against: Slabbert, Basson, Daiting and Eglin.

What a dishonest way to quote!

When the principle of whether there should be a Vice State President was put, the matter was held over.

Mr. Chairman, on a point of order: Is the hon. member for Houghton entitled to say that it was a dishonest way to put it when I quoted from a record verbatim as it stands?

Order! If the hon. member for Houghton said that, she must withdraw it.

I withdraw it. The hon. member did not quote the full text though.

Mr. Chairman, on a point of order: Is the hon. member for Hillbrow allowed to say that the hon. member for Durban Point is misleading the House?

Order! Did the hon. member for Hillbrow say that?

Yes, I said that he was misleading the House.

Did the hon. member say that he was doing so deliberately?

No, I did not say that.

Order! The hon. member for Sea Point may proceed.

The point I am trying to get at is that it is easy to quote selected extracts from minutes to try to prove a particular point. What the hon. member did not say was that, on the page preceding the one that he read, it is formally stated that a paragraph entitled “Vice State President: standing over”. It was therefore not put, and when it was put at the subsequent meeting, it was put in very specific terms: “Paragraph standing over: now put” and it was voted against by all four PFP-members on that commission. I do not want to get involved in a further argument, but I believe that, for the sake of both the record and of accuracy, the whole minutes should be reflected in the Hansard of this House.

Mr. Chairman, I do not wish to enter the fray to any great extent. I just wish to say that we have already discussed this matter very thoroughly during the Second Reading. I stand by what I said on the creation of the post of Vice State President. We think we owe it to the status of this body which is to be established, the President’s Council, that ex officio we should make a person of high status the chairman. This is one of the reasons why we are creating the post of a Vice State President. It is a fact, as has been indicated, that the President of the Senate can no longer officiate in an acting capacity, and we think that we must for that reason appoint a Vice State President. Finally, allow me to say that I refuse to be intimidated by the hon. member for Sea Point into believing that this person will find himself entangled in all kinds of political disputes. It will be a high office. He can, as does the President of the Senate and the Speaker of the House of Assembly, play an exceptionally objective role, and I have no fear at all that he will in any way be a person around whom any political dispute will develop. I shall content myself with that.

Mr. Chairman, with reference to what the hon. member has just said, I just wish to refer to the reply of the hon. the Minister to the Second Reading debate. Actually this entire question of the dignity of the Vice State President falls under clause 8. This is another clause, and therefore the argument is not really relevant now. Since it has been broached, however, I shall continue with the matter, simply to obtain more information from the hon. the Minister.

Order! I do not wish to interrupt the hon. the Leader of the Opposition, but I wonder whether this is relevant as far as this clause is concerned.

I shall say why I have problems. The hon. member for Durban Point elaborated at some length on the possibility that the Vice State President will stand in the same relationship to the President’s Council as Mr. Speaker does to this House. I should just like to have this point clarified. The Speaker of the House of Assembly stands in a completely different relationship to this House than I thought the Vice State President would stand in relationship to the President’s Council—and that is why I wish to ask the hon. the Minister for more information. I thought he would be more involved in the matter. There is a very clear convention in this House that Mr. Speaker is above any party politics. Mr. Speaker is actually responsible for the order here. He does not involve himself with party politics. He compels the deference and respect of all hon. members here, and his judgment is never in any way questioned. If the same is going to apply in respect of the Vice State President, there will naturally be no problems with the provisions of clause 8, as they will apply to the office of the Vice State President. That is also why I raised this matter during the Second Reading, and why the hon. the Minister reacted to it. He said (Hansard, 6 June)—

We concede that he is correct in what he said there. If he acts in those capacities, he must be protected. The same applies to the present circumstances as well. The hon. the Minister went on to say—

Consequently there is the suggestion that in his capacity as chairman of the President’s Council he may be drawn into controversies. On this I should like to have more clarity from the hon. the Minister.

You may put the question again under the clause in question.

Mr. Chairman, I am not prepared to allow the insinuation of the hon. member for Houghton to stand unchallenged. I have here a document which, if published, would purport to be the minutes of the meeting held on 25 April 1980. In this there are only two references to a Vice State President. The one is “Paragraph entitled ‘Vice State President’ standing over”. There is only one other reference to a Vice State President and that is the one I read, but if the hon. member for Houghton wants me to read the whole paragraph I shall. I quote—

I quote subparagraph (a)(i)—

That is the report of the commission. That document records that subparagraph (a)(i), which I have read in full, was agreed to with amendments, subject to the approval of an introduction to be drafted by a subcommittee. This was dealt with at a later meeting. This is the important part, and I am going to put it on record so that I cannot be challenged for giving half facts. I quote further—

1. (1) that a council be established;
2. (2) that the council should be known as the President’s Council;
3. (3) that the council will consist of 60 members.

It was further resolved that the method of composition of the President’s Council would be determined at a later stage and it was agreed that the Vice State President would be the chairman of the President’s Council but that the method of his nomination or election would stand over until the next meeting. Mr. Eglin indicated that he was opposed to the creation of the office of the Vice State President so that he may act as chairman of the State President’s Council.

That is the full, unabridged record. [Interjections.]

It is not.

It does not indicate the voting.

Of course, a week later there was voting, but that was after the hon. the Leader of the Opposition, who voted for subparagraph (a)(i) … [Interjections.] It is recorded “agreed to” and it specifically states those four things having been agreed to, except by the hon. member for Sea Point. [Interjections.] Then they had an emergency caucus meeting and came back five days later, on 30 April, and presented a minority report and voted against what they had voted for on 25 April. [Interjections.] I think the country is entitled to know that there was a total volte face, a complete somersault, because the only things that stood over and which were material were the composition of the State President’s Council, which I cannot discuss now, the method of the election of the Vice State President and the objection of the hon. member for Sea Point.

You are sucking facts out of your thumb.

For the rest, the commission was unanimous that there should be a council, about what its name should be, about the number of members of which it should consist and about the fact that the chairman would be the Vice State President. On that there was—bar one— total unanimity. The only opponent to that view was the hon. member for Sea Point. That is all I want to put on record. After a caucus meeting we saw a different picture. I accept it that there was a vote against all sorts of things which I had understood were agreed on … [Interjection] … such as the existence of a President’s Council with the Vice State President as its chairman. The only things which stood out in stark disagreement—and I will not try to debate them now—were the limitation of the race groups from which members of the Presidents Council could be appointed, the method of election of the Vice State President and one other matter that was standing over. For the NRP, I am going to be consistent and stand by the attitude I and this party have adopted all along, viz. that we need somebody who can act as the State President when necessary, that we should bring all the races together to talk and that the Vice State President would be a suitable, non-political figure to act as chairman of a body in which the races of South Africa can plan their future together. That is the essence of our support for this measure.

Mr. Chairman, I honestly do not think that I can allow the remarks of the hon. member for Durban Point to stand on the basis that he has put them. I think anybody who carefully studies the record of the minutes which have been printed, will construe, in the end, that the minority party on that commission tried everything possible to reach consensus. This is precisely what is reflected in the wording of those minutes. Subject to two aspects, the PFP Opposition members on the commission were prepared to accept a body, council or institution of some sort or other which may well have had, as its chairman, a Vice State President.

Now you are floundering.

They were prepared to accept it subject to two provisos, the first being that Black people be represented on it, like any other South Africans, and the second being that permanent institutions be not included in the constitution until such time as there had been negotiation on it.

The chairman of the commission—and this is not reflected in the minutes, but it is very relevant to this clause—said at the time, when it was pointed out to him that there were these two major conflicting principles between us and the other commissioners, that we should try to reach consensus on some of the details. On the question of whether we do need a council, we all agreed that we did need a council. On the question of whether it should have 60 members, we said that if there is to be a council, it was in order that it should have 60 members. We had no objection to that.

[Inaudible.]

We went through the whole gamut of the details concerning that council. We as commissioners went along trying to reach consensus on a body to be created … [Interjection] … but when it became apparent that what was happening was that we were being placed in a situation in which we would be called upon to agree to all the details concerning the council that was to be created, and that in the end the two major principles about which we felt very strongly, and upon which the very value of that council rested, were going to be denied, we decided that that was as far as we could go and that we would set our viewpoint out in a minority report. That is what is reflected here. I want to say that to me it is a great pity that the hon. member for Durban Point has raised this because he raised it merely to gain some sort of short-term political advantage. [Interjections.] I want to tell hon. members that the actions of the commissioners of the PFP are actions to which I subscribe and of which I am proud. I would do it again, because where it is humanly possible, in the circumstances in which South Africa finds itself today, we will try to reach consensus. We will try to create a body in which people can come together. We were even prepared to concede the appointment of that body as opposed to its election, but when it came to those two basic principles, we had to stand firm. That is why the record shows what it does today. I think it is quite wrong to try to create political capital out of an attempt by this side of the House to reach concensus. [Interjections.]

Mr. Chairman, to clause 6, and also to a number of other clauses which follow, there are amendments standing in my name on the Order Paper. All those amendments were consequential upon whether clause 5 would be agreed to or not. In view of the fact that clause 5 has now been agreed to by the House, I shall not move them. Nevertheless, we shall object to clause 6 and to the others.

Clause agreed to (Official Opposition dissenting).

Clause 7 agreed to (Official Opposition dissenting).

Clause 8:

Mr. Chairman, I have already made the points I wished to make during the discussion of clause 5 and I do not want to repeat those arguments now. I think they are perhaps still fresh enough in the hon. the Minister’s memory for him to react to them now.

Mr. Chairman, I want to indicate in detail what I said previously. The hon. the Leader of the Opposition did not quote me fully in this respect. I said that it was my contention that this person would often act as Vice State President in his own right and that he would also often act as Acting State President. I think that his dignity in those capacities should be protected, in the same way that that of the State President is protected. Unfortunately his person is not divisible and he is going to be an ex officio member of the President’s Council as well. I added that it might happen that as such he might now and then be a political target, but that I was not prepared to consider an amendment of the clause in question at this stage, because I was confident that his office as chairman of the President’s Council would be so dignified and objective that it would very soon be felt that his person and his office as a whole could be protected in terms of the provisions of the same section of the Constitution in terms of which the dignity of the State President is protected.

I spelt this out as clearly as I could. The hon. the Leader of the Opposition will forgive me, but I cannot spell out the rules of the President’s Council this evening. This whole matter is in a process of growth and evolution. I cannot spell out to him this evening just what the office of the chairman would involve. My personal feeling is that we should try to depoliticize that Council, and the office of chairman too, as far as possible. It happens, for example with regard to Select Committees of this House, that a person who is bound to a particular political party, the governing party, and serves as chairman of a Select Committee, is politically bound and motivated but nevertheless occupies the position as chairman of that Select Committee without becoming a controversial figure. That is as far as I am prepared to go tonight. It is my opinion that we should give it time. We may discuss this again in future if the chairman becomes too much of a political target. I do feel, however, that he will be a dignified person and as such also very objective, and that he will act in such a way that his dignity will be respected at all times, as is the case with the State President.

Clause agreed to (Official Opposition dissenting).

Clause 9 agreed to (Official Opposition dissenting).

Clause 10 agreed to (Official Opposition dissenting).

Clause 13:

Mr. Chairman, I think it is under clause 13 that we finally take leave of the Senate as we have known it all these years as a part of our parliamentary system.

We support this clause, as we have already indicated in our minority report. I think it is true to say that the Senate will be better remembered for its brilliant personalities than for its constitutional efficiency in our parliamentary system. During its existence, the Senate performed four basic functions, as I understand it. On the one hand, the Senate at one stage gave representation to so-called non-White persons by way of special Senators. This practice eventually fell into disuse and was discontinued as a result of decisions taken by the Senate itself. The Senate also looked after the interests of the provinces, but as the powers of the provinces were taken over by the central Government, this function, too, was largely abrogated by disuse. Another important function of the Senate was to watch over the entrenched clauses in our constitution. But last of these entrenched clauses we also removed from the Senate a few weeks ago, in a joint sitting. The final function of the Senate, of course, was to watch over decisions taken in the House of Assembly itself. However, as the Senate became a reflection of the party political division in the House of Assembly, this function also disappeared.

