Mr. Speaker, I move—

Since I introduced my budget in March this year, a considerable amount of new information concerning the latest trends in South Africa’s balance of payments and domestic economic activities has become available. On the basis of this information, I am able to give this House the good news today that during the past six months, the South African economy has in several respects done even better than I indicated or envisaged in my budget speech.

The balance of payments has once again showed its strength. According to the latest estimates, the surplus on the current account of the balance of payments rose in the first quarter to the new record figure for a single quarter, i.e. R1 970 million. At a seasonally adjusted annual rate, this surplus amounted to the almost incredible amount of R7 780 million, which, expressed as a percentage of the gross domestic product, amounts to about 13%.

†This is an astonishing figure and it reflects the remarkable strength of our current external accounts.

*As could have been expected, this record current surplus was accompanied by a further net outflow of capital. This outflow amounted to R1 715 million for the first quarter, and was once again mainly a reflection of repayments of foreign loans and a shift in trade financing from foreign to domestic sources—the logical consequence of the unusually low interest rates, in relation to those abroad, which prevailed in South Africa during this period. Nonetheless, net gold and other foreign reserves increased by R255 million during the quarter.

The unusually large surplus on the current account during the first quarter was an abnormal phenomenon, of course, which must in part be attributed to the high average gold price of $631 per ounce during that quarter. Since then, the gold price has been fluctuating around a lower level, as appears from the fact that the average price for the first five months of 1980 was $585 an ounce.

Meanwhile, thanks to the upswing in the domestic economy, the value of our imports is still showing a strong upward trend, which is likely to continue for quite some time. On the other hand, it would be reasonable to expect that our exports, under the influence of the present overseas recessionary trend, will not maintain the rate of increase of the past few years over the coming months. Unless there is another sharp rise in the gold price, therefore, it must be accepted that the current surplus on the balance of payments will decline over the coming quarters. Such a decline would be logical and natural, and should be welcomed as the final proof of the strength of the domestic economic upswing and the higher growth rate. In spite of this, the current surplus for the year 1980 as a whole will probably still exceed the record calendar year figure of R3 107 million, which was achieved in 1979.

The expected decrease in the surplus on the current account should not have any significant adverse effect in the coming months either on the exchange rate or on the gold and other foreign reserves, since it will probably be accompanied by a drop in the net capital outflow. Not only have interest rates in the United States fallen considerably over the past month or two, but since April, the Reserve Bank has also been making judicious use of an increased and variable discount on dollars futures, which has largely neutralized the effect of the big differences between the domestic and foreign interest rates. This new arrangement, which arises from the exchange rate recommendations of the De Kock Commission, is working well in practice and represents a new instrument of monetary policy which gives the Reserve Bank better control over its gold and other foreign reserves.

In the light of this strong balance of payments position, it is logical that there should have been a considerable further appreciation of the rand during the first five months of 1980. Since the introduction of the new exchange rate dispensation in January 1979, the rand has appreciated by more than 11% as against the US dollar, and by more than 8%, on average, as against all other currencies.

The financial rand system, too, is still doing well. The financial rand has consolidated its position to such an extent that it is presently showing a discount of approximately 27% as against the appreciated commercial rand, compared with about 45% when the new system was introduced in January 1979. The Reserve Bank has already approved applications to the value of approximately R600 million for the use of financial rand by non-residents for investments in South Africa in assets other than listed securities. Most of these approved investments have been of precisely the kind we wanted, namely investments in manufacturing and mining, which are conducive to economic growth and employment.

†Given this strong underlying balance of payments position, it is not surprising that South Africa’s overseas credit rating has improved still further in recent months. It is against this favourable background that South Africa is at present floating a public bond issue in Europe for an amount of DM120 million, at an interest rate of 9% with an issue price at par, and with a final maturity of seven years—the longest period for any South African foreign loan for quite some time. The significance of this particular transaction is that it is a public bond issue, and not a syndicated bank loan or a private placement. The fact that the Government is at present able to float such a public bond issue in Europe on such favourable terms, can only be interpreted as a sign of overseas confidence in South Africa and as recognition of our strong economic and stable political situation.

I am now turning to domestic economic conditions, and it affords me considerable pleasure to be able to inform the House that the South African economy has remained in a cyclical upswing throughout the first five months of 1980. This is evident from an analysis of such economic indicators as manufacturing production, wholesale and retail sales, sales of motor vehicles, the value of real estate transactions, loans extended by building societies, and employment.

In my budget speech I referred to the need to attain a more rapid and sustained increase, in real terms, in such areas of economic activity as production, employment, investment and imports. I stressed that a mere recovery from a low level would not be enough, that we should attempt to break new ground, and that it therefore remained the fundamental aim of economic policy to ensure that South Africa would fully utilize its growth potential in 1980.

The indications are that this policy is now yielding the desired results. Conditions in most sectors of the economy are distinctly buoyant. And although real fixed investment in new plant, equipment and construction has not yet risen adequately, it shows every sign of moving ahead rapidly in the period ahead. Such an increase in fixed investment is, of course, highly desirable, as it will not only generate additional income and employment in the short term, but also expand productive capacity for future long-term growth.

In these circumstances I believe that 1980 will turn out to be the best growth year for the South African economy since 1974 and that the present upswing will continue for quite some time thereafter. Output, employment and real income should continue to rise in the months ahead and the rate of increase in gross domestic product for 1980 seems likely to exceed 5%.

This sound state of the South African economy stands in marked contrast with the present economic situation in most of the major industrial countries. The United States has already moved into a recession and in most other industrial countries a similar downturn or slowing down appears to be imminent. Whether this recession will prove to be as serious or as protracted as the world recession of 1973 to 1975, remains to be seen. If, however, a serious world economic recession were to develop in the period ahead, it would only be realistic to assume that the South African economy will, after the usual time lag of anything between six months and two years, also be adversely affected to some extent. Certainly, the present cyclical upswing in the South African economy will not last for ever, but should in the normal course of events be followed at some stage by a normal cyclical downturn, however mild this might be. In due course, this downward phase will, in turn, be succeeded by the next upswing. And so the South African business cycle will continue on its normal course. However, in view of the strength of the South African economy in general, and of its underlying balance of payments position in particular, it can be expected that the long-term or secular trend around which these cyclical fluctuations will occur, will remain strongly upwards. The prospects for sustained economic growth in South Africa in the 1980s are therefore better now than ever.

Inflation remains a serious problem and the Government is determined to do everything within its power to counteract it. It is true that our rate of inflation has not accelerated over the past three quarters, as so many prophets of doom predicted during the second half of last year. It is also relevant that during the past year the inflation rates in the United States, the United Kingdom and many other countries have accelerated to levels well above the South African rate of inflation. Nevertheless, this in no way changes the fact that the rate of inflation in South Africa remains unacceptably high and needs to be reduced as a matter of high priority.

*Considerable attention has been drawn in South Africa recently to rises in food prices as a part of the inflationary process. It cannot be denied that there have been considerable rises in food prices recently and it is understandable that consumers should feel concerned about this. Essentially, however, the process of inflation is a vicious circle of rises in costs and prices, and it would be unfair to single out agriculture or any other individual sector of the economy as the guilty one in this respect. Just like the consumer, the farmer, too, is a victim of inflation, and his production costs have also risen considerably.

Interesting information in this connection is contained in a recent publication of the Union Bank of Switzerland under the heading: “Prices and Earnings Around the Globe—1979-’80 Edition”. In it, wages and prices are compared on a scientific basis. From this it appears that there are only seven cities in the world where a representative food basket costs less than in Johannesburg. Furthermore, there are only 18 cities in the world where an average worker has to work shorter hours than in Johannesburg to earn enough to buy such a food basket. Of these 18 cities, only two are situated outside Europe and North America. In all the other cities, including Athens, Dublin, Helsinki, Lisbon, London, Madrid and Milan, the ratio between wages and food prices is not as favourable as in Johannesburg.

In my budget speech, I gave considerable attention to the causes of the present inflation in South Africa and to the seven principal measures of the Government’s anti-inflationary policy. These measures are still being consistently applied. In this way, for example, Government spending and the general money supply are still being strictly controlled and the rand is being allowed to appreciate further as against the US dollar and other currencies, which means that the cost of imported goods, in terms of rands, is rising less rapidly than would otherwise have been the case. On the supply side, too, active steps are being taken by laying greater emphasis on the training and better utilization of manpower, especially with a view to removing or preventing bottlenecks and increasing productivity.

It would be unrealistic to expect that in a world in which inflation rates have accelerated considerably over the past year, South Africa should be able on its own to reduce its inflation rate rapidly and dramatically. The inflationary process is a deep-seated and complex process and there simply are no instant solutions for it. Nonetheless, we remain determined to persevere in the struggle against this evil, and if we stick to our guns and continue to maintain the necessary financial discipline, I am convinced that favourable results are bound to materialize.

Committee of Inquiry into the Finances of Local Authorities in South Africa (Browne Committee):

I now want to refer to the findings and recommendations of the Browne Committee concerning the finances of local authorities. Hon. members will recall that I tabled the Afrikaans text of volume 1 of this important report a few days ago. I did this in spite of the fact that volume 1 had not yet been translated into English and printed and that volumes II and III were not yet ready for the press. However, the question of local finances has attracted so much interest that I believe that the sooner people are enabled to study the contents of this important report, the better. I am told that the English text of volume I, as well as volumes II and III in both languages, will be made available within a few weeks.

For three years or more, our local authorities have been looking forward with eager anticipation to the appearance of this report. I want to convey my sincere thanks to the committee for the very thorough piece of work it has done. The penetrating study which has been made of the whole field of the finances of local authorities has inevitably been time-consuming and has for this reason, perhaps, given rise to expectations of large allocations of funds from the Treasury. Unfortunately, these impressions have from time to time been strengthened by some of the media and some representatives of local authorities, with the result that the Volume I recommendations have proved disappointing to some.

It is a pity that certain representatives of local authorities have been so quick to express unfounded criticism through the Press. It has even been argued that the solution to the financing problems does not lie in the determination of needs and the utilization of local sources of revenue, but in the direction of the complete abolition of municipal rates and their replacement by, inter alia, an increase in the general sales tax. Others again have been disappointed to read that no large-scale transfers from the Treasury of the general taxpayer to the local authorities are being proposed.

As opposed to this criticism, I believe that the report is extremely authoritative and will serve as a standard reference document for the statistics and finances of local authorities for a long time to come. It attempts to apply principles of objective measurement of needs and ability to pay similar to those that were successfully introduced years ago with regard to the provinces. Furthermore, it applies the principle of effecting maximum savings in the control and administration of local authorities through rationalization and combination of services, and of approaching these matters in a more professional manner through the streamlining of administrations and the training of key officials. The committee strongly recommends that the older, established local authorities should take under their wing adjoining newly established authorities which do not yet have a sound revenue basis.

Still, it is gratifying that responsible comment is being heard after more mature consideration of the report as a whole.

Order! Hon. members keep on conversing after I call for order. I want silence in this House, please.

I am referring, for example, to the 6 June edition of the Financial Mail—

Exactly what is being suggested by the Browne Committee.

The problem that local authorities have to contend with is that in a period of economic revival such as the one we are experiencing at the moment, they are finding it more and more difficult to create the desired infrastructure as well as to meet their own financial needs. This problem can be traced back to the relatively rapid development our country experienced in the post-war period, combined with sustained attempts to uplift our underprivileged population groups. To this should be added the continued rapid urbanization of the population, a movement similar to the one which is taking place all over the world; the provision of high-grade services to those who do not have the income to contribute their share of the costs; increased expectations of all population groups; as well as certain tendencies in government policy which may increase the cost of the provision of services, such as a policy of low-density housing, restrictive building regulations, and so forth.

The Government has not yet been able to study the recommendations of the Browne Committee, but as soon as it has had an opportunity to do so, I intend to publish a White Paper in which I shall formulate the Government’s standpoint on the recommendations.

†Effect of inflation on pensions:

Mr. Speaker, there is another matter which I would like to raise here, and that is the devastating effect which inflation has particularly on our senior citizens with fixed incomes or pensions. I am frequently asked to help in one way or another. Any direct financial assistance which the Government could offer would, of course, only be a palliative under the present conditions. Nevertheless, as I have stated in my budget speech and on numerous subsequent occasions, it is the declared policy of the Government to grant such assistance to the full extent of its capabilities. To this end, I have made substantial tax concessions, increased subsidies on food and, to the extent allowed by financial considerations, raised social and civil pensions and reviewed the means test in co-operation with my colleague, the hon. the Minister of Health, Welfare and Pensions.

Obviously, the only real solution to this problem is the eradication of inflation. I have already referred to this and do not think I need dwell on it any further. The question, however, does arise what private pension funds themselves can do to improve the lot of pensioners. The only resources available to pension funds are the contributions made by employees and employers and the investment income earned on such contributions. It follows that one way in which pension funds can increase pensions is by obtaining higher contributions from employees and particularly from employers.

When considering this possibility, one should naturally bear in mind that the resources of employees and employers are not unlimited, and that employers are also being called upon to make substantial additional contributions to pension funds in order to fund the additional liabilities which arise in the funds as a result of the salary increases which employers are obliged to grant to their employees in order to compensate the latter for inflation. Employers’ ability to make further special contributions to enable pension funds to increase pensions in the course of payment may thus be limited, but there is also evidence that many concerns are making increased profits. Having said this, I cannot but stress that employers and employees should heed the truth that one can make adequate provision for one’s old age only by accumulating sufficient funds for that purpose during one’s working life, and that contributions to pension funds should consequently be structured so as to ensure that this objective will be achieved.

In so far as the application of the investment income of pension funds is concerned, it would seem to me that not all pension funds and employers recognize that the relatively high returns presently earned on investments are partly due to the prevailing inflationary circumstances, and that it would therefore only be fair if pension funds apply their surplus investment earnings, and especially the surplus income earned on reserves held in respect of vested pensions, to increase pensions in the course of payment. I know that some pension funds already do this, but I am afraid that in many instances such surplus investment earnings are applied to reduce employers’ contributions. This course, I would say, cannot be defended at all in the present conditions of inflation. On the contrary, I should like to make a serious appeal to employers to consider sympathetically the plight of existing pensioners and, if at all possible, to make extra contributions to pension funds which would enable them to pay better pensions to such pensioners. It is not only a responsibility of the Government to see that our senior citizens are able to spend their last years in peace and with as few financial worries as possible, but certainly also of all employers who are in control of profit-making enterprises. It is only a joint effort in this regard that will bear worthwhile fruit.

*First Report of the Committee of Inquiry into the Retention of Pension Benefits:

While I am on the subject of pensions, I should like to say a few words about the first report of the committee appointed by the hon. the Minister of Health, Welfare and Pensions and myself to investigate the retention of pension benefits.

The hon. the Minister of Health, Welfare and Pensions and I appointed an interdepartmental committee in December 1978, under the chairmanship of the Registrar of Financial Institutions, whose terms of reference were to investigate the following pension affairs: Firstly, compulsory retention of pension rights by means of transferability or in some other way. Second, the conversion of a part of one-sum benefits into annuities. Thirdly, the provision of satisfactory pension benefits for that section of the community which does not enjoy any cover in this respect at the moment.

I have just received a draft of the first report and I intend to table the printed version tomorrow.

The committee was instructed to prepare draft legislation to embody its recommendations. Naturally, however, the legislation is of a complex and technical nature and it may be quite some time before it is completed. In order not to delay publication of the report, draft legislation is being kept in abeyance for the moment. However, it is still being drafted and the intention is to publish it without delay in the Government Gazette for general information and comment as soon as it has been completed.

The recommendations of this committee are of a complicated and technical nature and I do not intend to discuss them in detail at this stage. In spite of this, I do want to single some of the most important recommendations. Firstly, the provision of pensions should take place within a ring-wall enclosing three kinds of approved pension providing instruments, namely (a) pension funds; (b) retirement annuity funds; and (c) specially frozen savings accounts that may be operated by the Post Office, banks and building societies. These specially frozen savings accounts should be subject to the same basic discipline and should enjoy same tax treatment as that which applies to retirement annuity funds, but they will not be able to pay out annuities.

Secondly, new money should be able to flow in easily and informally over the ring-wall, but must remain frozen there until some approved unfreezing event takes place, namely (a) attainment of retirement age; (b) death; (c) disability; (d) emigration; (e) request for payment by married women; and (f) the issuing of a sequestration order. Until such time as an approved defrosting event of this nature takes place, there should be a high degree of mobility of frozen pension interests from one approved pension providing instrument to another.

Further recommendations cover, among other things, termination of membership of a pension fund and the position of provident funds. As far as members of provident funds are concerned, the rights of existing members are preserved and protected. Then there is the calculation of the statutory minimum accumulated interest of a member in a fund at any given moment. In addition, there are measures to provide the highest possible degree of protection for accumulated pension interests in funds, the natural actuarial interests, the estimation of accumulated pension interests and vested pensions against creditors, the combating of the unfavourable effect of payment of commission on pension provision, the tax treatment of pension provision and provident funds, as well as the elimination of duplication of functions between Inland Revenue and the Registrar of Financial Institutions.

The committee has done an excellent job and I should like to convey my thanks to the Registrar and the members of his committee for the very thorough piece of work which will be tabled tomorrow.

Consultations were held with the greatest variety of representatives of the pension and provident fund industry and other public bodies which had a vital interest in the committee’s task. I hope that interested parties will make an intensive study of the committee’s recommendations over the next few weeks and will submit their comments to the Registrar. Then the hon. the Minister of Health, Welfare and Pensions and I will formulate and announce our standpoint in this matter after consultation with the Cabinet.

†Fringe Benefits:

I turn, finally, to the subject of the taxation of fringe benefits.

During the months which have elapsed since the publication of the report of the Standing Taxation Commission in regard to the tax treatment of benefits or advantages granted in respect of employment or to the holder of an office, commonly known as fringe benefits, my department has carried on intensive consultation with the private sector on the subject in order to produce equitable and workable legislation to regulate the situation.

There was a surprising measure of consensus in regard to the principle that remuneration in kind or by means of allowances should be treated on the same footing as cash remuneration.

This is an important tax measure. Not only will it prevent the erosion of the tax base by the payment of so-called tax-free benefits, but it will strengthen the foundations on which further tax reform can be built. Furthermore, it is an important measure for preserving the integrity of the tax system in that all taxpayers will receive the same tax treatment on their earnings.

Although consensus was reached on the principle (subject to certain conditions not related to the principle of the tax), there were still some differences on detail in the last round of views expressed—as late as 5 June—which could not be resolved in the last days of the session.

It has therefore been decided to allow more time for further discussions in order to obtain as great a measure of consensus as is possible in a tax measure of this kind.

These discussions, which will be arranged by the Commissioner for Inland Revenue, will take place soon after the commencement of the Parliamentary recess so that final proposals for legislation can be submitted early in the new year. As I had already announced some time ago that the presently devised scheme to tax fringe benefits would not come into operation until March next year, the decision to proceed on this basis will not mean a delay in the application of the tax, but a still more thorough investigation of its practical implications and, I believe, of its virtues.

Mr. Speaker, the hon. the Minister of Finance has covered a very wide range of subjects in his address to us, and I propose to deal with most of them in my reply.

I want to start off by saying that we believe that the hallmarks, as we see them, of sound economy should at this stage contain five essentials: Firstly, that we see to it that we restrain inflation; secondly, that we should achieve a per capita growth rate that will in fact ensure that the living standards of the community are improved; thirdly, that we continue to balance our external accounts; fourthly, that our currency remains strong and increases in strength; and, fifthly, that we actually achieve stable interest rates in the community. We propose to test what the hon. the Minister has said against those aspects.

I want to start off by congratulating the hon. the Minister on the loan he proposes to raise in Germany. Obviously, we hope this will be a resounding success, because it will be a success for South Africa, and that is what is important in this context. It is, of course, a remarkable thing with bankers and the story is told that bankers give one an umbrella when the sun is shining and take it away when it starts to rain. At a time when it was raining in South Africa and we wanted public loans from overseas, they were a little chary to give us this money. I want to suggest to the hon. the Minister that, when he goes to Germany, he should tell them that the sun is shining in South Africa. That is no doubt the reason why we are getting this umbrella at this moment in time. I am pleased we are able to raise the money. I am also pleased that it is a public loan issue, and I am even more pleased about the fact that we actually do not need it, because that is really the crucial test at this moment in time. I think the hon. the Minister knows that our major concern, and one of the major problems with the economy at this moment in time, is the question of inflation. There are two other things that go with it, i.e. the difficulties of job creation and unemployment and the skilled manpower bottle-neck. Those three aspects are what give us particular reason for concern in regard to the economy.

Let us look at the picture in the light of what the hon. the Minister said about inflation. I do not think we can take much comfort from anything the hon. the Minister has said, or that anything is going to happen that is going to help fight inflation, at least not anything we have not seen as yet. The inflation rate is abnormally high. There is no question of rationalizing that away. The reality of life is that inflation is too high in South Africa. The lower income groups and the aged, in particular, are feeling the ravages of inflation utterly unduly.

I think the hon. the Minister must attend to some of the things. I have told him before, and I tell him again, that when we ask for the import levy to be abolished, we ask for it to be abolished to ensure that the benefit can be passed on to the consumer. I regret to say however, as I have said before, that he has not ensured that the benefits accruing from the abolition of import permits are, in fact, passed on to the consumer. Secondly, there is no doubt that with the revival in the economy he has sought to avoid the demand-pull inflation with this greater attraction of imports, but there is no doubt that imported goods have resulted in inflation, because the price rises in imported goods are about twice what they are in regard to local goods at the present moment in time, and that is certainly not an encouraging way to fight inflation. Thirdly, the adjustment of administered prices leaves very much to be desired, not only in regard to the quantum aspect, but also in regard to the timing of those increases when there are adjustments. Fourthly, when it comes to the question of labour bottle-necks, which are also a cause of the inflation, and will in fact aggravate it even further, in reality the planning that should have taken place before has, in fact, not taken place, and the very admissions embodied now, for example, in the second Wiehahn report are admissions indicating the failure of the Government to pre-plan adequately in regard to the availability of the skilled manpower that we need. These are indictments of the Government on this question alone.

I now just want to talk briefly about taxation. One of the things that seems to be fairly clear, when looking at the current statistics, is that South Africans are, in fact, going to be overtaxed this year, yet it looks as if there are going to be quite substantial surpluses. Let us take a couple of examples. The April figures show a 36% increase in sales tax collected over the figure for the same month last year. Transfer duty shows an increase of almost 150%, I think it is between 140% and 150%. This is the increase on transfer duty collected. Customs duty shows an increase of more than a third. It is about 35%. So it is obvious that revenue is increasing at a far greater rate than the hon. the Minister has budgeted for, and it is fairly clear that even with the tax concessions granted, even bearing in mind the fiscal drag—and I have not even referred to gold-mining taxation—South Africa is going to be overtaxed in the current financial year. The hon. the Minister makes concessions, but the reality of the situation is that we are still paying more tax than we need to, bearing in mind the expenditure for which the hon. the Minister has budgeted. If he is not, in fact, going to give us further tax concessions—and obviously one does not anticipate any further concessions between now and tomorrow—the other issue involved is whether there are not essential social services, necessary for the future of South Africa, to which some of this money should be devoted. One does not have to give any examples of it. It is all around us in South Africa. Everywhere money has to be spent in order to secure the future of the country. That money has to be spent, and it is no use being a good Minister of Finance and showing tremendous surpluses when all around you are the calls, the desperate calls, for the need of South Africa to build a secure future. I should like to appeal to the hon. the Minister not to discourage social expenditure, security expenditure, the expenditure on removing wage gaps and the expenditure on removing discrimination in the various fields, because all these expenditures are vital for the survival of South Africa.

I should like to turn now to some of the other matters with which the hon. the Minister has dealt. One of them is the question of the balance of payments. Obviously, the balance of payments is in a healthy position. We do, however, now have—this is obviously going to be a result of the Opec meeting—another potential increase in the oil price. We also have world trading conditions which continue not to improve, if I may use this understatement. In these circumstances I think we have to be relatively conservative in regard to the issues relating to the current account of the balance of payments. I should like to appeal to the hon. the Minister to try to prevent as far as possible the passing on of the oil price increases to the business sector, because that will undoubtedly fan the flames of inflation again. Therefore I should ask the hon. the Minister to exercise the utmost restraint in respect of this matter.

The question of the capital account still gives one some grounds for concern. The explanation continues to be that we are repaying loans—short-term loans. Surely, I think we must now be entering a new era in regard to the capital account, and certainly in regard to the repayment of short-term loans.

As far as the cyclical upswing is concerned I tend, with respect, to agree with the hon. the Minister that we have not yet seen the top of that upswing. To my mind there is one good indication of that. That is that one can look at the Stock Exchange to get some indication about what the movement of the Stock Exchange is in relation to the top of the cyclical upswing. The charts show that there is always a very substantial difference between the time that the Stock Exchange tends to go down and the time that the economy tends to begin to show a downward trend. Past history in South Africa has shown that there is a gap which varies between about 12 months and as much as 24 months in regard to that period. Our Stock Exchange has not yet tended to show that sign that it is anticipating the downswing. So this in itself indicates that the total body of opinion which is responsible for the movements of the Stock Exchange is still optimistic and anticipates a further cyclical upswing.

In regard to the Browne Committee I can understand the hon. the Minister’s chagrin at the criticism there has been so far of the recommendations thereof. Let us, however, look at the reality. It does not help to continue to quote the Financial Mail. That seems to be the hon. the Minister’s last resort. Whenever he is in trouble, he comes along with the Financial Mail under its new editor. He should know that does not impress anybody. I am sure he is aware of that. [Interjections.]

I can understand your sensitivity in this regard.

The reality, however, with which the hon. the Minister has not dealt, despite the fact that we have tackled him on this on two occasions before, is that, in the first instance, he has not indicated whether there are going to be new sources of revenue, and, in the second instance, he has also not dealt with the issue of the Black local authorities in an adequate manner, specifically in connection with how they are really going to be able to finance themselves without true industrial hearts and without true major central business areas. I repeat that the situation of the ratepayers of South Africa is of such a nature that we cannot continue to increase rates and the costs of services in order to finance the expansions which are required.

Then the hon. the Minister dealt with the issue of savings, and specifically referred to pension funds. The point he makes that pension funds should assist present pensioners as opposed to providing merely for future pensioners is a valid one. The question I have to ask the hon. the Minister, however, is whether that is really enough, whether the Government is really doing enough to give incentives to saving in South Africa. Is the Government really encouraging people to make provision for their old age themselves? Is it really possible for everybody to do that within the ambit of pension funds? It is not really possible to do that. I want to put it to the hon. the Minister that he has in fact failed in this respect in a number of ways.

Firstly, he has not provided the adequate amount of incentive in respect of tax-free savings. On the contrary. In this budget he has sought to discourage savings by dealing a very harsh blow to subscription shares. So that he has not given the incentive, and the whole concept of tax-free savings, all of those which he mentioned which are just over R90 000, due to inflation have become unrealistic levels, and he has done nothing about it for years and years. Secondly, he has consistently—I was going to use the word “stubbornly”, but let us use the word “consistently”—refused to give the aged people of South Africa an indexed bond. He will not agree to that. He will not consider it. Thirdly, we find ourselves in regard to the aged people in a situation where interest rates continue to be below the inflation rate. How can one encourage people to save when at the end of every year they have less in purchasing power than they had at the beginning of the year? There is hardly a fixed-interest investment in South Africa, which is a secure investment in South Africa, which comes anywhere near the inflation rate in so far as return is concerned. I should therefore like to suggest to the hon. the Minister that he should look at some of the incentives to save that exist in other parts of the world. I have previously given him the example of the United Kingdom and its indexed bond for the aged. Today I shall give him another example, and that is the so-called French Marony method of investment to encourage saving, where tax concessions are given to people who invest in shares in new industries and in new companies that are floated, whereby one actually serves two purposes. One is that one encourages savings and the second that one actually encourages further fixed investment in South Africa.

Our savings record is far better than that of the United Kingdom.

But the hon. the Minister does not offer the incentives which the UK offers to the aged. We have no indexed bond here. At the present moment I am giving an example from France, where they have a method of saving which is both good for fixed investment and which at the same time gives tax concessions to encourage saving.

On fringe benefits I should like to say to the hon. the Minister that we welcome the fact that he has held this back. But there are two things that we should like to tell him. Firstly, we support an equitable base of taxation, but we also believe that there must be an incentive in South Africa to work, and whatever comes out of the measures relating to taxing fringe benefits, the incentive to work, and particularly the incentive to entrepreneurs, must not be stifled. We regard that as an essential ingredient of any basis of taxing fringe benefits.

Whereas the economy as such perhaps gives a fairly attractive picture, when one looks at the political situation I think the situation is not quite as attractive. If one asks the question where South Africa is heading today, one has to look at a situation where, firstly, there is escalating terrorism in regard to vital industries and vital targets in South Africa. Secondly, there appear to be increasing campaigns of disobedience. Thirdly, there appear to be escalating industrial disputes and, fourthly, we are faced with mounting international pressure on South Africa. At this moment in time at the United Nations discussions are once again being held in regard to the possibility of sanctions against South Africa. Then we also have rising expectations which are not being satisfied and which do not appear to be capable of satisfaction within the time-span available. Then there is a further matter which I think we have not discussed adequately during this session of Parliament, and that is the estrangement of youth from existing systems and structures. This is another matter which I believe is a vital one, and which needs to be looked at in South Africa.

If we look at all these situations we have to ask ourselves what the issue in South Africa actually is. The issue in South Africa is the perception of power and wealth by the various groups of people in South Africa. These are the two issues which will have to be faced by South Africa in the years that lie ahead, the two issues which are crucial to any discussion of the South African scene. In relation to these aspects, I now have to pose five other issues.

Firstly, there is an increased radicalization, which is also related to what I have said in regard to the estrangement of youth from existing systems and structures. There is a clear picture in South Africa of increased radicalization. Secondly, there is what I have referred to earlier as this issue of fulfilment of expectations, some of which are raised and then shattered and some of which merely exist because of the feelings and the demand of the people concerned. The third issue is the issue of the nature of the reforms that are taking place in South Africa, whether those reforms are of such a nature that they can ever solve the problems of South Africa in that context.

Here we have two fundamental problems. The first is that the Government has stated repeatedly, during this session of Parliament, that it is still wedded to the concept of separate development and that separate development is non-negotiable. That is one of the major problems that South Africa will have to face, because if separate development is non-negotiable, I believe there is no solution to the power struggle which exists in South Africa at the present moment. The second is the issue of discrimination. Here the reality is that a specific definition of discrimination is given by this Government, and if that definition of discrimination, as they give it, is non-negotiable, the problems of the struggle in respect of the second aspect, namely the aspect of wealth combined with the aspect of human dignity, will not be solved. The Government has to look at the issue of whether separate development is negotiable and whether or not discrimination, according to the Government peculiar definition of it, is negotiable.

The fourth issue is the question of reform, why reform comes about. In this respect a tragedy is developing in South Africa, because those who believe in peaceful change and negotiation are unable to show to the people to whom they look, to their electorate, any benefits of negotiation. What is happening, however, is that it appears that the results of reform are coming about as a result of protest, pressure and threats of violence. Moderate leadership in South Africa in the Black community needs to show the fruits of negotiation if it is going to maintain any credibility and any electoral support amongst its own people. I have said before, and I want to repeat again today, that every time one makes a concession under pressure because of riots and violence, one is actually encouraging more violence and more pressure. If one makes the changes because people are negotiating with one and because one is, in fact, enabling them to show the fruits of negotiation, one is striking a blow for peace, for moderate leadership and for the future for South Africa which will be peaceful. I wish that the Government would understand this.

But your party has decided against taking part.

That hon. member is being quite foolish. He knows very well that that is not so. The last question that has to be posted on this, and which I think is fundamental, is what the effect of reform in South Africa will be. Will the effect of reform be such that it is going to be demonstrated in South Africa that every time one makes a concession, it is a sign of weakness? Is it going to be seen as a proper programme and an objective which one has? The issue which has to be put in South Africa today is whether there is a real programme, whether there is something that one can show to the Black people and the Coloured people of South Africa and tell them that that is what their future looks like and that that is what we want to negotiate with them. If one lays down the parameters, however, and say that one will only negotiate within separate development and within the Government’s definition of discrimination, I regret to say that I am more than pessimistic in regard to the outcome of the future for our country. Negotiation very clearly means that one must be prepared to deal with the real issues of the matter. In the same way that a Black man has a policy and an approach which may be unacceptable to the White man—I think in many cases it is unacceptable—the White man also has a policy and an approach which may be unacceptable for the Black man.