When we say, therefore, that we agree to the abolition of the Senate under the present circumstances because we believe that it is no longer efficient, we certainly do not mean to say, of course, that we are in favour of a unicameral system in South Africa. In fact, we believe in a bicameral system, as stated in our own policy in that connection. We believe that a bicameral system, if effectively structured, is much better for the kind of society we have in South Africa. For this reason, our consent to the abolition of the Senate certainly does not mean that we approve of the unicameral system. Nor does it mean that we believe for one moment that entrenchments are not important. In fact, if people would study our policy, they would find that we place a particularly high premium on entrenchments, by the Senate as well as by an independent Bench, by a Bill of Rights, etc. The fact that we are consenting to the disappearance of the Senate certainly does not mean, therefore, that we do not feel just as strongly as before about the question of entrenchments in the constitution. It is precisely because the Senate, as we know it, is no longer performing any of those functions effectively, that we believe that the Senate no longer serves any specific purpose. That is why we were prepared to agree to the disappearance of the Senate.

Clause agreed to.

Clause 17:

Mr. Chairman, clause 17 is one of the clauses on which we took a very strong stand during the Second Reading. This clause involves the enlargement of the House of Assembly by way of nominations and by way of indirect elections by an electoral college. It is our standpoint that the House of Assembly is a representative body and should remain one. We find every measure which militates against the representative nature of the House of Assembly unacceptable and we shall oppose it with all our strength.

There are differences of degree in the way in which this principle can be undermined. Clause 17 contains two such methods by which this principle can be violated. The one is the question of direct nomination by the State President himself, where the State President, in his executive capacity, nominates four members—one for each province—to serve as ordinary members in the House of Assembly. The other way is the question of indirect elections by means of an electoral college. In this case, provision is being made for the election of eight people to this House in this way, on a proportional basis.

Naturally, the second method to which I have referred is better than the first one, because it does contain an element of representation. However, both undermine the principle of representation on a direct basis. It is our standpoint that if we are able to do so—and I want to emphasize this very strongly—we shall immediately abolish this system in South Africa.

Now the hon. member for Durban North has asked a certain question here. By the way, I notice that the hon. the Leader of the NRP is going to move an amendment to this clause. His amendment, as printed, is similar to the one I am going to move myself. Therefore I shall certainly find it interesting to listen to the argument which the hon. member advances. The hon. member for Durban North asked what we were going to do if our opposition was not successful and the system was implemented in practice. This is the highest legislative body in the country. It does have many shortcomings, but the PFP believes that it is the most important instrument for constitutional change. We have already said so repeatedly in our own policy. As a party, we believe in our policy as the best one for effecting acceptable constitutional changes. In this House, we shall do everything in our power to promote our interests and those of our country and to prevent the interests of our opponents from being promoted. One voice that can state our case here boldly and clearly is worth ten times more, in our opinion, than one voice of our opponents. For example, the Opposition objected most vigorously at the time to the enlargement of the Senate. Subsequently, however, this did not prevent the Opposition from stating their case by means of Senators.

Until such time as we are in a position to abolish undesirable practices in this House of Assembly, therefore, we shall fight for our cause with all the means at our disposal. When your opponent ties one of your hands behind your back and threatens your life, you do not lie down because both your arms are not free. You fight with all your strength until you win, and then you free your arms.

This is our standpoint with regard to this clause. We strongly oppose it. We believe that it is a bad principle which is to be introduced here, and I should like to hear what the standpoint of the hon. member for Durban North is in this connection. After all, he attacked me with great relish the other night even before I was able to state the standpoint of the PFP in this House. We shall most certainly vote against this clause.

Mr. Chairman, this party is also totally opposed to this clause and to the nomination of members to the House of Assembly. We are particularly opposed to the four additional members who are to be nominated by the State President in terms of the proposed new section 40(1)(b), and I should like to deal with that first. We have here a principle which is totally foreign to the system of single member constituency elected legislative bodies. If there are to be people who are indirectly elected, as they have been in the past to the Senate, then there is a procedure which takes into account the wishes of the electorate, but a system of the executive nominating members to serve on a legislative body which is elected by the electorate is totally alien to the system. We are therefore completely opposed to people being nominated by the executive to serve on an elected legislative body.

The same arguments apply to the proposed new section 40(1)(c), i.e. eight members elected according to the principle of proportional representation. Here, at least, one is moving towards acknowledgement of the will of the electorate. If that were to be taken to its logical conclusion, as in Germany for instance, where a number of members of the Lower House are elected individually by constituencies, and a number elected proportionally by votes cast for parties, one is at least recognizing the will of the electorate. If one were electing them to a body such as the Senate, which purported to be a brake on the Assembly and a protection of minorities against domination by majorities, the original Senate concept would be a sound one, all four provinces having exactly the same representation, elected in proportion to the public representatives elected for that province. Here, however, we get away from even that limited acceptance of the views of the electorate. In a single member constituency election it is not only possible, but has actually happened in South Africa— it has also happened in Great Britain and all over the world—that one can get a minority of the electorate governing—i.e. a majority in the legislative body which does not reflect the majority of voters. Therefore proportional nomination, in terms of the members of this House, will not necessarily reflect the views of the electorate of South Africa. If there were to be any justification for this, it would have to be based on the number of votes cast for the political parties. That one could consider and debate.

Although we are totally opposed to this, the rules of procedure make it necessary that I should at this stage put our point of view should the majority impose the additional members to be nominated. I therefore want to move the two amendments printed in the name of the hon. member for Durban Central on the Order Paper, as follows—

1. (1) On page 9, in lines 37 to 39, to omit paragraph (b);
2. (2) on page 9, in lines 40 and 41, to omit “eight members elected by the members contemplated in paragraph (a)” and to substitute:

The first one is to omit the four members nominated by the State President without any reference to the will of the people or the electorate. That we would like to see completely eliminated. In regard to the additional eight members, if they are to be nominated—and we shall vote against the clause, whether this is accepted or not—we believe that in the South African context there is only one fair way in which to do it, and that is to take into account the wishes of the voters in the provinces and to reintroduce the system used when the Senators were elected to the Senate, when it existed, that is an electoral college of the members of Parliament and the members of the provincial council in each province. [Interjections.] At least this gives protection to the smaller provinces. It recognizes the smaller provinces. It gives them protection against the domination of the larger provinces. It takes into account the chance of a minority in an election being in the majority in Parliament, because it takes into account the two levels or tiers, the provincial council and Parliament. It would, therefore, be a much fairer reflection, or at least some reflection, certainly fairer than the number of MPs, of the wishes of the provinces individually. [Interjections.] Thirdly, it will ensure that one does not get one province, the Transvaal, which has almost half the members of this House, getting all eight of these members, because there is no provision that the smaller provinces will get any members at all. The Transvaal could therefore get all eight of these members, whilst the Cape Province and the Orange Free State get none, solely at the whim of the governing party. I believe that it is only fair that the smaller provinces should be guaranteed a share, if these members are to be nominated, an aspect with which we disagree in principle. I record our opposition to the clause and move that if the clause is to be carried by the majority in this House, that the proposed new section 40(1)(b) be omitted and that the eight members be elected, two members from each province jointly by the members of the House of Assembly and the provincial councillors for that province. The procedure is laid down as it has always been for the election of Senators, and it does not do any violence to the principle of this Bill. The number would remain the same. Only the method of election would be altered.

Mr. Chairman, the Opposition’s objection to this particular provision basically stems from the fact that the introduction of 12 persons, four appointed and eight elected in this manner, will distort the relationship between the parties in this House. That is fundamentally the basis of the objection, and the argument is that this introduces an undemocratic feature into our politics. There are two important considerations when looking at this particular argument. The first is the fact that one is here dealing with 12 members, 12 members out of a total of 177, if one takes the existing number of 165 and adds the 12 additional members to it. So one is dealing with a very small increase in the total composition of this House. That is the first point one needs to stress. The second point that has to be stressed is the fact that, of the 12 members, eight are elected on a proportional basis. Therefore, the relationship of the parties in this Chamber is not distorted by the election of those 12 members. I think that the hon. the Minister very graphically indicated, when he introduced this legislation, just how this would happen. Assuming a majority, if I remember correctly of about 20, the ratio of seats would be approximately 5:3, in other words, a very close ratio. Therefore, on those two grounds, namely the fact that this is not a considerable increase and, secondly, that of the 12, eight reflect the ratio of the parties in this Chamber, it is no real argument to say that this is a deviation from a democratic result. [Interjections.] Let us now look at this from a slightly different angle.

Business suspended at 18h30 and resumed at 20h00.

Evening Sitting

Mr. Chairman, just before the supper break, in reply to the hon. the Leader of the Opposition and the hon. member for Durban Point, I said that the main criticism of the hon. Opposition regarding this provision is that it distorts the democratic process, and I pointed out that this is not the case and that adding 12 seats to the existing 165 seats, of which eight are intended to reflect the ratio of parties here, can in no way be said to distort the representation of parties in this House, and I pointed to the fact that the hon. the Minister, in his Second Reading speech, had actually quoted figures which indicated just how close that ratio was in relation to the majority of any ruling political party.

Mr. Chairman, may I ask the hon. member whether it is correct that in terms of this provision the Government will obtain 11 seats and the total Opposition one?

I do not know that for a fact, but I will accept that that is so. We are, however, dealing with a constitution, the fundamental law of the country. We are not simply dealing with something that is related to one Parliament, but with a Bill that deals with several Parliaments which will be elected. Is the hon. member for Durban Point so pessimistic about the possibility of Opposition political parties making any headway that he assumes that that ratio is going to be constant at 11:1? [Interjections.] That is a silly argument, but …

Is that not the ratio of the parties represented here? [Interjections.]

There is actually a positive basis for these additional seats. If one takes any legislature there are two criteria in terms of which one would evaluate its democratic character. The first is the basis of its election, in other words, is it directly or indirectly elected? The second criterion which one would apply to such a body is whether the composition and character of that body reflects the character of the society.

Where one is concerned with multi-ethnic and diverse societies one accepts that politics and political representation is essentially a group thing. It is groups that are represented whether they be ethnic, language or religious groups, or whether they be class interests. What we are concerned with here is the character and nature of the composition of the body which is elected. All of us accept— I believe the Opposition also accepts this— that the classic democratic model, universal franchise and majoritarianism—does not, in a diverse society, achieve a result which reflects the diversity of the community. It is not the best method, and in fact in many societies it is argued that a far better form of representation is that of proportional representation.

We have a universal franchise, majoritarian system as far as the Whites are concerned, and it is perfectly arguable that one can achieve a better representation in this Chamber by introducing a measure of this kind to enable groups which are not represented in this Chamber to be represented. I believe that this provision can be used for persons with particular specialities, who are not represented here and who would find it difficult to make their way into the political processes. However, there are other communities which could be represented in this Chamber. One thinks in this regard of new South Africans and various communities within White South Africa who are not represented here. Just as various Governments since 1910 have used the nomination provisions pertaining to the Senate to appoint Senators from each province by virtue of their knowledge or experience of the Coloured people of those provinces, thereby achieving a more democratic form of representation, so we are applying this principle in this Bill. What we therefore hope to achieve with this—and this should be the attitude of members of the official Opposition because they are always concerned about groups, minority rights and veto rights, etc.—is a better form of representation in this Chamber by a less democratic form of election. However, as I have pointed out, the fact is that as this only involves an increase of 12 members, eight of whom reflect the ratio of political parties in this Chamber, it does not involve a distortion in the democratic process, an aspect which has been the main argument used by both Opposition parties against this particular provision.

Mr. Chairman, we have listened to the hon. member for Cape Town Gardens. The Bill presents two methods of introducing a new type of member of Parliament into this House. The hon. member has offered one rationale for those two types of implementation. The rationale which is offered is that this is a form or a method of introducing experts or, as he has put it, specialists into this Parliament who otherwise, as he also put it, would find it difficult to make their way into this Parliament. If this is to be the rationale, I honestly consider it to be a total vote of no-confidence in the governing party of the day.

Rubbish.

There are 130-odd seats which are controlled by the Government of the day, and if they tell us that with these 130-odd seats controlled by them …

Order! This Committee is dealing with a very important Bill. It is probably one of the most important Bills which has come or will come before a Committee such as this for a very long time in this country, and I would therefore suggest that hon. members should in this spirit conduct their private conversations more quietly so that a speaker may make himself heard and so that it may also be possible for the Chair to follow what he is saying, for in this particular case the Chair also has a duty to ensure that hon. members abide by the rule, which is to discuss the details of the clause and not the principle. The hon. member may proceed.

As I was saying, this Government controls some 130 to 135 of the 165 seats at the present time.

What do you mean they are controlled? They are elected.

Yes, they are elected. If this Government, controlling that number of seats, and with at least five or six or more by-elections per year, including the provision which was passed earlier this session, a provision in terms of which the Prime Minister was empowered to appoint Cabinet Ministers without those Cabinet Ministers having to seek election, and with the present political electoral power it has, now tells us that it has no means to bring experts, people of knowledge, into this House, I want to tell hon. members that that is an indictment of this Government such as we have not heard before.

This is merely a ploy, because of the absolute ineptitude of the current members of this House sitting on the Government side, to boost their debating power and expertise which they feel they will not be able to bring into this House through the normal electoral processes. I can begin to understand the argument if the hon. member for Cape Town Gardens had limited it to the four nominated members. If that provision was used to bring in nominated members who had a certain and particular expertise, at least I could grasp the argument, but I cannot grasp it on the basis that this is to be delegated to the provinces. We know exactly what has happened over the years with the election of Senators in the provinces. Together the provincial councillors and members of Parliament of the day sat in an electoral college and elected the Senators, but before such an election took place there was lobbying, discussions and a canvassing of votes and what happened was that the people with the most political pull, who were owed the most favours, were elected to those positions in the past. That is what happened, and that is one of the reasons why the Senate is now being abolished. That is one of the reasons, because the Other Place was abused over the years, by the political powers that be, to appoint people to whom they owed favours.

In the history of South Africa there was a Cabinet Minister—I think it was Jan Hofmeyr in the ’thirties—who actually resigned over issues of that nature when the Executive of the day appointed a person for, I think, his alleged expertise and knowledge of the Coloured people of South Africa, but it was subsequently found that the person had no expertise in that field at all and had been appointed for political purposes. This caused the resignation of the Cabinet Minister.

Is that why you voted for Laurie Poorter?

To argue that people are brought in through the electoral process of the various provinces on account of their specialized knowledge is indeed a fallacious argument.

Mr. Chairman, may I ask the hon. member for Sandton whether he is aware of the fact that the PFP will in all likelihood be able to nominate a member, and if so, does he not think the PFP needs another expert in its ranks?

Mr. Chairman, as small as this party is, in relation to the NP, we can draw upon an expertise which is sufficient for the purposes of placing effective opposition before the Government. [Interjections.]

We do not need much either!

Order! The hon. member for Houghton must please restrain herself.

[Inaudible.]

Mr. Chairman, in all honesty, hon. members on the other side of the House are causing me much more trouble than the hon. member for Houghton. [Interjections.] I want to say that her interjection was most appropriate. It is an indictment of the Government and fallacious to argue that one can bring experts into government by virtue of a political nomination through a provincial council or through a system in terms of which the parties have to nominate across the floor of the House in so far as the proposed eight other members are concerned. In so far as the four members are concerned, I can grasp the argument. I do not agree with it, but it at least has a basis on which one can discuss the matter.

Dave, is it true that you are going to be the next one to go?

In a system, in terms of which members of Parliament are responsible to their voters for what they say and for what they do, who will the proposed nominated members represent? On whose behalf will they be speaking when they speak in this House?

On behalf of the people of South Africa.

They will be speaking on behalf of the people to whom they owe the favour of their election—that is all. They will have no constituency they represent. They will be responsible to nobody. I want to tell you, Sir, that it is going to be very difficult to decide how we are going to address such people. Who will they be? The hon. member for what? The crux of the matter is that such members, who forfeit their political strength by coming to Parliament in this way, will be responsible to no one, will represent very few people and will even be difficult to address in the House.

The hon. member for Cape Town Gardens talked about reflecting the ratio. He said that 12 out of 177 members is but a small number which will not change the situation in Parliament. However, once we have accepted the principle in Parliament that members can be nominated, what is to stop a Parliament deciding in five years’ time under another Government, or maybe even under the same Government in different circumstances, to nominate another 80 members?

Why not? [Interjections.]

One cannot say that that is ridiculous.

The Deputy Minister has let the cat out of the bag.

May I request the hon. the Deputy Minister to repeat his interjection?

I said: Why not? [Interjections.]

There we have it from the hon. the Deputy Minister of Cooperation. Now I want to ask the hon. member for Cape Town Gardens whether he disagrees with that statement.

Your question is absurd. [Interjections.]

Let me ask the hon. member for Cape Town Gardens another question. [Time expired.]

Mr. Chairman, in dealing with this clause, to help you with any future ruling you might make, I shall only raise additional arguments and not cover the same ground as other hon. members.

The first principle contained in this clause is that there should be additional members. However, nobody has argued the case for adding more members to the 165 who already exist. What is the case for even one additional member? Nobody has motivated the case for extending the number of seats in this House by any number, let alone the number of 12. So first of all I should like to ask the hon. the Minister to motivate why 165 members is not an adequate number for the tasks and responsibilities allocated to members of the House.

Secondly, do the hon. members opposite really believe that a constitutional change is necessary in order to create a situation where one will have 11 more Government members and one more Opposition member? Does the hon. the Minister, who is a fair-minded man, really believe that that is going to enhance the democratic process in South Africa? To add another 11 to the serried ranks of members on the other side and one more on this side, is that going to make the House more effective, or is it going to make it less effective? The hon. the Minister has dealt with “kundigheid”, and the hon. member for Sandton has replied to that.

But one point I want to deal with is the question of distorting the result of an election. I believe that the hon. the Minister, because he was the chairman of the Schlebusch Commission and because he signed the majority report, has an obligation to the House and to the public to say why he has deviated in principle from the recommendations of the Schlebusch Commission. Hon. members will know that there was originally a proposal before that commission that there should be nominated members and indirectly elected members. After a lot of discussion, the unanimous decision of that commission, including the hon. the Minister, was that there should be no nominated members. The recommendation, signed by all the hon. members on the other side, was that, if there were going to be additional members, they should be appointed “on a proportional basis according to the number of elected members in the House of Assembly”.

That was the unanimous view of the Government and Opposition members. I want the hon. the Minister to explain what happened between the time he and his colleagues signed this and the time the Bill came to the House and he abandoned the principle which was fought for and agreed upon in his own commission. I believe the hon. the Minister must explain to this House why he and his colleagues have departed from the principle of proportionality in favour of a partly nominated body of members. The hon. the Minister has not explained this. I see the hon. member for Cape Town Gardens has now disappeared. I am not surprised, because he was one of the people who argued that as long as proportionality is maintained, it is not too bad. However, here we find the Government departing, in principle, from the recommendations of its own commission in favour of appointment of MPs by the executive in South Africa. The hon. the Minister, in his Second Reading speech, said: “Wat is al die bohaai.”

*He said that he ranged the four nominated members on one side and asked: “Wat is dan die posisie? As die regerende party ’n meerderheid van slegs vyf het, wat die posisie was in 1948, sal die Regering volgens die stelsel wat voorgestel word, vier kan kies en die Opposisie vier.”

†They can choose four and we can choose four of the elected members, but the hon. the Minister has failed to mention that they will get an additional “pasella” of four members nominated by the executive. Therefore, if a Government comes in with a majority of one, the Government will get four extra members, the Opposition will get four extra members and the Government will get a bonus or “pasella” of another four members. So automatically a majority of one is converted into a majority of five. A majority of two is automatically converted into a majority of six. The hon. the Minister refers to 1948. The majority of Dr. Malan and Klasie Havenga of those days, a majority of five, would automatically have been converted into a majority of nine. Where does the principle of proportionality apply? I say this is the grossest subversion of the democratic principle. This strikes at the heart of political representation. Here the hon. the Minister says: We have no qualms. If we get a majority of one, we convert that into a majority of five. This cuts right across the democratic principle, it cuts across the principles upon which this House was created in 1909 and 1961. I say this provision, on its own, is one of the most disgraceful travesties of the democratic process ever perpetrated by the Nationalist Party Government.

We had a debate on the entrenched clauses a little while ago. We were all solemnly saying that the entrenched clauses were almost sacred. However, the entrenched clauses are, in fact, subverted by this very provision. The entrenched clause is related to a two-thirds majority expressing the “volkswil”, but the Government can come along and subvert the “volkswil” and appoint additional members in order to override entrenched clauses. [Interjections.] The hon. the Minister has not explained this departure. I challenge the smiling hon. Minister of Mineral and Energy Affairs to tell us why he has departed from the principle of proportionality. He was one of those who agreed with us. Provided proportionality was applied, there was a case to be made. Why has he suddenly departed from this in favour of a situation in which the Government can nominate four members, irrespective of the expression of the “volkswil”.

I want to deal with another more important aspect, and I talk with hon. members as members of Parliament. I believe that this provision will change the nature of representation within this House of Assembly. We will no longer be a “Volksraad”, we will no longer be a House of Assembly. We will be a group of people partly representative of the “volkswil” and another group of people partly representative of the will of the executive. This is what will happen. We will no longer be a Parliament in the true sense of the word. We will no longer represent the “wil van die volk”. We will now represent partly “die wil van die volk” and partly the dictates of the executive in South Africa. I believe—and I speak as one MP to other MPs—that there is a strange common bond that unites us all. [Interjections.] That interesting common bond is that, despite political differences, we all have to face the electorate, all have to jump through the electoral hoop, all know that what we say here can be tested at the polls next time we have an election, and if the public disagrees with us, we can lose our seats. Suddenly a group of super MPs is to be introduced. They will not have to jump through the electoral hoop. They will not have to face the people on the public platform, knowing they can lose their seats if they misbehave.

All four people nominated have only one area of responsibility. That is to kowtow to the executive of the day so that they can continue to hold office in the Parliament of South Africa. What is one of the problems in South Africa today is the strength of the party system. Already it does not allow enough freedom of expression. What is going to happen now? Both the eight elected members and the four nominated members allow no room for individuality, for imaginattion or for independence. What will happen is that the party caucuses and the Prime Minister of the day will now be the party bosses and will reign supreme over those people who can become members of this House.

Finally, what is one of the most important functions of Parliament? To pass laws? Yes. To criticize the Government? Yes. Basically, however, we are here as representatives of the people. We are watchdogs of the people over the activities of the executive. That is in fact what the budget debate is about. That is what most parts of the debates in this House are about. The representatives of the people are here to criticize the executive. Suddenly, injected into the representatives of the people, are four representatives of the executive. What toothless watchdogs; people who owe their seats to the favours of the Prime Minister of the day. How are they going to be able to criticize the Prime Minister of the day? Are they going to take part in votes of no-confidence? To whom are they responsible in all of these circumstances? Are they responsible to the public? Are they responsible to the electorate? Are they responsible to the Prime Minister of the day, who offers them their seats in Parliament?

The provisions of this Bill change, in a fundamental way, the character of a Volksraad. It changes, in a fundamental way, the expression of a volkswil and an electorate. Allow me to refer to another example. I take the example of casual vacancies. Here we have two parties in Parliament who will have to elect these eight members of Parliament. The one elects five; the other one elects three. When there is a casual vacancy, however, in terms of this clause, every such casual vacancy for these additional members is filled by the governing party. I should like the hon. the Minister to tell us whether this is so or not. This is our interpretation of this clause. [Time expired.]