So when one negotiates one has to try to find a via media, a solution, to those two conflicting forces, but if both forces dig in and both say they are not going to negotiate away from these two points, one will have increasing polarization and violence. [Interjections.]

One of the disappointments I have had during the more recent part of this session was the failure of the hon. the Prime Minister, firstly, to be involved in the debate and to speak out forthrightly in regard to material issues in South Africa. I want to quote as an example what I regard as the most unfortunate incident concerning the hon. the Minister of Posts and Telecommunications. [Interjections.] The unfortunate thing is that we are getting into the situation again which was the same as that which existed between the former Prime Minister, Mr. Vorster, and the former Minister of Justice, Mr. Kruger, in respect of the Biko incident when the Minister used the words “That leaves me cold”. If the then Prime Minister had acted immediately, had dissociated himself from that remark and had made it clear that he would not tolerate such a thing, the history of South Africa might well have been different, but now we are going to have to live for many years with the consequences of the failure of the former Prime Minister to act. We are now faced with a very similar situation in South Africa.

Order! I want to ask the hon. member whether the House should not accept an unconditional withdrawal of words made in the House as was done by the hon. the Minister concerned?

Mr. Speaker, I accept the unconditional withdrawal of the words, but unfortunately those words were said and they are in the outside world, and I am saying that the hon. the Prime Minister must still take certain action in regard to this matter. I am sorry, but the reality is that the words were used and South Africa has to live with the consequences. I want to say to the hon. the Prime Minister what I believe he should do in this matter because I think it is in the country’s interest.

You are the last man I shall allow to dictate to me.

I do not really care whether the hon. the Prime Minister wants to make a debating point of this, but I am concerned about South Africa. [Interjections.] I know of the hon. the Prime Minister’s friendship with the hon. the Minister of Posts and Telecommunications, but I want to say that if he is doing his job for South Africa he has got publicly to repudiate the Minister concerned. I regret to say that the friendship for the Minister is unfortunately irrelevant. The only option open is that he is going to have to leave the Cabinet.

I will not be dictated to by a political grasshopper like you.

If the hon. the Prime Minister does not take that action, then I am afraid there is no way out of it. [Interjections.]

Mr. Speaker, may I ask the hon. member whether he ever withdrew his remark about the Afrikaners who went about in skins?

The hon. the Minister is telling an untruth, and he knows it. [Interjections.] He has seen the Hansard of the Transvaal Provincial Council and he knows that those words were not used and that I did withdraw the words I did use and apologized. [Interjections.] I may live with those words forever. I do not deny that.

Order! The hon. member must withdraw the words: “He is telling an untruth and he knows it.”

I withdraw the words, Sir, but the hon. the Minister read the Hansard in the provincial council and should know better than to ask that question.

I have seen your Hansard.

The hon. the Minister’s rather snide remark actually illustrates the whole picture, because he knows that although I withdrew my remarks, I have to live with them forever, in the same way as the hon. the Minister of Posts and Telecommunications will have to live with his words for ever. [Interjections.] He has got no choice. That is the reality of politics. You know, Sir, the actual remarks which I made were made almost a decade ago, I think, and yet, despite that, they have to be dealt with today. It proves my point.

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

However, my political future is not as important as the country’s political future.

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

No, you cannot. What is important is how the hon. the Prime Minister acts and not how I act. The way the Prime Minister of South Africa acts is what is important in South Africa. The hon. the Prime Minister is failing South Africa. The reason why he has not acted, and is not going to act, is that he, the boss of South Africa, was the man who raised that point of order. [Interjections.] The man who really speaks at this turning point in our history, is the hon. the Minister of Public Works. I shall tell hon. members why this parliamentary session has been a failure. The truth is that when it came to the Craven Week and the hon. the Prime Minister took a stand, that was to be the turning point for South Africa, because the hon. the Minister of Public Works challenged him and from that moment onwards the real ruler of South Africa has been the hon. the Minister of Public Works and no longer the hon. the Prime Minister, and he knows it. The whole issue of South African politics has changed. The truth is that this session of Parliament has been a session of failure for the hon. the Prime Minister and the Government. From that moment onwards a paralysis set in in every single department, the process of change ceased and the expectations that people had in South Africa for change disappeared down the drain. The Craven Week incident will turn out to be the turning point in the political history of South Africa—and I shall remind the people in this House of it in the years to come—because until then the hon. the Prime Minister had the courage to make changes. After that, however, he has been a prisoner and cannot do what he likes any more in South Africa. He is no longer a free man. This is the reality of the situation.

The hon. the Minister of National Education said, when we spoke about universities and about opening them to the Blacks, that the NP’s policy was one of separate development and that they stood by that. When the hon. the Minister of the Interior spoke in the debates on the constitution, he said that their policy was one of separate development and that they stood by that. The reality is that the hon. the Prime Minister is now unable to effect the great changes of which he has spoken, because he is no longer the boss and no longer runs South Africa as somebody else is now running the country. That is the tragedy.

King Andries.

That is the tragedy and that is why …

Have you finished your song?

… we stand here at the end of the session and have to ask one another to take stock of what has happened in South Africa during this session.

You are an ill-mannered man.

Let the hon. the Prime Minister stand up in this debate and tell us what he has achieved for South Africa. What he has achieved is to raise expectations, but he has been unable to fulfil them. That is why, when we speak about the name of the game in South Africa being power and wealth and about the fact that the issue has to be one of negotiation, one of give and take, we know that this new line which has now been laid down is the line of the hon. the Minister of Public Works, a line which involves non-negotiable aspects which are going to make it very difficult for South Africa to achieve a peaceful solution. I hope and pray that it will, but we must then also have the willingness on the part of the NP Government to show that there can be fruits from peaceful negotiations and to show that they are not stubborn in respect of the things that they speak about and that they will not negotiate with anyone on. If they are not prepared to negotiate in the true sense of the word, the only alternative will be radicalization and polarization, and one hesitates to think of the final consequence of that for South Africa.

Mr. Speaker, in 1966 the old United Party filled almost all the benches on the opposite side of the House. At that stage they were a powerful party and formed a fine unit. The hon. member for Yeoville is kicking up a fuss now because we on this side form a powerful unit, while there are now five opposition groups facing us in this House. Hon. members can count them. They can leave Gerrie out. [Interjections.] The Opposition is divided into five. The hon. member for Yeoville is a master of the art of throwing up a smoke screen, and I must give him full marks for that. He does it in a masterful way. One sees on his face the greatest indignation at what is ostensibly happening in Government benches, but he knows they are nourishing a viper in their own bosom. What more could we have had against us last year than the Information debacle? And where could one have found a party with more things in its favour than his party? We were in an embarrassing situation. We had a new Prime Minister.

That is a source of embarrassment to you. [Interjections.]

We elected a new Prime Minister almost unanimously. [Interjections.] What happened in the ranks of the PFP, a party which has a powerful Press behind it, at the start of this session? I want to predict that the hon. member for Bezuidenhout is merely the first and that there are a number of hon. members of the PFP who, deep down, are bitterly unhappy. [Interjections.]

The hon. member for Yeoville is one.

That is wishful thinking.

Why did the hon. members of the official Opposition become so agitated about something for which a man apologized and which he withdrew? The words were withdrawn, but hon. member of the Opposition are still harping on it. For what purpose are they doing this? [Interjections.] The hon. member for Yeoville speaks of “negotiation”, and that we should take the people with us. I want to ask him to prove that their negotiations with the Venda, the Tswana, the Zulu and the Xhosa will succeed. They must first try to convince the Whites of this country of their standpoint. How can they hope to convince the Black groups if they are unable to convince the White voters of this country? And in the whole process of negotiation the Opposition keeps on dwindling away.

I am sorry that the hon. member for Yeoville dragged politics into the debate towards the end of his speech. I did not want to discuss politics today. Perhaps I shall have the opportunity to reply to a few aspects at a later stage, but I want to tell the hon. member that there is one thing I agree with. It is pointless for us to adopt all these measures if it is impossible for us to get the inflation rate below 8% at some stage or another. I want to add to that—this is the problem of Africa—that we in this country are grappling to an increasing extent with growth problems. The hon. member said “growth is essential”. If our population growth rate is 2,2% per annum, we have to be able to show a growth rate of at least 3,5%, coupled with mechanization. But it is of no avail to have growth if mechanization is not taking place. The problems of Africa are unemployment and starvation. I agree with the hon. member that we need growth.

I shall turn to politics in a moment, but while the hon. member for Orange Grove is here, I just want to …

I think you agree with me on Andries.

I do not have enough time to discuss Andries as well.

I now come to the hon. member for Orange Grove. There was an investigation into the meat industry in South West Africa. It has nothing to do with the industry in South Africa.

The same companies are involved.

It might be so that the same companies are involved, but it was an investigation into South West Africa’s problems. I told them beforehand of a subsidy on cattle of R6 per head.

*A report on it has now been brought out. At the beginning of this year, I read out the names of all those who had been consulted, but now I read in the newspaper that the hon. member for Orange Grove said: “Meat Industry Probe Needed.” I quote from the report—

He then goes on to make cruel allegations that the same fraud that is being practiced there, is being practiced here as well.

No.

That is what it amounts to. That is the insinuation. I have a suggestion I wish to make to him, as a friend. I have strange friends in life, sir. I shall arrange a meeting which will be attended by the meat producers of the S.A. Agricultural Union, the Meat Board, Vleissentraal, Karoo-vleis, Imperial Cold Storage, the retail Butchers’ Association, the Wholesale Butchers’ Association, the rural Retail Butchers’ Association and the Consumer Board —all of them.

†Name them and we shall invite them. Before 15 July he can give me the names of additional people he wants to have invited to this meeting. I shall be present myself. I shall then tell those people: “Give me an instruction on what must be investigated.” The consumer, the producer, the marketing people, the Meat Board and everybody connected with meat will be represented there. I shall ask them: “What must I investigate?”

Mr. Speaker, may I ask the hon. the Minister what happened to the over 46 000 cattle which came through to the Republic of South Africa on improper permits? That is the sort of thing that needs to be investigated.

That all happened in South West Africa. Those permits were granted in South West Africa. I can spell out in detail what the position is. One does not even see in the report that some of those cattle also qualified for a subsidy of R6. I go further. At that meeting I shall explain the whole thing, that I want to have a look at the meat industry in South Africa. I cannot appoint a commission if I cannot tell them what to investigate. There are two court cases pending at the moment. The hon. member must also tell the meeting what he wants investigated.

*Then we can clear the air. I just want to know what we must investigate. I have never said that there are no faults in my department or in the control boards. But the hon. member must just tell me what I must investigate. He must be present at that meeting where he will sit face to face with the housewife, as represented by the Consumer Council, and the farmer whom he is concerned about. He can rise there and say what should be investigated. Once this is done I shall be prepared to institute such an investigation at once.

†Will the hon. member be there? Can I arrange the meeting?

Yes.

Will you give me some more names if you can think of any?

Yes. [Interjections.]

I shall arrange such a meeting in any event.

Hendrik, can I come too? [Interjections.]

I think all of us in South Africa are concerned about one matter. It serves no purpose to give a man a salary increase and then to make his food more expensive. From time to time questions are put to me in this regard. I always say I should like to have peace in this country. If one is able to feed a person at a fair price, one has tranquillity in one’s country.

The hon. member for Yeoville has one problem, and the same applies to the whole Opposition. If my colleague quotes the prices of overseas foodstuffs—I am not going to do so today—it is an absurd thing to do, it is anathema. If one considers how long a worker—regardless of his colour, but let us say a Black worker—has to work to be able to buy a food basket, and compares this to the amount of time a White mineworker in England has to work to be able to buy the same basket, it is said that one cannot draw such a comparison. The hon. member for Yeoville, who is now sitting there conversing with his hon. leader … [Interjections.] They take turns, but let us leave it at that. This morning he referred to interest rates in France and Germany.

I did not.

†The hon. member quoted inflation or interest rates and compared France, the United Kingdom and Germany this morning.

You are talking nonsense.

Did the hon. member not mention those countries?

I referred to incentives to save.

Okay, incentives to save. [Interjections.] The hon. member makes comparisons …

You should stick to farming. You know nothing about finance.

The hon. member draws comparisons with other countries. [Interjections.]

*I am pleased that that hon. member said that my mother and father and my grandfather and grandmother wore skins. I am pleased he said so, for I am proud of it. He need not be disparaging.

You are really impossible.

His sitting there with such a pious face is of no avail. [Interjections.]

I now turn to the question of foodstuffs. [Interjections.]

Order!

It is no use giving a person a salary increase of 8% and making his food 12% more expensive. But I should like the nation to understand why this was done with a few commodities. On butter, cheese and milk we gave the farmers an increase of 12% and asked the consumers for 15% more, but the farmer’s production costs have risen by 16%. We told them that we could not harm our economy further and asked them to pull their weight as well in combating inflation. We told them we were giving them a smaller amount and asked them to try to make up the deficit with efficiency. We said the cow still has the same mouth which had to be fed and the same four teats which produced the milk, and if a farmer obtained 12 litres of milk from a cow in the past, he should now try to obtain 14 litres from the same cow. This was our attitude to the South African producer. We did this in every sphere. However, there is a certain feeling against the South Africa farmer which is gaining ground and this is a mistake. Can we afford the drop in the number of farmers over the past 10 years from 92 000 to 70 000, i.e. 2 000 farmers per annum? This is the number of farmers we are losing every year. We must look into this matter. We do not have land which is lying fallow, but we must keep the people in agriculture. The farmer’s burden of debt has risen to 13,5%, assets compared to liabilities. This is still quite sound. I am not complaining about it, but 10 years ago it was 12%. The hon. the Minister of Finance and I were concerned and consequently we appointed the Jacobs Committee. The committee made a number of recommendations. Inter alia, they said that we should increase food prices from time to time, within one year. I see how disturbed the consumers are and I say we are not going to have increases in respect of the other administrative prices before the next round of price increases, after the maize price has been increased. But there is unrest among the farmers as well. They say that their expenditure keeps on rising and they cannot pay their accounts. The hon. the Minister of Finance did not grant a bread subsidy of only R90 million. Over a period of 12 months he granted a total bread subsidy of R137,5 million so that a brown loaf can now cost 25c. The price of a loaf of brown bread is only half the price of a litre of Coca-Cola.

†The hon. member for Yeoville says we are overtaxing this country. Can you believe it! The hon. member says we are overtaxing South Africa. He does not seem to take note of all the tax concessions granted in this year’s budget. The crux of his argument is, of course, that the public of South Africa are being overtaxed by way of the general sales tax.

*Our general sales tax of 4% is certainly not the lowest in the world. One thing the hon. member is forgetting is that there are many people in this country who are enjoying privileges for which they never have to pay a cent in tax. There is a tremendous number of people who have reached a certain level today, but nevertheless pay no tax. Surely that man must also feel that he is making a contribution somewhere.

Are you referring to poor people now?

The education of those people, the roads on which they drive, their bus transport, their rail transport, their inexpensive train tickets, the subsidies they receive—which the hon. the Minister of Transport Affairs mentioned here—are all things that cost money. In some way, therefore, those people have to make a contribution as well. That is why I say that when such a person then buys a litre of Coca-Cola, he may as well pay his 4% tax on it.

Those are poor people.

Order!

I am now making an appeal specifically for the poor people.

† The other day I asked someone who belongs to the PFP: “What happens to a dead politician?” His reply was: “He lies still.” [Interjections.]

[Inaudible.]

I know of a person who has a skin covering his eyes. [Interjections.]

When I examine the food situation in South Africa today, one thing is clear to me. The South African farmer’s share in the food basket has dropped from 53,8% to 48,6%. The hon. member for Yeoville alleged that we were doing nothing for the less well-to-do people. Does he know what is happening to the South African producer? The gap between the price of processed foodstuffs and the original farm product is growing ever wider. The farmer produces food at a lower price. Can you believe it? We go to the farmer who cultivates clingstone peaches and tell him that we have to compete on the world market, and that he must receive less for his produce to enable him to compete. The container, the packaging, the label, the electricity, the transport, the labour, etc., for which the farmer has to pay have all gone up in price. There is only one place where one can save. I admit that our food prices are among the lowest in the world. We are able to control our inflation. There is only one solution, and that is to work harder. Of course this is the most unpopular thing one can say today. I have never yet seen anyone work himself to death. People get thrombosis from eating too much fatty meat, but certainly not from too much hard work. What is our real dilemma today? Today we have three million Black dependants on our farms, people who are directly or indirectly dependent on agriculture for their livelihood. Since his profit margins have diminished, it is the South African farmer’s duty today to mechanize.

In fact I explained to hon. members what was happening here during the discussion of my Vote. For example one comes across farms where there used to be 30 Black or Coloured families, but where there are now only five. Yet the production of the farm in question has increased considerably. This is the problem of Africa. Everywhere mechanization is the order of the day. Just consider the application of herbicides. The other day I was speaking to a person on a farm where there were 70 ha under irrigation. That whole surface area is irrigated by mechanical means. There is an automatic humidity meter which, as soon as the humidity drops below a certain level, switches on the automatic sprinkler. On those 70 ha, where 40 Blacks used to operate the irrigation scheme with spades, there is not a single person today. When I see things of this nature, I can understand why President Banda says that he will not allow tractors on his lands. His people have to work their lands manually with garden-forks and spades.

We are going to have increasing unemployment in South Africa in future because we are compelling the farmer to mechanize. I believe that Black workers on farms should receive considerably higher wages. Of course their wages have increased considerably over the past ten years. They have received large wage increases. But what is the farmer doing now? The farmer feels that he can no longer hire a worker today at less than R2 per day, particularly if it is borne in mind that he also still has to accommodate and feed that worker. That is why a farmer decreases his labour units from, say, eight workers to four, and then mechanizes. These are things of which we have to take cognizance. On the other hand, however, the farmer is becoming more efficient as his profit margin shrinks. When the farmer becomes more efficient, he also becomes more labour oriented and more mechanized. That is what is happening in agriculture today.

Last year South Africa exported agricultural produce to the value of R1 650 million. I want the consumers of South Africa to know that I realize what their problems are. I realize what problems the less well-to-do people have—the Black man, the pensioner, the man who has just received a salary increase, a salary increase which is simply re-absorbed by the cost of essential foodstuffs, because their prices rose again. On the other hand, however, I am saddled with these farmers who have to work at a return of 6,8% on their investments, although they received 7,9% ten years ago. Consequently their profitability is diminishing. This is a pincer movement. Therefore I want to tell the South African consumer: We are exporting agricultural products to the value of R1 650 million today, and we are going to export agricultural produce to the value of R2 000 million this year.

We always look at the gold mining industry, but not a single consumer in South Africa is standing in a queue because there is not enough food to eat, even though it is sometimes difficult to afford it. Can hon. members imagine how tragic it is that a country such as Kenya which at one stage exported food to the value of R500 million, is today asking South Africa for wheat? Can hon. members see what has happened in Africa? I am merely stating facts because the Black man there is not yet agriculturally oriented. One cannot speak of Government left, right and centre, but not yet have understood the fundamental fact, i.e. the discipline to cultivate, to inhabit, to create a happy dwelling place on and to grow from the land. Civilizations do not start from the top. Just listen to this cry for self-government, but just see what happened where there was self-government in Africa?

So what are you doing in Transkei and Bophuthatswana?

I say we have hold of the wrong end of the stick. We must hold Transkei by the hand for a long time to come. We are going to do so and this is not a matter which can be rectified overnight. I am not opposed to self-government, but then one must realize the responsibilities and consequences of self-government. Take the White man out of South Africa for one moment, let him disappear, and what will happen? Just consider what happened in countries where they shouted “uhuru” and obtained it. And what has happened in Mozambique, a food exporting country? What is happening in Angola? Just look at a country like Zambia. I can also see what is going to happen in Zimbabwe if those people do not realize that knowledge, determination, organizational ability and discipline are necessary. If you do not have them, to shout that Africa must be given self-government means nothing. And what is happening in South Africa? We have experienced difficult years since 1973. We are now burdened with a terrible drought in the Eastern Cape, and there are people in the winter rainfall areas who are almost on their knees. But what has happened in all the years that have passed? Every year our agricultural production has grown by almost 4%. And what has happened in Africa? Its average agricultural production has declined by 2,1% every year. I foresee terrible starvation in Africa in future. I read the other day that there are 60 million in Africa who go to bed hungry at night. I cannot have peace of mind if my neighbour is not happy as well. If my neighbour is unhappy and sleeps badly, I also sleep badly. Then there is the UN and the Western world which do not understand Africa and do not have the insight to realize how the minds of these people work. Let us first look at the fundamental things, and then I ask the South African consumer not to be dissatisfied. I realize the bottlenecks and I realize the problems with the cost of living, but we have a subsidy system for bread, for which I thank the hon. the Minister. We have a subsidy system of R50 million on the price of maize. We have a subsidy system in various spheres in order to keep the cost of living low. The African country which wants to import a ton of wheat from Canada or the US today, has to pay R42,50 for that ton in freight charges alone. Then it is only lying in the harbour and still has to be conveyed to the interior, whereas we here on his doorstep are still able to produce adequate seed for him in future, but then we must also be understood by the South African consumer. The cost of living of the farmer has also risen. Over a period of 10 years the price of diesel fuel has risen by 220%. During the same period the price of fertilizer rose by 123%. However, the price of the farmer’s product has remained behind, but with efficiency he was able to make the grade and to produce increasing surpluses, and not only for himself. He is an example to Africa to produce in a disciplined way. I ask for sympathy and understanding for these people.

Mr. Speaker, I should like to say that the hon. the Minister of Agriculture and Fisheries once again gave an efficient reply to the hon. member for Yeoville, in his customary manner.

I should just like to say a few words about the hon. member for Bryanston. I feel that the hon. the Leader of the Opposition is a person who puts the interests of South Africa above the interests of his party. I also believe he is a person who has a very real concern for the Whites in Southern Africa and in Africa. Therefore I want to refer him to the speech that the hon. member for Bryanston delivered here yesterday, when he spoke about the remark of the hon. the Minister of Posts and Telecommunications. He said the following—

He went on to say—

I should just like to ask the hon. the Leader of the Opposition one thing, and I do not want to ask it with a view to making political capital out of it or in order to disparage him. I am asking it as one South African to another. Does he really think that we as politicians in this House and we as Whites are acting in the best interests of our safety and the stability of our country by saying this type of thing to one another across the floor of the House? I want to ask him pertinently whether he agrees with the spirit of what the hon. member for Bryanston said, particularly in the juncture in which we are living. I expect the hon. the Leader of the Opposition, when he has the opportunity to reply, to tell us in his skilful way that he definitely does not agree with it, because I cannot imagine that he would agree with it. The PFP has tremendous problems in their own ranks.

The role that the Whites have to play in the future of this country, and in the entire world too, is of such vital importance that we cannot suffer this radicalism. The hon. member for Yeoville spoke about the growth of radicalism, and he is correct. I want to tell him that that radicalism is present in the ranks of their own party too and that it is on the increase. The hon. member for Bezuidenhout has his hands on his hips today.

He is not a radical.

He has his hands at his sides and he is looking at the hon. the Leader of the Opposition. He is like the actor in the Afrikaans drama company that toured in the platteland years ago, and was still very poor. Wherever they appeared, they had to use two of the local inhabitants as extra players in their play. The role of these two players was very simple. At a particular time one of them had to appear on the stage and say: “I caught Caesar.” Then the other one had to come on to the stage and say: “And I killed Caesar.” Whilst they were touring in the Free State, the first of the two additional players went onto the stage, but he became confused and said: “I caught Caesar and I killed Caesar.” Amazed, the other fellow, with his hands on his hips, said: “Oh, you does. So you does and you buggers up the whole concert.” [Interjections.] I now want to tell the hon. the Leader of the Opposition that Japie Basson is looking at him in this way today.

The hon. the Leader of the Opposition— and he will not be able to escape it—has people in the ranks of his party who are conducting the sounds of the Black Power orchestra outside this House. There is no doubt about that. There were riots this year. The hon. member for Sea Point’s involvement with what happened outside this House, was something that he could scarcely conceal. Then there were also the predictions of the hon. members for Pinelands and for Houghton of what was going to happen if the Government did not listen to them. They too could scarcely conceal their involvement.

I received the impression, from the first time that I took my seat in this House, that some hon. members of the Opposition consider things which happen outside in this respect as a method of overthrowing the Government and overthrowing the whole existing order that they want to destroy. The hon. member for Pinelands said the following on 28 April this year (Hansard, col. 4969)—

Thus we can quote one Opposition member after the other.

I want to tell the hon. the Leader of the Opposition that these people in the ranks of his party are trying to lie low at the moment, but a tortoise cannot keep its head inside its shell forever. It has to put its head out sometime or other, and then one sees its face. I want to tell him in all seriousness that he does see the radicalism in his own ranks. It seems to me that he does not realize that there are people in the PFP, in his parliamentary ranks, who are playing in the Black Power orchestra of South Africa. I want to put it to him directly and to the public outside that they should take the trouble of reading the Hansard reports of this Parliament over the past few years, and every member of the public must read the speeches of the hon. members for Pinelands and Groote Schuur, for instance the interjection that he made on communism here the other day. They must also read the speeches of the hon. member for Houghton. Then they will see that what I am saying here is true. I want to make a request of those hon. members, not in the interest of the NP or the Afrikaners, but in the interests of the country, to moderate that radicalism, because as sure as we are sitting in this House, the outside world is lauding the division in White ranks.

Prof. Rothenberg of the USA carried out an investigation on behalf of the American State Department into the role and plans of Russian communism and it is very interesting to note that one of the people from Moscow, the expert on White politics in SA, Mr. Arkady Bolitzki, did a great deal of research and wrote a great deal about the dissension in White ranks in SA. Ultimately he concludes—

It does not matter that we are practising party-politics here—this is the hon. Opposition’s right—but what does, however, matter is that we should not practise party-politics in such a way and that we in this Parliament should not involve ourselves with extra-parliamentary activities in such a way that the Black people of this country and the enemies outside can say with justification: “Wait a moment, the self-confidence of the Whites is cracking.”

I want to say—I say it frankly, honestly and openly—that there is a tremendous developmental backlog amongst the Black people in Africa, in South Africa too. If hon. members would take the trouble to look at what a great philosopher and scientist such as Dr. Albert Schweitzer said on the subject of development, including the potential and level of development of the Black people, they would see that we are struggling with a great problem. The NP’s recipe is one of recognizing human dignity, but we must take into account the reality of a tremendous developmental backlog in so many spheres, that we cannot cancel out and that we cannot undo with White political activity. It is a slow process. Real cultural clashes are involved. We can look at the political sphere where we have two totally foreign systems that clash with one another —the traditional system of the Black people and the developing nature thereof amongst many of them today—the economic sphere where there are also two economic systems in opposition to one another. There are people that are on the lowest rung, but also those that are fairly far advanced. We can also look at the social sphere and the varying nature and variety thereof. I do not say this in a disparaging fashion, but it is a difference that we must take into account when we determine our policy.

The hon. member for Pinelands thinks that South Africa consists of a human mass of one integratable, integrationist whole, but this is not the case. That is why I say once again to the hon. member for Yeoville that if he says that our standpoint is “separate development is non-negotiable”, then I say “yes, definitely”. This is the recipe according to which a variety of people and nations can meet one another with human dignity and respect for one another and for themselves. That is not all. The other evening on TV, Dr. Anton Rupert made a very interesting remark. He said that what South Africa is experiencing and struggling with today, is the problem of the entire world of tomorrow. In the sphere of racial conflict, cultural conflict and the problematics of development in the world, it is in fact true.

There is no doubt about the fact that a wave of uncertainty is washing over South Africa today. However, the wave of uncertainty that is washing over South Africa, is a wave of uncertainty that is washing over the entire world. We must look at what the great people of the world say. Robert McNamara, the President of the World Bank, recently pointed out the tremendous problems that the world is struggling with, such as the tremendous growth in the world population from 4,3 billion in 1980 to 5,2 billion in 1990. He said that this would lead to unbridgeable gaps in various spheres, such as the labour sphere. In 1990, 400 million more positions will be required for young people entering the labour market. He spoke about a food gap in the Third World, where chaos reigns in the sphere of the provision of food. He also spoke about the energy gap.

South Africa is privileged to be a country endowed with the riches that we have at our disposal in a continent that is struggling with problems in various spheres such as overpopulation, food shortages and all the other problems to which the hon. the Minister has just referred. Let us utilize these riches in a positive manner and let us eliminate the uncertainty surrounding these problems by practical action.

There are emotions and uncertainty in South Africa concerning the racial conflict. I have no doubt that as a result of the Rhodesian drama, a large group of White people in South Africa are entitled to ask: “What does the future hold for us?” As politicians, we must assure those people in the interest of everyone in Southern Africa that the future holds fine and stable things for us.

I referred to the cultural conflict that exists. A spirit of desperation prevails amongst many people, particularly amongst the radicals. There is desperation in the air. One hears it when they speak and one hears it in this House too.

South Africa has an everlasting potential for conflict. The hon. the Leader of the Opposition wants to tell us that we must choose between negotiation and conflict, but I want to tell him that this is not the choice, because negotiation as well as conflict are everlasting processes in South Africa. Why must the Whites in South Africa allow Black Power to take over, and in doing so allow another type of situation to arise here in the eyes of the world? Why should one power be replaced by another? I want to tell the hon. the Leader of the Opposition that I believe that our recipe of negotiation to try to settle that everlasting conflict, is the only recipe that we can follow.

We in South Africa and the entire world— as a sociologist the hon. the Leader of the Opposition knows this—are dealing with a generation of uncertain people. The whole of mankind is unsure of itself. Schweizer and other philosophers long before his time professed this. The people in the world, including the people in South Africa, are asking themselves: “What is the sense and meaning of life?” The material aspect of life has begun to dominate, and the more important spiritual values, those things that used to anchor man and give him sense and meaning in life, are diminishing. In this uncertain world, a world in which everyone is yearning for material things that are not easily available, the NP must try to bring about stability in a complex South Africa.

In a world in which, according to a report of the UN, R800 000 is being spent per minute on arms, uncertainty is sure to prevail. In a world in which we have communication the like of which there has never been before in history, a world in which the Ayatollah visits one in one’s own sitting-room, in which the strikers in Miami throw stones in one’s lounge and in which the students of South Africa are given a hiding in sitting-rooms throughout the world, we must brave that uncertainty.

I want to ask the Opposition what role they are playing in moderating that uncertainty. They have done one thing and this is, as the liberals of the world, to make freedom an absolute concept. There is no better way of creating chaos in South Africa than to make freedom absolute.

One of the most problematical concepts with which the Black people are struggling in their identity crisis in South Africa is this concept of freedom. This problem arose because they were historically part of a fixed social structure, in which they knew what they might and might not do, and now all at once they have come into contact with a new developmental situation in which there is more freedom. This social disruption causes dramatic problems. I want to say that if we in South Africa want to make freedom absolute in the political, economic or social sphere, we are seeking chaos in South Africa. We must have order within which there can be opportunities for people to develop and to achieve.

We are entitled to wonder whether the civilization that we have been building up over so many years, is in the process of collapsing. I want to deny this, because here in South Africa we have so many positive things to offer in the interest of civilization that we should make a joint effort. In this world we must not struggle with emotions, because as I have often said before, emotions cannot win the race against facts. If the world launches an emotional onslaught on South Africa and if our enemies within South Africa do so too and try to incite cruel emotions, that are not based upon the truth, I want to say that ultimately those emotions cannot win the race against the facts. Ultimately, the NP’s recipe of coexistence and social justice will be a fait accompli which will rise above the emotions that are being incited left and right, in spite of the limited means at our disposal.

In this emotional world there are a few allies in South Africa. The hon. the Leader of the Opposition will know that the PFP, the HNP and the radicals are allies in this emotional onslaught on the existing order in South Africa, because all of them want to destroy it. The hon. members for Sea Point and Musgrave have often spoken about the system. They are allies in an attempt to destroy the system. The only difference is that the HNP wants to replace the system with radical Whites, whilst the PFP wants to replace it with radical Blacks, even though they do not say so. I am very sorry for the hon. the Leader of the Opposition, but this is what the public believes and what we will help them to believe, because this is what we see happening in that party opposite.

The hon. member for Yeoville said that this parliamentary session has produced nothing. Parliament is a mirror image of the whole population. Our feelings are reflected outside, and that is why it is very important that every politician should be a partner in the total onslaught against our enemies. The Opposition must know this. After all, they themselves say that the struggle against South Africa in the world has become a struggle against the White man and his authority. That is why they as Whites have a role to fulfil.