Mr. Chairman, I must say that I am impressed with the performance of the hon. member for Sea Point this evening. I am impressed in that the most extravagant language he used here this evening was “subversion of the democratic principles” and “subversion of the volkswil”. [Interjections.] Well, that is a pleasant improvement. The hon. member for Sea Point is known for much more extravagant language than that. [Interjections.]

I am surprised he did not dub this measure “a draconian Bill” or added that “the lights of democratic freedom were going out one by one in the Republic”. That is the sort of language that one would expect from the hon. member for Sea Point. [Interjections.] I was also impressed, however, by the hon. member’s sturdy defence of the democratic principle and of the volkswil. I am surprised, I must say, because, as I understand it, the hon. member for Sea Point alleges that this Parliament is not representative of the people of South Africa. What he actually means is that this Parliament is not representative of the Black people of South Africa, who are the people he should like to see as the majority here in this Parliament. They are not represented here. Therefore I am a little surprised that he should put up such a touching defence of the volkswil in South Africa. [Interjections.]

If the hon. member says that the volkswil can be subverted by the nomination of certain members to this House, he is obviously presupposing that an election result is going to be close. The hon. member for Sea Point is living in a dream-world. The days when that could have happened were the days when the old United Party was in the Opposition and the hon. member for Sea Point and his newspapers were subverting the Opposition. [Interjections.]

The hon. member for Cape Town Gardens developed two arguments. He said that the reason why the principle of nominating people to Parliament—in the first instance in respect of the nomination of four members —should be acceptable was because it was only a very small number. His second argument was—as regards the eight representatives elected on a basis of proportional representation—that he thought it was fair because it was in fact a manifestation of the volkswil, similar to that which we have in the Senate at present.

During Second Reading I said that we would support this Bill because we thought it was establishing a new dispensation in South Africa, but that we would oppose this clause. We are not only opposed to this clause, but we are also opposed to the amendment moved to this clause, because that amendment merely ameliorates the clause to which we are opposed in principle, and it recognizes the principle of extending the number of members of this House. It only tries to make it better, I think, only because the hon. member for Durban Point has a hope of gaining one or two possible representatives to strengthen the numbers of his party in this House. My argument is that Parliament as we have known it since Union is a Parliament consisting of representatives who have been elected by constituencies. There are 165 constituencies, and one of the things that has impressed me most in the period that I have been in Parliament is the fact that there are people here representing the people who have returned them to Parliament and they speak up for the interests of those people. I think it will be a sad day if that principle is watered down by bringing in people who are nominated. I therefore argue that this is a forum of the elected White people of South Africa, and I think it should remain the elected forum of the White people of South Africa. I do not want that situation to be disturbed.

The other argument raised by the hon. member for Cape Town Gardens was in connection with the four experts to be brought in. I cannot see why any one of those four experts cannot subject himself to an election in the normal way. If one were to think for example of an expert like Dr. Rupert or Dr. Wassenaar, people who would be ornaments in this House, I see no earthly reason why they should not succeed in a party nomination and I see no earthly reason why they should not succeed in an election in being properly elected to this House.

With regard to the eight who would be nominated on the basis of proportional representation, I say that the danger there is that the Government of the day will be tempted to reward people for professional services rendered to its own party. I think they would tend to be party appointees and would not be brought here—I am now referring to the eight—on the basis of the contribution that they could make or on the basis of the expertise that they could bring to this House.

For these reasons we are opposed to this clause. We shall vote against it and we shall also vote against the amendment because we feel that only lessens the stringency of the provisions of the clause.

Mr. Chairman, in his speech tonight the hon. member for Simonstown has pointed out certain irregularities which may arise. I just want to tell the hon. member—and I do not want to refer to him and his party—that a custom I often observed on the part of the old United Party, and I think on the part of the Progressive Party as well, is that they put up candidates for constituencies in which those candidates had not grown up. I think that if there is one party which, in terms of the system we have had up to now, has really put up candidates for a constituency who had grown up there, it is the National Party.

Like Jan Marais. [Interjections.]

That is the general rule. Usually they are people who live in the community and who have been designated by that divisional committee. [Interjections.]

Are you against Rissik?

I hear the voice of the hon. member for Bryanston. As everyone knows, he was my opponent in 1966. The difference between the two of us, apart from the differences in political views, was the fact that I lived in Rissik and that the Nationalists of Rissik had chosen me as their candidate, while the hon. member for Bryanston had come from the Rand or somewhere else in South Africa and had actually just been dumped there. And that was the last we saw of him. We have never seen him there again. If one wants to exploit and abuse a system, one can do so under any system, but I think that a civilized electorate, such as we have, will always reject a party which disregards the fairness and the norms of democracy.

There are a few matters to which I should like to draw the attention of the hon. members of the PFP and especially the hon. member for Sea Point. Firstly, all of us actually came to the conclusion in the commission that the Westminster system, as we have hitherto known it, does not work for a society such as the one we have in South Africa. Therefore, to take a very narrow view, from a certain angle only, of the House of Assembly as we have it here, was something I actually found rather absurd this evening, especially coming from a party which is supposed to be enlightened and terribly modern. It is actually strange that this side of the House, for which I am acting as spokesman at the moment, wishes to bring about a certain renewal in our present dispensation, because I want to point out to hon. members that if one regards Parliament as consisting of the House of Assembly and the Senate, the underlying principle we are going to incorporate into this House of Assembly as well are principles which already exist in the whole parliamentary system. Therefore I cannot understand the vehement reaction of the hon. members of the PFP.

The principle which existed in the nomination of members of the Senate, and on certain occasions when the Senate and the House of Assembly met to take certain very important decisions, is the same principle as the one we are introducing here as well. Since we are engaged in a process of constitutional growth, I cannot see that the representation of people outside is being tampered with in any significant way. I want to say that the PFP is showing itself to have a very pessimistic nature. Listening to them this evening, we must accept that they do not envisage taking over the Government of this country in 100, 200 or 500 years’ time.

On that score they are being realistic.

I agree with the hon. the Minister. In all likelihood they are being realistic in that respect.

The fact is that if any advantage is built into this measure, the party that wins the election will get the benefit of the system. The argument of the hon. member for Sea Point, i.e. that if we were to win by a majority of one, and these four members were appointed from each province, we would then govern in that way, is not valid. I want to tell the hon. member that if the NP, or any party, has to govern in that way, it will not stay in power very long. Then the party which scores a convincing victory will take over control anyway.

What about 1948?

I want to come back for a while to the argument of the hon. the Leader of the Opposition. I cannot quite understand why the hon. the Leader of the Opposition should express his opposition to this clause in the strongest language, but neglects to say that if it becomes the law of the land, and his party finds itself in a position, through an election, where they can nominate two persons, he will not accept it. I cannot quite understand the logic of that. The other instrument, the President’s Council …

I shall come to that.

If the hon. the Leader of the Opposition is going to discuss that later, I should very much like to receive a reply.

Then I want to say that the hon. member for Sandton said here that the Senate had been abused in the past. I think the hon. member’s words in this connection were not very appropriate. If such a thing ever happened in the history of the Senate, it happened so seldom that one may say that such a situation was not the norm, but the absolute exception.

Mr. Chairman, may I ask the hon. member whether he remembers that a Cabinet Minister—I think it was Mr. Hofmeyr—actually resigned in 1936 or 1937 because of that very reason?

I do not want to reply to that, because I am not quite sure about the details of the case to which the hon. member is referring.

However, my point is that I think it is absolutely wrong to say at this stage in our political history that the Senate was abused, if there were one, two or three cases in its long history where it happened that a member of the Cabinet, the Senate or the House of Assembly resigned because of something he was not happy about. In such a case, I believe, it is not appropriate to say that the Senate was abused throughout its history. We can discuss the historical facts at a later stage, and I shall try to find out for myself what the facts are.

On the basis of what expertise was Senator Odell appointed? [Interjections.]

Order!

He was so knowledgeable that the United Party often put him up as their candidate … [Interjections.] … and his knowledge grew after he became a Nationalist. [Interjections.]

[Inaudible.]

In what sense did the hon. member for Sandton use the word “dishonest”?

I withdraw it. [Interjections.]

Mr. Chairman, on a point of order: Is the hon. member for Sandton allowed to remain seated and to address the Chair in a casual manner?

Mr. Chairman, I withdraw that word.

That is much better.

Finally, Mr. Chairman, I want to refer to the expression “super members of Parliament” which has been used. Reasonable people accept that this legislation will be passed and they accept that there are going to be certain appointments of MPs.

You can bet on that.

I think the hon. member for Sea Point, if he is still amongst us then—i.e. if he retains his seat in Sea Point—will also have to use that expression to describe representatives of his party, because the hon. the Leader of the Opposition says that he will appoint such a person and will accept him.

I cannot nominate people. [Interjections.]

There are going to be 12 additional members

He was referring to the four nominated members.

If the hon. member was referring to the four nominated members, I shall accept the statement in that light.

Order! Hon. members must really try to keep their interjections to a minimum.

Mr. Chairman, I shall make a final attempt to say what I want to say to the hon. member for Sea Point, i.e. that we should be careful not to disparage in advance, through the terminology we use, the people who are going to be our colleagues here in the future. [Time expired.]

Mr. Chairman, I think that all hon. members, including the hon. the Minister who is steering this legislation through, will totally agree that we are dealing with a principle here which is probably of the greatest importance in the South African constitutional design. The change in terms of this clause and the effect which it will have will probably have a quite considerable influence on the course which democracy will steer in South Africa. I should like to make an urgent appeal to all hon. members on the Government side to think very carefully before they decide to support this clause. I say this in all seriousness because we are dealing here with a change in the fundamental principles of democracy.

I should like to point out to the hon. the Minister and to the hon. members on the other side that once one transgresses a particular principle, there is no going back to the original starting point. I should like to point out that the arguments raised by the hon. members for Cape Town Gardens and Rissik and other hon. members on the Government side, are in fact very valid arguments for voting against this clause.

The reasons given to us this evening are, firstly, that expertise must be brought into this House, and I ask the hon. the Minister and all hon. members on that side: Since when is technical expertise to supersede the principles of democracy? I ask in all seriousness why we find it necessary to bring expertise into this House while in the process of doing that we transgress the fundamental principle of democracy that people who enter this House should be representatives of the people who elected them. The name of the game in this House and the process of democracy and good government is not only based on technical expertise, but also on political acumen. We know from very recent statements by hon. Ministers on that side that a small statement can have massive repercussions. Political acumen and political knowledge can only be gained through the shifting process of democracy.

I want to ask the hon. Ministers in the Cabinet, who obviously support this clause, why they cannot obtain the advice of experts by consulting laymen and not hon. members of Parliament. Is it beyond their capability to benefit from the knowledge and the expertise of experts in the field by consulting them rather than by bringing them into this House? I should like to point out to hon. members on that side of the House that this is a fundamental principle which will severely affect the course of our political destiny in South Africa. The fight in Africa has been fought for the preservation of democracy. Minister after Minister and member after member on that side of the House have pointed, like myself, to the north of the Limpopo and to the north of the Zambezi and said that democracy has not survived in Africa, and yet these very proponents of democracy are trying to introduce a principle here which will lead to the knocking-out of a corner-stone of the democratic principle.

You are exaggerating now.

There is very real danger that by attempting to double the effort in respect of technical ability we will, in fact, square the error on democracy.

Mind you, they do need some technical ability.

I totally support my leader, the hon. member for Durban Point, in the arguments which he has raised here today. Every hon. member in this House, bar one, has been voted in here according to the principles of democracy. Every hon. member, irrespective of the party to which he belongs, owes allegiance and loyalty, not only to his own constituents, but also to the people of South Africa, to preserve, as the Crusaders of old preserved the rights of Christianity, the system which brought him to this House. I think that every hon. member must examine his conscience in this respect. No degree of technical expertise should be allowed to undermine the very fundamental process of democracy. That is the fundamental reason why we in the NRP will be voting against this clause.

Now I should like to turn to the hon. Leader of the Opposition and thank him for the courtesy of giving me a reply to the argument I raised about the fact that despite their voting against this clause, they would, if they were allocated a nominated member, utilize that facility.