I believe that many truths have been written about this parliamentary session. The Opposition says that we created expectations, but I want to tell them that one does not create expectations amongst people. In the world in which we are living and with the means of communication at our disposal, our expectations are part of human civilization. If the Government says that it wants to satisfy expectations in this or that sphere and will make efforts to satisfy them, it is not creating expectations, but complying with them and it must continue to comply with them.

Something else which became clear during this parliamentary session is the fact that there is no final, absolute or instant solution to anything in South Africa.

Something else that became clear—the Opposition does not want to give us credit for this either—is that the hon. the Prime Minister and the Cabinet have shown that they know what is happening. I want to repeat here what I said to the HNP know-it-alls in my constituency. If 18 Ministers, a good number of Deputy Ministers and all the members of Parliament with the whole Government machinery that provides them with information and facts and evaluates things for them, do not know what is happening and what decisions must be made, no know-it-all outside, least of all a know-it-all from the HNP, will be in a position to judge what is in the interest of South Africa.

This was a session of many questions. If hon. members of the Opposition were to make some calculations about everything that they asked, they would see that they asked for larger pensions, more educational facilities, more housing, etc. If all their requests had been granted, South Africa would have been totally bankrupt. In our zeal and with our good intentions of justice for all, we must always bear in mind that our abilities are limited.

This session was also characterized by unrest in the country and we hope that it will come to an end soon. I want to say frankly that what is needed in South Africa to eliminate this unrest is violence. We do not need the calls for incitement and overthrowing the system, because this is physical violence. What we need in South Africa, is the violence of inner strength and conviction; the violence of White self-respect; the violence of the most basic human right—the right of opportunity; the violence of faith; the violence of positive upliftment actions, the violence of Christian values; the violence of communication and peaceful coexistence; the violence of orderly freedom; and the violence of self-preservation. If we, every White man in South Africa, use this violence and if we as politicians go outside—and we must do this—and communicate with the Black people and others in South Africa, this violence will totally supplant the emotional and physical violence that we want to destroy in South Africa. South Africa is a country of challenges and opportunities. We on this side of the House tell our leader and the Cabinet: “Carry on, regardless of the opposition from wherever it may come. We will support you in what you do in the interest of South Africa.” I know that even the most pessimistic voter outside will support us in this regard in future, because the issue is the continued existence of us all, and justice for the Black nations in this beautiful country. If they want to, the Opposition can help to build this country and its future.

Mr. Speaker, I move—

Agreed to.

Order! I have to inform the House that in terms of Standing Order 69(1) I have extended the period for the Third Reading of the Bill to three hours.

Mr. Speaker, I move—

Mr. Speaker, now that we have reached the Third Reading of this contentious Bill we may review the nature of the debate up to now, the problems which arose and the standpoints that were adopted. The predominant feeling I have is that this is actually one of those moments in the history of Parliament where an opportunity to initiate real constitutional development has been lost. The attitude towards our standpoint that the Government has consistently adopted has been more or less that of the man who hurried to get to the station and when he got there, saw the train moving off. He was so vexed and in such a bad mood that when he turned and walked out and saw the station master fastening his shoelace he gave him a kick and said to him: “You are always fastening your shoelace.” The attitude of the Government may be typified as follows: They excluded the Blacks from the President’s Council and because they did so, they are now angry with us. [Interjections.]

†Basically two kinds of arguments predominated the debate on this Bill. The first kind of argument related to our proposed action with regard to the President’s Council, i.e. our non-participation. I will come back to that in greater detail in a moment. The second kind of argument related to the President’s Council as a constitutional mechanism as such. We must draw a clear distinction between these two types of arguments if we want to try to understand the nature of the debate.

As far as our non-participation in the President’s Council is concerned, it has been said, firstly, that we are following a boycott approach, a hands-off approach as it were, to institutions and organizations created by Parliament. I made it quite clear during the Second Reading of this Bill that in principle this party was in favour of participating in bodies created by Parliament. I made that quite clear, and, in fact, we have done so on numerous occasions in the past. That is our statement in principle. In practice, however, it is also our responsibility to evaluate and assess, in terms of our position of principle, the nature, viability and desirability of the various institutions and organizations created by Parliament.

This is not something new. It is part of good parliamentary tradition and has been for a very long time. I cited two previous examples of the official Opposition refusing to participate in bodies created by Parliament itself, the one being the High Court of Parliament. This High Court met in Pretoria in the old Raadsaal on 27 August 1952. The official Opposition of that time was absent at the meeting of that High Court of Parliament. It was, if one wants to call it that, a boycott action that took place almost 30 years ago. The second instance was more recent. That was the Parliamentary Internal Security Commission set up by the Government as a body to investigate internal security in South Africa. The Opposition was asked to serve on that body as well. But all Opposition parties refused to do so. They refused to participate in that commission. Even the hon. member for Simonstown was part of the official Opposition that refused, and he could not have been very happy about that because he loves serving on all bodies dealing with security measures. That was the first argument. In other words, we are not in favour of boycotting institutions created by this Parliament. In principle we are, in fact, in favour of serving, but that does not absolve us from judging the validity and acceptability of such organizations. That is what we did in regard to the President’s Council and we found that we could not serve on that body.

The second argument that was used was that we should make use of every available instrument to pursue our goals in South Africa. To a certain extent that is good advice, but it is only true if the means one is using are not counterproductive in the face of the ends one is trying to achieve, and what are the goals we are trying to achieve on a constitutional level? We want to create a situation in which all the people in this country participate in the same body in negotiating a new constitution for this country. That is the goal, and we have to assess all the means put at our disposal to achieve that goal. This President’s Council, by its very composition, excludes the vast majority of people from serving on it, and therefore we judge it to be an inadequate means towards achieving that goal.

It is a very straightforward and simple argument, and let me say that it is this argument, in particular, that led me to take one of the most difficult decisions in my brief political career, a decision I took with deep regret because I have a very high personal regard for the hon. member for Bezuidenhout. There was no personal animosity or bitterness involved in my decision. It was merely a question of parliamentary caucus discipline, as well as a difference of opinion. I had to resolve that in the way I did, and I have to say, in all honesty, given the facts at my disposal, that I still believe that I had no option but to act in the way in which I did. [Interjections.] I believe that one cannot use the argument that one would use any means at one’s disposal to pursue a goal, because if the means at one’s disposal are counterproductive in the face of the goals one is trying to achieve, one has no option but to abandon those means.

The third argument that was used against us, particularly by the Minister of the Interior, was that we adopted an “all or nothing” approach in regard to the President’s Council. I emphatically reject that argument and deny it. I see that the Press this morning talks about a new deal I am offering the hon. the Minister. He knows that is not true. From the very start our position was quite clear. We were willing to compromise, because what is our ideal position? Our ideal position is that we want a constitutional mechanism that will assist genuine negotiation and will be representative, but this constitutional mechanism, the President’s Council, is by its very nature advisory and non-representative. By its very nature it leads to consultation and not to negotiation, because it is a non-representative institution. What we were prepared to do from the start was to say that we would accept and support this, for the purposes of compromise, for the purposes of consensus across the floor in order to try to initiate the debate, if the Government was prepared to allow Blacks to serve in an advisory capacity on what is, in any case, an advisory body. That we made clear on the commission, and it was that that was rejected. So it is not true to say that we adopted an “all or nothing” approach to this whole issue. If we were to have done that, we would have insisted on a representative body that could lead to genuine negotiation. That is our ideal position, our position of policy. We were prepared to compromise on that, and we said so from the beginning. It was this very attempt at compromise which was rejected. The point is that if one takes an all or nothing approach, which, I happen to suspect, the Government has been adopting all along, then it is impossible to create a situation in which constitutional dialogue can take place.

Another argument which has been used is that if we are prepared to sit in Parliament, we must also be prepared to sit on all the bodies created by Parliament. This is obviously a fallacious argument. I have already dealt with it in regard to previous instances where this did not happen. Fundamentally, however, such an argument confuses the very nature of Parliament with the products that flow from Parliament. Parliament is the sovereign law-making institution in this country.

Do you respect the laws made by Parliament?

Obviously. I have to. I am a member of this very institution.

Do you believe you are entitled to boycott those laws?

I can fight those laws with every means at my disposal. [Interjections.] That is why I am in Parliament. I am opposing this Government because it passed the Group Areas Act. I am opposing this Government because it has a Population Registration Act. I am opposing it because it has a Immorality Act. I am doing it here, in this institution.

Are you also prepared to do it through means outside this Parliament?

I am asking the support of people outside this Parliament. I ask them to assist me. Well, they are my voters. They cannot all sit in this House. I ask my voters to assist me in getting this Government out of office, in ousting them from this institution, which is the law-making institution. [Interjections.] Therefore, to confuse the sovereignty of Parliament with the products that arise from Parliament is a fundamental confusion. It is in fact a completely erroneous argument. [Interjections.] A final argument that was used on a personal and, I believe, undignified level, an argument to which I am taking extreme exception, is the argument used by the hon. member for Pietermaritzburg South, the argument that my position is motivated, in this particular instance, by my hatred of the NP and hon. members on the Government side. I want to make it quite clear that I do not hate any individual or organization. I do not hate any hon. members of the NP or the NP as such. In the position I have adopted I have never been motivated by that negative emotion. I believe it ill behoves the hon. member for Pietermaritzburg South to masquerade in the guise of the resident psycho-analyst of this Assembly. As it is, there are already enough pots here calling the kettle black. I do have to say, however, that I have always believed the hon. member for Pietermaritzburg South to be one of the most congenial victims of his own undisciplined mind. [Interjections.]

Who is playing the psycho-analyst now?

I had hoped at least that the hon. member for Pietermaritzburg South, when he ran out of arguments, would not resort to abuse of that nature. [Interjections.]

You are simply cross with him because he does not want to become a Prog.

The second kind of argument I referred to, apart from the question of the PFP’s participation or non-participation, relates to the President’s Council as a constitutional mechanism as such. Independent of what our attitude is with regard to serving on it or not, hon. members did argue the merits or demerits of the President’s Council as a constitutional mechanism. Here two basic arguments were offered. They were offered in response to a question posed by us as a party in this House right from the beginning: Why does the Government introduce a Bill into this House and give notice of a constitutional mechanism which in fact excludes Blacks—70% of the population? This was the question. Two kinds of responses have been given during this debate. The one was: “Well, this is a mistake. It is wrong; it is an imperfect institution, but it is the first step to something better.” Then we had a whole range of first-steps-to-something-better kind of argument. They came predominantly from hon. members of the NRP.

I have listened to those arguments and I have come to the conclusion that, without any exception, those arguments relate more to the intentions and desires of hon. members of the NRP than to the legislation or to the motivation offered by the Government. It is what they would like to see happen rather than what is reflected in the Bill; it is what they would like to see happen rather than what has been given to us by hon. members of the NP, who have made it quite clear that this is not so because it is wrong or because it is an intermediary step, but because the exclusion of Blacks is a fundamental part of Government policy. This, as I have pointed out, was made clear on a number of occasions by hon. members opposite, and I have referred to them repeatedly. They exclude Blacks for the simple reason that they happen to believe it is right. They believe it is correct that it should be done. They do not believe it is wrong and that it will come right in future. They believe it is right that Blacks be excluded.

The hon. the Minister of Transport Affairs almost made a mistake yesterday in trying to say that this Bill could in fact be interpreted as being a deviation from NP policy. When I asked him to explain to me how, he quickly retracted and said: “No, it was not a deviation.” [Interjections.] Then I have to accept that it is not a deviation. Is it a deviation of NP policy? Is it a deviation of principle? Obviously it is not, because he knows it is not. He said so in his own Second Reading speech and in the Committee Stage as well. But I think that philosophically the most extensive argument that was produced by the Government as to why Blacks have to be excluded, was in fact by the hon. member for Cape Town Gardens. The hon. member for Cape Town Gardens quite clearly said that as far as Coloureds, Indians and Whites are concerned, we can try to pursue a consociational solution, but that as far as Blacks are concerned partition is the only solution. He then made light of the work that I had done. I do not mind; it is his right as a politician, but I do not think that he did his image as an academic much good. He then tried to show that I had adopted a ridiculous position because I stood for a democratic solution for everybody in South Africa. The hon. the Minister of Transport Affairs made it clear, and I agree with him, that a democratic solution for our problems in South Africa is extremely difficult to achieve. I make that point repeatedly in my book published with Prof. Welsh. I also say quite clearly in that book that if we are going to look for a peaceful solution to our problems, a relatively peaceful and constitutional solution, then I believe a democratic solution is the only one that can possibly work in the long run. I cannot see a non-democratic solution working. That is the point I try to make in that book. However, what the hon. member did not say is that in this book I say that a democratic solution may be difficult, but a peaceful solution by means of partition is impossible. The reason for this is quite simple. Partition as a solution to our problems is premised on the assumption that there are irreconcilable conflicts between Whites and Blacks in terms of their critical interest. In other words, this is the argument which is often used by the hon. member for Cape Town Gardens as well as Prof. De Crespigny, with whom I know he agrees to a large extent. Because there are irreconcilable critical interests between White and Black, one can never find a peaceful democratic solution. Therefore partition is the only solution. But what does partition fundamentally mean? Fundamentally partition means that one takes a scarce commodity, land, and divides it between White and Black. Land, as the hon. member for Cape Town Gardens knows, is a scarce commodity. In fact it is what is called a zero sum commodity. A zero sum commodity means: The more I have of it, the less you have of it. It means it cannot expand. It may decrease, but it cannot expand.

Thank you for the lecture.

No, I am talking to the hon. member for Cape Town Gardens in terms of partition. As such, partition tries to use land to divide the country up constitutionally and to do so peacefully, and I say to him this is impossible to do, for the simple reason that the more land the Blacks want, the less Whites can have and the more land Whites have, the less Blacks can have. That is why a partition solution will always lead to conflict This is what the hon. member for Cape Town Gardens should have read, because this is in fact what we say there, i.e. that if one wants to find a solution by means of partition in South Africa, then one is not going to do so peacefully. We say on page 169 of our book—

That is the fundamental point I have tried to make with regard to partition.

Another argument which was very important in this debate why we opposed the Bill from the start, was the whole question of adding nominated members to the House of Assembly. Here, I must say, the hon. the Minister of the Interior made a unique contribution to democratic theory during the Committee Stage in trying to explain how one can save democracy by increasing the number of people in Parliament through nominated members, which is an absolutely undemocratic procedure to adopt, and he failed to persuade us at all.

*On what did we achieve consensus in the committee? The hon. the Minister of Transport Affairs also referred to this. We reached consensus on three aspects: In the first instance, that all population groups should be involved and consulted when constitutional development was involved. On this we reached consensus; in the second instance, that the level of acceptability of constitutional proposals did not depend on one particular group only, but in fact depended on all population groups. We reached consensus on that as well. Thirdly, we reached consensus on the fact that if we were going to have constitutional development, we should talk to recognized leaders of the various population groups. This is reflected in paragraph 8(b) of the commission’s report. We say this very clearly. I said during the Second Reading debate that with regard to these aspects we had shown pure profit on the constitutional level. However, seen against the background of the matters about which we achieved consensus, I have to express my disappointment at the concrete proposals to give expression to that consensus. The President’s Council as such is a contradiction of the nature of the consensus we achieved. Perhaps I could try to illustrate this dramatically. We have to understand this consensus against the background of the composition of the South African population. As it is at the moment, the South African population consists of 16,9% Whites, more than 70% Blacks, and the rest Coloureds and Asians. All these population groups are de facto subject to the decisions of this Parliament. This is the essence of the constitutional crisis in which South Africa finds itself and it is this constitutional crisis from which we have to escape. We must do this in the most peaceful manner possible, if we want to survive, and all of us do want to survive. Therefore we have to realize that if we try to create constitutional mechanisms, they have to be evaluated on the basis of the nature of the composition of the population and the subjection of the population to this Parliament.

[Inaudible.]

The hon. the Minister should not ask me that. He should go and ask those people themselves, and he will be surprised at the replies he will receive from them. The point is that they are subjected to it. Therefore, if we look at the President’s Council as a constitutional starting point, against the background of the composition of the population and the subjection of the population to this Parliament, the outstanding characteristic of the President’s Council is that 70% of the population is excluded from it. That is the outstanding characteristic, and that was the original reason for our objection and still is the reason for our objection. I say this because we are of the opinion that if one creates a constitutional instrument such as the one we are presently creating, which excludes 70% of the population, such an act is in point of fact a greater act of polarization than anything else in our community. By taking such a decision, we are polarizing the community. The hon. member for Innesdal attacked me and said that we were at the one pole of politics. This is a total miscomprehension and misconception of reality. The radical Blacks will not speak to us. They are not at all interested in the official Opposition, and they say so repeatedly. They urge us to get out of the way. They say we should leave Parliament, because we are supposedly clouding this whole relationship between those who govern and those who are governed. They tell us to get out of Parliament. This is the point that hon. members on that side of the House have to understand. We are trying to prevent this process of polarization. We are preventing it by saying that this institution, Parliament, still has an important and historical role to play, and that is to take decisions here which may lead to real constitutional development. Real constitutional development bears a relationship to those three aspects on which we had reached consensus in the commission, viz. to talk to recognized leaders, to talk to all population groups, and see to it that the acceptability level would not depend solely on one particular group.

It is not true that the Blacks are excluded.

If we did that, we could initiate a process of true constitutional development. I challenge anyone to look soberly and objectively at those three aspects. If we look at those three aspects and then at this Bill and measure it by those three criteria, we on this side of the House have no option but to oppose this Third Reading of the Bill as well.

Mr. Speaker, we have listened to the hon. the Leader of the Opposition a number of times in this debate. I want to draw the attention of the House to the fact that when the members of the Select Committee, and later of the Commission, were appointed, it was interesting to note the changes that occurred in the ranks of the PFP. When the Commission began its proceedings, the hon. member for Sea Point was the leader of the PFP.

In the course of the proceedings of the commission, a change of leadership took place in the PFP. The present Leader of the Opposition then took over the reins from the hon. member for Sea Point. And then, in the course of this debate, we found that one of the most senior leaders of the PFP had been suspended from the caucus of the PFP. Having just listened to the hon. leader of the PFP for the umpteenth time, the question occurred to me: What is the course of history surrounding this debate going to be for the PFP in the future? Later in my speech I shall come back to the hon. the Leader of the Opposition, because I have a few words that I want to address to him specifically this morning. I am going to conclude my speech as I began it, by saying to him that his words reminded me of the words in Daniel 5, verse 25: Mené, mené, tekél upharsin. The writing is on the wall, not only for the hon. the Leader of the PFP but also for his party.

Those words were for you, for the whole land.

In the course of time these words will become true for the hon. Leader.

Look at the context of those words and you will see that they were for the land.

Before coming back to the hon. the Leader of the PFP I want to make certain basic, elementary inferences with reference to what I myself saw as a member of the commission. In the first place, every person or body that put its case to the commission in the form of evidence, did so to the best of its ability. In the second place, each of these witnesses was given a full and sympathetic hearing and every document was carefully studied by us. In the third place, no one who submitted evidence before us, with the best intentions, succeeded in suggesting to us a clear-cut solution. In the fourth place, the ethnic problem of Southern Africa is very complicated and full of traps and difficulties. In the fifth place, the historical and existing milieu has been and is being stirred up for a number of reasons. In the sixth place, everyone who is seeking a just and fair solution and resolution of this question must take a few things into account.

In the first place, such a person must have a very extensive knowledge of what one is dealing with when one deals with the ethnic organisms in Southern Africa. One must know how human societies are put together, how they live and grow and what happens when they meet. One must have a very comprehensive knowledge of the history of the people. One must have a knowledge of their group and individual characteristics. One must be aware of their ideals and aspirations as well as their shortcomings and talents. Then, too, it is important that we should get the best talent in each of these population groups to take part in these deliberations, and I think that the deliberations of the politicians in this regard are just as important. Thirdly, those who are working on this matter must have the proverbial patience of Job and Solomon’s wisdom and must take cognizance of what Paul wrote to Timothy, have the faith to move mountains and the will to achieve the apparently impossible. Unremitting zeal and the utmost goodwill must be shown.

To the best of my ability and judgement, and in the light of my own conclusions, I signed the report in a sincere effort to achieve what was best. The recommendations as contained in the legislation were born out of good faith and form a basis from which to begin. They affect established institutions and have given new momentum. If we accept this Third Reading today, it will result in the following: The abolition of the Senate, the establishment of the post of Vice State President, the creation of a President’s Council and an alteration in the composition of the House of Assembly. Each of those decisions hung in the balance while arguments for and against were advanced. However, due to the way practical politics work, what only just tipped the scales by 1% in private consultation, must be given 100% support when one applies it in practice.

There are two basic points of departure in this report. They are contained in paragraph 8(a) and (b) of the report. Paragraph 8(a) reads as follows—

That is the first point of departure, which is very important. The second point of departure is contained in paragraph 8(b)—

The first point of departure is of cardinal importance because it expresses an incontrovertible fact, and the second point of departure is of cardinal importance because it displays sound understanding, a sound attitude and the will to co-operate. Neither of these points of departure are newly-discovered principles, but are long-standing truths and are representative of existing practices recognized and followed by my party in the course of history.

Paragraphs 8(a) and (b) presuppose—and for me the true significance of these two paragraphs lies in this—that this Parliament is sovereign and it must remain sovereign while new instruments and institutions are created to help chisel out our future, so that it may protect, look after and defend the interests of the people by whom it was created. As long as the sovereignty of this Parliament is maintained and respected by every member of this House and as long as authority, order, peace and prosperity are maintained, constitutional growth will be facilitated in this country.

I want to deal for a moment with the hon. Leader of the NRP; A great deal has been said about what the hon. the Minister of Posts and Telecommunications said here. With reference to the hon. the Minister of Posts and Telecommunications, the hon. member for Durban Point said in his Second Reading Speech (Hansard, 4 June 1980, col. 8059)—

I now want to refer the hon. member to what one of his own hon. members, namely the hon. member for Durban North, had to say. With reference to the Black people, the hon. member for Durban North said (Hansard, 4 June 1980, col. 8141)—

In this world we are living in today and in which humanity must work out a peaceful existence for itself, a sound attitude is one of those things that is of fundamental importance. As a student of human organisms I know that various people who are concerned with the different facets of science such as physical, cultural or psychological anthropology, theology and genetics, have in the past referred to the similarity and differences between people, equality or inequality and superiority or inferiority. However, I wish to state categorically that this kind of thing is of purely academic interest against the background of what we on this side of the House want to achieve in this country. Firstly, the recognition of the diversity of humanity in Southern Africa is to me sufficient, and secondly we must all have respect and understanding for one another. In this connection I shall come back to the hon. the Leader of the Opposition.

Many people have expressed opinions on this, people like Gen. J. C. Smuts, Ndabaningi Sithole, Noni Jabuvu in her book Drawn in Colour and Samora Machel. On one occasion the hon. member for Yeoville, who is not present at the moment, referred in the provincial council to the forefathers of Mr. Danie Hough as primitive people who went around in skins, in contrast to his own forefathers who were civilized.

I therefore say that we should be careful today not to seek from a person or a body things which are not there as far as attitude is concerned. If we begin to do so, there are few of us who are not also guilty of having made a cutting remark—sometimes refined and sometimes less so—at some time in our lives and at some place—about other people. As far as that is concerned the Opposition has been clumsy, wilful and very indifferent to the matters with which we in South Africa are engaged.

This brings me to the hon. Leader of the Opposition. On the commission and during the various stages of the Bill we spoke our hearts out, stated our standpoints and debated them. I want to call as witness the words of the hon. Leader of the Opposition himself. In his Second Reading speech he said that this side of the House, the hon. the Prime Minister and the Cabinet had been placating feelings in the right wing of the NP caucus.

That means you.

Perhaps I am regarded as a member of the right wing. However, I do not like the concepts “right” or “left”. As a member of a team I have specific ideas and approaches, but I co-operate as a member of that team. The important thing is that I work together with that team.

I want to come back to the speech by the hon. Leader of the Opposition. He went on to refer to the hon. member for Klip River, while he was leaving the House, and said that the hon. member was dissatisfied because Blacks were not included in the President’s Council.

I asked him. I did not say he was dissatisfied.

The important thing is that the hon. Leader of the Opposition is known in this country as the great scientist. I concede that the hon. member has academic achievements to his credit and I respect him for that. A short time ago I quoted a saying from the Scriptures for him, and the longer he sits where he is sitting now, the longer he is making use of things that are unscientific and will find himself travelling a road which will make his term as leader of a party a very brief one. While the hon. Leader of the Opposition spoke about a so-called right wing in this party and said that there were tensions in this party, one of his most senior members was preparing a speech which would ultimately lead to his being expelled from the PFP by the hon. Leader of the Opposition himself. I think that in its history, its existence and its functioning the NP is simply a party—I cannot think of the right adjective now …

Look in the Bible.

… which is unparallelled in its greatness. Under the most difficult circumstances we served on a commission and have been through the Second Reading and Committee Stage of the legislation and are now busy with the Third Reading. I want to challenge any member of the Opposition to find the width of a fingernail in any differences between what I, any other member of the commission or any member of the NP have said. We thrashed out these matters as a team with people in private, in the caucus and in the commission. We spoke to a variety of people. We discussed matters and we are carrying on from here as a united team. By means of our arguments we succeeded, with the goodwill of the NRP and the SAP, in obtaining the greatest degree of unity possible with regard to certain basic matters on which we decided in the commission, because we approached matters in a spirit of goodwill. There are other reasons, too, that I could mention. This serves as a good example for the hon. Leader of the Opposition, who is scarcely still leader. Perhaps he has gained one or two people, but in the meantime has lost a man. If one does not have goodwill in one’s heart, one loses. I want to say to the hon. Leader of the Opposition that the NP has a will to solve these things in South Africa. In the light of what I have said today we shall continue. I have now said to the hon. Leader of the Opposition what I wanted to say, but I have not finished with him yet.

The hon. the Leader of the Opposition has often referred to the interim report of the commission, and did so again during this Third Reading. Paragraphs 8(a) and (b) of the report are of great importance. Why did the hon. Leader of the Opposition only refer to paragraph 8(b) and only to the fact that there should be the widest possible deliberation between the leaders of the various population groups?

To (a) as well.

The hon. Leader of the Opposition only stressed paragraph 8(b). I listened to him very carefully, and he left out paragraph 8(a) because it created tensions as far as he was concerned and it also created tensions in the ranks of his party. [Interjections.] I shall tell you why.

That is not true.

The reason he left out so important a paragraph, despite the fact that he spoke at such length, was that there was a fundamental problem as regards the drafting of their principal point of departure.

I want to say to the hon. the Leader of the Opposition—perhaps I am complimenting him in saying this—that I read everything he says. I read what he says because it is my duty and my field of interest. I have told him before that as a prototype he is very interesting to me. I do not want to carry out a psychoanalysis of the hon. the Leader of the Opposition, although I have drawn my own conclusions. I just want to refer to two of his books. In the first place I want to refer him to the work he wrote entitled Kulturele en Etniese Politiek. The hon. the Leader of the Opposition will remember it. It appeared in Afrikaans. Then there is the book by Thompson and Butler, Change in Contemporary South Africa. He wrote a chapter of that, too,—the first chapter, what is more— entitled “Afrikaner Nationalism, White Politics and Political Change in South Africa”. I want to put it very clearly that in the writings and utterances of the hon. the Leader of the Opposition there is one thing as plain as a pikestaff, and that is that he has no appreciation of or love for the national organism from which he was born.

That is absolutely untrue.

It is a very unpleasant remark, anyway.

Hon. members can read either of these two works. I can quote other works in this regard as well. These works are a scientific indication as to why the Afrikaner has no right to exist. The hon. the Leader of the Opposition advances the most unscientific—as far as I am concerned—and the most prejudiced arguments as to why the NP remains in power. He colours it in the most sociological scientific terminology, but underlying this is the fact that he has no appreciation or respect for it. He wants to see it destroyed. His whole effort is aimed at seeing it destroyed. That is why I can understand that he has difficulty with paragraph 8(a). As I have said before, he does not accept—and if he does accept it, he does it unwillingly—that there are ethnic organisms in Southern Africa. In a moment I also want to mention the fundamental principles of the hon. member for Houghton. Therefore the hon. the Leader of the Opposition has no appreciation for the reality of ethnic organisms. His writings prove it. That is why he runs away from paragraph 8(a). That too, is why he involves us in a basis for discussion based on paragraph 8(b) …

May I ask a question?

Unfortunately I have very little time. He only wants a basis for discussion where he can state the standpoint of the PFP, on his conditions.

I also wish to refer to the hon. member for Sea Point, and I do so with reference to the fact that the official Opposition does not wish to serve on the President’s Council. I have indicated the principles involved in this matter, and I shall come back in a moment to the hon. member for Houghton. The hon. member for Sea Point, when he became the Leader of the PFP in …

In 1970.

Yes, in 1970. He has a good knowledge of history. On that occasion he made the speech “Priorities for the ’70s”. One of the points of departure he stated there was—and I quote—

There is just one question I want to put to the hon. member. If Parliament, against his will, creates an instrument where people can talk, not talk together as he wishes, but where they can talk—and the hon. member for Sea Point declared 10 years ago that he was prepared to talk to verligtes, but not to verkramptes like myself, although I think that I am sometimes “verlig” enough to talk to him—why does he refuse to take part? I cannot understand him. After all, he said that he wanted to talk.

I want to come back to the basic principles to which I referred. The hon. member for Houghton stated the philosophy of the PFP in a book issued under the editorship—and perhaps I ought not to mention his name—of Dr. Nic Rhoodie. The book’s name is South African Dialogue. Her article appears on page 227 of that book entitled “The Progressive Party’s Programme for Multiracial South Africa”. In that article the hon. member for Houghton stated the following—

That is the one aspect. Now the other one—

Hear, hear!

Very good.

That sounds like the Palm Springs speech.

In other words, this fundamental basis of the PFP is in conflict with paragraph 8(a) in which we acknowledge … [Interjections.] I do not wish to allow myself to be misled at this stage by reacting to the hon. member for Bryanston. They say that there are 17 million, 20 million or 24 million individuals living in Southern Africa, and as long as they think that a society is based on a collection of groups of isolated individuals, they will make this part of the world a false and hopeless part of the world without a future or confidence in the future. There is one thing that the hon. the Leader of the Opposition must concede. If one wishes to seek peace, security and prosperity in a society, but one bases one’s point of departure on the individual alone, one will be creating the biggest mess of a conglomerate imagineable, because society is not composed of individuals, but of organized individuals, and the smallest unit in a community is the family. The family is the smallest social unit. There is the happiness of the father, the mother and the children, and then the larger units until one gets to the ethnic organisms. There is something I should like to say to the hon. the Leader of the Opposition today, and I say it all seriousness. In his writings, his thinking and his leadership he rejects the organism from which he comes.

Untrue.

He must rediscover the heritage left him by his ancestor, Floris Slabbert—and here we have one thing in common, because Floris Slabbert is one of my ancestors as well. The PFP must rediscover their own people. They must go back in history and seek the value of their own people, because it is there. [Interjections.] Then they will not stand up, in one of the most important periods in the history of their fatherland …

You are just being personally insulting, that is all.

I have scientific proof of this. I do not wish to hurt the hon. the Leader of the PFP. I just want to state a fact. The hon. the Leader of the PFP and the hon. member for Houghton do not recognize the basic realities which we in South Africa are faced. All I want to say to the hon. the Leader is that he must go and rediscover himself. He must rediscover the history of his own people. He must rediscover the history of the diversity of peoples in Southern Africa. When he has done that, when he has managed that, he will understand those things that the National Party are doing. Based on the existing diversity we wish to speak to all peoples in Southern Africa, with all their leaders, with the best will in the world. I see that my time is running out. I wish to conclude by saying just one thing, and that is “mene, mene, tekel upharsin”. If the PFP is going to seek a basis composed solely of individuals who, in an isolated and selfish way, wish to form the basis of the community, then they really have no contribution to make. History will pass judgment. If they do that, then, however difficult it may be, the rest of South Africa will seek a solution for the problems of our fatherland without the PFP.

Business suspended at 12h45 and resumed at 14h15.

Afternoon Sitting

Mr. Speaker, first and foremost I want to disagree with my friend the hon. member for Rissik. He started by saying that nobody had submitted perfect plans to the Schlebusch Commission. I want to remind him that the NRP was the only party to give oral evidence there. When the new constitutional dispensation first begins to take shape, the hon. member for Rissik will find that it will be the closest to a perfect proposal … [Interjections.]