Not a nominated member, an elected one.

Yes, elected on the basis of proportional representation, and not one of the four who will be appointed. I am with the hon. the Leader of the Opposition in that respect. What the hon. Leader of the Opposition said is that they will avail themselves of the seating capacity of a member elected on the basis of proportional representation. I should like to thank him for that reply, because I think it must have taken a tremendous amount of courage to say that, considering the import of the stand which the official Opposition has taken not to serve on the President’s Council.

There is no similarity between the two.

The principle, the detail and the affect of the clause are absolutely identical, because what is involved here is the stand the official Opposition has taken, i.e. that if one votes against a particular recommendation or clause in this Bill, one must not participate in the proceeds or benefits flowing from it. [Interjections.]

Absolute nonsense.

Then I stand to be corrected by an hon. member of the PFP who will be able to reply. However, in answer to questions put by my hon. leader, the hon. member for Durban Point, and myself during the Second Reading debate, the hon. the Leader of the Opposition said they would not serve on the President’s Council.

Exactly.

That is quite correct. They also said they are totally against this particular clause for the same reason, i.e. they do not agree with it.

No, not for the same reason.

The lack of consequential logic in their reasoning is their problem. I should like to point out to the hon. the Leader of the Opposition that if one is prepared to take the results of one clause for one’s own political party’s benefit, one must also participate for the benefit of South Africa when it comes to other clauses. One cannot only look after party-political interests. The hon. the Leader of the Opposition, the hon. member for Sea Point and the hon. member for Sandton have said consistently here this evening that we must not only look at party-political interests. On that point I am totally in agreement with them, but then they must be consequential in their decision-making and in their logic. I maintain that if the hon. members of the Opposition are prepared to enjoy the benefits of this clause, and to avail themselves of the benefits of an elected member in terms of this clause, they must also be prepared to serve on the President’s Council.

Wait for clause 34. I shall answer you when I speak to clause 34.

The hon. Leader of the Opposition says we must wait for clause 34. I am afraid that one does not have to wait for clause 34 in order to determine a fundamental principle. [Interjections.]

Mr. Chairman, on a point of order: Would you please give a ruling on whether the question of parties serving on the President’s Council should be debated under this clause or under clause 34, which relates to the President’s Council? [Interjections.] I should like a ruling on that because if we can debate it under this clause, we shall enter the debate now. [Interjections.]

Order! Hon. members must confine their arguments to the contents of the clause before the House and also take cognizance of Standing Order No. 63.

Mr. Chairman, on a further point of order: Is the hon. member for Durban North in order?

Order! I have listened to the hon. member and other hon. members, and I have allowed some leniency.

Yes, Sir, you have, and we are very grateful!

The hon. member for Durban North may proceed.

Thank you, Mr. Chairman. Coming back to the fundamentals of the argument and the apparent logic used by the official Opposition in terms of this clause, let me say that the hon. the Leader of the Opposition has stated that they are totally opposed to the conditions laid down in this clause for the nomination, and election by proportional representation, of members. However, what is important is that they are prepared to benefit from the provisions of this clause. I hope the hon. Leader of the Opposition has taken note of what he has stated here in reply to the question about whether they will avail themselves, for party political gains, of the provisions of this clause, and I hope that they will, in fact, be logical about this. Whether, in fact, the PFP benefits from this clause or not is relatively unimportant in the South African context.

Finally, I should like to come back to hon. members on the other side of the House, particularly the hon. the Minister responsible for piloting this Bill through the House. I want to appeal to them to think very carefully about transgressing the principle of democracy, because … [Time expired.]

Mr. Chairman, I have three objections to this clause which I would like to discuss with the hon. the Minister. The first point was touched upon by the hon. member for Durban North when he asked whether it was beyond the bounds of the capability of hon. members on the other side of the House, and the hon. Ministers in particular, to make technical knowledge and technical expertise available to Parliament and hon. members of Parliament in any other way than by bringing into this House, by means of nomination or indirect election, people who have that technical expertise. I believe that hon. members of this House who have been here for a while do become experts in a variety of fields. I can think of a number of hon. members on the other side of the House who, because they have served on Select Committees or have worked in the various study groups over a period of time, can bring a considerable body of knowledge to the assessment of legislation, policy or things like that. For that very reason I have proposed before in the House—and I want to reiterate it to the hon. the Minister for the purpose of my argument—that what Parliament needs is to streamline its procedure by means of Select Committees in a wider variety of fields so that members who serve on those Select Committees can be given the sort of expert knowledge, technical advice and information that members would not ordinarily have, but which can be made available to them in the course of their duties as members of Parliament. I absolutely fail to see why the hon. the Minister should sound his argument for bringing appointed members into this House on that basis, because technical expertise and technical advice is available to every member, and it is only a question of the rules of the House being altered in such a way that the groups into which we are divided can have available to them, at any moment, that sort of expertise. It is totally unnecessary to queer the whole pitch of this Parliament, as it were, by bringing in members on the basis proposed by the hon. the Minister. I cannot accept that as being a valid argument, in any way, for the cause which the hon. the Minister is advancing here.

The hon. the Minister also said it was necessary to have members here because it was not a new principle, having been done in the Senate since 1910. I concede the point that it has been done in the Senate since 1910, and very properly too, because the Senate was a House of review. That was the purpose of the Senate. It was a House of review which required greater technical knowledge because it had to deal with legislation which had passed through this House. The Senate had to be in a better position perhaps—this was a theory—to deal with that sort of legislation as a House of review. In the case of the Senate I think the hon. the Minister was quite right to say that, but to attempt to marry the two functions of legislation and review in this House, the primary House of legislation, is, I think, a complete mistake.

Why?

Because it is entirely unnecessary to bring into this House, with the purpose of reviewing legislation, that sort of technical expertise which, as I have already explained as the hon. member would have known if he had been listening, is already available to members of the House by a simple change of the rules. I do not agree for one instant that this is something that is necessary from the point of view of the new Parliament which is going to come about.

There is a third point I wish to make, a point I also made in the commission. The Bill we have before us is the first step towards a new constitution for South Africa. However any hon. member on that side of the House may argue with me, I want to say that, whatever comes out of the negotiations for a new constitution, it is going to result in this Parliament being stripped of certain of its functions. There is no way of avoiding that. It is going to happen. It is no good the hon. the Minister saying to me that in saying this I am anticipating what is going to happen, or anything like that. We know as sure as we are here that the hon. the Prime Minister’s own proposal for a constellation of States means that powers currently in the hands of this Parliament are going to pass to other bodies. The same applies in respect of the Indian and Coloured communities. Powers in the hands of this Parliament will pass out of our hands. It is no good bluffing ourselves and saying that it will not happen. At present we have a Parliament with a given body of functions, but the functions of Parliament are going to be reduced. What are we doing however? We are increasing the number of members of this Parliament. For what purpose are we doing that? I cannot understand the purpose of making a bigger Parliament to do less work and of going beyond the whole tradition of the election of members to Parliament by bringing people in from outside on a totally different basis altogether when we are faced with the situation where this Parliament is going to be one among other Parliaments. If this was going to continue to be the sovereign Parliament with total say over everything, the hon. the Minister might possibly have had a point, but what is going to happen to this Parliament without any doubt at all is that it is going to move to the periphery and that other legislative bodies are going to come into existence which are at least going to have a share in the total decision-making in South Africa. I cannot and will not support a proposal by the Minister to increase the size of this Parliament when in fact the functions of this Parliament are going to get less.

Mr. Chairman …

Mr. Chairman, if the hon. member for Pietermaritzburg South will forgive me, I first wish to say a few words. I shall reply to him if he can succeed in advancing a new argument later on.

I want to begin with the contribution by the hon. member for Mooi River. I think he is making a basic mistake. In the first place, he was kind enough to admit—and he was the first to do so—that I did have a point in quoting the Senate as an example. Immediately afterwards, however, he made a basic mistake by saying that the Senate was only a house of review. This is not so. I proved in my Second Reading speech that in many respects, a Senator has an equally decisive say in this Parliament as members of the House of Assembly. For example, the vote of a Senator carries just as much weight as the vote of the hon. member for Mooi River in nominating the State President.

No.

Of course!

How often do we do that?

What about financial measures?

Order!

Sir, I really do not need the help of the hon. member for Yeoville in making my speech. [Interjections.] In the second place, it is usually the parliamentary party caucus—and I think this applies to all parties, but the party opposite will not know this, for they have not governed for a long time—consisting of members of the Senate and of the House of Assembly, which elects the Prime Minister, and this is the most important of all the decisions taken by members of Parliament.

Only twice since we have been here.

So one cannot simply say that the Senate is inferior and that it is only a house of review. I go further. If this is the position, I say this position was laid down in 1910. One of the Houses of Parliament has been constituted on this very basis since 1910. At the moment, that House consists of eight nominated members and 43 members elected on a provincial basis.

†To reply to the hon. member for Sea Point, I should like to confirm that the position is that a casual vacancy will be filled by the candidate of the majority party, as it is on a provincial basis in the case of the Senate at present.

The Senate is disappearing.

Of course, and I am not referring to the Senate in that sense. I just say that as a vacancy in the Senate is at present being filled on a provincial basis, so a casual vacancy will be filled here.

*Now the hon. member for Sea Point comes along and points a dramatic finger at our side and says: How did the majority come to allow the Government to change their recommendation? I do not think the hon. member for Sea Point has any moral status in this connection. He voted against the whole thing. This is surely a matter between the majority …

But why are you

Wait a minute. I shall give the hon. member the answer. Surely this is in the first place a matter between the majority which made this recommendation and the Government, and the majority is satisfied with the fact that the Government changed its recommendation, after very thoroughly reconsidering the matter, and reduced the number from 20 to 12. Surely the fact that the number has been reduced will satisfy hon. members on that side of the House as well.

The hon. member for Sea Point has objected vigorously to the four nominated members, but the hon. member for Sandton, on the other hand, says that he has no serious objections to the four.

No, I did not say that. That is not true. I said I could understand the argument. That was all I said.

Yes, and that is more or less what I wish to indicate. The hon. member for Sandton is not too hostile towards the idea, while the hon. member for Sea Point is extremely hostile.

I am extremely hostile towards it.

No. In fact, I thought the hon. member was being very kind.

What lies at the heart of the question of expertise? Usually the democratic process applies a hundred per cent in any party. I do not know whether this is true of the hon. Opposition, but in my party, the democratic process applies a hundred per cent, in the election of a candidate to the House of Assembly. This process means that a constituency chooses its own candidate. What happens, in effect? They choose their man, the man who is prominent in their community and who has shown strong leadership qualities and whom they like. They do not ask in the first place whether he is a clergyman or an attorney. Nor do they take into consideration whether the neighbouring constituencies have clergymen or attorneys as their candidates. They choose their own man. I have nothing against clergymen or attorneys. In fact, I think it is a good thing that we should have many clergymen, attorneys and farmers in this House, because they are good members.

As long as he is not a Dopper.

For that very reason, however—because the people are democratically elected—one finds eventually that people from certain professions are very well represented here. Personally, of course, I have nothing against this. I have nothing against it. It is the democratic process, which we all welcome. If there are good representatives of several professions here, while one or two or three specific professions are not represented here, what is wrong with making use of this process to … [Interjections.]

The NRP does not have any attorneys. They do not even have a single lawyer.

Order!

Yes, I do not want to be personal, but I could also point out shortages among hon. members on the other side. I should prefer not to do so, as I do not want to be personal.

Mr. Chairman, I should just like to ask the hon. the Minister: Taking into account what he has just said, whom does he consider the nominated members will represent in true terms, and to whom will they be responsible?

In the first instance, they will be responsible to Parliament. They will represent the people of South Africa in the same way as nominated Senators and elected Senators represent the people of South Africa.

Why then do you abolish the Senate? [Interjections.]

Order!

Mr. Chairman, I deny that that is the reason. However, what lies at the root of the matter? I want to concede at once that this process can be abused if too many people are brought into the House of Assembly in this way. It is true that the process can be abused. But this is not a valid argument. The House of Assembly is sovereign, and apart from the one remaining entrenched clause, the House of Assembly can in any event take virtually any decision, practically speaking. So that is not an argument. I say it would be unsound if there were too many of these members. However, what is the essence of the matter? The essence of the matter is that such a large number of members should not be brought in and that this should not be a system which lends itself to creating a serious imbalance in the House of Assembly.

I want to argue this matter from two points of view. The first is if, hypothetically speaking, we held an election—and this is very hypothetical, of course, because I am not in a position to see into the future—and the party that won got 83 members, while the losing party got 82 members. The winning party has to produce a Speaker, so that there would then be an absolutely equal number of votes in this House. Is it not in the interests of democracy that …

You are running into trouble with that argument. I would stop it if I were you.

Well, I am quite capable of coping with my own problems myself. [Interjections.]

*Now a position arises where the State President will obviously ask the leader of the party that has won 83 seats to form a Government. He will then form a Government and will naturally nominate the four members, which will give him a majority in this House. My first question is whether it is in the interests of democracy that this should happen: Yes or no? I say it is in the interests of democracy, because one does not want to go back to the country immediately and have a repetition of all that emotion. What will be the position if one goes to the country for a second time and one obtains exactly the same results? What is in the interests of the country is that the Prime Minister who is appointed should be enabled to govern and to prove his strength and leadership, as Dr. Malan did in 1948, and to increase his majority. If the Government is unable to do this, if the Prime Minister is unable to do this, I can assure the hon. members that that party will be forced to go back to the country within a year or even sooner for another election. Therefore I say that after such an election, this mechanism is essential and desirable so that the person who has been designated as Prime Minister may at least be afforded an opportunity to prove whether he can govern or not.

You are talking about a loaded House of Assembly.

Now I come to the question of the eight members. There the system is absolutely fair, for if the results are equal, the position in respect of the eight members remains exactly the same. It remains 4:4, as I have shown, and this will remain the position up to a majority of 21; only then will the position change. So this is not an unreasonable proposal. If the number had been considerably more, I suppose it would have been open to criticism, but the four nominated members and the eight elected members provided for in this measure is a reasonable proposal. It is actually a system which has been a part of our constitution since 1910, and under those circumstances I am not prepared to amend the clause.

Mr. Chairman, I have listened to the hon. the Minister with great interest to try to find out exactly why this clause is necessary. I have yet to hear a single Government member tell this House why this clause is really necessary, why it is necessary to have 12 additional members. Nobody has provided a valid reason so far. The only reason that has been mooted is that it might bring extra expertise to the House. I am afraid that I have to say that I should like to record my vote against this clause and agree with those hon. members who have expressed their opinions against it. It would seem that the whole Opposition is united on this particular clause. As it now stands, it would seem that these 12 members are going to be nominated or elected on the basis of “jobs for pals”, and I can see no reason for that. It will certainly add nothing to Parliament, and I have yet to hear any valid reason why it will improve Parliament. The hon. the Minister has said that the number has been decreased from 20 to 12, but let me take that a little bit further and ask, why not reduce it to zero?

That is a good point.

If one uses the argument that it is good to reduce the number from 20 to 12, then rather wipe it out entirely, so that we can get back to where we were before. I am convinced that the taxpayer is going to pay for these extra 12 people and he is going to get nothing in return. I estimate it is going to cost approximately R500 000 per year for which the taxpayer will receive absolutely nothing in return. The principle is totally unacceptable, even although we have already voted on that principle, but we have heard argument for it where it was said that it would in fact improve the validity of Parliament and that it would bring better people to Parliament. I have to concede that the Government does need a few extra top men in Parliament. I would also like to concede that the Government might win the vote in this case. I am not normally a pessimist, but let us accept the fact that we are slightly outnumbered in this case. If so, I should like to motivate an additional view and I should like to stress it as a second best option. I should like to stress that it is a second best option in the event of the proposal that this clause be negatived being defeated. I should like to ensure that the Government keeps its word. The Government’s motivation for and sole argument in favour of this clause has clearly been that people of special skills, experience and quality, and future Cabinet material would be acquired through the application of this particular clause. They admit that there is a serious lack of talent in this House, and I am afraid that we all have to agree with that view. [Interjections.] It would seem that out of the 12 members, 11 are going to be nominated by the NP and those 11 might in fact increase the value of the NP. I should like to say that that is a very real possibility. I should like to say that we should at least ensure that that is done.

Some hon. member asked for some examples of the type of people we could get, and of the non-political type of specialists who could be available to the House. When one looks to the field of finance, the names of Gerhard de Kock, Joop de Loor, Simon Brand and the late Dr. Smit come to mind.

Naas Botha. [Interjections.]

He might qualify in terms of the NP view that he would be an economic expert.

Order! The hon. member must confine himself to the details of the clause.

Mr. Chairman, with respect, I am trying to motivate that we have to get people of better calibre here. I am trying to substantiate the view that the Government …

Order! Is the hon. member reflecting on the hon. members of the House?

No, Mr. Chairman, but the Government has done so. The Government has clearly reflected on the hon. members of this House. [Interjections.] I have no doubt about it. The hon. the Minister has done so just previously to my speaking turn. [Interjections.] It is quite obvious that the hon. the Minister does not agree with you, Mr. Chairman. He feels that this House needs to be improved, and I must say that I concede that point. If the Government is sincere with regard to attracting specialists such as the men I mentioned earlier—and there are hon. members in the House today who are specialists—these type of people should be considered. I want to say that, if that is the case, the hon. the Minister should have no objection to adding, in the proposed sections 40(1)(b) and (c), words to the following effect—

If the hon. the Minister is sincere in his motivation and in saying that this is necessary, he should have no objection to a clause like that. I must admit that the clause is difficult to word, but I believe that he has the expertise and skill in his legal department to give teeth to what he has said. I should like to put the plea to the hon. the Minister that he should, possibly even in the Other Place, find a way in which he can ensure that these people are going to be of the quality which he has said is required.

I do not wish to move that as an amendment, because I do not think that those words would stick legally, but I am sure that the hon. the Minister will be able to find better words than those. I honestly believe that, if the Government is sincere in their wish to improve this House by nominating or electing an additional 12 members to this House, they should surely be able to put their money where their mouth is and frame the clause in such a way that we would get better members.

Mr. Chairman, I just want to make sure that I understood the hon. the Minister of the Interior correctly in his defence of this particular clause, because he used two arguments: The one was substantive and the other one was a formal argument. The substantive argument was that if an election should result in 82 seats for the Opposition and 83 for the Government, the majority party, although it has to provide the Speaker, could still keep itself in power by nominating four members. To me, this is a unique contribution to democratic theory. I have never heard of a system where one keeps democracy functioning, when the results of an election seem likely to turn against one, by appointing people who have not been democratically elected. [Interjections.] I should be glad if the hon. the Minister could point out precedents for this in modern democratic politics, i.e. where a Government comes into power with a majority of one and artificially increases its majority, contrary to the rules of democratic party politics, to keep itself in power. This is the substantive argument which the hon. the Minister used.

His formal argument was that it was a good thing to do this for the sake of democracy, i.e. to preserve democratic government, it is actually a good thing to make use of undemocratic methods. I found this an extraordinary argument, and a sinister one, to say the least, in the circumstances in which we found ourselves. The hon. the Deputy Minister of Co-operation made a striking remark at an earlier stage when we asked him: What prevents you from nominating 4, 10 or 12 members?” He simply said, with a nonchalant attitude: “Why not?” [Interjections.] Why does the hon. the Minister stop short at 4 members? Why does he not nominate 20 members? [Interjections.] The hon. the Minister can reply in a moment. The great question which arises is: Why are these four nominated members suddenly so very important for undermining the democratic process? Why not do it with a certain degree of flair? Why not stick to 20 members? And if 20 members are not enough, why not more? In this way, therefore, we can go on explaining and rationalizing indefinitely, because it is basically a question of rationalizing why we are undermining the democratic process under the present circumstances.

Are you prepared to concede that it will still be the electorate that will decide who governs this country?

If the hon. the Minister wants me to go into the whole procedure of nomination and how a man eventually … [Interjections.] It is clearly stipulated in the Bill that the State President may nominate four people. He decides who they are and from what province they will come. If one says that is democratic, we need not have general elections at all and we can simply say that the State President may nominate all the members. [Interjections.] The point I am trying to make is that once one undermines the principle of direct representation, as is obviously being done in this clause, numbers are irrelevant. It does not matter whether there are four or ten …

That is why I say: “Why not?”

I wholeheartedly agree with the hon. the Deputy Minister. The hon. the Minister of the Interior tried to make out a case for the four. He said they were necessary to preserve democracy. Why only four? Why not go the whole hog and nominate 20, just to make sure? [Interjections.]

Mr. Chairman, the hon. the Leader of the Opposition has referred very melodramatically to the four nominated members and asked me where else in the world this happens. It has been happening a few meters from the hon. member since 1910, because it has happened in the Other Place at times that the governing party has obtained a majority of one through the eight members it could nominate. There the hon. member has his answer. It is already a recognized principle in our parliamentary system. I did not use the example of a draw at the polls as a reason why four nominated members are a good thing, but as an example of where it will be most open to criticism, i.e. where one stays in power by means of those four nominees, and I tried to point out that under the circumstances, and for a limited period, this was better for the working of democracy than to go back to the country immediately, which may lead to another stalemate, and so on. I said that if that particular Government was up to its task, as the Government in 1948 was, it would be able to consolidate its governing position with those four members, but that as a Government it would very soon fall if it was not up to the task. So I have had words put into my mouth which I never used. I never held this up as a system through which one could keep democracy going ad infinitum in an undemocratic way. I have pointed out that the system has existed in this legislative Parliament of ours since 1910.

Mr. Chairman, the hon. the Minister is usually very courteous, but he has now completely ignored two amendments which I have moved this afternoon.

But he is still replying.

He has answered twice and has completed his answer every time

He can speak more than twice.

I raise those matters again with the hon. the Minister. In his speech just now, as in the Bill, he has recognized provincial identity in that the four members to be nominated by the State President are to be nominated on the basis of one per province. I have moved an amendment that that same principle be applied also to the other eight members. If the Government believes it correct that it should have the power to appoint one member per province, it must realize that it is totally illogical that the provincial interest be ignored when it comes to their being elected proportionately. That is why I have moved my amendment. If this is not corrected, it is going to boil down to a blatant admission that all the Government wants is the power to appoint pals in jobs, because it will be totally illogical and totally indefensible if in respect of the members they appoint they recognize the provinces, but in respect of the members to be elected they ignore them. That is why I have moved an amendment to the effect that the eight members to be elected should, just as the four nominated members are nominated on a provincial basis, also be elected on a provincial basis. However, I have taken it further and said that if the hon. the Minister’s argument carried any weight at all, if he is not using words simply for the sake of effect, if he believes all he has said about the Senate and if there has been any sincerity in his talk about the Senate, he would translate that belief and sincerity into using the same system used for the election of Senators.

The hon. the Minister’s whole argument has been that we have had this in the Senate since 1910. He can say this when it suits his book, but if he is sincere about the procedure used to elect Senators, he must prove his sincerity by following the same procedure in respect of MPs. If he does not do so, his total argument based on the way the Senate is chosen is absolutely meaningless and shows, that he does not really believe it. He cannot have it both ways. He cannot use the Senate as an example of a democratic process to support his argument and then say “No” when I move an amendment to the effect that we should apply the same system here. I hope he will now stand up and prove his sincerity by saying that he accepts this argument, that he believes that the Senate system has been the right system and that we will therefore apply it.

Mr. Chairman, I must apologize to the hon. member. There was a slight misunderstanding about the notes on my copy of the Bill and my failure to reply to the hon. member was an oversight.

The position is that the majority report did not recommended it on a provincial basis and that the Government saw fit to accept it like that, but to change it only by providing that one member should be elected from each of the four provinces, keeping the rest proportional, as recommended in the majority report.