At this point, however, I want to agree with the hon. member for Rissik in another respect. I am delighted that he stated unequivocally that he and the whole NP accepted that the consultation had to take place with and among all the population groups. He clearly emphasized “all population groups”. I believe that it is important that he himself, who is known as one of the, shall I say, conservative elements in the NP—I shall not put it more strongly, although I could easily do so—one of the conservative people, who is not always happy about the developments taking place, also accepts that the discussions must take place with and among all population groups. For that reason I am really sorry that he went on to try and defend the utterances of the hon. the Minister of Posts and Telecommunications. The hon. the Minister withdrew them unconditionally and it was therefore not necessary to try and defend them at this stage, or even to give reasons for them, or to argue that other people, too, had said such things. I believe that it was an unfortunate episode, an episode which has now been settled and that it does not, therefore, behove to be defensive about it now.

†I should like to deal now very briefly with a few of the points raised by the hon. the Leader of the Opposition. The first is his attempt to show that Opposition parties in the past boycotted instruments of this Parliament. I think he chose two unfortunate examples. He chose the High Court of Parliament, which, everybody knew, was a farce, a total subterfuge to get around the constitution. The High Court of Parliament was designed as an instrument for the taking away of political rights. It was designed to exclude people from the political process in South Africa.

Just like the President’s Council.

He also chose the Internal Security Commission, the so-called Piscom, which was also designed to remove rights. It was a negative organization, which was never formed in any case, and therefore nobody was required to serve on it. Here, however, were two instruments designed to break down or take away. We are dealing now with an instrument which is trying to create something. It is not an instrument which is going to take away political rights, but an instrument which is going to seek to create machinery which will lead to the granting of political opportunity and to the creation of instruments and systems for political participation by all other race groups. Therefore, the analogy is totally false.

In the one case it had to do with the taking away of rights. In the other case it has to do with an instrument, which, as I have said, is imperfect, but is nevertheless designed to create opportunities for bringing all our people together in joint decision making and in sharing the planning of the future of this country. Therefore, I do not believe that the Leader of the Opposition’s analogy can in fact be taken as a justification for boycotting, for withdrawal and for nonparticipation in a positive measure aimed at moving forward.

We have come to the stage where a final choice has to be made on this Bill. The official Opposition has made its final choice. The choice which faces this House is a simple one. The basic choice is not merely to support or to oppose. That is the right of any political party, viz. to support or to oppose a measure or a Bill before Parliament. But then one must project one’s decision and equate it with what flows from it. The next step is whether one co-operates or whether one confronts as the follow-up of one’s support or one’s opposition; in other words, whether one encourages and tries to make something of a measure or whether one tries to discredit it and destroy it.

Let us first look at the two constitutional changes contained in this measure. This party is on record as saying we support the one, the abolition of the Senate, and oppose the other, the addition of nominated and proportionately chosen additional members to this House. But that is not really the crux of this issue. We have differed before on that sort of constitutional measure, and to my mind that is not enough in itself to totally reject the Bill. Opposition to nominated MPs is not sufficient reason to turn our back as a party on the other aspects of this measure.

I want to analyse the remaining objectives, apart from those two, the two solely constitutional steps. Firstly, I want to look at the plus factors. The first plus factor is that this measure is designed to create an instrument for dialogue, for consultation and for deliberation leading towards a new constitutional future for South Africa. The second objective is a unique one. There have been other attempts to change the constitution, including the commission which recommended this measure, but the second step is a unique one. It is to draw into that deliberation, into the constitutional-making process, all the population groups of South Africa. If one asks with whom consultation and deliberation is to take place, then it is with all the groups and it will lead finally to all the population groups sitting around one table, discussing together in one joint committee the future of this country.

There is another fundamental new difference in objective, and this is that now for the first time this Parliament says to South Africa that we the Whites are not going to try to formulate a constitution alone. We no longer say: “Ons sal die tafel dek en as julle nie wil aansit nie, kan julle nie deelneem nie.” That attitude of “ons sal die tafel dek en julle kan aansit of nie soos julle wil” is gone. We have a fundamentally new approach here, the approach of trying to take people with us and sharing in the process of constitution-making. This leaves a potentially open door to a completely new form and structure for South Africa’s constitutional future.

Then there are the minus factors, the limitations. I want to deal specifically with the repeated argument that the Blacks are excluded. It is not true, as I see this measure, that the Blacks are excluded from the process. They are excluded from one of the two elements in the negotiating process. This Bill does not constitute the total process. This is merely one of the elements, and there is reference in this Bill to the other elements in the process. The full process comprises consultation and negotiation between one body of White, Coloured and Indian, and another body of Black South Africans. It is not true, therefore, to say that Blacks are excluded from the process of negotiation and consultation. They are only excluded from one of the two instruments for negotiation. I think that this is terribly important. We would have preferred to see one body. Our attitude to that is recorded, and if the Blacks were totally excluded, we would have opposed this measure completely. However, because there are two elements, and the Blacks comprise one of them, we believe that changes the whole picture. Again this is a fundamental change, because, for the first time in the whole period of office of this Government, the urban Black man is brought into the negotiating, consultative mechanism to play a part as one of the elements of our society. The original intention was that it should be so defined, but it did not fit into this Bill. It is clear, however, that by the use of the terminology “council for Black South African citizens”, it includes the non-independent homelands and the urban Blacks. This is a fundamental advance in our constitutional thinking. Then there is the statutory machinery which is created in this Bill itself.

That is why I regret the somewhat dualistic approach we have had from some hon. Government members, the hesitancy, the qualification we have had and which has placed the question mark over the effectiveness of this measure. I think that that has probably done as much harm as anything else. Nevertheless, we have come very close to consensus. At one stage, as I have said in previous stages of this debate, I thought we had reached complete consensus. However, we now have something before us which is better than nothing at all. I want to ask the hon. the Leader of the Opposition a question in all sincerity. He said yesterday, and dealt with it again today, that he was prepared to compromise, and that if the Blacks were brought in, even in an advisory capacity, a temporary capacity or an interim capacity, he would review his attitude.

On the President’s Council.

Yes, on the President’s Council. They are not on the President’s Council, and we would like to see them there. But they will be part of a body which will sit in a joint committee with the President’s Council and will, therefore be advising the President’s Council.

Who will be advising the Government.

Who will be advising the Government. Now is this not a case of splitting hairs? He says one has to put Blacks on the President’s Council, even if only to advise. Then he will accept it. If, however, one brings Blacks into a joint committee with the President’s Council, which together will advise, he will not accept it.

Mr. Speaker, may I ask the hon. member for Durban Point to answer just this one question: Why does he think Blacks are excluded from the President’s Council?

It is as a result of two things. Firstly, it takes a long time to get this Government moving, and if one can get them moving half way, eventually one will get them the whole way. I would rather get them moving half way than leave them standing, bogged down, tied to yesterday, and not moving at all. That is one reason. There are limitations, doubts, and persons who have had to be persuaded in the Government. The first reason therefore is a party political one within the Government. But I believe that the Government is now moving. The second reason is that nobody has yet really identified the place of the urban Black vis-à-vis the homelands. Here is an opportunity for a Black body to determine the aspirations of the urban Black. They are the only people who can do it. They can get together and say: This is how we see the role of the Black, both in and outside the homelands. They can then recommend, through the joint committee, what they think, and not what the hon. official Opposition thinks they want. We have got to get away from this arrogance of the hon. official Opposition saying that they know what the Blacks want and they are going to see that they get it.

Do you not ever listen to the Blacks?

I say let the Blacks say what they want …

They have. They have expressed themselves clearly in regard to the President’s Council.

Let them do it through their elected leaders in a body nominated for that purpose.

They have.

Order!

I have heard Black leaders say that the only time they meet that party is on the cocktail circuit, and they feel that that party’s main objective in meeting them and talking to them is to give credibility to them as people who talk with Blacks. [Interjections.]

I say we were near consensus. The hon. the Leader of the Opposition feels so strongly about advice from Blacks. When he voted for consultation between the council for Black South African citizens and the President’s Council, he by implication wanted those two bodies to talk together. Why then did he not support the hon. member for Sea Point, who voted against it?

He was against the two bodies being …

The hon. leader voted for consultation between the two bodies. Why did he not then record his support for the view of the hon. member for Sea Point? [Interjections.] Why did he wait until afterwards? [Interjections.]

[Inaudible.]

Tell that fool to come outside and I will fix him.

Mr. Speaker, may I continue with my speech?

Are you threatening someone?

Order!

Mr. Speaker, on a point of order: Is the hon. member for Bryanston allowed to threaten a member on this side by saying: “Come outside I will fix you”? [Interjections.]

Will the hon. member for Umbilo complete his point of order please.

Mr. Speaker, the hon. member for Bryanston referred to hon. members on this side and indicated that someone should come outside and that he would then fix him. [Interjections.]

Order!

Is it parliamentary to make such a threat?

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

Mr. Speaker, yes, I did and I withdraw it, but ask that hon. member what he said …

Sit down you idiot.

Order! The hon. member must withdraw his words unconditionally.

He is a street fighter.

Mr. Speaker, I withdraw my very friendly statement unconditionally.

The hon. member must resume his seat.

Mr. Speaker, I also want to make a point of order. That hon. member for … What is his seat? [Interjections.]

You are wasting my time.

Stop wasting time, you idiot.

Order!

Mr. Speaker, may I raise a point of order?

Order! The hon. member for Durban Point must please resume his seat.

The hon. member for Umhlanga called me an idiot, and I think that is unparliamentary. [Interjections.]

Order! The hon. member must resume his seat. The hon. member for Umhlanga must withdraw those words.

I do, Sir.

The hon. member for Durban Point may proceed.

The hon. the Leader of the Opposition, who spent most of his speech on the defensive, has his team now trying to prevent the other point of view being put. We did not interrupt him, but this is now their tactics and I point that out.

We were accused of living in cloud-cuckoo land if we thought this …

Mr. Speaker, is the hon. member for Bryanston entitled to say that the hon. member for Durban Point is lying again?

Mr. Speaker, I never said a word. [Interjections.]

I am sorry, Mr. Speaker. It was the hon. member for Sandton.

Make up your mind.

I just have.

Did the hon. member for Sandton say that?

Yes, Mr. Speaker.

The hon. member must withdraw those words.

Sir, he was not lying again.

Order! The hon. member must withdraw his words unconditionally.

I withdraw them, Sir.

The hon. member must rise when he addresses the Chair. He must rise and withdraw the words unconditionally.

Sir, I withdraw the words unconditionally.

The hon. member for Durban Point may proceed.

Mr. Speaker, the hon. the Leader of the Opposition accused us of living in cloud-cuckoo land by suggesting that there was any change of the overall mechanism of these two bodies, the President’s Council and the Black council, being able to operate. We have had experience of this. The NRP provincial administration in Natal has negotiated under conditions where the Black people were excluded from those negotiations by law and therefore, as a result of their being excluded, we could only negotiate with the official representatives of the Coloured and the Indian people. That did not destroy the negotiations, because unofficially and privately we continued with negotiations with representatives of kwaZulu. As the negotiations went on, we brought them into the picture informally, and in the end an agreement was signed which included these words—

This was the outcome of negotiations which started with very little chance of success and which excluded the urban Blacks entirely, whereas in this case provision is made for consultation with Blacks. After a year of negotiation an agreement was reached between the three groups which provided for the inclusion of Black South Africans and which was accepted and signed by the representatives of the other three groups. It is therefore not true to say that it is impossible to negotiate with an instrument that is not perfect. Not only is it possible; we have actually done it, and it has worked. I have the evidence here in the signatures of representatives of the three racial groups of South Africa carrying the implicit support of the Black Government of kwaZulu.

Finally I want to make, in all sincerity, one appeal to the Government. I believe it is absolutely vital that this Bill should be implemented in such a way that these two bodies which flow from it, the President’s Council and the council for Black South African Citizens, can together move forward ab initio. From the start they should be moving together, not one as an afterthought of the other or one leading and the other trailing. The timing must be such that it will become clear that this is a package deal with no tails added on, but is part of the basic thinking which led to this Bill, namely that all groups, including the Blacks, will negotiate together. Other than those in the official Opposition who tried to make a mockery of this debate, whose behaviour has shown their total lack of interest in the reality of the future of South Africa and the price we shall have to pay for failure, we in this party will support this Bill; we will participate and will try to make it work and not behave like a spoilt child stamping his feet and saying: “I cannot have the whole sweet; so I will not have any, so weh!”

Mr. Speaker, I want to make my speech unconditionally. After many hours of debate, almost every conceivable argument both for and against the aspects of this Bill have already been used. Some have been used over and over again, and I certainly do not intend repeating them. I am, however, going to express my disappointment over the fact that the Government has not budged from its granite-like stand on two major points of dispute. The Government has accepted no amendments and no modifications to this Bill and it has made it very clear that it does not intend to do so either.

During the Second Reading and during the Committee Stage many hours of debate were spent on the principle of clause 17, but even after so many hours of debate I have heard not one single member being able to morally or ethically justify or even defend the fact that 12 more members will occupy seats in this House while offering the taxpayer absolutely nothing in return. No one has stood up in this House and said that nearly half a million rand per annum of the taxpayers’ money would be spent and could be justified in any shape or form. No one has been able to state that the 12 additional members would, in any way, improve the prestige or ability of the House. No one has been able to justify the fact that these 12 members would get a free ride to Parliament, while the others would have to fight costly and hard election campaigns for their seats. The fact that these 12 members would not represent constituencies and would not be responsible for and accountable to an electorate has also been overlooked. Not one hon. member has been able to morally justify the undemocratic and patently unfair fact that the present ruling party would disproportionately receive 11 of the 12 new members of Parliament. However, a number of Government speakers have offered the view that men of stature and quality, and with specialist knowledge, would be attracted to Parliament by this measure, but even this argument proved to be completely fallacious and insincere. I tested this argument with the hon. the Minister. I tried to get the hon. the Minister to agree that he should specifically qualify the provision in such a manner that it would ensure that the 12 new members would, in fact, be genuine specialists. It was talked about over and over again and offered as an argument. This was to no avail. It is obviously a job for pals situation.

It is also clear that a portion of this Bill has been formulated purely for the benefit of the NP and not for the people of South Africa. The Government has been equally uncompromising on the highly contentious clause 34 of this Bill, and specifically the section which excludes Black South Africans from the new President’s Council. It is obvious that the Government is not, at this stage, prepared to budge an inch or to modify the position it holds in this particular respect. After listening to speaker after speaker on this issue, I have yet to hear one hon. member express the view that the exclusion of Black South African citizens can be morally or ethically justified. We heard how this exclusion fits into the broad framework of the NP’s dogma, philosophy and policy, but we have heard no valid or moral justification for it.

We should consider how difficult it is going to be to explain or justify the exclusion of Blacks to foreign dignatories. I certainly do not envy the task of the hon. the Minister of Foreign Affairs or the hon. the Minister of Co-operation and Development when they have to explain this particular issue. I am genuinely disappointed that the Government has not, even at this late stage, been able to find some form of compromise or alternative solution that could defuse this situation and make the whole exercise of the formation of a President’s Council more palatable to those leaders who may be invited to participate in it.

Unfortunately I now have to change from this tack and turn my attention to the hon. the Leader of the Opposition, who so violently attacked me just prior to the suspension of business for lunch. [Interjections.] He attacked me personally on an issue, but I do not intend attacking him in the same vein in which I was attacked. Not only did he attack me personally, but he also attacked my motives when I suggested yesterday that the PFP should rather concentrate on the positive aspects and the love that they have for South Africa, rather than on the hate that they have for the NP. That was my view. If the hon. the Leader of the official Opposition has taken that view as a personal attack on him, I want to apologize to him. I am not above apologizing to him if he has taken it personally, but I did not mean it as a personal attack. However, I do believe that there are members in his caucus who are blinded by their hatred. [Interjections.] They are so consumed by hatred that they are unable to see what is of importance to our country.

Did you not say that about the NRP last time?

I do however believe that there are members in the PFP caucus who are consumed by hatred as I said yesterday. Surely that severe personal attack on me could not have been precipitated by those words alone. There must have been some other reason. I can only assume that the attack was not only aimed at me, but rather at the many supporters of the PFP who share my view, as well as the view held by the hon. member for Bezuidenhout, and that is that the PFP made a vital error in judgment when they decided to once again take up the cudgels of boycott and protest politics. Or maybe the hon. the Leader of the Opposition is angered by the known fact that my sincere opinion is solely based on and motivated by the love I have for my country. He also knows that my views and opinions are not suspect or coupled to any possibility of political gain or expediency. My views, as I expressed them to him and to the PFP, were given sincerely and in all good faith.

But we are tired of them. We do not want them.

If they do not wish to hear them or consider them, that is naturally their prerogative and in that case they can stew in their own juice. I am afraid I stand by what I have said. I should like to repeat my view. My plea to all in this House was sincere. It was that we should try to find a peaceful path through the minefield we are presently in and use each and every tool or vehicle at our disposal to that end. That was my plea—nothing more and nothing less.

The hon. the Leader of the Opposition could also personally help to defuse this issue. I say “personally”. It must be obvious to him that his party’s negative attitude towards the President’s Council is going to make it very difficult to get any of the leaders of the various race groups to sit around any form of table to discuss our future. I should respectfully like to suggest to the hon. the Leader of the Opposition that he should read between the lines of the speech directed to him by the hon. the Minister of Transport Affairs and try to see some of the positive aspects rather than just the negative aspects of the Government’s plans. I would further like to suggest that the hon. Leader of the Opposition should go and have a private and quiet discussion with the hon. the Prime Minister over this issue, away from the glare of publicity that might have motivated their previous stances. Possibly they can, between them, arrive at a compromise solution that could be acceptable to most of the leaders of the other South African race groups.

I am sure that all of us in this House realize that the sole alternative to dialogue and consultation is in fact confrontation and war—and that no one here wants. I hope no one in the House wants that. Based on that premise, I make a final plea both to the Government and to the PFP to forget their own parties’ private political positions and posturing and, for the sake of South Africa as a whole, to find some suitable and acceptable compromise to get us out of the cul-de-sac we are in.

Mr. Speaker, I would be grateful if I could be afforded an opportunity to furnish a short explanation of my personal position before I say anything further on the Bill before us.

Last Friday morning the hon. the Leader of the Opposition informed me that he was going to move in his caucus that I be suspended from membership of the caucus, and that he would make it a question of confidence in his leadership. A short caucus meeting was subsequently convened, and because it was not concerned with the merits of my actions, but with the leader and confidence in him, it was obvious to me that a suspension was a foregone conclusion. Consequently I did not attend the caucus meeting.

So I stand here as member of the PFP, although not as a member of the caucus. In this capacity I should like to make a specific appeal to the hon. the Leader of the Opposition before the Bill passes through its final stage. After the suspension, the hon. the Leader of the Opposition made certain statements about it in which he explained his action. To allow the tension which had arisen to subside, I decided not to become involved in a war of words, particularly not in the Press, with the hon. the Leader and the caucus. Nor did I participate in the debates subsequent to the Second Reading debate because I did not want to become personally involved.

Pursuant to the statements which were made by the hon. the Leader of the Opposition, however, I must make certain observations.

†I regard his action against me as unjustified, particularly in the fight of what had gone before in the Schlebusch Commission and in caucus meetings, although I say this without any feeling of personal antagonism. If he feels that I “undermined” a caucus decision by the speech I made last Thursday, let me add that the facts show that that could not have been my intention, because three weeks before the caucus took a final decision in regard to the party’s participation in the President’s Council, I told the Press, in answer to a question, that I was not opposed, and that I did not think that my party would be opposed, in principle, to participating in instruments and institutions created by Parliament, including the President’s Council. That is and was my bona fide belief, and the hon. the leader must know why, at the time, I had reason to believe it was so. I cannot and will not talk out of the caucus. I have never done so. This, of course, puts me in a difficult position. I admit that I am not a political Sancho Panza, but I was not an obstructionist, and in the final stages of long discussions, etc., in the caucus, I was prepared to support a compromise proposal. That is all I can say as far as that is concerned.

As far as my party-political position is concerned, I never entertained the idea of seeking another party. I did not just join the PFP. I helped to form it and I helped to formulate its federal policies. I have no intention of seeking to join another party, if I have to say it again in the face of the infantile and malicious Press speculation that I was joining the NP. I hope that the position will now be understood.

Now I want to come to the question of principles that are relevant to the Bill before us. We all—and I include myself— consistently supported the principle that there should be “the widest possible consultation and deliberation with and among all population groups” in the process of designing a constitution. Neither was there ever any internal difference between us in the party on the matter of the composition of the President’s Council. On that point I would vote with the party to make it clear that we continue to support our positive stand that the President’s Council should be representative of all South Africa’s population groups and that we are, as strongly as we said, opposed to the appointment, by the Government, of members to the House of Assembly, or any system that could distort the result of a general election in favour of the majority party. In no way did I ever demand that the party should weaken its point of view in respect of what procedures would be the better procedures to follow. I have consistently felt that we should use our influence as an Opposition to achieve the greatest measure of progress possible, but we are not in power and we do not constitute the majority in the country. The hon. the Leader of the Opposition is in a unique position to give a positive and constructive lead to the country, away from the negativeness that certain groups in the country are propagating. [Interjections.] For eleven months we have been participating, as a party, in the Commission of Inquiry into the new constitution, the Schlebusch Commission, which the English-language Press would describe as a “Nationalist-created”, all-White advisory constitution-making body. The hon. the Leader of the Opposition and his caucus have no intention of withdrawing from this body, and I do not believe they should. In fact, if the Schlebusch Commission had not now come forward with the present proposals before us, but had continued with its proceedings and had completed its mandate, we would have gone all the way with this “NP-created”, unilaterally White advisory constitution-making body. Not once did any of us feel “hijacked in favour of apartheid” by serving on this all-White constitution-making body. The PFP has a clear record. It has a breadth of vision which makes it speak up everywhere in the interests of all South Africans. That is what we did on the Schlebusch Commission as well, and this is what we would do in any and every other institution on which we serve. That is why I feel so strongly about the fact that it is our duty as a party, if not in our own party’s interests, then in the interests of all South Africans, for whom we always speak, not to withdraw from the very task of politics or from any machinery for change created by this Parliament.

Therefore I must say in all honesty that if we considered it right in practice and right in principle to serve on an “NP-created” advisory constitution-making body, such as the Schlebusch Commission—despite the fact that it is an all-White body, with no Coloureds, Indians, Chinese or Blacks participating on it, no logical person would, surely, dare accuse us of falling from principle or of being inconsistent if we also decided to play our role in another so-called “NP-created”, advisory constitution-making body such as the proposed President’s Council, which will in fact be multiracial, if not all-inclusive. In fact, a matter no South African should overlook—and that was instrumental in my forming my point of view—is the fact that here for the first time in the history of South Africa the significant principle is established of interracial deliberation and decision making at the highest level in a semi-parliamentary body on the fundamental question of constitution-making. I want to know who in South Africa would benefit by it if we ignored or belittled such a development?

*Surely we ought to know from experience that once one has established the correct principle, the correct practices inevitably grow from that. Consequently I think it would be a mistake—with all the criticism which we level at its constitution—not to concede that here for the first time we have a body which includes other population groups and not only Whites on a matter which affects the highest level of constitution-making in the parliamentary sphere.

†We all realize that it would be unrealistic to try to ask the hon. the Leader of the Opposition now, at this stage, to commit and to bind himself and his caucus beforehand to accepting participation in the President’s Council. Logic demands, however, that the party should then also not commit itself beforehand to a rigid line of nonparticipation in the council. I have already pointed out that as long as the caucus continues to serve on the all-White Schlebusch constitution-making body, service on the interracial President’s Council could not possibly be seen as a deviation from principle. If the President’s Council is incomplete in its composition, then the Schlebusch Commission is even more incomplete; it is, in fact, totally exclusive.

*It is therefore my opinion that serving on the President’s Council would not clash with a single PFP principle. In any event, a party does not sacrifice its principles by fighting for its principles and its standpoints wherever possible and on every available body. I wish to make it clear today that I am very deeply concerned about the party to which I belong being seen as demolishers, as wreckers, something which, I know, is not the intention.

The majority of them are.

I do not wish it—in fact I shall not be able to square it with my conscience—to be said of my party that they egg on the members of other population groups to be negative; leading the figures among the other population groups, people who even under the most difficult circumstances are prepared to give their co-operation to a course of peaceful constitutional change. We are all going to need one another in South Africa. Consequently no one can gain when instruments which are intended to bring renewal are belittled.

†We must realize that there are Black, Brown and Indian leaders who are so revolutionary-minded that they will not under any circumstances co-operate with Whites, or with a body such as the President’s Council, even if Blacks were appointed. If, say, 10 Blacks were to be appointed to the President’s Council, then my hon. friend and the PFP would serve on it. But would the Soweto Committee of Ten accept it? Would Mr. Mandela accept it? Would even Bishop Tutu accept it? Or would they not say: “No, it is still a Nationalist created toothless advisory, White dominated constitution-making body,” even if 10 Blacks are appointed? The point I want to make is that irrespective of what party is in power today, a tough and complicated situation is facing us m our country to which there is not one simple, direct solution. I therefore say to the hon. Leader of the Opposition that if there are any differences of approach in respect of these matters between him and me, then I should only like to add this: I feel sure that the hon. the Leader of the Opposition would want to play a constructive role and give a positive lead to all South Africans in the strenuous times which lie ahead of us, and I want to say that he should not worry about not being seen as a strong leader. We all want to see strong leadership, but he should not listen to kind liberal editors who are now suddenly telling him that Basson is not a bad chap, but rigid, inflexible caucus rule is right. Purge your party! The hon. the Prime Minister should also purge his party! If that is their understanding of our departure from the Westminster system, then we should try to re-educate them in the true art of parliamentary democracy. All the strong leaders which South Africa ever produced, men such as Gen. Hertzog, Gen. Smuts and Dr. Malan, were at their best when they led difficult coalitions and had difficult caucuses. Gen. Smuts had three parties in his war Cabinet and he had the most difficult caucus in history, but he would have scorned the idea of “skoonmaak” in his party, of purging his party of some of its members who differed in some respects from him.

As far as I can judge there are many capable business leaders, constitutional lawyers and other leading citizens, who are either members or supporters of the PFP and who would care to play a part in building up the new South Africa and to serve on the economic, the planning and the community relations committees of the President’s Council, if they were given the opportunity. I say, why should men like these be discouraged or be made to feel that they are obstructed by rigid caucus leadership? I believe that matters of this nature should be left to the personal decision of the people concerned. As far as the parliamentary party is concerned, I would suggest to the hon. Leader of the Opposition that once again he makes it clear to the country that the PFP is not opposed in principle to participating on bodies and institutions created by Parliament, that the party does have reservations at the moment about the viability of the envisaged President’s Council in its present form, but that it is premature to give a rigid ruling at this stage as to whether the party would participate on it or not. The hon. Leader of the Opposition would be doing the country a great service if he would ensure, because he has the confidence of his caucus, that the party be clear and determined in criticizing weaknesses and shortcomings wherever they appear, but would generally promote a spirit of cooperativeness among all South Africans in the process of designing a new constitution.

*Just before I resume my seat I should also like to address a few words to the hon. the Leader of the Government. Because people have been in touch with me, I came to realize that there really were prominent leaders in the Coloured, Indian and Black communities in this country, who were prepared to accept, at least as a starting point, the Government’s procedure as proposed by the Schlebusch Commission. Several of them discussed the matter with me in private. Perhaps some of them are still prepared to proceed with it, and I say again that if it depends on me, I shall encourage them to co-operate. For example I have a letter here from a very well-known Indian leader whom I have known for years and who would be a great asset to the activities of the President’s Council. He wrote to me on 6 June—

He went on to say that what had happened here, statements and attitudes on the Government’s side, had caused him to change his mind. I do not wish to repeat the statements of the hon. the Minister of Posts and Telecommunications now. He had the courage—and I respect him for it—to withdraw what he said, and as far as I am concerned, the matter is closed. It is not for us to re-open it. If someone takes the step of withdrawing something, the matter is closed. All that I want to say to the hon. the Prime Minister is that there are people, first-rate people, whom I know were prepared to serve on the President’s Council, but it seems to me that, under the circumstances, further steps will have to be taken by the Government to make those people feel again that they will be prepared to serve. I hope it will be possible to do so. I also hope sincerely that the hon. the Prime Minister will, at the right time, give attention to the possibility of a broader President’s Council, or a broader Constitutional Committee of the President’s Council, which will involve and include the Chief Ministers of the national States of the Republic, even though it is on an ad hoc basis, in the deliberations.

Mr. Speaker, I want to tell the hon. member for Bezuidenhout that I welcome his plea at this late stage of the debate and of this session, viz. that the party to which he belongs, must not be spoilers. I trust that this plea of the hon. member has not simply passed over the hon. the Leader of the Opposition, but that he listened to it very attentively. Then I want to tell the hon. member for Bezuidenhout that we have no quarrel with his logical thoughts and that no right-thinking South African will quarrel with the standpoint on principles that he adopted here. I think that only a person who has a negative attitude, can quarrel with the principle standpoint of the hon. member. Only a person who is obsessed with prejudice, malice and bitterness, can quarrel with that standpoint. I also want to tell the hon. member that I welcome the standpoint that he adopted, viz. that one cannot sacrifice a standpoint on principle by participating in the President’s Council. As far as the hon. member for Bezuidenhout is concerned, I want to conclude by telling him that I believe he is the only member of that party who has the courage of his convictions in this whole matter. However, perhaps it is not too late yet. I have looked at the hon. members of that party, and I think there are one or two other hon. members who have the courage of their convictions. The hour and the opportunity will soon arrive for those hon. members to stand up and reveal the courage of their conviction.

I should like to deal with the hon. the Leader of the Opposition now. Earlier today he said that this House had allowed a wonderful opportunity to go by. I agree with him that this House had a great opportunity in the history of South Africa, and I believe that the majority of this House utilized that opportunity, but the hon. the Leader of the Opposition was not in a position to lead his party in order to benefit from this opportunity. Then he comes up with the accusation that since we have left the Blacks out of the President’s Council, we are now angry with his party. However, we are not angry with his party, but what we cannot understand, is their short-sightedness, their lack of co-operation on such an important matter and at such a critical stage in the history of South Africa, and their failure to take into account the reality of South Africa.

He is making a few fatal mistakes. He is making one big mistake when he says that 70% of South Africa’s people are being excluded from constitutional change. After all, he knows that this is not the case. Surely he knows that the proposals that are before this House, create a President’s Council in which the Whites, Coloureds, Indians and Chinese are included, but surely he knows that a Black council is to be created and he knows that there will be negotiation. After all, it is not true to say now that 70% of South Africa’s people are excluded from constitutional development.

It is true.

I want to tell the hon. the Leader of the Opposition and the hon. member for Pinelands—he says it is true—that this is extremely irresponsible. At this particular time they are in the process of saying things that can cause tremendous problems for South Africa. I want to make an urgent, serious request of them to review the position of South Africa, to adopt a clear standpoint on principle and not to broadcast these type of words in South Africa. I want to say one thing in particular to the hon. the Leader of the Opposition; I say it in all seriousness. One day when he looks back over his career, there will be a date that he will regret. It will be that day when the hon. member for Sea Point took him in tow on the matter of the constitutional changes. This afternoon I want to say as commissioner that I am aware of the fact that he held a different view on matters, but I want to tell him that he did not have the courage of his convictions to carry through his own opinion.

He was hijacked.

He took strict action against the hon. member for Bezuidenhout and then went to his caucus to ask for a motion of confidence, but he did not need a motion of confidence. He should have gone to his caucus and they should have discussed the principle of whether they were willing to serve on the President’s Council and therefore to co-operate, because the issue here is not a leader or confidence in a person, but a principle …

Quite right.

… a serious, important matter in the interest of South Africa as the hon. member for Bezuidenhout emphasized and that is why he adopted his standpoint. However, I have realized the following: The interests of South Africa do not concern the hon. the leader. He does not bother about them. He sees his way clear to hold a caucus in order to obtain a motion of confidence.

They may deny that this is true, but there is one lesson that I have learned in life and this is that there is one thing that one cannot shake off—one’s conscience. One cannot shake off one’s conscience. If the hon. the Leader of the Opposition wants to be honest with himself, his party and South Africa, I believe that he must admit that he welcomed the measure that is before the House. However, I leave the hon. member of the Opposition there with his conscience. I just want to remind him …

But he voted against it.

Yes, very well, he voted against it, but surely we know other things too.

Why did you take votes there?

After all, we know other things too. I want to tell the hon. the Leader of the Opposition that he will think back to that day when the hon. member for Sea Point took him in tow and he caused his own political career to fail. However, I want to leave it at that now.

I now want to say that the acceptance of the principle of a President’s Council that is being introduced to advise the Government on a broad front, surely gives a very clear indication of the difference between the Government and the official Opposition. It is very clear from the proposals before us that the Government is following a policy that offers us elbow room in order to meet the problems in the South African community, a policy that enables us to create structures in order to study matters carefully and to find solutions. In other words, it is only a body with a vital, powerful policy that can produce proposals like this one. As the hon. member for Bezuidenhout rightly said, all the population groups will now be given the opportunity of sitting around a table for the first time in order to discuss these important matters. However, on the other hand we have the official Opposition with its rigid policy, that I want to call a one-eyed policy. I should like to motivate this statement.

A blindfold policy.

Let us call it a blindfold policy, as that hon. member says. They are following a blindfold policy with regard to problems in South Africa and the solutions that must be found for them. I want to motivate my statement.

If one looks at the President’s Council, one sees that it will have a broad, wide task. In other words, this council can operate on a broad, wide level. Amongst other things, it will give attention through its committees to the constitution, economic matters, planning and community relations. After all, these are the spheres where South Africa’s problems are to be found. From a socio-economic viewpoint, the President’s Council is therefore an institution that can bring about new hope, new vision and new momentum. I consider the President’s Council an institution that can show us new ways out of possible dead ends.

Let us be honest. One sometimes lands in a dead end and after all, one’s policy sometimes lands in a dead end too. However, now the Government comes up with a proposal that we should create a President’s Council, look at all these problems and bring about a new movement in South Africa. The Government wants to give the people of South Africa new hope and new vision.

A brand-new dead end.

I do not mind if the hon. member for Bryanston speaks so loudly, but he must please not open his mouth so wide, because I am not interested in his lunch.

The hon. the Leader of the Opposition is a sociologist and therefore he ought to realize the value of an institution such as the President’s Council. From a sociological viewpoint, it should be welcomed. Unfortunately, however, the hon. the Leader of the Opposition is blinded by the political viewpoint of his party. He is under tremendous pressure. The President’s Council is an institution of great socio-economic value.

I said that in contrast the official Opposition has a rigid policy. It is a policy by means of which they propagate and want one thing only, and that is a national convention, a national convention which will be composed of representatives only and where emphasis will be placed on people who represent population groups only, whilst the emphasis in the President’s Council is going to fall upon skill. Therefore, some of the best brainpower in the country is going to be gathered together in order to look at all the different spheres. In the so-called national convention of the PFP, all the attention will be focussed on politics, a constitution that will take up all the time, and all the other important matters will not enjoy attention.

That is why I want to ask the hon. the Leader of the Opposition to look at it from this angle too. He must not simply look at it from a political angle. He must not simply consider it from an angle where he thinks he can gain something for his party. Let us look at the broad South African set-up. Let us look at a council in which we can gather knowledgeable people, in which we can discuss things in detail and study South Africa’s problems in detail in order to bring about happiness and prosperity for all South Africa’s people.

The official Opposition says that they do not go along with the President’s Council because Black people are not involved. I want to make the statement once again that we have a great deal in prospect. After all, we are not starting from the beginning now. The proposals that we have here, arose from the Erika Theron Commission that made a clear recommendation. This commission was appointed on matters concerning the Coloured people. They made the clear recommendation that we should see whether the Westminster system of government should not be adopted. The Government accepted this and thus far, it has been worked on by a Cabinet Committee, the Schlebusch Commission, politicians and other people throughout the country. Therefore, after all we are not starting from scratch. I do see that the proposals are a new starting point at which all these matters can be brought together.

With regard to the Black peoples of South Africa, surely it is true that they have advanced considerably in the political sphere. After all, they have their own political structures. Surely it is true that there are many cases of self-government.

However, it is also true—we cannot deny it—that with regard to the Coloured people today we do not actually have anything in prospect. This is where our urgent attention is absolutely essential.

Now the official Opposition is refusing to accept the President’s Council. They are refusing to look at the interests of all the population groups in this country. They say they will boycott the President’s Council. Therefore, they do not want to co-operate in the interests of the welfare of the people of this country. This is how I shall always remember the official Opposition. I shall remember that they withdrew themselves from a fine, great opportunity where we could pool our energies in the interests of South Africa.

What we in South Africa need—we can see it clearly in these proposals—is a domestic action, based on negotiation, with peace and order in this country as the main objective. Now the Government has created the mechanism, the Government has made the vehicle available, and it must succeed. I am glad that we will have the Government, the NRP and the SAP on that vehicle, and that we will have leaders of stature from the other population groups. We shall make progress with this vehicle, whilst the official Opposition is boycotting South Africa’s future. The official Opposition knows that there is conflict ahead, but they are prepared to adopt the standpoint and say: “We are not going along; we are not going to cooperate.”

I want to conclude. If we can just forget the official Opposition, I want to make this request of all the other people in South Africa: “Let us make a success of this. Let us stop scolding and swearing at one another. Let us stop throwing stones at one another. We are being threatened by a common enemy, and what we need is a strong internal action against our enemy.” The official Opposition is not aware of the fact that we have a struggle against a common enemy. At this stage, they see their way clear to boycott.

Now in conclusion, I cannot but think of the fine words of a poet—and I want the official Opposition to listen now. When there was talk of a struggle—and this also applies to the struggle that we are waging at the present—the struggle against a common enemy, the poet said—

And now the official Opposition must listen—

Mr. Speaker, I have on many occasions in the past had some very sharp differences of opinion with the hon. member for Bezuidenhout. That is a matter of history which both he and I will remember. I must say, however, that I thought that his speech this afternoon was a speech of considerable courage. He ended that speech on a note I should like to begin on. I want to say to the hon. the Leader of the Opposition that it is quite apparent from the whole approach here that he and his party here in Parliament will not support the legislation we are dealing with. The point made by the hon. member for Bezuidenhout was that business leaders and other leaders who are not members of Parliament but who might be influenced by the attitude of the official Opposition, should be encouraged with every means possible to take part in the workings of the broader President’s Council. This vehicle has been constituted with the intention of achieving many things. It is not simply meant to arrive at a constitution for South Africa, but to investigate the whole socio-economic and political framework here in South Africa. In this we desperately need the co-operation of the best people the country can give us. I think it would be an absolute tragedy if we could not get that co-operation. I really hope that, whatever differences there may be in the House, when this body is constituted, those leaders will be prepared to come forward and give of their very, very valuable time. Let us make no mistake about it: There time is valuable to themselves and to their businesses. However, their time in this instance can be of the utmost importance to South Africa. I would like to echo the appeal that has been made by the hon. member for Bezuidenhout that those people should be prepared to work together to make a success of this body, which will be in the interests of all the peoples of South Africa and not just in the interests of a particular political party.

One of the points that has been made repeatedly by the official Opposition is the question whether this instrument is going to work. I think that that is a valid point. I should however like to put it to them that, if it can be made to work, it will produce an end which I regard as being greatly to be desired, and that is that one will have brought together all the different groups in South Africa to get to know one another and to negotiate and discuss in the close and intimate atmosphere of a conference of that sort a new constitution.

They are not all being brought together.

The hon. member must just give me half a minute. What I am saying is that, if it were possible to achieve that, that would be an end to be desired. I take it that the hon. members agree with me.

We, and I include the hon. members of the official Opposition, should not underestimate the ability of the Government to persuade leaders of all the groups to serve on a council of this nature and on the Black council to be formed. Let us understand one thing: There has been that most unfortunate incident of the hon. the Minister of Posts and Telecommunications, but that in itself will not bring to an end contact between White and Black in South Africa. That contact will have to continue to be there. We have to live together and there will have to be discussions. The very day on which the hon. the Minister of Posts and Telecommunications made his remarks, the hon. the Minister of Co-operation and Development in reply to a question spoke of the drought assistance to Ciskei. What he said struck me to the heart. He spoke of the effort that has to be made to keep the national breeding herd of Ciskei intact.

He said special measures would be taken to ensure that that herd was kept alive, co-operation that will continue, despite anything that is said in this House, necessary co-operation between the groups of people in this country who five eyeball to eyeball and will continue to live in that way for the rest of time. I do not believe that hon. members should now say that there is going to be no more contact and that such a structure will never be set up, because in myself I believe, as I said the other day, that what one is setting up here is a gathering of conservatives. Here we have a gathering of the conservative leaders of South Africa, and this is the one chance they will have of getting together, of putting their heads and minds together to attempt to extend, into the future, the constitutional process that has brought us to where we are today. That is the intention that the hon. the Minister has with the legislation he has brought before the House. The intention behind the legislation is to extend, into the future, by constitutional proposals, the traditions, the democratic process and the consensus that has brought us to where we are today.

Only the conservative elements in the population of our country are interested in achieving that, in carrying on that process. The radicals on either side are not interested. On either side the radicals do not want to see that happen. They have a specific interest in saying, on the one hand, that there should be revolution or, on the other hand, that there should be reaction, whilst those who are the conservatives want to continue the tradition on the road along which we have come so far. I simply want to repeat what we have said in the past. This is a vehicle that is adequate to the purpose. I do not think there can be any argument about that. I place on record my belief that it is in the power of the Government, the Prime Minister, by whatever action he has to take to re-establish his credibility, to put it on the line to Black people who wish to serve on this council that the Government is absolutely deadly serious about achieving, in this country, a working consociational, consensus-forming process that will include every group we have.

One of the problems we have to face is how the Government can do this. I think it is important to recognize, and to state here and now, that the nature of our politics is group politics. Let me therefore put a question to any hon. member in this House. Can anybody believe that the White man is going to surrender control of this Parliament to anybody else? I certainly do not believe so. I do not believe for one single instant that the White community in this country is going to surrender control of this Parliament to anybody else. That forms the basis of what we are trying to do, of what this party of mine has postulated for the future, and that is that there should be Parliaments or bodies, or whatever one likes to call them, for each group, allowing people to take decisions jointly, but that every group should have a bastion of power of its own, as we shall have here in this Parliament. If one accepts that …

If one accepts that, one can accept anything.

I am glad the hon. member said that if one can accept that one can accept anything, because if one cannot accept that, one is not part of the new process of politics in South Africa. Then one is not part of the move away from Westminster. Then one is left behind in a backwater, whilst the mainstream of South African politics goes forward in its own direction. That is what is going to happen. So I am glad the hon. member said that. Let me also put another question. What Black leader has demanded that the White man should surrender control of this Parliament? Nobody. No Black man has demanded that we should give up control of this Parliament. What they want is a system whereby we can work together, each from his own group, constructing a future for all of us together.

Ah, come on, Bill, surely you do not believe that?

We have had discussions with many people. If one analyses the whole question and asks them then whether they would accept the group basis on which we can work together because that was the last resort, the last chance, and that was what we either had to accept or reject, it is clear that people are prepared to acknowledge that there is a group, here in this Parliament, who will not surrender control of this Parliament. That is the reality. [Interjections.]

Order!

I want to put it to the hon. the Minister that if he is now going to go ahead with this process—and he obviously is—the way in which he can gain acceptance by other groups of people is if he should announce this now as a package deal. I think it is important that this should be seen to be a whole, so that the suggestion that is made to Black people that they are an afterthought, that they have been left out, should be avoided. I think the hon. the Minister should rather announce the whole deal together with the President’s Council, the Black council and the joint committees. The whole structure which is going to be put into motion should be announced simultaneously. In that way, I believe, it is perfectly possible that people can be persuaded to believe that they are not being left out or excluded in any way.

There is one other thing which, I believe, is very important. That is that what is envisaged here is a backroom operation as it were. What is envisaged here is not the grandstand, not the national convention, not the bright lights, not the big deal, but the backroom operation. It is the backroom where people can get together to negotiate quietly and seriously, away from the glare of publicity. It is the backroom where they can bare their souls to each other without compromising their own position in the eyes of their own people. I think it is extremely important that one should realize this.

For the purpose of the seating of people on this particular council and on the joint committees I do not believe it is even necessary that people like Chief Minister Buthelezi or Chief Minister Lennox Sebe should be members of the Black Council as such. I believe what we want are people who can do the practical negotiations. What we want are representatives of their groups. I believe that is extremely important, because the Prime Minister of our Parliament will not be a member of the President’s Council. The hon. the Minister himself, if he remains in the Cabinet, will not be a member of the President’s Council. What we want are people who are not of the top echelons, but who will be able to negotiate in good faith. I believe it is important that this should be realized.

Mr. Speaker, I am delighted to be able to follow the hon. member for Mooi River, whose contributions to this debate have been most reasonable. His contributions have reflected the reasonable and constructive attitude of his particular party and of that section of the Opposition.

In respect to the attitudes of people outside of politics, and in particular English-speaking South Africans, the heads of big companies, etc., it would be very interesting were some enterprising journalist to go along and ask the English-speaking heads of those major corporations whether they approve of the particular line which has been adopted on this legislation by hon. members of the Opposition. One recalls the statement made by Mr. Harry Oppenheimer, in London—I think it was—about a year or 18 months ago, when he said that he believed in a politics of involvement. One wonders just what the reaction would be of persons like Mr. Oppenheimer to the attitude adopted by the official Opposition.

I believe that the position which has been adopted by the official Opposition towards this legislation, and in particular their attitude of non-co-operation in respect of the President’s Council reflects the neuroses of that caucus. It reflects the isolation of the PFP caucus.

This has obviously been an important debate, and the issues discussed have ranged very widely. They have covered all the major facets of South African politics, and it is right that it should be so. The hon. the Leader of the Opposition, when he spoke in this Third Reading debate, said that as far as he was concerned there were fundamentally two issues in this debate. First of all there was the attitude of the Opposition and the Government on the question of the composition of the President’s Council. That is the first issue on which he invited argument. The second issue on which he invited argument was his party’s attitude towards participation in the President’s Council. Those, he said, were the two particular issues, and it is perfectly clear that those two are the issues on which this House will divide.

I want to suggest that in assessing the arguments on these issues, in assessing how arguments have been matched and who has won the argument in this lengthy and important debate, there are two basic sets of criteria which one could apply. The first is an intellectual one, a matching of argument against argument, and the second is the attitude of the party towards the country, towards the question of reform and its constructiveness in relation to the issues which reform raises. Those I believe are the two criteria which one would apply in this particular debate. When one examines the Opposition’s arguments, with respect, in particular, to the composition of the President’s Council, and in particular to the fact that Blacks are excluded directly from the composition of that body, one finds that the Opposition’s arguments can be broken down in the following way. At the simplest and most superficial level there has been an attempt at discrediting the President’s Council by attributing motives to the Government. This was the line that was adopted, in particular, by the hon. member for Bryanston in his speech yesterday, an attempt at discrediting completely this institution and writing it off on the basis of views which had been expressed down the years. That is a line of argument which one wishes to treat with contempt, which one regards as repugnant and which one regards as being totally unworthy of a debate of this kind.

There has, however, been a second kind of discrediting, and that has been to cast this particular institution, the President’s Council, in pejorative terms, in terms of apartheid. It is said to be an apartheid institution, an apartheid structure. Although it has been a theme which has run through the speeches of the official Opposition, the leader is particularly guilty of this in an article which appeared yesterday in the Cape Times under the heading “President’s Council a Political Vehicle in Reverse”, by Frederick Van Zyl Slabbert. The article states—

Fundamentally I see this article as a panic reaction. I see this article as an attempt at forestalling a backlash which the PIT is experiencing as a result of the position adopted by the hon. member and his Party.

Are you quoting from the article or from this debate?

I am quoting from a newspaper article written by the hon. the Leader of the Opposition, which relates to this question, but which does not deal with this debate, and the hon. member knows that very well and should stop wasting my time. As I say, I believe this article is the result of a panic reaction on the part of that party, because they realize there is a great deal of sympathy for the position adopted by the hon. member for Bezuidenhout. They realize that their position is not understood and that there is little support for their position on this particular issue. I am using this article to demonstrate one of the arguments which has been used. They speak, for instance—and this is a reference to a remark which was made by one of the Ministers in the debate—in the following terms—

They go on using terms of this kind. The article states further—

The hon. member knows that by using terminology in a certain way he evokes a certain negative reaction. He knows that very well. He knows too that this is the kind of argument which is likely to influence the attitude of Coloureds, Asians and others who are looking at this particular piece of legislation.

The third argument which the hon. the Leader of the Opposition used was that no constitutional arguments were advanced from the Government side for the exclusion …

No, you did.

No, the hon. the Leader of the Opposition said that from the Government side no arguments of a constitutional nature were advanced for excluding Blacks from the President’s Council.

No, I did not say that.

There was a clear statement to that effect, and the fact is that that is nonsense. In the first place we all understand that a party-political statement, a party programme, is a formalistic thing. It is a simplified thing. Generally it contains catch phrases, because one is aiming at getting as wide a support as possible for a particular point of view. Underlying a party’s policy, however, are certain assumptions about society, about political processes and about constitutions. There are certain basic premises and fundamental principles. Underlying the Government’s attitude to the President’s Council, there are certain fundamental constitutional assumptions, and it is nonsense to try to write off the President’s Council as simply being an expression of party policy or as an “apartheid” structure. I shall deal with this point in detail in a while.

What I want to say now, however, is that when one looks at the President’s Council, and focuses solely on the exclusion of Blacks, and says, as the Opposition has constantly done, that this means that the Blacks are excluded altogether from the process of deliberation and consultation which was envisaged by the constitutional commission in its interim report, that is not correct. It is not correct, because, paragraph 8(b) states very clearly that the commission is of the opinion “that in the process of designing future constitutional structures there should be the widest possible consultation and deliberation with and among all population groups, in an attempt to raise the level of acceptability of any proposals in this regard”. It is to the credit of the NRP members that they have seen this point and that they have driven it home. However, that point has otherwise been ignored. Furthermore, both in the arguments here in this House, and in this particular article which the hon. the Leader of the Opposition wrote, there is a complete dismissal of the process of deliberation and consultation which is already going on between Blacks and leaders of the White community at a whole variety of levels.

The hon. the Leader of the Opposition, in this article, speaks over and over again of the Black majority having been excluded from these constitutional proposals. This is not so however because, there are the Black States, such as the Transkei, Bophuthatswana and kwaZulu which are platforms from which Blacks are negotiating directly with the South African Government on a level of equality, or formal equality.

You are destroying your argument.

The hon. member for Hillbrow says I am destroying my argument. I am not doing that at all. I am introducing a little bit of perspective into this. This is not a case of Blacks being excluded altogether. While I would expect others to deny this, I would not expect the hon. the Leader of the Opposition to deny that those Black States have contributed to racial justice in South Africa, that they have contributed to a reduction of racial conflict in South Africa, that they have contributed to, or enhanced, the principle of self-determination in South Africa and that they have contributed to the growth of political expression in South Africa. So, in talking about the role of the President’s Council …

[Inaudible.]

Mr. Speaker, if that hon. member wants to keep putting questions, I shall take a question directly from him, but it is extremely rude just to keep on putting stupid questions that have no meaning whatever.

Mr. Speaker, when the hon. member for Cape Town Gardens refers to independent States developing justice, could he tell us which States he has in mind?

What I did say, and it is typical of the official Opposition that they misinterpret one’s words …

Just answer the question.

The hon. member over there should keep quiet. I am answering the question. What I said was that the creation of those States reduces the possibility of racial injustice in our society. That is what it does.

You did not say that.

I said that they minimized the potential for conflict in our society, and I am referring to all those States. The transfer of political power on territorial lines is part of a whole process of deliberation and discussion of an intercommunity, inter-group nature, which this Opposition totally ignores in this debate, in its approach to this particular issue. It tends to cast the President’s Council in terms of all Blacks being excluded from the deliberation process. We admit that for Blacks outside the homelands this is a developing process. The hon. the Minister made that point in his Second Reading speech.

To return to the argument of the hon. the Leader of the Opposition that no constitutional grounds have been offered by Government spokesmen to justify the exclusion of Blacks from the President’s Council. The hon. member spoke yesterday—or perhaps it was earlier today—of constitutional responses in this respect. We accept—and I believe he accepts too—that the simple classical model of majoritarianism—“one man, one vote” in a single system—does not work in a diverse society. He nods his head in agreement. In that case he will agree with me when I quote somebody of the standing of, for example, A. Lijpaart, an expert. He says one is then left with three possible responses, three possible ways of reducing the pluralism of a society to the point that democracy becomes possible. The first response is assimilation, which is impractical in our situation; the second response is consociationalism; and the third is partition. The hon. the Leader of the Opposition will concede that the President’s Council comes closest to the consociational model. He wrote a book in which he dealt basically with consociationalism, and he came to the conclusion that as a matter of fact the odds that are against—those are more or less his words—consociationalism working for the whole of the South African population.

What page is that on?

He does not need to ask me that. He knows where it is.

That is not true.

You take a chance, not so, Dennis?

In this respect there are excellent authorities, e.g. Lijpaart who says he does not believe that it will work for all the population groups in South Africa. [Interjections.] This happens to agree with the views of somebody like Prof de Crespigny who similarly says it will not work.

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

No, I shall not take questions from that hon. member.

One is then left, if assimilation will not work, and if consociationalism will not work for the whole society, with the principle of partition.

And apartheid will not work.

The fundamental thrust of the Government’s response to the problem of diversity in our society is, in fact, the principle of partition. Transkei, kwaZulu and all those territories are expressions or applications of the principle of partition. So therefore, for the hon. Opposition to argue that there is no constitutional basis, is nonsense. In terms of the hon. the Leader of the Opposition’s own book, and his own theories about the response to democracy in our kind of society, he ought to be supporting the President’s Council.

To turn to the other question raised by the hon. the Leader of the Opposition, viz. that of their participation in the President’s Council, and their decision to withhold their support, I want to say that I believe there are two reasons for that attitude. Firstly, contrary to the hon. the Leader of the Opposition’s claim earlier today that his party does not take an all or nothing stand, the fact is that it does. Theirs is a completely uncompromising attitude. I quote from The Cape Times article—

Just listen to this—

This is an “all or nothing” statement by the PFP. That attitude flows from a certain presumption, from what I would describe as a benign superiority on the part of a certain section of the English-speaking intelligentsia with its attitude of “we could do this thing all that much better”.

The second reason for the PFP’s decision not to have anything to do with the President’s Council, its decision not to participate in the President’s Council, has a great deal to do with the ideological tensions within that political party. Although the hon. member for Bezuidenhout was very discreet and diplomatic, he nevertheless indicated that this is so and confirmed this interpretation. In that particular political party there are two basic approaches. There are the hardliners and there are the pragmatists. The hard-liners accept that polarization and confrontation is inevitable in our politics. They believe that and hold the view that now is the time to start forming alliances with Black leaders and Coloured leaders. Their view is that White initiative cannot really resolve the problems of South Africa and that the Whites are irrelevant in the South African scene.

The pragmatists however, who were led by the hon. member for Bezuidenhout, take the view that White initiative is still a factor in South African politics and that if one must necessarily make compromises to White public opinion to achieve general advances in race relations, particularly in terms of political expression, one should make those compromises. That is the view of the hon. member for Bezuidenhout who correctly sees this Bill as a very important Bill which creates possibilities for an expanded democracy in South Africa which will accommodate the interests of all population groups. What happened in that party was that the hardliners won. They kicked out the hon. member for Bezuidenhout, who was the sacrificial lamb, not essentially because of his attitude on participation in this council, and not because of the advice he said that he would give persons of colour, but because of that strong condemnation, by him, of the fact that their party’s policy could not, in terms of the Schlebusch Commission, be one of “one man, one vote” and that anybody who believed that should get out of the party. That was the spark which caused his expulsion. [Interjections.] That is why the hon. members of that political party have been so dogmatic in their arguments that the President’s Council must fail, that it will be a total “mislukking”, as the hon. member for Bryanston put it, that it will never get off the ground. There was a frantic, almost frenetic, quality about their opposition to this particular provision. Not once did a single hon. member, in any one of the many speeches one heard in the Second Reading debate and in the Committee Stage, say that though this was a flawed institution, he wished it would work, even though he did not believe that it would work. Not a single word was said in this respect. It is to their total discredit that not a single one of them adopted that attitude. I want to conclude with a reference to an editorial which appeared in the Sunday Times of 25 May under the headline “Don’t Get Stuck on the Sidelines”. Seeing that this editorial was written on 25 May, there is a certain prophetic quality about this editorial, and that is why there is a sort of uneasy and nervous giggling among the hon. members of the PFP at the moment. [Interjections.] The editorial points out that a multiplicity of institutions is not an undesirable thing in a pluralist society. The editorial goes on to say—

The editorial then says—

I believe this is an excellent comment on the sort of crisis which the PFP is going to find itself in. It has been completely discredited as a political party which talks about the desirability of deliberated social reform. It has put itself on the sidelines.

Mr. Speaker, I will not devote much time to the speech of the hon. member for Cape Town Gardens, except to say only two things, because all the matters raised by the hon. member this afternoon have been very clearly dealt with, over and over again, by hon. members of my party throughout the debate.

The hon. member once again used the opportunity this afternoon to push a little further his own politics of partition, the politics which says that South Africa must be divided up into separate States. However, his partition, as he sees it, is partition in terms of which one part of South Africa will somehow—and this is not defined—try to accommodate the Whites, Coloureds and Indians and the other sections of South Africa, i.e. the remaining 13% or 14% of the country, will try to accommodate all the Black people of South Africa. He bases this on the premise that partition becomes necessary when there are peoples of irreconcilable, conflicting interests who cannot be accommodated in one country. He says this of the indigenous Black people of South Africa. I want to ask the hon. member what it is that makes the Black people of South Africa so irreconcilable to the rest, yet does not make the Indian people of South Africa just as irreconcilable to the rest? There is no moral or logical justification for discriminating or differentiating on that basis. Partition politics is the politics of despair. It is the politics which propagates that there are no other solutions available to South Africa, and it is the politics which will allow of no consensus or negotiation or of learning to live together. He praised the homeland Governments and the homeland authorities for using the institutions of government to further their own causes, and he contrasted this with the actions of the PFP and asked us why we were so negative in our attitude towards the President’s Council. We have only one question to ask the hon. member, and that is: Could he please name one single homeland Government which has intimated that it will participate in the President’s Council and in its little adjunct, the Black Council? Let him name us one homeland Government which, if it has not agreed to participate, has expressed support for the concept, or enthusiasm. We will find that the answer is that there is nobody.

You have done a lot to encourage them.

The hon. member for Rissik will forgive me if I take further a quotation he used. He used the time-honoured quotation “Mené, mené, tekel, upharsin”. That is to be found in Daniel, 5. His interpretation of this statement relating to the writing on the wall is that the writing on the wall is there for the PFP, but he did not read the text of what was written, for it is written—

If we are to use a quotation from the Book, the quotation says not that the writing is on the wall for a section of a community, a party or a point of view, but that the writing is on the wall for the kingdom, for South Africa, for the country.

Why, I ask, do we believe that the writing is on the wall for South Africa? We look around us, we read the newspapers and we talk to people on the streets, in our homes and at community meetings. There are riots in this country, there have been strikes, there are marches, there has been sabotage, there is conflict and we have seen an escalating and alarming growth in terrorism. This challenge which we are witnessing and which is becoming part of the life of South Africa must be met. It must be met not by military action, not by policing of the suburbs or the towns—it can only be met by developing a society which is acceptable to the majority of the peoples who live in it, a society which must be acceptable to the Whites as well, and not only to the Blacks, the Coloureds or the Indians.

In seeking such a vehicle, a vehicle in which to move towards such a society, we must ensure that it will be a vehicle which will be capable of drawing support from all sections of the community, of enjoying the respect of all sections of the community and, above all, of enjoying the participation of all sections of the community. However, the President’s Council, as set out in this Bill, and the Black council which goes with it, has been rejected by the Coloured leadership of South Africa. Can anybody deny that? It has been rejected by the leaders of the majority Indian party. It has been rejected by all the urban Black leaders of any consequence. It has been rejected by the homeland leaders. It has been rejected by Inkatha and by Mr. Sebe, the head Minister of Ciskei. The hon. member was praising those people a few moments ago. They are people and parties and representatives of bodies who have in the past taken part in Government institutions to further the cause of their own people. They are not radicals. Why has this body been rejected by every respectable Black leader in South Africa?

Have you asked them?

Yes, we have asked; we have read and we have listened …

I know you have!

… and we are conveying what that hon. member should already know, and that is that they see the Black council as inferior, as almost insulting to them and to their people. They see it as totally inadequate to meet the needs of the present time. They see it as an extension— not a breaking down—of the apartheid system. It is because of that rejection, which is known to all of us, that any person who takes part in that little Black council, sitting in isolation except when its members are invited to tea by the rest of the President’s Council, will find himself distanced from his own political constituency. [Interjections.] That was the fact of life last year and before that in Rhodesia, and that is going to be the fact of life in South Africa today.

Yes, if you have anything to do with it.

Whether hon. members believe it or not, the PFP is the last White buffer between Black radicalism and White exclusiveness. It is the only democratically elected White buffer that has representation in this House. If we had given notice that we would serve on this institution, in its present form, we would have forfeited our right to any sense of sincerity in our attempt to bring about a rational meeting of minds …

Do you know what happens in history to people like you?

… of those who today are in opposite camps.

They are squashed.

The hon. member for Mooi River asked why we opt out of the mainstream of politics. I ask him, however: Where, today, is the mainstream of politics? Is the mainstream of politics to be found exclusively in this body? [Interjections.] I say it is not. The mainstream of politics is to be found in the relationships between this Parliament, this Government, and people who have no representation in this House.

The mainstream of politics is to be found in the frustrations and in the undercurrents of the townships of South Africa. There is no time left, in South Africa, to create mechanisms which cannot assist progress, which cannot assist consensus, but which will serve only to polarize further the different communities of our country. So I say that the writing is on the wall, and I say it especially to that hon. member for Rissik. The writing is on the wall, yes, but it is not on the wall for the PFP. It is on the wall for all of us, whether we be Nationalist or PFP, or whether we be Black or White. Solutions must be sought and vehicles must be created, but they must be vehicles of unity and not of division.

The hon. member for Bezuidenhout spoke a few moments ago.

Jolly well.

I see he is not with us.

We have noticed that.

I see he is not in this House, but it is my duty to say a few words for his benefit. He stated that my hon. Leader had ’phoned him and said that he felt that the hon. member for Bezuidenhout had undermined the caucus’s standpoint, and the hon. member said he had not meant to undermine the caucus’s standpoint. I want to say, on behalf of my colleagues, that it was not only my hon. Leader who felt that he had undermined the caucus’s standpoint.

The clique.

It was all of us who felt that he had undermined the caucus’s standpoint. [Interjections.] I state, without fear of contradiction, that it was the entire caucus who believed that. It is not a question of having total rigidity in a party. I want to say that the hon. member for Bezuidenhout has, over the past year, enjoyed anything but total rigidity in the viewpoints which he has expressed.

Quite monolithic, you see.

It is not a question of enforcing total discipline. It is a question of making the PFP an understandable, a rational and a clear-cut party with a clear-cut point of view. In this party of ours we honestly do not wish to create another United Party. [Interjections.] We do not want another United Party, which never had a point of view which could be understood. [Interjections.]

Order!

We were asked why we served on the Schlebusch Commission but were not prepared to serve on the President’s Council. We are not opposed to serving on a parliamentary institutional body. There is a big difference, however. The Schlebusch Commission is a direct result of a decision of this House. It originated as a Select Committee. It was reflecting of Parliament. We have opted to play a role in parliamentary politics in South Africa. It is and was our duty. Taking into account its very mandate it was our duty to serve on this body, just as it is our duty to serve on a sovereign body, a body such as this, whose decisions have the force and the effect of law on the lives of all the people. It is our duty to argue our standpoint, to try to improve our position, to try to change the Government, and then, in that way, change the very system itself.

How can you change the Government if you cannot even change Japie?

The President’s Council is, as I have said, a very different kettle of fish. I should like to say to the hon. member for Bezuidenhout—who is not here at the moment—we have come a long way together. I have often listened in admiration to the political wisdom of the hon. member for Bezuidenhout.

Especially today.

He was one of the elements …

You should have listened to him again.

I am proud of what he did in those days. He was one of the elements of inspiration of the reform movement in the old United Party, all of eight, nine, ten years ago. It was something of his actions which gave birth to the party in which I find myself today. I have always known him to be a man and an hon. member who has been at the forefront of enlightened thought in the political party of which he was a member. He does not support race discrimination. He stands for peaceful negotiation, for a just society, and he does not support apartheid. The hon. member stands firm, however, on the matter which led to his expulsion from the PFP-caucus.