I do want to tell the hon. member that he and I both come from a small province, and we should not push too hard. In terms of the quota, as it is contained in the constitution at the moment and will remain in force until 1983, but will now remain in force even longer through the delimitation, we are quite fairly treated. I do not think that he and I, who come from small provinces, and who are being fairly treated, should make too much of a fuss about this question. I think we are being quite fairly treated at the moment, and because the smaller provinces are being fairly treated with the quotas which are now being allocated to provinces one should not insist any further on the introduction of the quotas.

Mr. Chairman, may I ask the hon. the Minister how he justifies the fact that as the proposal reads at the moment, the NP Government will acquire one additional MP for every 12 members, while the Opposition will only acquire one additional member for every 30 members? How can he justify this, and what justification is there for his use of the Senate as an example, when it is not at all applicable to the allocation of the members?

When the Opposition becomes as strong as the Government is at the moment, the shoe will be on the other foot. [Interjections.]

In other words, power is all that matters and to hell with fairness.

Order!

Mr. Chairman, I do not know whether the hon. the Minister is open to persuasion. It seems to me that it is almost a waste of time to talk to the hon. the Minister about any of the basic principles of democracy.

Well, sit down then!

Who said that?

I did.

Why does that hon. member not get out of the House, go and sit in the Lobby, smoke his cigarettes and do other things rather than be bored by people who are trying to discuss some of the basic elements of democracy which affect South Africans and South Africa? If that hon. member is not interested, I suggest that he leaves, goes away and keeps quiet. [Interjections.]

Regardless of whether the hon. the Minister is open to persuasion or not, I want to come back to a comment made by the hon. the Deputy Minister of Co-operation. Perhaps I shall not come back to it for the purpose of persuading the Government, but I think it is important to come back to it for the purpose of highlighting for the public of South Africa the interesting, if not slow, thought processes of members of the Government. I asked a little earlier that if we decide upon the principle of nomination and indirect election of members, why could this principle not be extrapolated at some later stage by another Government, or by the same Government under different circumstances, to include not eight extra elected members, but 80, and the hon. the Deputy Minister …

Not 80. Why not make it 800? You are silly! [Interjections.]

I asked why 80 members could not be nominated and the hon. the Deputy Minister asked “Why not?” [Interjections.] In other words, the hon. the Deputy Minister says that the principle is the same. Once we have established a principle of nomination, that principle can be extended as the circumstances pertain. There is no reason why, once a principle of this sort has been accepted in relation to the elected body of South Africa, we shall not have a situation that when the Government feels itself threatened in any way, either by the members in the House, or by the outside public, further nominated members could be brought in. There is an established precedent for this in South Africa. What happened in 1955? When the Government at that time could not obtain a majority to exclude the Coloured people from the main body politic of South Africa, what did they do? They gerrymandered the Constitution and fell foul of the Supreme Court and, having done that, they moved by means of nomination to enlarge the Senate.

Mr. Chairman, on a point of order: May I ask to which aspect of the clause the hon. member is referring now? [Interjections.]

Order!

Sir, I compliment you on your chairmanship because I believe that you at least see the relevance of this argument.

It is not necessary to praise the Chairman.

The parallel which is to be drawn and the comparable situation is that this relates to nomination, and I am saying that if the Government could gerrymander the Constitution in 1955 to achieve an ignoble object, as it did—and this, I believe, has resulted in the demise of the Senate this week—then if circumstances arise which cause the Government fears or problems, they will gerrymander the Constitution again. I argue that we must not accept this principle.

The hon. the Minister said it happened in the Senate. I want to ask the hon. the Minister whether he approved of the procedures that were adopted in the Senate in order to maintain a Government. Does he think that that is in the furtherance of democracy as expressed by the electorate?

The hon. the Minister said that if one finds 82 members elected of one party and 83 of another, it is in the interests of democracy to use this procedure to maintain a Government. I want to say that it is not in the interests of democracy. It is only in the interests of democracy if the will of the people is reflected in the House and if the Opposition, no matter how close it is in numbers to government, can act as a total watchdog on government. It cannot act as a total watchdog on government if the Government has a built-in pad, a built-in security basis, on which it knows it cannot be defeated in a vote in the House.

Explain to us how you would operate if there were 83 members of one party and 82 of another.

We are talking in terms of principle. If a government starts along the road of trying to cook democracy …

It cooks its own goose.

… to suit its own purposes and to keep an Opposition from achieving a Parliamentary majority, whether it be this Opposition or another Opposition, whether it be an Opposition next year or in five years time, frustrations will be created in the electorate which, over a period of time, will boil over. If those frustrations boil over, democracy is sunk; it is sunk because one started by trying to cook it by utilizing a political mechanism. In the end result one kills the very system upon which our society is based.

Like you did with Japie.

Mr. Chairman, the hon. the Minister has offered us two reasons for this provision. The one was that this is intended to accommodate the problem one encounters when there are 82 members of one party and 83 of another. That problem would be alleviated if four members were nominated. However, can the hon. the Minister give us any moral reason why an additional eight should be elected? Let him just give me the moral justification for an additional 12 members of Parliament. I have yet to hear that in the House.

I shall reply to that.

The hon. the Minister has also said that what happened in the Senate in 1910 is another reason for this. Again, I see no moral justification for applying anything that was done in the Senate in 1910 to this House, which is democratically elected. I also have yet to receive the courtesy of an answer on the issue where I suggested that the hon. the Minister should bind himself to what previous speakers have said …

I shall reply to that.

… namely that members of quality will be either nominated or elected. I shall appreciate receiving an answer on that.

Order! I am loathe to ask hon. members not to make any interjections, but I must request hon. members to keep this constant muttering to a minimum now. If hon. members are not interested in the debate, they can converse somewhere else.

Mr. Chairman, I think the hon. member for Sandton suffers from political hyperbolism. He is guilty of blowing up the matters we are dealing with and wrestling them out of context. I shall leave the hon. member at that.

I just want to tell the hon. members of the Opposition something concerning the question asked by the hon. the Minister of Mineral and Energy Affairs. The hon. the Leader of the Opposition says that with this clause, we are completely destroying democracy, because we are introducing the principle that four members, one from each province, can be appointed. I want to tell the hon. the Leader of the Opposition what the whole procedure is. An election is held and the electorate votes a Government into power, even if it is by a majority of one. In other words, the result of the election is that the electorate has decided according to democratic rules which party should govern, even if by a majority of one. Having done this, the electorate decided at the same time that the winning party may appoint four additional members. Now I cannot quite understand how the hon. the Leader of the Opposition can say, in the light of this, that we are destroying democracy, for the winning party has been voted into power by the majority of the electorate. That is the only remark I want to make.

Mr. Chairman, I should like to refer to the explanation given by the hon. the Minister for his party’s change of attitude on the very clear principle of the majority report that the appointment of the extra members should be on a proportionate basis, according to the number of elected members in the House of Assembly. He has conceded that they have departed from that, but has only given one reason, and that is that in the event of an 83:82 electoral situation, this will tip the balance in favour of the Government so that one can have temporary political stability and the Government will be able to govern. I will deal with this in a minute, but I first want to ask the hon. the Minister whether there is no other reason. Do we understand that the reason for the departure of the Nationalist Party from this principle, to which he himself subscribed, is only because you may have a situation of 83:82 and it therefore allows you to have stability in government for a while? We have heard no other reason. No other reason has been advanced by the hon. the Minister or by any other member on that side of the House. We would like to know whether that is the total reason.

You are misinterpreting my words.

I thought I was very accurate in saying that you had indicated that if we had a situation of 83:82, the Government could appoint four more people, which would enable it to govern until such time as it could go to the electorate. In other words, as the hon. the Leader of the Opposition said, we are now saying that we are actually going to use an undemocratic means in order to bolster democracy in South Africa. Is there any other reason? Is it not perhaps because the hon. the Prime Minister would like to nominate members without being restricted by the nomination procedures of his own party? He is now actually free to nominate another four people without any reference to the provincial leaders, or to anyone else. I want to get this quite clear. The Government will be able to appoint the extra members if there is an 83:82 situation. That will give them a majority of 5. I want to know what happens if in those tense circumstances two of the elected members cross the floor of the House and join the Opposition.

Two Japies.

Well, I never! This is a case of the pot calling the kettle black! What a Freudian slip! That hon. Minister and the hon. the Minister of Posts and Telecommunications should get together on these things. Here is an hon. Minister saying: “Two Japies.” Two Marais Steyns! All I am saying is that at a time like that, when you have two members crossing the floor of the House, you will have a situation in which, in terms of elected members, there will be a minority Government. The Government, although it will then have a minority of elected members, will then be able to govern because of its nominated members.

Is this not correct? The hon. the Minister has also said that from the time this new proceeding is introduced, every time there is a vacancy on the Government side of the eight members, a Government member will be able to fill that vacancy, but every time there is a vacancy on the Opposition side that vacancy will be filled by a Government member. Is that democracy? In other words, over a period of time proportional representation will disappear entirely, even as far as the indirectly elected members are concerned. I submit that this is a subversion of the whole system and of the whole concept of proportional representation in this House. The hon. the Minister comes back time and time again with the excuse that it has already happened in the Senate.

It is part of Parliament.

I shall come to “part of Parliament” in a minute. The hon. the Minister knows that the hon. the Leader of the Opposition made it quite clear that our support of the abolition of the Senate should never be used as a justification for subverting this House, the sovereign legislator of South Africa, by nominated or extraneous members. Let us therefore get it quite clear that our support of the abolition of the Senate could never imply that at all. What is more, the hon. the Leader of the Opposition sent a letter to the hon. the Minister in connection with this particular matter.

There is a fundamental difference between the Senate and the House of Assembly, and the hon. the Minister constantly ignores that fundamental difference. According to the hon. the Minister there once was a time—or there have been times—when the Government of the day was saved in the Senate because of its nominated members, otherwise they would not have been able to continue to govern. That is quite untrue. A Government governs primarily, in the framework of the existing legislation, through money Bills. The hon. the Minister knows that if he should read section 60 of the Republic of South Africa Constitution Act, 1961, it is stated quite clearly there that revenue or money Bills for the ordinary annual expenses of the Government “shall originate only in the House of Assembly”. In other words, for the purposes of budgeting the Senate is not a relevant factor. It is only this House that can bring a Government down on a budgetary matter. It is only this House in which appropriation measures can be introduced. Therefore, the Senate is not the equal of the House of Assembly when it comes to the important area of budgeting.

The Senate cannot bring down the Government in any case. The hon. the Minister should know this. If one looks at section 63 of the Republic of South Africa Constitution Act, 1961, one will see that it is clearly stated there that if this House passes a money measure, even if it is turned down by the Senate in the same session, it shall be deemed to have been passed by the Senate. In other words, the Senate has never had the power to block money measures or to bring the Government down on an issue of appropriation or taxation.

Furthermore, even on the most important measures that this hon. Minister can think of, an amendment to the Constitution, it is true that if the House of Assembly, in two successive sessions, passes the same Bill, even if the Senate rejects it …

I know all about that.

Well, if the hon. the Minister knows all about that, why then does he say that the Senate is in fact in a position to bring the Government down?

I did not say that. I deny ever having said that. [Interjections.]

The hon. the Minister said, in fact, that there had been cases in the past where, were it not for the fact that the Government could nominate Senators …

I deny having said that. I shall repeat what I said.

Well, this hon. Minister should stop using the Senate, which is a House of review, which is not the sovereign place which this House is, which has no powers to tax or to initiate taxation and which has no power to block measures which this House is determined to pass. The hon. the Minister should not use the Senate and nominations to the Senate as a pretext for his raping of the underlying principle of representation in this House.

Mr. Chairman, I want to begin by replying to the hon. member for Pietermaritzburg South. This hon. member is obsessed with expertise. In the first place, I would courteously suggest to him that a little arithmetical expertise would not be unbecoming to him. He made the wild statement here that the 12 members would cost more than R1 million.

I did not say that.

The hon. member mentioned a figure of R1 million.

I said half a million rand.