I am pleased to see the hon. member for Bezuidenhout has come back into the House now. [Interjections.] I want to put it to the hon. member that it seems to me that we have come to the parting of the ways. We wish him good fortune. I must say a week is a very long time in politics. A month is a very, very long time in politics. A year is an age. Who knows? In the difficult times that South Africa is going to face, perhaps our paths will cross again, but it seems not for the moment.

We have now come to the end of the debating of this Bill. What do we have? What is the end result of this? We have a Vice State President, which nobody called for. We have 12 extra members of Parliament, which is a retrogressive constitutional step. We have a unicameral system, which is no long-term solution. We have a President’s Council, from which 70% of South Africans are excluded. Yet, that then is the answer that this commission and this Parliament brings to a very serious situation facing South Africa. There have been no arrests made in regard to the arms cache found in Natal, in regard to the attack on the Booysens police station, in regard to the attack on the Moroka police station, in regard to the sabotage attempt at Sasol. There have been no arrests. Nobody has been detained. Nobody is in jail. The people who are doing these things have both organization and expertise, and what is most alarming, is that they have support amongst certain groups of people who keep them hidden. [Interjections.]

I want to state that we are reaching a stage in South Africa in which we are in the third stage of revolution. Political subversion has taken place. Organization has been put into these attempts. We are now seeing the tip of the iceberg, which is a form of open terrorism which is beginning to occur in South Africa. It is not a question of avoiding a war. We are in a war. Yet, the Government comes along with this President’s Council to solve the situation. The sands of time are running out, and unless real reform is forthcoming we may well find that our kingdom will be divided and given, not to the Medes and the Persians, but to the Marxists and the enemies of us all. The duty before us is clear. [Interjections.]

Mr. Speaker, I shall not devote much time to the hon. member for Sandton. I think I can also say to him what he has just said to the hon. member for Cape Town Gardens, viz. “I shall not devote much time to the hon. member because all the matters he raised have been dealt with ad nauseam in previous debates.” However, I want to say that what is characteristic of what he said and of his party too, is the negative and destructive way in which he approached this entire matter and once again gave a clear indication of the way in which he tried to anticipate the question of a Black Council by calling up and inspiring every responsible Black man in this country to cause the Black council to fail as far as possible.

Then I immediately turn to the hon. the Leader of the Opposition. The main point that he made in his speech, is that the President’s Council excludes 70% of the people. I now want to quote to the hon. the Leader of the Opposition one of the key decisions of the commission, a decision that we took unanimously and upon which we all agreed, viz. paragraph 8(b) of the preamble to the report, which reads as follows—

In their minority report they accepted this paragraph 8(b) and repeatedly alleged that they supported paragraph 8(b) unconditionally. In other words, in actual fact, before we came to the true merits, etc. of the President’s Council, we agreed that paragraph 8(b) was not only a declaration of intention of all the parties that participated in this commission, but that paragraph 8(b) was in actual fact also a contract between my party and his. Now I ask the hon. the Leader of the Opposition: In what respect is this side of the House guilty of a breach of contract? Where has it broken its word in any respect with regard to this matter, viz. to give all population groups the opportunity of consulting with one another and negotiating with one another? It is stated here; it is broadly stated, and if the hon. the Leader of the Opposition debates it until he is blue in the face, we are creating in clause 106 of this draft legislation the machinery by means of which all population groups in this country can negotiate with one another and can consult with one another. This side of the House has a clean conscience as far as this is concerned, that it has fulfilled its share of the contract.

I do not want to devote much more time to the hon. the Leader of the Opposition, nor do I want to say much more. It is very clear from the attitude of the official Opposition in this regard that they oppose the essence of this legislation, viz. the President’s Council and the office of Vice State President. It has become very clear from the debates here that they went out of their way, as far as the true essence of this legislation is concerned, to obstruct it and to encourage withdrawal. However, I want to go further. I do not want to make any positive allegations towards hon. members of the official Opposition in the House, but I want to tell them that they have established a pattern of action here in the House that will be welcomed and will be a green fight to radical elements of their party outside this House. I am very sorry that the hon. member for Yeoville is not here. Those radical elements are elements like some leftist radical groups of young people in that party who are undermining national service in this country.

That is nonsense.

What are you talking about?

What those hon. members have done here by implication today, is to give the green light to those elements to continue with obstruction and withdrawal in the greatest possible degree. I want to go further and in the first instance say that I am well known for not thinking sectionally as regards the attitude between Afrikaans and English-speaking people in this country, and what I am going to say now, must be seen in that light. I want to tell the hon. the Leader of the Opposition personally that, as a result of the way he handled the hon. member for Bezuidenhout, his personal dream of gaining access and acceptance amongst Afrikaner academics, is in ruins. The hon. the Leader of the Opposition is laughing. After all, we all know that he regularly visits Stellenbosch. We know of the abortive attempt that he made a while ago in a certain election at Stellenbosch. Deep in his heart, the hon. the Leader of the Opposition holds the ideal of becoming the Leader of leftist liberal Afrikaner academics. Even in their ranks his ideal is in ruins. What did he do? He is in the process of kicking a fellow Afrikaner out of his party.

What did you do to Hertzog?

Whether one agreed with the political views of the hon. member for Bezuidenhout or not, he is a person who gave his speeches and writings a well-thought out, philosophical and academic content at all times. I want to tell the hon. the Leader of the Opposition that in this harsh political life of ours in South Africa that on the one hand, one simply cannot be the “blue-eyed boy” as he is at the moment, of leftist liberal English newspaper editors and at the same time fulfil the ideals that one would so much like to fulfil, viz. to be the leader of the Afrikaner academics who are left of centre. [Interjections.]

As chairman of this commission I did not interfere by referring to the minutes of the commission and I definitely do not intend to do so now, but I want to tell him in all seriousness that I have learned my lesson. [Interjections.] In the future I shall ensure that before a commission that consists of members of Parliament makes decisions, it is transformed into a Select Committee so that its decisions can be available for public perusal.

Go ahead.

In conclusion, I want to tell the hon. the Leader of the Opposition that he has in fact given us an example of forcefulness, by excluding the hon. member for Bezuidenhout from his parliamentary caucus. I want to ask him whether he will continue with this policy and image of forcefulness. Is he in fact not going to implement as party policy what he undertook and endorsed in this report, viz. that he is not in favour of “one man, one vote”? Is he going to tell us whether he is also going to take action in a forceful, disciplined manner against the hon. member for Houghton? I am pleased she is here. I have here a newspaper report that I have not checked.

The Oosterlig of 17 January 1977 alleges that she said on British television that the unavoidable consequence of her party’s policy is Black majority rule in this country. [Interjections.]

I did not say that at all. I said something quite different and it was qualified by a number of other factors.

Since the hon. member is so kind as to react, will she tell us whether it is true that she said in Australia: “It is a matter of time before there will be a majority of Black voters on the common voters’ roll, but we still hope there will be a multiracial parliament emanating from that?” [Interjections.]

Can I ask the hon. the Minister a question?

He is asking me a question.

Will the hon. the Minister answer a question?

Will the hon. the Minister answer a question? It is very simple.

Will the hon. member for Houghton tell us whether it is true that she gave this reply when the question was put to her: “Under the electoral laws which your party favours …”

Will the hon. the Minister answer a question, just one easy question?

“… how long will it be before there is a majority of Black voters?”

Write to me and I will give the answer to you in writing.

I leave the hon. the Leader of the Opposition at that. However, I just want to say that he will not take disciplinary steps against the hon. member for Houghton; he will not take disciplinary steps against the leftist radical section of his party. [Interjections.]

He cannot afford to do so.

He cannot afford it because he is their captive. [Interjections.]

I want to thank the hon. member for Rissik, particularly for his words that the NP has the will to solve things in this country.

I also want to thank the hon. member for Durban Point once again for his positive contribution and for the fact that he pointed out that, as far as he is concerned, a negotiating mechanism has been created which is not perfect, but in which he and his party will participate nevertheless. I am sure that the hon. the Prime Minister will take his words into account that it is of vital importance for the two councils that are to be created, to function and operate together from the very start so that there will be no doubt that the one may be inferior to the other.

The hon. member for Pietermaritzburg South attacked me once again on the question of the 12 additional members. I dealt with this fully during the Committee Stage and I do not intend discussing it again now.

Now I want to come to the hon. member for Bezuidenhout. I want to compliment this hon. member on his courageous action here in the House today, and I want to thank him for his meaningful, sound co-operation in the commission and for the logical explanation of his behaviour. If the hon. member has not yet read what I said during my Second Reading reply, I want to tell him now that I said favourable things about him in my reply and said that the hon. member was very clearly hankering after a unified view on how we should solve our crucial problems in the future. I am sure that he will not simply leave it at hankering after, but will actively assist by making a positive contribution.

I am grateful to the hon. member for Oudtshoorn for once again pointing out that the President’s Council will not have narrow terms of reference, but in fact will have very wide, broad terms of reference, and that the President’s Council will not only enrich our constitutional life, but the entire sphere of our domestic economy with its advice.

Once again I want to thank the hon. member for Mooi River for his positive contribution and tell him that when the President’s Council is constituted, it will definitely give serious, urgent attention to his request that some of the council’s consultation should take place in camera, for the sound reasons that he gave.

I want to thank the hon. member for Cape Town Gardens for the effective contributions that he made in several of these debates and for his logical explanation of the options that are facing us with regard to the constitutional development of this country.

With that we have come to the end of the Third Reading debate. I want to convey my hearty thanks to all hon. members who made positive contributions in this regard and to all hon. members who were members of the commission, for their co-operation.

Mr. Speaker, I move—

In the light of the prediction relating to the escalation in the incidence of terrorist onslaughts, attention has been given for some time now to the improvement and streamlining of security measures, particularly at those industries and places identified as national key points. For this purpose the security forces have in the past devoted their energies to motivating the management of the bodies mentioned and advising them as regards the tightening up of security measures.

Although the desirability and need for the provision of appropriate legislation relating to the protection of national key points has been realized for some time now, the recent events at Silverton, Booysens, Sasol, Secunda and Natref proved beyond all doubt that the introduction of such legislation has now become a necessity.

At the moment the Republic of South Africa finds itself in the midst of an unconventional war which up to now has been of relatively low intensity. However, it may be expected that in future the terrorist onslaughts will increase both in frequency and intensity.

There are also many other places and areas which, like Sasol, render such important services or manufacture products of such national importance that destruction or damage to them could cause the Republic and its inhabitants incalculable harm. Not only could the State be handicapped thereby in any war effort, but it could also result in domestic law and order being seriously prejudiced. The aim of this Bill is to declare such places and areas as national key points to ensure that appropriate security measures are taken and maintained there and that the owners of those key points have adequate powers to implement those measures.

Clause 2 vests in the Minister the power to declare those places and areas national key points. Subsequently it will be the responsibility of the owner to ensure that he introduces and maintains effective security measures. Where he does not do so, or does not do so to the Minister’s satisfaction, clause 3 vests in the Minister the power to oblige him to do so. It is realized that these provisions are drastic, but in point of fact there is no alternative. The private sector is in the front line of a terrorist onslaught. The enemy threatening us can best be combated by a calm and determined Government, public and business community, that derive their calm from the knowledge that essential security measures have been taken and that they will therefore be better able to deal with the element of surprize which is so characteristic of terrorism. The power acquired in terms of clause 3(2) in particular will, therefore, be appropriate where the necessary understanding of the onslaught on us is lacking and the security awareness is inadequate. Indeed, security is the responsibility of all citizens. If all play their part, survival and progress is guaranteed.

†Key points where little or no security measures have been implemented provide attractive targets for the country’s enemies. Although the majority of owners of such key points have been positive about security, the Government cannot allow the State’s interests to be jeopardized by the indifference of a few people. It must be appreciated that the South African Defence Force, the South African Police and the Railway Police cannot always be on hand to deal with sudden emergencies. Terrorism, by its very nature, endeavours to select the battleground and to involve the innocent, the prestigious, the unprotected and the newsworthy. It is therefore imperative for the owners of key points to secure these adequately.

*Clauses 4, 5, 6 and 9 provide the measures that are necessary in order to proceed with the administrative processes that will arise out of the implementation of this Bill.

In terms of clause 7 the State and its servants are exempted with regard to acts carried out in terms of the Act.

As regards clause 10(1), it is stressed that national key points are as important as “prohibited places” as defined in section 1 of the Official Secrets Act, 1956. Accordingly it is essential that all acts that constitute an offence with regard to a “prohibited place” in terms of that Act must also constitute an offence in regard to a key point. On the other hand, there are certain “prohibited places” that are not key places, and vice versa. Accordingly, these omnibus provisions have been included to avoid unnecessary duplication of offences.

Clause 10(2)(a) and (b) are intended to meet some obvious needs, while the principle contained in subclause (c) is required to prevent information and security measures concerning key points from being compromised.

†Clause 11 is also important. The enemy’s unconventional methods can precipitate sudden change, and in order to apply such measures as he may deem appropriate to those circumstances, the Minister is empowered to prescribe by regulation what a guard at a key point should be able to do. This is complementary to the principle embodied in clauses 2 and 3 and provides the legal machinery whereby the owner will be enabled to undertake basic security measures by means of the guards which he employs at his key point.

Clauses 12, 13 and 14 are self-explanatory and, as in the case of clause 1, do not require any further elucidation.

*Finally, I want to stress that security measures as provided for by this Bill, which include primary counter-espionage and subversion measures, are the responsibility of the management of the industry concerned. Physical protection or defence, where necessary, will be supplementary to these measures in the form of an element or unit of the security forces. Legislation to regulate such activities already exists.

Civil protection, which is and remains the primary responsibility of the provinces, is concerned with the survival of the civil population of the RSA and the protection of property, in a different way to armed action, the provision of assistance to persons and the combating of civil disruption during a state of emergency or disaster, and entail activities in the field of communication, firefighting, medical care, traffic control, rescue work and evacuations.

This, then, is the safety and security network as it will be after the Bill under discussion has been passed.

Mr. Speaker, in the first instance I should like to express my gratitude towards the hon. the Deputy Minister and also towards the senior officers concerned for the courtesy afforded us in explaining this piece of legislation to us beforehand. It is a measure which has come before the House somewhat hurriedly, near the end of this parliamentary session. We do appreciate the fact that the senior officers concerned spent the time with us in order to ensure that the implications of the legislation were explained clearly to us.

In the second instance I should like to state that we in the official Opposition will support the Second Reading of this measure. The reason for that is a very simple one. That is that we disapprove of violence and of terrorism. We disapprove entirely of what is in fact the objective of this Bill to combat, namely—if I could use the very words of the Bill—terrorist activity, sabotage, espionage and subversion. We object to all these practices. We shall fight them all and oppose them all. Therefore, as the principle is to secure national key points in South Africa, which are key points for the country and which are vital to all of us, the principle of this measure meets completely with our approval. The question one should ask, and which the hon. the Deputy Minister has not really answered yet, is why this measure is only introduced now and not a long time ago. Terrorist threats to South Africa have long been obvious. The potential for escalation of these threats has been there for a long time. If measures were needed in order to bring about this form of protection, it is only fair that we should ask why it is only done now and not earlier. The second question which I believe we should ask is whether the other aspect which goes with this, namely civil defence, is in a state in which it can deal adequately with the potential threats which are there. I should like to suggest to the hon. the Deputy Minister that there are many aspects of the civil defence organization which need attention. In particular in many areas of South Africa that organization is not yet functioning adequately. We do not want it to be put to the test and to be found wanting. We want a situation in which, when it is put to the test, it will be able to meet the challenge Therefore, at this time we draw the attention of the hon. the Deputy Minister specifically to this facet.

A matter which is, I believe, important to be mentioned is that I do not believe it should be suggested that we are in fact over-reacting to the threat of terrorism, and to the threat of terrorism aimed at industrial targets. I believe it is vitally important that we are not seen to be over-reacting, because part of the weapon of the terrorist is to cause over-reaction, to cause a disposal of the resources of a country in such a manner that they cannot be used for the purposes which will actually make the terrorists’ task more difficult in the broad sense. In other words, it is part of terrorists’ objective to get one to concentrate as much as one can on certain activities which in themselves will not bring about the kind of climate in a society which will make the operation of terrorism difficult in that particular society. In other words, if I may go back to the old saying of Mao, which is quoted so often: “The fish cannot live if he has no water”. If we are able to remove the water in which the terrorist fish can operate, then we will succeed against terrorism far more easily than when we merely use military methods against it. One must be very careful not to create the impression that we are over-reacting, that we are going to spend too much of our resources on this, and that we cannot deal with this problem within the limits of the means and resources that we have at our disposal, while still also dealing with all the other problems of South Africa.

A further important matter which, I believe, we deal with now, is the provision which is contained in clause 3 of the Bill. The principle which we adopt in relation to the provision of security measures for key points is the following. To the extent to which it is practical and possible, businessmen and industrialists should provide for the security of their own establishments as part of the ordinary way of dealing with their businesses or industries. If, however, it is required that they should do something which is extraordinary, which is beyond their normal capability, then it becomes the responsibility of the State as a whole, because that security is provided not only for the business, but for the community at large. Therefore we believe that in the appropriate circumstances there has to be financial assistance for those who have to provide measures in respect of security, which, in the ordinary course of events, they would not have to do. Clause 3 deals with a criminal offence, and in the case of a criminal offence, the defence which is available to the persons who are going to be charged is that they must show reasonable cause. The question which needs to be asked is: What is reasonable cause in these circumstances? There can be many reasons which a court would regard as being adequate as answers to a criminal prosecution, but the one which is specific is when there are, in fact, circumstances which would impose an undue financial burden, and I use the word “undue” deliberately. In such cases the State should give financial aid.

The other matter which cannot be dealt with in this legislation, and which one had hoped could have been dealt with in the Income Tax Act, is that relief should actually be given in respect of expenditure in order to secure premises. That requires an amendment of the Income Tax Act in two respects. The first is to specifically allow security expenditure, and the second is to make it clear that that security expenditure is not of a capital nature, so that it cannot be deducted at all. It seems to us that in conjunction with this provision there should have been a provision that such expenditure should be capable of being written off for tax purposes, or set off against income. With great respect to the hon. the Minister of Finance, we regard it as a serious casus omissus that he should not have attended to this, and we shall tackle him again on this matter tomorrow when we deal with the income tax legislation. We believe that should have been done, and we are very surprised that it has not been done in the present circumstances.

We also want to draw attention to the fact that in our view when one asks a man to attend to the security of his business or factory, the first thing he is going to ask one is what one really wants him to do. I therefore think that clause 3(1) of the Bill needs amendment, and we have already indicated to the hon. the Minister that we shall move such an amendment. We have also indicated that we propose to move an amendment in regard to clause 3(3) to include in the term “good cause” the fact that there may be the imposing of an undue financial burden and, if the State does not offer assistance, that that should in that regard be sufficient for the purpose of reasonable cause, because normally in a court of law financial inability is not regarded as being reasonable cause.

With regard to clause 4, we had a good precedent for what should be allowed, the Armaments Board legislation which we dealt with just a short while ago, viz. that persons who perform functions in respect of their employment should be allowed to communicate that. So when the hon. the Minister has authorized it, there should also be authority to communicate the information referred to in clause 4 of this Bill.

The comment which we have on clause 5 is that we actually think that subsection (2) is superfluous. Subsection (2), which imposes on the members of the Defence Force the obligation to perform functions in terms of this legislation, is superfluous, because they have to perform those functions in any case, but we are not going to object to the provision being there. We merely think it is unnecessary to have inserted that subsection.

Clause 10 is the next one with which I should like to deal. It gives us some difficulty, and there are two points that we want to make on this. Firstly, we again believe that it is necessary, in certain circumstances, to communicate information for the purpose of the ownership of the property, and we would like to move an amendment in that regard. Secondly, we have a problem with the wording in clause 10(2)(c), because there it is provided that any person who— and I mention just the relevant portion— furnishes, in respect of any incident that occurred, any information, or disclose it in any way, commits an offence. In our view, that is a major problem, because the issue of publication must be divided into two sections. On the one hand, we have to deal with the issue of how much the public should know, from the point of view of morale and stopping rumours and, secondly, how much should not be made public in order to ensure that the terrorist and the saboteur is not assisted. Somewhere between those two sides, a line must be drawn so that, on the one hand, the terrorist will not be assisted and, on the other hand, there will be sufficient information for the public to know what is going on, so that we will not have rumours circulating which can be the most harmful imaginable. Let us take a simple example. We recently had the Sasol situation. The whole country knows that something has happened there, that there is smoke billowing, that aeroplanes are flying past, etc. If one did not inform the public of what has happened in such a situation, one would, in fact, be doing one’s cause a tremendous amount of harm.

There can be reasons for delay in publication. There can be reasons for not wanting to publish all the information. One does not want to be critical, but I think that to some extent too much information in regard to the workings of Sasol, and in regard to the actual harm the terrorists did on that occasion, was in fact published. I think that what they really wanted to know when they left the place was whether they had been successful in certain operations. Therefore, on the one hand one must make sure that one does not assist them, but on the other hand that one does not do anything to harm the morale of the people. We have drafted an amendment to cover that aspect. We have given it to the hon. the Minister for his consideration. The suggestion we make is that the provisions of subsection (2) shall not be construed as prohibiting the publication of information in respect of any incident, if such publication will in no way assist any activities relating to terrorism, sabotage, espionage and subversion. We believe that we have, by that amendment, managed to draw that line between these two conflicting interests of the State in regard to that matter.

In regard to clause 11, we believe that guards of this nature should exist and should have certain powers, and therefore we shall support the right of the hon. the Minister to make regulations with regard to the guards as such. We also believe, however, that in the existing circumstances, one must also be able to search persons, even without any just cause, because anybody who should enter premises, should be searched, and there need not be any reasonable grounds for suspecting that they are carrying explosives or anything else of that nature. The right to search must be there. The right to seize articles is, to my mind, in a different category, however, but one might again go along with that, because obviously the hon. the Minister would not make regulations to seize articles of a harmless nature. He would only make regulations which would relate to the seizing of articles that are potentially harmful. In regard to the arrest of persons, we believe that the normal rules should apply which also apply in respect of the Police Force, but there must be reasonable grounds to suspect that a person has committed or is likely to, or may, commit sabotage, espionage, subversion, or terrorist activities. I think that force should only be applied when the person reasonably believes that he needs to do so for the protection of the installation or the apprehension or elimination, if necessary, of the terrorist in the circumstances which may exist. The police have this obligation, and it seems to us that the guards should have a similar obligation, and so we have submitted a proposal in this regard to the hon. the Minister.

May I finally just make a suggestion to the hon. the Deputy Minister relating to this whole question of the guards and the protection of vital installations. In the Second World War there was an organization we knew as the NVB, which existed to protect vital installations. The National Volunteer Brigade consisted of people who were normally not fit for national service. They were often more elderly persons, like some of us in this House.

Our age today, Harry.

The age of the hon. member for Umhlanga, not youngsters like me. They were elderly people who felt they would like to play a part. That was an organization which rendered, I think, very sound service to South Africa in protecting vital installations when other people were doing the fighting in the forces. I therefore suggest to the hon. the Deputy Minister that consideration be given to the re-creation of the concept of the NVB, and that we should have a similar volunteer organization in which people can participate, spending some of their time on rendering a service to the community. They would then, on a voluntary basis, be able to supplement whatever guards there were on a permanent, full-time or paid basis. I think it would enable a lot of people in South Africa, who would like to make a contribution to the defence of the country, to do so on a voluntary basis, even though they could not do it in other ways.

So, we have made a suggestion in regard to the improvement of this legislation. We have made these suggestions in a constructive spirit, and the Second Reading has our blessing.

Mr. Speaker, the hon. member for Yeoville has elaborated somewhat on the proposed amendments which he intends moving tomorrow, and we thank him very much for that because that gives us advance knowledge of what he intends doing. I have a copy of his proposed amendments. We also wish to thank him for his constructive approach to the matter. We have known him as such a person for a long time, and we are pleased to see that he, at least, has not changed.

*Mr. Speaker, when we consider this legislation it is important that we bear one thing in mind, and that is that the onslaughts on these installations of ours have not been the work of internal organizations. It is not the “water” in this country that is the problem. The hon. member said: “Remove the waters in which the fish swim.” The fish are not in this country at all.

The people who made the attacks on Sasolburg come from overseas and are orchestrated from overseas, and therefore it is important that we should note that our security situation in regard to the peoples of this country is not at issue here.

When the onslaught comes from abroad, it is clear that the onslaught on our industries and economic installations are meant to be a surrogate for people who are unable to conquer us by military force, because they fail when they oppose us in the military sphere. We should really be pleased, because it is an indication of the respect they have for us, but on the other hand we must not underestimate the total extent of this tremendous onslaught.

†The hon. member asked why we have only come with this particular legislation now. I should like to point out that we are concerned here with private enterprise. These are not State installations, but private enterprise installations, and it is the policy of this Government not to interfere unduly in private enterprise.

*However, the situation is that the time scale of the activities of the terrorists has been curtailed, and this thing was precipitated by them.

Now that I have replied briefly to the speech by the hon. member for Yeoville, I want to come back to the Bill. There are a few aspects of the Bill I wish to touch on.

The first argument I wish to advance is that attacks similar to those which are now beginning to be made on our national key points have been occurring in other countries for a long time now. A very important reason why this Bill is being introduced now, is the fact that the Defence Force is now going to be called in to assist in circumstances where the Minister deems it necessary. We must distinguish between the security guards acting within the installations and the Defence Force that will act outside them.

This brings me to the second point I wish to touch on, viz. that the guards that have been employed thus far by installations like Sasol have not in fact had any powers, because they were not peace officers in terms of the provisions of the Criminal Procedure Act. They could only act in terms of Schedule 3 of the Criminal Procedure Act, and then only if they suspected that a crime was being committed. This is an important aspect that is now to be rectified by way of the Bill. We cannot wait any longer in this regard.

Having said this, I wish to point out that the Minister may, for example, take steps to compel private initiative to effect certain improvements to their security set-up. It is true that this can entail capital-intensive expenditure and that one does not want these bodies to be saddled with heavy expenditure unnecessarily, but it is also true that it is provided in the regulations in terms of clause 11 that compensation may in fact be paid in such a case. However, an aspect we must not lose sight of is the fact that the security of Sasol, for example, is closely bound up with the lot of the inhabitants of Sasol. Sasol itself has a responsibility towards the people living in its vicinity, and for that reason, too, it is right that it should be possible to call such a body to account in order to ensure that the lives of other people are not unnecessarily endangered.

I agree with the hon. member for Yeoville that the financial implications involved and the possibility of financial assistance to these bodies should be reconsidered, because clearly national security is a matter affecting all the inhabitants of this country.

Having said that, there is another important aspect I wish to touch on. A regulation can be made to ensure that security guards undergo proper training and that they are given more powers, similar to those vested in peace officers and the police in certain circumstances and within those areas. I do not believe anyone will object to that.

I want to conclude by saying that the time has now come for our enemies to find out how tough we are. The fact is that we shall have to gird up our loins. This Bill is the only step we are taking to show that we are not going to capitulate and that our enemies will rue the day that they seek to attack us in any sphere.

It gives me great pleasure to support this Bill.

Mr. Speaker, I agree with the hon. member for Pretoria West. The NRP also supports this Bill. Apart from the fact that we support it, we also welcome it, since I think it is something we need very much indeed.

†Only a week ago during the snap debate on the Sasol incident, a debate called for by the hon. member for Simonstown, I said (Hansard, 3 June 1980, col. 8022)—

I then went on to deal with the problems which arose and the need for preparedness. I particularly pointed out that protective measures were not taken to ensure that what happened at Sasolburg, would not happen. It is therefore a welcome development that this measure, which I accept as having been under preparation for some time, is able to be passed this session, because the position has not been very satisfactory. For instance, a friend of mine, who does business with certain items in the security line, told me only last weekend that he had been to Sasol and had spoken to the security officer there about certain security equipment not four weeks before the incident occurred. He was told that they were not interested in his product because they had no security problems at Sasol. Four weeks later the incident occurred. I quote this as an attitude of mind which we have to eliminate, and that is why this measure is so important. We cannot afford the attitude of mind where a security officer says to a person who brings them an innovation—in this particular case it was an armoured patrol vehicle—that that sort of thing is not needed, as there is no danger. [Interjections.] With all due respect, it is not civil defence that is at issue here, and the hon. member for Yeoville mentioned civil defence. Civil defence comes into operation, as the hon. the Deputy Minister said, after a crisis has occurred.

You hurt us in the snap debate. I think you owe us an apology.

No, I had a look at my Hansard …

Be big enough to apologize.

I will come to that. I am now dealing with another issue. What we need is a stepping up of the industrial commando system. That is where our additional security comes from. We do not only need guards. We have to make provision for industrial commandos and I think that is a weakness that also needs to be tightened up. We must have security measures, guards, electronic devices, continuous radio communication and all the other features for preventing something from happening, but this must be backed up by a well-trained and active industrial commando system. That is where I think we must have a dual preparedness.

If the hon. the Deputy Minister looked at my Hansard on the snap debate, he will see that I said the following (Hansard 3 June 1980, col. 8023)—

I dealt with the two in parallel, because the one deals with the incident and the other has to be ready to deal with the consequences of a disaster. So, I was not referring to the civil defence system as being the system which would have to prevent the action. Civil Defence is the organization which comes in after the action, and I specifically linked the industrial commandos and the civil defence system as working in parallel, the one to prevent and the other to follow up. Prevention is not an easy thing. It is not easy to prevent an attack of this sort, but we have to do all we can to have all the possible facilities to prevent one.

I see the hon. member for Yeoville is not present at the moment, but I want to say that I welcome the attitude he adopted on this measure. I am particularly glad to see the hon. member for Musgrave here. Some of these measures I could call Draconian measures. They are gagging the Press, they are interfering with human rights and they are taking away habeas corpus and the freedom of people. It may be a Draconian measure. The powers being taken are draconian, but I accept and support them, because I believe that when one is dealing with a situation like this, one has to have such powers, even if they are greater than the minimum powers that are absolutely needed. I hope that, when the hon. member for Musgrave speaks on another Police Bill, he will take the same line his colleague the hon. member for Yeoville has taken in regard to this measure, which gives powers which perhaps go beyond the minimum required.

In respect of terrorism.

Yes, in respect of terrorism or in this case sabotage and terrorism combined. This is a welcome development and I am very grateful to see that the official Opposition are taking a new line in regard to this particular measure.

It is a new Bill.

It is a different Bill, but with the same sort of provisions.

You are busy with a little bit of politicking.

Yes, of course it is politics.

I said “politicking”, not “politics”.

It is a little bit of politicking, if one likes.

It is a miserable little bit of politicking.

When one gets two Bills containing similar provisions and one is opposed and the other not, I think I am entitled to draw attention to the contrast. [Interjections.] I do not know why the hon. members are so sensitive.

We are not sensitive, we are just showing you up.

I like my party being praised. I like people to say we are doing the right thing. Here I am praising the PFP …

Praise from you worries us.

I am congratulating them and saying I welcome their attitude to this.

Beware of Raw bringing praise.

The gratitude I get is this sort of reaction! Ingratitude is something one just has to accept. I am nevertheless grateful for the attitude adopted by the official Opposition.

There are one or two minor points I should like to raise. Where information can be called for in terms of clause 4, I just want to establish clearly that the information the Minister may demand will be information concerned with the security of the key points. I read it that way, but I just want it put beyond doubt. The clause reads—

That would have to be information required for planning security. I take it that someone cannot come along and ask, for instance, what the profits were last year or seek other information which has nothing to do with the security planning for a key point. I should just like to get that clear. I have checked it and I am told that that is the position, but I should like to get it on record.

Similarly, as regards clause 7, the provision in the Defence Act dealing with liability for loss or damage in two cases, namely where it refers to vehicles and equipment and in the indemnification during terrorist operations, refers to acts carried out in good faith, or bona fide acts. Again, I am told that the legal ruling is that an act carried out under orders or instructions is not considered to have been carried out in good faith if it is an illegal act, so that one does not require the term “good faith”. Again I should like to get that clear.

Then we come to the point raised by the hon. member for Yeoville in regard to clause 10(2)(c) which concerns releasing of information. This is a very difficult matter to define. I have battled to see how one could amend this provision so that it would not be so circumscribed that one under-protected information or allowed too much information to get out. As this clause reads, as I have already mentioned in reference to another provision earlier, it is Draconian and gagging because it will prevent any information from being released. Here again I wonder whether, rather than limiting it in this respect, we should not associate it with the overall security and use the same wording which is used in clause 4, where it says—

When it comes to clause 10, I suggest, the same wording could apply in connection with the needs of the security of a specific key point.

Other than that we have no problems with this measure whatsoever, and we shall support it in all its stages.

Mr. Speaker, the hon. member for Durban Point is not always noted for the discreet expression of his ideas. I believe he has often subsequently regretted things he may have said in the heat of the moment. In order to support this point of mine I wish to quote what the hon. member for Durban Point said in this House on 3 June this year in the snap Debate on the motion by the hon. member for Simonstown in connection with the explosions at Sasolburg. I quote (Hansard, 3 June 1980, col. 8023)—

However, what are the facts? Before coming to that, however, I want to refer to what the hon. member said in this House today. He said that a close relative of his had spoken to a security guard at Sasol and that the guard had told him: “Man, we are not worried, because there is no danger.”

It was a senior official.

Just imagine that. It was a senior official. But of course I have grave doubts about the seniority of that particular official. However, I know that it is probably the most normal thing on earth in such a case to say that there is no danger, because up to that stage nothing had happened at Sasolburg.

However, I want to put it to the hon. member for Durban Point that the security situation at Sasolburg is not quite so bad as the hon. member is trying to make out. The fact is that in the one instance, at Natref, the whole cut in the fence was discovered at an early stage. There are guards doing the rounds at all times who meet one another at certain points. That hole in the fence was discovered before the first explosion took place. The alarm raised then probably prevented greater damage eventually being caused at that particular place. So much for Natref.

In the case of Sasol itself, a guard noticed the unauthorized persons on the site. The guard raised the alarm. However, shots were fired at him and he fell to the ground. While on the ground he used his walkie-talkie to call for assistance. The hon. member specifically said that there were no radio links. However, that guard used his walkie-talkie to notify his immediate security chief that he had been shot and that there were unauthorized people on the premises. I believe that that prompt action of his was the main reason why only two of those storage tanks at Sasol exploded, and why far greater damage was not caused. One should really get one’s facts straight before making accusations of this nature. I want the hon. member for Durban Point to know that I am aware that the hon. the Minister of Defence—and later the hon. the Deputy Minister as well—had personally taken the trouble to activate and motivate these people in particular to attend to their security measures. I am fully aware of that.

The hon. member also speaks as if there was no commando at Sasolburg. For his edification I want to say here and now that there is an outstanding and well-organized commando at Sasolburg. I believe the hon. member ought to know that. Surely the hon. member ought to know as well as I do that the commando consists of people who are employed, who cannot stand guard day and night and that they can only be used for work of this nature during emergencies. Surely it is also quite clear that the hon. member is in fact talking through his neck, as the saying goes. As regards the motivation, I want to tell him that as befits a good representative, I have acquainted myself with the existing security measures and the civil defence measures. I must point out— the hon. the Deputy Minister has also said this on occasion—that Sasolburg has one of the most prepared Civil Defence organizations in South Africa. As a former officer in command of the Civil Defence who knows about communication I was really impressed by the operations room of that Civil Defence organization. They had two channels to use. If the one was out of action, they had an alternative. They were in contact with all their key points, persons and organizations. They were able to broadcast instructions over radio to every inhabitant of the town in the case of a real state of emergency. I can give the assurance that the operation room was manned day and night. What more does one want?

We should really get our perspectives straight. The hon. member speaks about electronic fencing and the Lord only knows what else. In any event, these are things that cost a great deal of money. I concede that they may be necessary. However, in the case of Salisbury, rockets were fired at, the fuel storage tanks from a long distance away, and in such a case electronic fencing has no effect at all. We did not know how they would strike. I have given details showing that in both cases the presence of those people was almost noticed in time. Therefore security is by no means as lax as the hon. member is seeking to imply. Nevertheless I concede that there is probably room for improvement. It is also true that the legislation before us at present is aimed at bringing about the necessary improvement.

There is another fact which ought to make a strong impression on us. I refer once again to the Salisbury incident where a similar fire occurred. In that case the fire raged for weeks until South African fire-fighting experts helped to extinguish it. In the case of Sasol the fire was fully under control and was even extinguished within two days. I think that speaks volumes for the effectiveness of the handling of the whole matter by the Civil Defence organization. The Defence Force, through the Air Force, also played a part in fighting the fire.

The situation is that the city council of Sasolburg immediately identified the events as a disaster and announced them as such. After I had become aware of what had happened, I telephoned one of my contact men early that morning and asked him what was going on. He told me: Good heavens, man, it was a terrible night. I was almost jolted out of bed at 12 o’clock last night by a terrific explosion and everything was lit up as bright as day. Immediately after that, several other explosions also took place. Sir, in spite of that, there was no panic movement in Sasolburg. This also speaks volumes for the control and the reassuring effect of the Civil Defence organization at Sasolburg. There was immediate control over traffic, because as may be understood, there were curious people who flocked there to see what was happening. I repeat, I think that speaks volumes for the effectiveness in this regard.

I therefore think the hon. member for Durban Point owes the hon. the Prime Minister, in his capacity as Minister of Defence as well, and the hon. the Deputy Minister an apology, because he said that there had been no effort to motivate these people. Such things do not happen without motivation.

They immediately declared a state of emergency, and all bodies were approached. The number of firemen who were on the scene immediately or shortly afterwards, almost ran into double figures. That, too, speaks volumes. 185 people were involved in the traffic control division of the Civil Defence organization. That is the only figure I want to mention. A formidable number of people were involved in emergency services and evacuation and that kind of thing.

I wish to conclude. I do not wish to drag out this discussion for too long; I said last night that the only popular thing in this House was a short speech. I want to repeat that I think the total absence of panic at Sasolburg speaks volumes for the effectiveness of that Civil Defence organization in Sasolburg. I repeat: I really think the hon. member for Durban Point owes certain people an apology.

Mr. Speaker, I should like to refer only to one principle contained in the Bill, to which the hon. member for Yeoville has already referred. The hon. the Deputy Minister has said that the Bill covers installations which are of great importance to the Republic and also to all its people. He went further by saying that according to this Bill it would be the owner’s responsibility to ensure that efficient security measures are taken to protect such installations. Security measures could in many instances be very, very expensive, perhaps even beyond the means of that particular owner. Therefore, if the protection of such installation is going to be to the benefit of the entire community, I wonder whether the community via the State should not be prepared to make a considerable contribution towards the security measures.

The hon. member for Pretoria West has already indicated that up to a point—I do not know to what point—he concedes that my hon. colleague, when he raised the point, had made a good point in this regard. I should therefore really like to appeal to the hon. the Deputy Minister now to indicate whether he is prepared to consider financial assistance and whether, when we come to the Committee Stage, he would consider certain amendments in this regard which will be put by this side of the House.

Mr. Speaker, to begin with, allow me to thank the hon. member for Pretoria West for his support of this Bill and for the ideas he put forward for the improvement of the Bill, and for the fact that he looked at the Bill objectively with regard to the financial assistance. This shows that hon. members on this side of the House do not necessarily accept a Bill simply because it is a Government Bill. In the course of what I have to say I shall come to what the hon. member for Yeoville and the hon. member for Wynberg had to say.

As far as the hon. member for Sasolburg is concerned I think he did this House a service by putting in perspective the statements made by the hon. member for Durban Point earlier this month. I think it was as well and was in the interests of the people of Sasolburg and the civil defence organization there that the hon. member for Sasolburg put the facts in perspective. I certainly think that his constituency will benefit thereby.

This brings me to the hon. member for Yeoville. Let me say at once that I welcome his support of the Bill at this stage. In my opinion this is a reaction which one expects of a responsible Opposition. It seems to me that if we take the history and the record of the hon. member for Yeoville into account, he represents virtually all the responsibility that is to be found in the official Opposition. To tell the truth, if the hon. member for Yeoville had been alone in the Opposition, we should have found all the responsibility at the disposal of that side, in him.

Here and there it is very meagre.

The hon. the Deputy Minister of Finance says that here and there it is very meagre. I accept his word because he is a very honourable person. The same applies, to a very great extent, to the hon. member for Durban Point. What I particularly appreciate about the hon. member for Durban Point is that he said that this was a serious intervention, but nevertheless circumstances justified it and therefore he went along with it. That is an extremely responsible approach characteristic of a good patriot, a good representative and also a good member of the Opposition. I appreciate what the hon. member said and I shall reply to him in full.

As far as the hon. member for Yeoville is concerned, he asked us why we were introducing this Bill now, and I think he is fully entitled to ask that. In my opinion the hon. member for Pretoria West has already replied to him in part by pointing out that we do not lightly infringe upon the private sector or prescribe to them how they should conduct their business. However, we tried to adopt this policy and approach, for example by using persuasion in order to get things done which were in the interests of security in general, but also in the interests of the security which is the responsibility of the owner of a national important point, in this case a key point. The hon. member for Yeoville agrees that it is the responsibility of that owner. This process of persuasion dates back a number of years, when an attack was launched on the National Key Point Committee, which at that stage was not a statutory committee, but which will now become one if the hon. Minister of Defence appoints such a committee. That committee was established in the early ’seventies with the task of furnishing guidance with regard to the securing of strategic industries. A tried and tested organization was established throughout the country and is now in its stride. Therefore what we are now doing is to give statutory effect to those activities. This National Key Points Committee has always functioned in Pretoria and there are regional committees to be found in the Army Commands. These Army Commands co-ordinate the highest degree of cooperation among the Defence Force, the provinces, the police, the Railway Police and other bodies controlling such points. I can therefore give hon. members the assurance that this process is now merely being given statutory effect and that we are not coming to the House with overhasty legislation at this stage. However, this has become necessary, for that small percentage who do not want to be moved by persuasion and argument. In other words, it has become necessary to get things moving more rapidly, particularly in view of the incidents at Silverton and Booysens, and later at Sasolburg and Natref. That is the history of the matter, and it is also the answer to that question.

The hon. member for Yeoville also referred to the provisions of clause 3, and said that we should make financial concessions. I think the hon. member will realize that we would do well to take another look at this during the Committee Stage. However I think that the South African public and the private sector in particular will have to realize that they will have to include a certain percentage for security in their budgets, and that this will be their responsibility. It is recognized throughout the world that an expenditure of 0,5% is a reasonable expenditure. Here and there the average expenditure is even higher. Therefore the private sector and the public must develop a security awareness which will result in such capital expenditure being part of the industry. I do want to support the hon. member in principle in that regard. However, I cannot concede that this is not the responsibility of the private sector. The spirit is evident from the fact that we are making provision in the regulations for possible financial assistance. I shall let that suffice. The hon. members for Yeoville and Pretoria West and also, perhaps the hon. member for Wynberg, spoke in terms of tax assistance. Surely, however, it is true that this Bill cannot make provision for that. That is the first point. The second point is that the private sector is free to negotiate with the responsible bodies and persons, in this case the hon. the Minister of Finance and his department. I do not think the hon. member should be very sharp and critical about this point at this stage because after all, he does not know what is going on behind the scenes. Therefore I am not in a position to open or close the door. This is a financial matter.

The hon. member for Yeoville also has a problem with regard to the publication of certain information, particularly with regard to an incident. In section 118 of the Defence Act we made provision for the coverage of certain movements and events. Up to now it has worked very well. It is important that when it comes to an incident that takes place within our borders, it will have the same coverage. My argument is that it is more necessary for us to have news control over that incident, even more so than news about an incident on one’s borders, for the simple reason that the publicity and shock effect he achieves, are food and drink to a terrorist. Therefore his target is innocent people, the people who will make him newsworthy and the people who can be shocked. Accordingly, if, for example, we could withhold news of an incident for a few days to enable us to trace the terrorist and his helpers more easily, we should be assisting the S.A. Police in their task. It is a question of move and countermove, because nowadays these people are sophisticated in the action they take. Their actions are calculated and they know that they will achieve the maximum effect by way of news coverage. It is not the bomb that explodes or the shot that is fired that is most important. It is the effect overseas and the effect on people whom they wish to influence, and therefore it is of the utmost importance that we should increase control everywhere in this regard. But we are not imposing a general prohibition on publication. It will be released by the hon. the Minister, and it works well. As long as we have an effective Opposition with whom we can co-operate in regard to these matters, it will be possible to find norms and criteria between ourselves and them and between ourselves and the Press Union as to how this information is to be released, because the way in which we release or withhold it also becomes part of a strategy. In this way we combat terrorism. That disposes of that point.

I now come to the proposal of the hon. member for Yeoville that we should establish an Old Guard. I understand that this is well known term as far as he is concerned because there was a time in politics …

I did not even use those words.

Surely it is very clear what the hon. member had in mind.

There was a time in politics, in the history of the Opposition parties, when the Old Guards were written off. Then there were the New Turks, the Young Turks, who took over. I can very clearly see a change taking place in the hon. member and a re-evaluation of the Old Guard, and a desire that they should take over again. I am aware of his line of thinking, but unfortunately I must tell him that there is one aspect which he has failed to bear in mind, and that is that the Old Guard was based on voluntary service. The hon. member for Durban Point advocated an industrial commando. At this stage, until such time as we introduce other measures—and I want to underline this— that industrial commando will for the most part consist of volunteers plus such national servicemen as we may call for to perform those protection services.

We must distinguish between security and protection. Security is at all times the primary task of the owner, but the protection can be afforded by elements of the Security Forces which includes the S.A. Police, the Defence Force and the S.A. Railway Police. It can be anyone of them. The industrial commandos of the Defence Force and the Police Reservists rely on volunteers. I therefore think that the hon. member may have failed to bear this point in mind, but I concede that if it should become necessary, and if there is a demand for the necessary manning of the industrial commandos, we shall have to consider measures to increase the manpower available in that regard. I want to leave the matter at that. We can take another look at the hon. member’s proposal.

The hon. member for Durban Point asked a number of questions. To begin with, he asked whether in terms of the proposed section 4 we should confine ourselves solely to information required for the planning of protection. I want to tell him that we shall do so. He also asked whether acts indemnified in terms of clause 7 would be bona fide acts. In other words, he asked whether I did not wish to insert a clause in the Bill in terms of which mala fide acts, unauthorized acts, could be condoned. Of course not. The advice we had was based on the approach that the legislator does not request authorization for mala fides and unauthorized acts. That is my reply and I hope the hon. member accepts it. However, I am quite prepared to reconsider his argument, and if it should be necessary he could consider an amendment in this connection.

The hon. member for Durban Point also referred to clause 10 and asked whether we should not try to find a method whereby we could be certain that these provisions relating to the security of key points could in fact be implemented. I think that the spirit of the Bill as a whole could only be construed to mean that it relates to the security of key points. I think that I have now replied to his questions as well.

Question agreed to.

Bill read a Second Time.

Mr. Speaker, I move without notice—

Mr. Speaker, when the Defence Amendment Bill was discussed, the hon. member for Yeoville suggested certain amendments the spirit of which were accepted by the hon. the Deputy Minister. With regard to article 57 of the Code we were particularly pleased that the suggestion was accepted that less serious misdemeanours should not be punishable after three months have expired since servicemen have returned to civilian life. That was a fairly important alteration to which the hon. the Deputy Minister agreed, and we were very pleased about that.

What we should like to know now—and I would ask the hon. the Deputy Minister to respond to that—is why he has found it necessary to lower the rank from major-general to that of brigadier relating to those officers who may institute a court martial. We would appreciate it if the hon. the Deputy Minister would respond to that inquiry.

We on this side of the House accept that there may be very exceptional cases in which court proceedings should take place behind closed doors, but the point must be reiterated that this principle should not be extended in any way unless court proceedings or public knowledge of court proceedings would be to the disadvantage of to the detriment of the community as a whole, i.e. the whole of South Africa. With these few words I want to say that we accept the motion.

Mr. Speaker, I thank the hon. member for Wynberg for his support for this amendment which emanates from certain legislation which was passed only a week ago. The amendment which I have proposed emanates from that legislation. In reply to his query on clause 1, I want to point out that the amendment to clause 1 originates from the re-organization of the top structure of Defence Force whereby the medical services were elevated to the status of a fourth arm to bring it on a par with the Army, the Air Force and the Navy and also to investing the chiefs of certain supporting services, for example the Quartermaster-General, and staff division, such as the Chief of Staff of Personnel, with command functions. These changes made it necessary to extend the definition of “chief of staff” to include those chiefs of the supporting services and staff divisions charged with command functions. I think the crucial point the hon. member was inquiring about is that in certain circumstances the rank of the officer concerned may be that of a brigadier, for example where a brigadier is acting in the place of his chief who is a Major-General. I hope I have answered the hon. member’s query to his satisfaction.

Question agreed to.

Mr. Chairman, I want to assure the hon. member for Yeoville that I gave his proposal very serious consideration. If the amendment he suggests were to be accepted, subsection (2) would read as follows—

1. (a) for the purposes of securing the debt in question or any other obligation arising from the transaction in question, the debtor was required to take out, renew, vary or cancel a policy of the nature and amount of the policy in question.

I am very sorry, but this amendment weakens the measure to such an extent that it would have little, if any, effect on the existing malpractices. Any insurance, whether necessary or unnecessary, constitutes security, and where it relates to a credit transaction of whatever nature, it constitutes security for the credit grantor. If the measure is adopted with the amendment as proposed by the hon. member for Yeoville, it would mean that the credit grantor could always prove that the insurance was ceded to him “for the purpose of securing the debt”. The proposed amendment would allow the existing practices, in their present form, in which they are to the detriment of the public, to continue. The hon. member must not take it amiss of me, but I cannot accept his amendment in this connection. We are here considering a measure aimed at combating an undesirable practice that is on the increase. In this connection I should like to refer to the report of the Franzsen Committee on the Limitation and Disclosure of Finance Charges Act. In paragraph 150 of the report the committee states—

The Crowther Committee is a committee which investigated this matter in the United Kingdom—

1. (i) charging the debtor excessive sums for insurance cover;
2. (ii) requiring excessive cover to be maintained, e.g. by gearing the sum assured to the original advance throughout, regardless of the fact that the debt is constantly diminishing;
3. (iii) continuing to collect instalments after the debtor’s death—relying on the ignorance of the debtor or his personal representatives as to the existence of a policy—the credit grantor receiving an appropriate award from the insurers;
4. (iv) failing to give a rebate for early settlement or on refinancing;
5. (v) requiring cover to be continued for a period longer than the period of the instalment contract;
6. (vi) generally, utilizing the provisions of insurance not as a legitimate protection for the creditor but as a method of reaping substantial and unjustified additional income”.

It would be irresponsible of the Government not to introduce the measures necessary to combat these abuses. I am not indifferent to an amendment which would improve the measure, and I am even prepared to accept the amendment of the hon. member for Yeoville if he formulates it as follows—

1. (a) where for the purposes of securing the debt in question or any other obligation arising from the transaction in question it is reasonable to require the person concerned, having regard to—
   1. (i) the creditworthiness of the debtor;
   2. (ii) any other security furnished or offered by the debtor; and
   3. (iii) any other relevant considerations,
      to take out, renew, vary or cancel a policy of the nature and amount of the policy in question; and
2. (b) where it is required that a new policy is to be taken out—
   1. (i) he informs the debtor that he has a free choice in respect of the insurer with and the intermediary through whom the policy is to be taken out; or
   2. (ii) to insure immovable property which has been or is to be mortgaged to secure a debt or other obligation, the premiums payable under the policy are reasonable in relation to premiums generally charged in respect of any such policy: provided that a certificate from the Registrar in which he states that in his opinion the premiums in question are reasonable shall for the purposes of this subparagraph be sufficient proof of the reasonableness of such premiums.

I regard the measure that I am now suggesting as a balanced compromise which ought to protect the public effectively. If experience shows that adjustments are necessary, I shall consider such adjustments. If the proposed amendment is not acceptable to the hon. member for Yeoville, clause 9 remains unchanged. I should like to put the amendment I proposed to the hon. member for Yeoville and I should like to know whether it is acceptable to him. If it is not acceptable to him, I shall unfortunately not be able to accept the amendment as initially moved by the hon. member. However I shall accept the amendment I have proposed.

Mr. Chairman, on a point of order: I think I am not allowed to speak any more, because I have already spoken three times during the Committee Stage. Therefore I suggest that the hon. the Deputy Minister move the amendment.

In that case I shall move the amendment. I appreciate the hon. member’s position.

Order! Does the hon. member for Yeoville withdraw his own amendment?

Mr. Chairman, if I am allowed to withdraw my amendment, I shall do so.

Amendment, with leave, withdrawn.

Mr. Chairman, I move the amendment as quoted by me, as follows—

1. (a) where for the purposes of securing the debt in question or any other obligation arising from the transaction in question it is reasonable to require the person concerned, having regard to—
   1. (i) the creditworthiness of the debtor;
   2. (ii) any other security furnished or offered by the debtor; and
   3. (iii) any other relevant considerations,
      to take out, renew, vary or cancel a policy of the nature and amount of the policy in question; and
2. (b) where it is required that a new policy is to be taken out—
   1. (i) he informs the debtor that he has a free choice in respect of the insurer with and the intermediary through whom the policy is to be taken out; or
   2. (ii) to insure immovable property which has been or is to be mortgaged to secure a debt or other obligation, the premiums payable under the policy are reasonable in relation to premiums generally charged in respect of any such policy: Provided that a certificate from the registrar in which he states that in his opinion the premiums in question are reasonable shall for the purposes of this subparagraph be sufficient proof of the reasonableness of such premiums.

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, I should now like to deal with this issue of the amendment. I think that all that has happened as a result of the hon. the Deputy Minister’s amendment is that the question of the onus of proof has been slightly alleviated with regard to a person who performs the transaction. I have had to settle for it because it is the best that one could get in the circumstances, since the hon. the Deputy Minister and his party would not accept the other amendment. However, I must say to the hon. the Deputy Minister that I am still unhappy about the situation. I still believe that it is an encroachment with regard to the ordinary contractual situation. The problem that appears to arise is that there seems to be some difficulty in respect of legislation that is introduced, and this is an example of it, to draw the line between one protects the consumer on the one hand while on the other hand one actually interferes with normal practices. One should be able to protect the consumer and at the same time not interfere with normal and legitimate business practice. All I can do is to hope that the hon. the Deputy Minister will keep an eye on this provision. If he receives representations from people who are adversely affected by it, I hope he will reconsider the matter. I hope he will consider specifically the fact that it is not only the big institutions that are affected here. It may also well be the widows who lend money on bonds, etc. Be it as it may, I want to leave the matter at that, because one can quite obviously not condemn a whole Bill on the strength of one clause of this nature.

The only other thing I should like to point out is the following. I should like to come back to the provision which contains the amendment to the Stock Exchange Control Act. I think this will also still have to be watched, because the one thing that is not really dealt with in terms of this clause is the question of advice. This means that it could well lead to people getting into substantial trouble with regard to their investments, which are still handled by fly-by-nights, and for which very substantial fees are charged. One of the things which happens is that a method of charging is applied in terms of which charges are made virtually on a monthly basis for whatever advice is given where that advice has resulted in the appreciation of a portfolio. Even though the portfolio may go down eventually, only because it has gone up over a period of time, very substantial fees are payable. This is quite obviously an abuse which can result in very substantial hardships being suffered. Even without delivering the shares and without having that specific form of control, this kind of activity, I believe, is highly undesirable. Whereas one does not want to restrict private individuals who want to carry on business as share advisers and investment advisers, etc., I believe that where there are endeavours of this nature which cause harm to individuals, particularly to smaller investors, who usually end up in the hands of these fly-by-nights, one will have to take strong action in future. I hope the hon. the Deputy Minister will keep an eye on this sort of situation as well.

Otherwise this Bill in its entirety, as we have indicated, has our support, and we will not oppose it at Third Reading.

Mr. Speaker, the hon. member for Yeoville mentioned the fact that under the circumstances he supports the amendment that I moved in connection with insurance. I do not want to allege that the clause in its original wording, as well as the amendment that I have moved, is the final, ideal solution to the existing problem. This is not the case at all. Of course, I think that my amendment, that has just been accepted, is as close to the ideal as is at all possible at this stage.

The hon. member for Yeoville pointed out that apparently there are problems. He asked where the line must be drawn between the protection of the public on the one hand, and a too drastic interference in the normal workings of the marketing mechanism on the other. This is a problem. In this case, I believe one must be led by the naked truth. The naked truth in this case is that insurance, particularly in cases where the money lender has a restricted market, gave rise to tremendous exploitation in the past. That is why I cannot but include fairly drastic measures in legislation here.

One of the objectives of this legislation—I want to emphasize this very strongly—is in fact to protect the consumer. That is why I could not accept the amendment of the hon. member for Yeoville, because, to the best of my understanding and to my best opinion, his amendment would leave the door wide open for malpractices which would be to the detriment of the public. The hon. member raised a valid argument with regard to portfolio managers. In cases where the value of a portfolio rises considerably, there are certain fees that are payable to the manager. When there is a drop in the market later on, the investor often loses money because he does not have the necessary skill at his disposal. I believe this is the type of thing that should not happen in our country. We are propagating the system of free enterprise in our country, and if that system is guilty of practices as a result of which the public could suffer, that system is brought into discredit. That is why I shall look at this matter once again.

I should like to thank hon. members on both sides of the House for their support of this measure which particularly concerns the whole financial sector of the country. It is one of the most dynamic sectors in the economy. The financial institutions are the axis around which the country’s financial activities turn, as a mobilizer of the country’s savings for use in the economy as a whole. Since the economy is still in the process of developing, it is important that legislation concerning financial institutions should keep pace with this development. The measures that are being considered, make it possible for financial institutions to keep pace with changes in an orderly manner, with the customs of the investors and the economy in general. The measures that are being introduced to the Insurance Act, should promote the marketing of smaller life insurance policies considerably. The home service business should become more popular amongst our lower income groups in particular. It is important that this group, Coloured, Black and White are encouraged to build up capital for themselves by means of insurance. I expect the home service business to be very successful amongst the public, particularly since the maximum insured amount has been fixed at R1 000, and in addition the maximum of R500 that previously applied to funeral policies, has been increased, and that this measure will offer a large portion of the community the opportunity to strengthen their insurance coverage.

The other very important measure that is being introduced to the principal Act by means of the Bill, is the advisory committee for short-term insurance. The existing advisory committee for long-term insurance makes a great contribution and I am convinced that the creation of an advisory committee for short-term insurance is an important step for the industry. During the discussion of the provisions of the Bill, hon. members referred to possible shortcomings in the short-term insurance industry. The premium war and the solvability of insurers that carry out short-term business, was mentioned in particular. A sound short-term insurance policy is a priority for the development of the country. The advisory committee will look at these matters to the benefit of the community as a whole.

The other matter that concerns insurance and that gave rise to a great deal of discussion in the House, is the prohibition that has been placed upon conditional sales. Authoritative committees of inquiry in South Africa and abroad have identified these undesirable practices that arise as a result of linking insurance to credit transactions. It is a good thing to look at the remark of the Crowther Committee in this regard once again viz. “experience has shown that where credit insurance has developed on a substantial scale serious abuses can occur”. The measure contained in the Bill, should provide proper protection for the consumer, particularly for the small man too. This is part of a package measure introduced by the Limitation and Disclosure of Finance Charges Amendment Bill and the Credit Agreement Act in order to protect the consumer, particularly the use of credit financing, without disrupting the free market mechanism.

Hon. members can go home this year and tell their voters about the measures that have been introduced, particularly to combat abuses that made their appearance in the granting of credit where insurance is required as security. I am convinced that the protective measures that are being introduced to the Insurance Act in this regard by means of the Financial Institutions Amendment Bill, will be to the benefit of the community as a whole and should ensure orderly credit insurance.

The measure that did not give rise to much discussion in this House, but that is of the utmost importance to the investing public, particularly for investors in listed securities, is the measure that applies to portfolio managers. Over the past years the public has suffered considerable losses as a result of the undesirable practices that have appeared in the management of portfolios and listed securities. In reality, listed securities are liquid assets that can easily be turned into cash on the Stock Exchange. There were cases when the public was seriously misled. Over the years, the Government introduced measures to protect the savings of the public as financial institutions. Portfolio managers were not included in these measures. The steps that are now being taken, fill an important gap and should ensure that the management of portfolios of listed securities will take place in an orderly fashion. I want to mention here that there are banks, boards of executors and other financial institutions that show the greatest care and diligence in ensuring that the interests of their clients enjoy precedence. Such institutions will have no problem in complying with the envisaged protective measures. The measures will ensure that the portfolio management of listed securities is managed in an orderly fashion and in the interest of the investing public.

The amendment that has been made to the Bank Act, should provide considerable relief to the pressure being placed on the capital and liquid assets of banking institutions at the end of every month. The measures should be welcomed by the banking institutions themselves. If the Bill can be viewed as a whole, the provisions contained in it, once again serve as proof of the protective measures that this Government is setting in motion on an ongoing basis in order to provide adequate protection, to the small investor too, firstly that person who can only afford to take out a policy to the value of R1 000; secondly the Coloured, Black and White consumer who becomes the prey of unscrupulous credit granters due to his weaker negotiating abilities and thirdly, the small investor that entrusts his listed securities to a portfolio manager in good faith, who then uses these securities for his own benefit.

At the same time the legislation opens the door for financial institutions to expand their industry in an orderly fashion. We are entitled to be proud of our financial institutions, banks, building societies, pension funds, insurance companies and the Stock Exchange. These are only a few of the type of financial institutions that make such a considerable contribution towards the economic development of the country.

Question agreed to.

Bill read a Third Time.

Mr. Speaker, subject to Standing Order No. 88, I move—

Mr. Speaker, we object. I should like you to leave this until after dinner, so that we can have a look at it. We do not know what the hon. the Minister is talking about.

Mr. Speaker, then may I just explain. Last night I submitted an amendment to the House to the motion of the hon. member for Yeoville. However, the officials went over the entire legislation last night and saw that that amendment is faulty and that the numbering of the old clause was in fact correct. Therefore, it is just a question of the numbering of the clause here.

Question agreed to.

Business suspended at 18h30 and resumed at 20h00.

Evening Sitting

Mr. Chairman, perhaps I should just explain that I submitted an amendment yesterday following a motion by the hon. member for Yeoville. In actual fact it merely concerned the numbering of certain clauses and the amendment was then accepted. Yesterday evening my departmental head and other members of the department looked at the amendment once again and discovered that the numbering was in fact correct in the original and that it was simply an incorrect interpretation. Today, I moved an amendment in the Other Place in terms of which I withdrew the amendment that I moved here. Of course, I have learned the lesson that I should not move an amendment so quickly, even if it is at the request of an honest man like the hon. member for Yeoville. I shall not do so again.

Amendment agreed to.

Mr. Chairman, I would like to move the following amendment—

The reason why I move this amendment is that in April 1979 provision was made for a partial rebate on excise duty on petrol, aviation spirit, kerosene, distilled fuels and residual fuel oils which were intended for home consumption. For some reason, a reason with which we certainly do not agree, that rebate was withdrawn on 12 October 1979. In our view this rebate is desirable. In fact, one might almost say that it is necessary because these fuels are used mainly by the poorer sections of the population, in particular by Black people. It seems to us that some relief should be given to them in regard to the excise duty which is payable on these items which are essentials of life, which are required for ordinary living by the poorest people in our country. To my mind there seems to be no justification whatsoever for removing this rebate and I appeal to the hon. the Deputy Minister to allow it to be reinstated so that those members of our community, who in the main are the underprivileged, should get the benefit of this.

Mr. Speaker, I should like to support the hon. member for Yeoville. The hon. the Deputy Minister will remember that in last year’s debate on the Customs and Excise Bill I proposed a further reduction in the excise duty. Will the hon. the Deputy Minister listen for a moment?

I am all ears.

The point that was made last year is that kerosene, lighting paraffin, is to a very large extent used by the Black community for the purposes of heating and cooking and for primus stoves and fighting. I think the hon. member for Yeoville has made out a very real case in this respect. It will cause considerable hardship if there is any increase in the price of that commodity. I should like to ask the hon. the Deputy Minister to consider this very favourably and to grant the relief that has been asked for.

In Soweto it costs the people R9 to R11 per month.

When we went to Soweto and asked the people there about their problems, they told us that it cost them between R9 and R11 per month to buy kerosene for the purposes of lighting, heating and cooking. I think the hon. the Deputy Minister could well afford to use some of the money he receives from customs and excise to grant relief.