Then I apologize to the hon. member. It sounded to me like R1 million. As regards the words he wants to add, I am not prepared to do so, because I shall gladly leave this aspect to the discretion of the party which is entitled to an additional member or members in this House, to decide for itself what kind of people with what kind of expertise they want here. The hon. member asked me whether I would bend it, and I say: No, I shall not bend it.

Then I come to the hon. member for Sea Point. To the best of my knowledge, I did not say that the Government had been kept in power by eight nominated members in the Senate. To the best of my knowledge, I said that the Government had retained a majority in the Senate through eight nominated members. I never said that the Government had remained in power in this way, but the fact that it did so in one part of the legislature is a precedent I am referring to.

It is a subordinate system.

The hon. member for Sea Point will allow me to say that he does not need to lecture me on the rights of the Senate. I know them too. What I did say—I have said this time and again—is that in many important cases—I mentioned the cases—the Senate has the same rights and influence, qualitatively speaking, as the House of Assembly. I never alleged that in terms of our constitution, the vote of a Senator has the same value as a vote in the House of Assembly in every respect.

I did not say the reason why the Government had decided on the method of nomination and election of these 12 members was that it wanted to remain in power in case of an 82:83 electoral result. I said we had to see whether, in the final analysis, if the worst came to the worst, the system was fair or not, and then I took the worst circumstances and tried to argue the matter.

I am afraid that I cannot advance any new arguments in this connection, and I do not know either whether any hon. members on that side of the House can advance any new arguments. This is as far as I am prepared to go by way of explanation. I am certainly not prepared to amend the clause.

Mr. Chairman, as the hon. the Minister did not reply to me, I should like to ask him whether he thinks that it is fair that if one of the nominated or indirectly elected members of the Opposition vacates his seat, that seat is filled by the majority? Does the hon. the Minister not think that it would be fairer to ensure that a member who vacates his seat for any reason and leaves Parliament, be replaced by the party to whom that member originally owes his nomination?

It is a built-in principle in the system of proportional representation, with a transferable vote, as it is in the Senate at the moment. This is also a precedent that we are following, and therefore it is right.

Mr. Chairman, with respect, that was not the question. I do not think the hon. the Minister understood the question. Does he understand the question?

I am not so slow thinking.

Mr. Chairman, I ask the hon. the Minister whether he will answer the question. I ask him whether it is fair, not whether it is a precedent or not, but whether it is constitutionally and democratically fair that if a member vacates his seat for any reason, the governing party fills that position. Is it not fairer that the member who vacates his seat, should have his seat filled by the party to which he belongs?

Mr. Chairman, I shall rise only this once more to answer a question. I am afraid that I am not here to answer a question by the hon. member in the way he would like it to be answered. My reply to him is that it is a recognized principle which has been applicable in the Senate all these years, and because it is a recognized and accepted principle, I think it is fair.

Mr. Chairman, would the hon. the Minister answer another question?

No, I have replied to enough questions. If you make a speech, I shall reply to it.

Mr. Chairman, I should just like to reiterate the point that was made by the hon. member for Durban Point. The hon. the Minister has not replied to it yet. How can he reconcile it as being fair—and he cannot relate this to the Senate—that where the proportion of elected members in this hon. House is 135 to 30, the effect of the new system will be 11 to 1?

Mr. Chairman, this is the final outcome of the system we are proposing here. In the first place we have the four nominated members. The four nominated members have to be considered separately, for the simple reason that they are specially nominated members. Whether the hon. member wants to relate it to the Senate or not does not matter. I do relate it to the Senate, because the Senate is a part of Parliament at this moment, and this is a built-in principle in the Senate which has always been recognized. This leaves the eight members, and if one divides those eight members according to a proportional system with a transferable vote, the proportion is seven to one.

Order! I should just like to ask hon. members to keep themselves to the rules of debate in the Committee Stage, and that is not to repeat any argument and, secondly, not to discuss the principles of the Bill, but to discuss the details.

Mr. Chairman, I shall be very brief indeed. There is an important point of clarification that I should like to put to the hon. the Minister in reply to a question put to him by another hon. member of the House. The hon. the Minister says that the 12 nominated and elected members will be responsible to Parliament. I should like to ask the hon. the Minister to clarify his argument in this respect. I should like to know specifically whether he is implying that the Cabinet, which in essence will be making the recommendations to the State President for the nominated members, will accept joint responsibility for the actions of those four nominated members. Secondly, I should like to ask the hon. the Minister to clarify precisely what he means when he says that these members will be responsible to Parliament. I should like to ask him what sanction can be exercised on them and what redress can be taken against them should they act in a way which is not to the benefit of South Africa. So I wonder whether the hon. the Minister would clarify precisely what he means by the statement he made earlier that these members will be responsible to Parliament.

Mr. Chairman, those members will be responsible to Parliament and will have the same rights and obligations as he has. They will be members of Parliament, in the same way as he is and with the same obligations that he has, except that they will not have a constituency.

Mr. Chairman, this clause relates to the ability of persons being able to serve on either the President’s Council or in the House of Assembly. Subsections (1) and (2) relate to members of the President’s Council who become members of the President’s Council who become members of the House of Assembly or a provincial council having to vacate their seats and that members of the House of Assembly who are appointed to the President’s Council have to vacate their seats in the House of Assembly. This means a person cannot be a member of both bodies at the same time. That is the principle contained in this clause. However, in the Bill itself the question of the President’s Council only comes up under clause 34. This means that the actual clause relating to the President’s Council has not as yet been accepted. I would therefore like to propose that this clause stand over until such time as clause 34 has been debated. I think it would then be correct and proper to look at the merits of this particular clause. I therefore move—

Agreed to.

Clause 30:

Mr. Chairman, this clause relates to a member of a provincial council who becomes a member of the President’s Council. The exact same principle applies here as in Clause 21 and therefore I move—

I have no objection.

Agreed to.

Clause 34:

Mr. Chairman, clause 34 contains one of the most important elements of this Bill, i.e. the establishment of a President’s Council. I tried to motivate fully during the Second Reading debate why we are opposing the President’s Council with all our strength. One of the central questions I put to the hon. the Minister and to any hon. member on that side of the House, as well as to hon. members of the NRP, during the Second Reading debate was the following: What significant reason is there for excluding Blacks from participation in the President’s Council? I have listened attentively to the arguments in this connection, and three basic arguments have emerged.

The very first argument is the type of argument we heard from the hon. the Minister of Posts and Telecommunications, and I do not want to devote any attention to that. It is a ridiculous argument, and as a result of his particularly rapid thought processes he only noticed a few days later that he should not have said certain things, as he has indicated today.

Have you read Kaunda’s book?

The second type of argument is the one which goes more or less like this: The President’s Council, as set out in the Bill, is not a perfect body; it is an imperfect body and it has certain shortcomings, but it is a step in the right direction.

†I would say that this is the major argument used by the NRP. It is also advanced by one or two of the members opposite, such as the hon. member for Randburg. We also heard it from the hon. member for Pietermaritzburg South. The argument is that this is an imperfect institution, that it has its limitations and problems, but that it is a tottering step in the right direction.

This position has, I think, been stated most eloquently by the hon. member for Mooi River. In fact, I happened to be in my office and I saw the hon. member for Mooi River on television. For just one second I felt that I was looking at one of those political melodramas that one sees in the late-late show on the west coast of the USA. I could not believe that someone could speak with such rare enthusiasm about an institution. He was talking as if we were already approaching a constitutional Shangri-La where we all locked our arms together and goose step our way into a beautiful future singing “Yippee-Yippee-Yi”. He was very enthusiastic. At first I was amused, but then I became concerned, because I know the hon. member for Mooi River to be a very sincere person—and I say this with all sincerity on my part. He is a very sincere person. He does not lightly commit himself to a particular position in the House. I can say that seldom, if ever, have I heard him defend a position without sincere conviction. He means it. So he genuinely believes that the President’s Council has, as an embryonic constitutional mechanism, great promise.

You also believed in it for a while.

I went back to the legislation again and studied it, but I could not find any of the promises that the hon. the member for Mooi River saw in this legislation. He talked about powers being conferred, but I could not find any clause in the legislation which refers to powers being conferred. He also talked about the President’s Council taking over certain powers and giving certain advice to Parliament, advice which would have to be considered, but I could not find it in the Bill. He talked about Parliament divesting itself of certain of its powers. That was inevitable. It had to happen, whatever anybody said. I referred back to the legislation, but I could not find anything in it. This is the one kind of argument that one has heard consistently from those who feel optimistic about the President’s Council being some kind of constitutional catalyst leading to something big.

I would still have said that we should give him the benefit of the doubt. Maybe it is possible, but having listened carefully to the speeches of the hon. the Minister of the Interior, the hon. the Minister of Mineral and Energy Affairs, the hon. the Minister of Transport Affairs and the hon. member for Cape Town Gardens, I can come to no other conclusion but that the hon. member for Mooi River and other hon. members who think like him are labouring under an incredible illusion.

What about Japie?

The hon. member knows what happened to Japie. That they are labouring under an illusion becomes as clear as daylight to us from the speeches of these hon. members. The hon. the Minister of Mineral and Energy Affairs said, when he was asked why Blacks were being excluded, and I quote from his unrevised Hansard—

The hon. member for Mooi River believes that channels are still going to be created for Blacks. However, the hon. the Minister of Mineral and Energy Affairs believes that when we come back here in four years’ time, remember what I told you: The Black peoples already have effective channels.

That is so.

That hon. member says it is so. I then listened to the speech by the hon. the Minister of Transport Affairs. He rose in this House in a kind of pious huff and said with his hand on his heart, and I quote from his Hansard (col. 8184)—

These are fine-sounding words, words which one immediately … [Interjections.] One would think that this is a situation which requires a certain measure of seriousness and which we should listen to.

Mr. Chairman, may I ask the hon. member a question?

No, Sir. These are words one should listen to in all seriousness. I thought to myself that something great was coming, something which would rise above party-political concerns, something which would have a bearing on the cause, as the hon. the Minister put it. [Interjections.] Reading the speech, however, one finds exactly the same standpoint, i.e. that channels have already been created for Blacks. I quote from his Hansard of 5 June 1980 (col. 8191)—

He goes on to say—

The hon. the Minister of the Interior himself tells hon. members in this House in the clearest and most concrete possible terms that we have already had draft legislation, after all, in which reference has already been made to a President’s Council. He says that there is nothing new, therefore, and that this step is only the fulfilment of what was contained in that measure in any event. I quote—

He goes on to say—

In other words, this President’s Council is nothing but the implementation of the policy of separate development as conceptualized by the other side of the House. It is not concerned with the wonderful dreams of the hon. members of the NRP. It is not concerned with the new possibilities of constitutional development. It is concerned with the implementation of the policy of separate development. And now I say to the hon. member for Durban North: This is the official Opposition which is opposing that policy. It is our duty and we have the right to oppose it. We are not going to serve on bodies which implement that policy for the Government, and that is the vital difference. We belong to this House and therefore we shall remain in this House and fight with all our strength to oppose the Government, but we are not going to help the Government to implement its policy of separate development. This is the one point.

The other point is that the hon. member for Mooi River and the people who share his views are living in cloud-cuckoo land. The Government, through the mouths of its hon. Ministers, has been clear and frank. They have said that the President’s Council is part and parcel of the policy of separate development. Do not be under any illusions. Do not dream any dreams. Do not see any visions. Remember, this is our policy and we are going to implement it. This pious talk they are now directing at me, saying that we are shunning parliamentary institutions, is the biggest lot of nonsense I have ever heard in my life, and I shall come back to it on another occasion, because I do not have time for it now, and I shall reply in full to that question.

One thing which the Government must understand quite clearly is that they are not going to take me for a ride and they are not going to take my party for a ride either. They must not think that when they come to this House, implementing the policy of separate development in a different guise, they can expect us to play ball with them. This at least I can tell the hon. the Minister of the Interior. [Time expired.]

Mr. Chairman, I move—

House Resumed:

Progress reported and leave granted to sit again.

Mr. Speaker, I move—

Agreed to.