I now want to deal with the amendments printed in my name on the Order Paper. I should like to ask the hon. the Deputy Minister for reasons why, in each case, provision has been made either to increase the duty or to disallow the rebate which has been applicable to these things in the past. If the hon. the Deputy Minister would tell us what the reasons are, I think the Committee would be in a better position to judge my amendment, which proposes the deletion of certain items, and would also be able to conduct a meaningful debate. I think anybody who simply goes through this quickly and merely glances at certain items to pick up a few ideas, is at a peculiar disadvantage. I want to tell the hon. the Deputy Minister straight out that I am sorry, but I did not have the chance this year to contact the officials of the department, as I usually do, to ask them to clarify these matters and to iron out any particular problems. However, there are certain matters listed in the explanatory memorandum which has been sent to us, matters relating to the schedules of the Customs and Excise Act. I should like to ask the hon. the Deputy Minister for his comments on the points that I want to raise. After that I will then decide whether I will move my amendments or not.

The first point I wish to raise relates to the item “Fire extinguishers” on page 10 of the explanatory memorandum. I quote—

I want to ask the hon. the Deputy Minister whether at a time like this, in our country, it is appropriate to increase the rate of duty on compounds which are designed to assist in fire-fighting. I really, honestly think that in the situation in which we find ourselves, a situation in which apparently there is a tendency for people to be marching around with petrol bombs and this kind of thing, anything that can help the ordinary members of the public with fire-fighting ought to be encouraged. We should do that rather than increase the duty from free to 25%. There may be some reason for it. Maybe this stuff is produced here in South Africa. It may be a protective device. I do not know, and that is why I am asking the hon. the Deputy Minister for some information. However, it seems to me as if this is a short-sighted measure which I should prefer to have deleted.

On page 18 of the explanatory memorandum, under tariff heading No. 82.01.40, the rate of duty on forks with eight or more prongs is increased from free to 15%, and the rate of duty on certain other forks from free to 15% or 100 cents each. Among these certain other forks are forks with a tine length of more than 150 mm. Hon. members can see how long 150 mm is on the ruler which I am holding up. [Interjections.] My concern is that the sort of fork with a tine length of more than 150 mm may well include hay-forks which are used by farmers. This would therefore increase the input cost of the farming community, something I have been fighting against, and the hon. the Minister of Agriculture and Fisheries will support me in this.

Hear, hear!

What reason is there for this increase from free to 100 cents? In other words, a levy of R1 is to be charged on every hay-fork which the farming community has to use for storing hay in this year when the hon. the Minister of Agriculture and Fisheries and the hon. the Deputy Minister of Agriculture and Fisheries can confirm that a tremendous drought is plaguing the entire country. Every bale or stack of hay that we can put together is of immense importance to our national herds.

I support you. I think Pietie du Plessis is a “boerehater”! [Interjections.]

That is right. I now want to turn to tariff heading No. 97.06.30 on page 29 of the explanatory memorandum. Here I have a severe difficulty which I want to raise with the hon. the Deputy Minister. Tariff heading No. 97.06.30 reads—

That means the rate of duty on squash racquets of a certain value is being increased by R1,50. I want to tell the hon. the Deputy Minister that the game of squash is the fastest-growing game in South Africa, and large amounts of money are being spent in every city in South Africa to build complexes, e.g. health complexes which incorporate squash courts at which people can play. There are also housewives’ leagues where housewives who have a bit of spare time available in the mornings can participate, and we know all housewives have a little bit of spare time! [Interjections.] That is all right, the hon. member for Houghton is not in the House. Municipalities are spending tremendous amounts of money on trim parks, get fit campaigns, and medals are issued if a person can run 100 metres without falling down, etc. The game of squash is, of course, the best way of keeping fit, but the hon. the Deputy Minister wants to put an additional duty of R1,50 on every squash racquet which is to be sold in South Africa.

Even the soldiers on the border now have squash courts.

That is another point. The hon. the Deputy Minister is being unpatriotic. Soldiers on the border now have squash courts, and he places an additional levy on squash rackets.

I think it is a racket.

I want to tell the hon. the Deputy Minister that I will try to squash that item. [Interjections.]

I also want to ask the hon. the Deputy Minister for information on tariff heading No. 29.15 which is contained on page 44 of the explanatory memorandum because, quite honestly, I do not know what it means. It reads as follows—

I presume this means fireworks and so on. I have heard many stories of how dangerous fireworks are and of how people want to ban them. I want to ask the hon. the Deputy Minister whether the Government has decided that fireworks are no longer going to be allowed in South Africa and may no longer be imported, and whether the Government is now making it impossible for people in South Africa to manufacture them? [Interjections.] I wonder whether the hon. the Deputy Minister is concerned about the person who said that the only man who ever went to Parliament with honest intentions was Guy Fawkes. [Interjections.]

I want to draw the attention of the hon. the Minister of Agriculture and Fisheries to item 306.09 on page 45 of the explanatory memorandum. This item reads as follows—

Whatever that means—

Why is the provision for a rebate on copper oxide, which is used in agricultural pesticides, being withdrawn? Year after year I have been pleading here for the input cost of farmers to be brought down, and the hon. the Deputy Minister was just getting to the stage where he saw my point. I have asked repeatedly for a committee to be appointed by the hon. the Deputy Minister’s department in conjunction with the Department of Commerce and Consumer Affairs to identify this sort of item. That is why I have brought it up in the House today. Here we have a classic example of what I have been talking about. As I have pointed out, copper oxide is the active ingredient in the manufacture of agricultural pesticides. The rebate on that is now being withdrawn, as a result of which, obviously, all the pesticides farmers are using are going to go up in price, and pesticides are an input cost to farmers. The hon. the Deputy Minister, by withdrawing this item, can keep down the farmers’ input costs. I ask him to consider that.

It is useful for spraying against blight in vineyards.

It is an ingredient in fungicides.

Bill, are you calling me a “boerehater”?

If the hon. the Deputy Minister grants my request, he will not be.

The last point I wish to make relates to item 31506 on page 60. There again the provision for a rebate on duty is being withdrawn. It concerns what are obviously parts for solid-fuel stoves. I would like to know why this rebate is being withdrawn at a time when we are going all-out to get away from the use of petroleum products in cooking. It would seem to me that the solid-fuel stove is something the use of which we can encourage. When it comes to smokeless zones, there are ways of ensuring that these stoves will burn without emitting smoke. I put it to the hon. the Deputy Minister that it would be possible to save on oil if this matter were to be reconsidered.

I ask the hon. the Deputy Minister for his comments on these matters. Then we can decide whether to move our amendment or not.

Mr. Chairman, it was very difficult to hear what the hon. members opposite had to say because there was quite a noise in the House. I noted here that the hon. member for Yeoville asked a question about paraffin and that the hon. member for Mooi River spoke about fire extinguishers, pitchforks, squash racquets, fireworks, copper oxide and parts for stoves that use coal. [Interjections.] I must say that I have not cleared up this matter with the hon. the Deputy Minister and therefore I do not know what his reply will be to the questions that were put to him.

I just want to pass some comments on a few of these items. As regards the question of paraffin, the hon. member for Yeoville is of course correct in saying that paraffin is used by the poorer sections of the population. I do not know if the hon. member for Yeoville is aware of it, but this paraffin is also used on a very large scale as a washing preparation in the engineering industry, in garages and on repair premises.

However, it is provided here that the issue is merely paraffin that is used in the home.

If that is all that it is about, I have no quarrel with him. However, this paraffin is also used on a large scale as a washing preparation in the motor repair industry. What is important in regard to all the items that were mentioned here, viz. fire extinguishers, paraffin, forks, etc., is that we must take into account that we have our own industries that must also be protected. The hon. member for Mooi River must also take this into account. For instance, we also have an industry that manufactures pitchforks. I do not think it is necessary for us to import pitchforks, since we manufacture our own pitchforks. The same applies to fire extinguishers. If one goes to any co-operative today, one will find a variety of fire extinguishers there that are all manufactured locally. I assume that the duties levied on the import of these articles, are levied chiefly in order to protect the local industry. The same most probably applies to fireworks, as well as squash racquets. I am not an authority on this and I do not want to give an opinion on it. However, where I do want to agree with the hon. member for Mooi River, is that we should not place unnecessary levies on the chemicals that we cannot manufacture locally and therefore have to import.

Mr. Chairman, in the first place I want to refer to the amendment that the hon. member for Yeoville has moved. If the amendment were accepted, it would mean that the customs and excise duty on fuel would be decreased by 2 cents per litre. The argument that the hon. member for Yeoville raised here, is that a decrease in duty came into operation on 12 April 1979. That decrease was aimed at strengthening the Equalization Fund so that there would not be an increase in the price of fuel for the consumer. The hon. the Minister of Industries and of Commerce and Consumer Affairs, stated clearly in a statement to the Press that this measure was merely an interim measure. If the hon. member’s amendment were to be accepted, it would amount to a loss of revenue of approximately R120 million for a full financial year and R90 million for the present financial year. It must be pointed out that in his budget speech the hon. the Minister of Finance announced that tax concessions of approximately R909 million would be granted during this financial year. Bearing this in mind, it is clear that a further loss of revenue amounting to R120 million is not desirable at this stage and consequently I cannot accept the amendment. I just want to point out further to the hon. House that the hon. the Minister of Environmental Conservation and Energy issued a statement to the Press on 12 April 1979 in which he said the following—

I feel we must be very careful not simply to eliminate customs and excise duty of this extent without due consideration. No one sitting in this House today can say what is going to happen to the oil price in future. It may be very popular to forfeit 2 cents per litre at the moment. Hon. members of the Opposition can therefore ask for it. If it came to that, they would ask for more than.2 cents. When the oil price increases again as a result of the increase announced by the Opec countries, the Government will have to increase the domestic oil price, since it carries the responsibility for it, and then the hon. members of the Opposition would be the first people to reproach us about that. That is why I am simply not prepared to give a hearing to this proposed amendment.

The hon. member for Mooi River moved a number of amendments.

I did not move them.

That is correct. However, the hon. member announced that he may yet move them. The tax on the goods that are referred to in paragraphs (a), (b) and (c) of the hon. member for Mooi River’s amendment, were increased at the recommendation of the Board of Trade and Industries. When one takes note of what goods they are, it appears that they are the following: Liquid preparations for fire extinguishers, preparations that contain chlorine compounds and on which the scale is being increased to 25%; then there is also garden forks, squash racquets and frames. In the explanatory memorandum with regard to the amendments of the schedule to the Customs and Excise Act, 1964, the Board of Trade and Industries made certain recommendations in report No. 1906. After the Board of Trade and Industries makes these recommendations to the hon. the Minister of Industries, they are referred to the Department of Finance and we consider the matter in view of the financial implications thereof. After that, exemptions of increased duties are proclaimed by the Department of Finance. These increased duties are introduced as a protective measure, since the goods in question are manufactured locally. For instance, if we do not stimulate and protect the local manufacture of these types of materials, that are intended for extinguishing fires, we can end up in a situation in which the countries abroad could introduce a selective boycott action against South Africa. As we all know, there are certain countries in the world that, when large scale fires might occur in South Africa, would immediately place a prohibition on the export of fire extinguishers and fire extinguishing material. Then we would really be in trouble because we would have allowed the domestic industry to come to nothing due to overseas competition, and therefore no longer have material with which to fight fires. Therefore, these measures were taken in the national interest. They were taken to protect the local industry.

Of course, the same also applies to garden forks to a certain extent, which was the next article to which the hon. member referred, as well as squash racquets and racquet frames. When an industrialist asks for protection by means of customs duty, the matter is referred to the Board of Trade and Industries, which really makes a thorough study of it. That is not all. The importer of that article and the entire trade in that article is consulted. It often happens that serious objections are received to such an application for an increase in duty. The board takes all those requests into very thorough consideration. After that it is considered by the hon. the Minister of Industries, following which the hon. the Minister of Finance considers it too. Therefore, I can give the hon. member the categorical assurance that these matters are very thoroughly weighed up. Knowledgeable people report on them. In so to say all the cases the organized industry is consulted for their opinion. We do not simply adopt these measures lightly. With regard to ammonium oxalate and ash-pit tops we will institute the rebate immediately if anyone requests it, but there is no longer any demand for it. Therefore, it is consequently no longer relevant to the situation.

Now I should like to come to the question of paraffin, a question which the hon. member for Mooi River raised here. I want to put it to the hon. member for Mooi River and the hon. member for Yeoville that there is no tax payable on paraffin whatsoever and that there has not been any tax on this product for many years. Hon. members will remember that the price of paraffin was recently increased by 6 cents per litre for consumers, if I remember correctly. It is a decrease in accordance with the Equalization Fund that was announced by the hon. the Minister of Industries. He is the Minister responsible for the Equalization Fund. Since paraffin is such an extremely important source of light, cooking and heating, particularly for the less well-off people, it was decided to grant a considerable discount on paraffin, and this is still in effect. I can assure hon. members that no duties are levied on paraffin.

Mr. Chairman, I have listened very carefully to the hon. the Deputy Minister’s reply and I have considerable difficulty with the figures he gave. He said that this meant a difference of 2c per litre and would amount to a loss of R120 million in revenue. I hope I heard him correctly. I think my hon. colleagues also heard him that way. Now if that is so, that means that we are dealing with 6 000 million litres of this kind of kerosene which is going to be used for household consumption. Is that correct? In other words, we are dealing with 6 000 million litres, and I am quoting the hon. the Deputy Minister’s figures.

The second point is that according to the estimates of revenue which I have for the financial year ending 31 March 1981, in the 1979-’80 year there was R1 009 million that was going to come from excise duty and in the 1980-’81 year R1 111 million which is going to come from that source. That means that the hon. the Deputy Minister is suggesting that 10% of the total excise duty comes from kerosene products used for home consumption. I find the greatest difficulty in accepting these figures. I cannot challenge them, but they are the most remarkable figures I have seen. I cannot really believe that the poor people of South Africa who use kerosene products in their homes are responsible for 10% of the total excise income. That cannot be right. I think there must be a mistake in the hon. the Deputy Minister’s figures, and I think he should deal with it. There seems to me to be a difference between what the hon. the Deputy Minister calls “lampolie” and what is here referred to as “kerosene products” used for home consumption. I think there is a great misunderstanding somewhere, and I hope that the hon. the Deputy Minister can clear it up.

Mr. Chairman, the hon. member for Yeoville’s amendment concerns a decrease of 2 cents in the price of all fuel. Is this what it means?

No, only for domestic consumption.

The exemption that was granted in terms of proclamation No. R.2296 affected all fuel in the country. That is where the sum of R120 million comes from.

Mr. Chairman, I just want to clear up one point. I could not quite get the answer of the hon. the Deputy Minister with regard to the matter of copper oxide for agricultural pesticides. Is it one of those that have not been asked for over the last couple of years, or is it a special matter to which he did not reply? I thank the hon. the Deputy Minister for the answer he gave me, and I am satisfied with it. I shall not move my amendment. However, I await the hon. the Deputy Minister’s reply with regard to copper oxide.

Mr. Chairman, South Africa ranks as one of the great copper producers of the world. Copper oxide of the required quality is manufactured locally, and that is why we withdrew the rebate of the duty on imports. The reason for this is the same, viz. to protect local industries and to ensure that the country can withstand any boycott action in that regard.

Amendment negatived (Official Opposition and New Republic Party dissenting).

Clause agreed to.

House Resumed:

Bill reported without amendment.

Third Reading

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

The impression that most people have of customs and excise officers is of people who stop other people at airports and harbours in order to establish whether they have taxable or prohibited goods to declare. Most people are under the impression that it is the main objective of these officers to complicate and delay one’s passage through airports and harbours. The extremely important security service that these officers render to the community, however, is overlooked, and I should like to emphasize this security service. These officers are our first defence line against the illegal import of, for instance, drugs, pornography and goods that may be to the detriment of the agricultural industry. In this regard it is particularly the import of animals and animal products that can result in the spreading of animal diseases, such as foot-and-mouth disease, Newcastle disease, etc. With regard to drugs, I can mention that since 1979 officers have found approximately 97 000 Mandrax tablets which passengers wanted to bring into the country illegally. These tablets are hidden very deviously and the officers have to be extremely meticulous in order to find them.

For instance, in one case it seemed to an officer that a portable organ that someone had with him, was heavier than would normally be expected. On closer inspection the officer noticed that some of the screws in the organ were not properly screwed in. The organ was opened up and approximately 15 000 tablets were found inside. If we bear in mind that these tablets would have been sold to addicts for approximately R10 each, we realize what a valuable service is being rendered by these officers.

Another important service is the protection of local industries against low-priced goods being imported from abroad. In this case customs and excise officers must see to it that the correct import duty is levied. If this is not done, incalculable damage can be caused to local industries which could result in large-scale unemployment. Here one can think of the clothing industry etc. in particular.

As hon. members know, provision is also made for certain raw materials and parts to be imported without payment of import duty, provided that they are used for the manufacture of approved goods. By forfeiting the tax on these raw materials and parts, local manufacture is encouraged. In this case officers must also see to it that the provisions are implemented correctly.

The main objective of customs and excise is to collect revenue for the State. Customs and excise duty is also very important to revenue. For the 1980-’81 financial year, it has been calculated that a sum of approximately R1 611 million will be collected. Of this amount, customs duty represents R480 million and excise duty R1 111 million. Although it seems that customs duty is not such an important source of income as excise duty, the protection and encouragement of local industries must not be overlooked. It has been calculated that the rebates granted on imported goods, mean a loss of revenue of approximately R400 million per year.

The general public has a limited and possibly a negative image of the functions of the customs and excise officers. The positive action of these officers is largely ignored, and I am of the opinion that more emphasis should be given to them.

During the Second Reading debate, the hon. member for Yeoville referred to the present Commissioner as a “tough cookie”. [Interjections.] In the nature of the provisions of the Customs and Excise Act, strict action towards offenders is essential. However, my experience is that strict action takes place in a humanitarian way.

Question agreed to.

Bill read a Third Time.

Mr. Speaker, I move—

As is customary, this Bill deals with various matters relating to the State Revenue Fund and the finances and accounts of the Railways and Harbours.

Since the various clauses are explained in the Explanatory Memorandum which hon. members already have before them, I do not think it is necessary to explain the clauses in detail at this point. If hon. members require more information about any clause, I or the hon. Minister in question will be happy to provide further details.

Mr. Speaker, the Bill is of course the usual omnibus Bill, but there are a number of matters on which we should like to have more detailed explanations and on which we should like to comment in despite of the very full explanatory memorandum.

May I start off by referring to clause 1? It is of course a somewhat unusual procedure which is being followed here in the sense that expenditure which really relates to the 1981 financial year is being surplused from a surplus which existed as at 31 March 1980. In fact, I would imagine that in accordance with proper and strict accounting practice all the amounts should have been shown as being part of the surplus for the year and should then have been separately appropriated in the new year so that we could then see the real extent of the expenditure in the 1981 financial year. Whereas we have no objection to this, we believe that it is a way of seeking to demonstrate that expenditure during the current year is not quite as high as it would have been had it been dealt with in another fashion. That is the only problem we have with this, and I think the hon. the Minister, who is shaking his head, must concede that it comes from the surplus as at 31 January 1980 and therefore is already being appropriated now, in terms of this Bill, rather than being dealt with in terms of the financial position for the 1981 financial year.

Clause 2 deals with unauthorized expenditure. This matter has been fully investigate in the Select Committee. In the normal course of events there would be a further debate about it here, but as at least one of the matters concerns the Department of Defence, and has already been fully ventilated, I do not believe it is necessary that we should now redebate that at this stage. I think our views are well-known, and I do not believe it is necessary to have a full debate on it again now.

Clauses 3 and 4 relate to the town board of Richards Bay. We shall support these provisions. However, there is a very interesting principle which is involved here, and that is that if a certain development which relates to a local authority is not only in the interest of that particular local authority, but also has an aspect of national interest involved in it, the financial assistance in respect of that development is given by the central Government, as is done in this case. We actually welcome that principle, because our concern lies with local authorities that have limited sources of revenue and therefore require this kind of assistance. If this particular board had not received this assistance, we doubt very much whether Richards Bay could have been established in the manner in which it was established. We therefore support it, but I want to tell the hon. the Minister that we actually regard this as establishing a precedent in the sense that we might well approach the hon. the Minister and tell him that there are other matters for which this sort of assistance should be given.

I should also like to refer to clause 5, which concerns the Eastern Cape Administration Board. I want to tell the hon. the Minister that the Eastern Cape Administration Board is an utter disaster and that the sooner somebody does something about the Eastern Cape Administration Board, the better it will be. In this particular instance there is obviously a good case to be made out for the writing off of this money, but as far as the ability of the Eastern Cape Administration Board to deal with its affairs is concerned, we are extremely unhappy. In respect of that submission we have the support of the Select Committee on Public Accounts. The hon. the Minister will have to talk to his colleagues in the Department of Co-operation and Development about this board and about boards in general, because there is something fundamentally wrong with the whole system of Administration Boards as far as the administration, the way in which they run their finances and a whole variety of control measures are concerned. The responsibility for that lies with the Cabinet, in particular the hon. the Minister of Co-operation and Development. However, in the final instance the responsibility lies with those who were responsible for the creation of those particular bodies. We are indebted to the Auditor-General, and also to the private auditors involved, for seeing to it that proper audits were done. However, the whole running of these things is something that is going to need the attention of the Government at a very early stage. I want to tell the hon. the Minister that he should go back to the Cabinet and tell the Cabinet that something has to be done to replace the Administration Board system with something which is more effective. They are dealing with a very delicate situation in South African politics and therefore they have a far greater responsibility than other administrators. Broadly speaking they have failed. There are exceptions, I admit, but broadly speaking that system has failed, and we ask the Government to take action in this regard.

I now want to turn to the clauses relating to the divisional councils. We have no problems in respect of those and we also have no problems in regard to the town board of the township of Melmoth.

We then come to the provisions relating to the South African Mint and the Kruger medallion. We have no objection to the changes which are listed. We also have no objection to the schedule as it is set out, and we certainly welcome the concept that we will have coins other than the Kruger Rand. I may say that although we have never minted a R5 gold coin I, for one, am sorry that we have never done this. I think that to mint a larger coin than the Kruger Rand today is perhaps not an attractive proposition any more, from an economic point of view, but there was a time when we could have done it and when it would have been a good investment medium. However, I want to suggest that if things go well with us we may, as we are doing now, do away with the concept of needing a R5 coin. If gold really goes places we may well be able to do away with the Kruger Rand and only deal in half-Kruger Rands if the price goes that high. Perhaps that is really living in a dream world, but it is a reality that to some extent the fact that we are doing away with a R5 gold coin means prosperity for South Africa, because the increase in the gold price has made that a proposition that is not attractive any more.

The provisions of clause 15 relate to reproductions of the Kruger Rand. This is something which has disturbed some of us in the past. The concept of a Kruger Rand medallion is not only being marketed abroad but it has been abroad in South Africa as well. People have been sailing very close to the wind in regard to passing off Kruger Rand medallions. I would like to see a stop put to this, as would the hon. the Deputy Minister, I am sure. The only problem that I have with this clause is that it says that one may not use the words “Kruger Rand” or any derivative thereof. What people are really doing, however, is using the words “Kruger Rand” in conjunction with other words. In ordinary law, when somebody passes something off, the fact that one uses it in conjunction with other words does not mean that one can escape the consequences. Therefore I propose to move an amendment during the Committee Stage to the effect that the words “or any combination thereof with any other word” be added. In other words, the words “Kruger Rand” may not be used either in a derivative form or in conjunction with any other words.

One of my colleagues will deal with the provisions dealing with the Railways and we have no problems with any of the other provisions contained in the Bill. Therefore we will support this Bill at Second Reading.

Mr. Speaker, the hon. member for Yeoville became very excited about the financing of the administration boards.

With good reason.

I want to say to the hon. member in all fairness that item No. 18 on today’s Order Paper is the consideration of the Second Report of the Select Committee on Public Accounts.

We shall not get to it.

I do not think it was necessary for the hon. member for Yeoville to become so excited. The Select Committee considered these matters and a report was issued which we agreed on and which will come before this House. I do not think it is necessary at this stage for the hon. member to discuss matters affecting this report in such emotional terms. That is all I want to say about the matter.

Order! I just want to point out to the hon. member for Malmesbury that he may also do so, because if I am convinced that an item on the Order Paper will not be taken, I have full discretion to permit a discussion on the matter in the debate on the Appropriation Bill and other relevant Bills.

Mr. Speaker, I should just like to comment on three matters in the Bill. Firstly, there is the question of Richards Bay and Melmoth. The hon. member for Yeoville was quite right, because this concerns a very important principle, which is being accepted almost by default. I do not know whether the hon. the Minister intends this to be accepted as a principle by which he can be guided in the future or whether this will simply be an ad hoc thing where each case will be considered on merit. The hon. member for Schweizer-Reneke spoke recently about Mafeking being incorporated into the independent State of Bophuthatswana. Similarly, there are going to be many other areas which are going to be incorporated into Black States on their way towards independence or whatever. Therefore, I believe other areas are going to find themselves in the same situation where the development of a capital city or of an industrial city in a Black State is going to require a considerable investment of funds in order to house the White community who are essential for leading the people concerned into the industrial set-up that is being established. They will be housed in their own White area but they will be commuting every day to the area where the industry is placed. I regard it as entirely proper that the State should take such a step in such cases, of which Melmoth, which services Ulundi, and Richards Bay itself are examples. I think this is certainly something we have to support. Those who have been to Melmoth know the problem. We have had discussions with the people there and know what is going on there. I think it is a very real problem that town board had to face. Any small local community which is faced with a sudden development like this simply cannot out of the normal rate charges bear the interest and redemption charges involved. We welcome this provision and support it. I want to ask the hon. the Minister whether we can now take it that in any such case this sort of assistance will be forthcoming.

I should also like to support the hon. member for Yeoville in what he had to say about the Krugerrand. The Krugerrand is almost part of the national prestige of South Africa. It has come to be associated so much with our country that anybody who wants to climb on the band-wagon for his own purposes and wants to bring down the esteem in which that coin is held in the minds of the public should be stopped from doing so.

Then I should like to refer very briefly to the funds administered by the Public Debt Commissioner. I think that the Public Debt Commissioner with the aid of those funds provides an absolutely indispensable service in regard to the funding of particularly local authorities and other bodies in South Africa. I have never met a Public Debt Commissioner. I wonder who those commissioners are?

I am one.

I am so glad. I am pleased to know there is one here.

Are you getting worried?

No, I am not worried. I trust the hon. the Minister with public debts. I feel that these are some of the unsung heroes of the public financing system in South Africa. I want to say that we accept and welcome the fact that the capacity to operate in that field has been extended.

Mr. Speaker, I am very grateful for the opportunity to take part in this debate this evening and to support this legislation. I want to thank the hon. members for Yeoville and Mooi River for supporting the Bill in order to accommodate Richards Bay and Melmoth. However, I think that there is just one aspect in this connection that we must put into perspective. When the development there was undertaken, it was initially decided that the local authority would fall under the control of the Department of Planning. In fact, that department nominated the chairman of the town board and the majority of the members of the town board, because money was voted for the development and establishment of an infrastructure at Richards Bay. The development that was undertaken there is on a vast scale. It comprises an area of 310 km3, and initially 1 200 ha was earmarked for a petro-chemical industry. Due to circumstances beyond the control of the local planners, the Department of Planning and the town board, this petro-chemical industry did not materialize. When one plans a growth point of this scope, it is logical that one has to create an infrastructure capable of accommodating the kind of growth that may take place. It did not take place, and one cannot expect the group of pioneers who did establish themselves there to bear this tremendous burden of debt. The hon. member for Mooi River states that a precedent is now being created here, but his party is partly responsible for the fact that there is such a heavy burden of debt on the town board of Richards Bay. As far as I know, it is the duty of a provincial administration to build a road from one town to another. I just want to say to the hon. member for Mooi River that the road from Empangeni to Richards Bay, the extension of the John Ross Highway, had to be built and tarred by the town board of Richards Bay at a cost of more than R3 million. The provincial administration of Natal was not prepared to build that road. Moreover, the town board also built the road from Ijukhaweni to Richards Bay, but the Department of Co-operation and Development did its duty in that regard. I just want to say to the hon. member for Mooi River that another road has now to be built, running from Richards Bay to Richards Bay Minerals, the new smelting works. The town board of Richards Bay is going to build that road as well. Therefore, when the hon. member speaks here about precedents being created, he must know that his party is partly responsible for that burden of debt. [Interjections.]

The acceptance of this legislation heralds a new era for Richards Bay. In the first place it will enable the town board to create more stability and compete to a greater extent with the surrounding areas with regard to land prices, rates and so on. When they achieve a state of self-sufficiency, it will also mean that the town board will become autonomous and that the members of the town board will be elected by the inhabitants of Richards Bay within the near future. This also creates great challenges for the people of Richards Bay.

In conclusion, I wish to pay tribute to the former Department of Planning and the Environment, the town board and the officials who performed a gigantic task under extremely difficult conditions and established a model city of which we can rightly be very proud. To the hon. members over there in the corner, I also wish to say that we expect their full support, since the creation of that growth point also creates employment opportunities for Black people in Zululand.

With these few words I take pleasure in supporting this legislation.

Mr. Speaker, the hon. member for Eshowe has pointed out that it was necessary for the municipality of Richards Bay to pay for certain roads into Richards Bay which would otherwise have been the responsibility of the Provincial Administration of Natal. However, quite rightly, when new infrastructure towns are being built, it is necessary for the Central Government to give assistance and in the clause to which the hon. member has referred provision is made for the Treasury to write off certain loans owing by the Town Council of Richards Bay.

I rise merely to comment on clauses 19, 20 and 21 which have to do with the South African Railways and Harbours Administration. During last year the Franzsen Committee was appointed to look into the services that the South African Railways provide in respect of passengers—these services are not economical and are run purely for socioeconomic reasons—to move commuters from one part of the country to another. It was felt that it was unfair that other railway users should have the unreasonable burden of the losses on these services transferred to them, and it was accepted in principle that the Treasury would pay for these losses itself rather than the Railway Administration.

In clause 19 an amount of R1 870 million, which is a certain percentage of the total aggregate of loans which have been made over a period to the Railway Administration, is being deemed to be permanent capital made available to the Railway Administration for rail passenger services. Also further sums of money were deemed to be interest on that capital amount, and have also been written off as a kind of subsidy to the Railways, although one should perhaps not call it a subsidy, because in fact it is payment for services rendered, services rendered for the public good, and normally services which the Railways would not have undertaken unless they had been repaid by central Treasury.

We certainly support clause 19. It contains a provision which we suggested some years ago. We suggested it was most unfair that the Railway Administration should have to bear these socio-economic costs. Clause 19 puts this into effect. It has our full support.

Clause 20 and clause 21 are purely technical clauses. In terms of clause 20 the revenue deficit for the financial year ended 31 March 1980 is debited to the Rates Equalization Fund. It is a pity this amount should have been a debit. We hope that next year the hon. the Minister of Transport Affairs will be able to transform that into a credit going to the Rates Equalization Fund. Clause 21 creates a better situation in that there are credits in the Reserve Account of the Sinking Fund and the Betterment Fund, which go to the Revenue reserve. We support that clause as well.

Mr. Speaker, I should like to refer to clauses 9 to 16 of the Bill which deal with the smaller Kruger rands. During the Part Appropriation on 25 February this year, the hon. the Minister of Finance announced that he had granted approval for smaller gold coins to be minted, namely a half, a quarter and a one-tenth Kruger Rand. This concession was made at the request of the Chamber of Mines, and was the result of the increasing trade, not only in South Africa, but also overseas, in the golden R1 and R2 coins.

Smaller gold coins are already available abroad, and if South Africa does not adapt itself to the situation and also mint smaller gold coins, we shall lose much of that trade. That is the reason for these provisions in the Bill at present before the House.

The Kruger Rand is today the world’s best-known gold coin. It also enjoys more confidence than any other gold coin in the world. The golden Kruger Rand is exactly 10 years old today. The first golden Kruger Rand was minted in 1970, and was made public at the Easter Show in that year. Strangely enough, at the time the Kruger Rand attracted very little interest and there was very little enthusiasm for it. When it was marketed, due in particular to the major role played by Intergold in this regard, the Kruger Rand gradually began to make a name for itself, and very soon there was a substantial increase in sales. During the first year that Kruger Rands were offered for sale, only 2 011 of those coins were sold. In 1979 the figure rose to 4,9 million. 1978 was really a record year. In that year 6 million Kruger Rands were sold. This represents approximately 26% of South Africa’s annual gold sales.

When the Kruger Rand was made public in 1970 the principle behind the minting of Kruger Rands was to ensure that the greatest possible number of private people possessed gold, to ensure that a larger number of people throughout the world would have a personal interest in the price of gold. Of course, it was also regarded as a medium for investment. Secondly, it was to offer gold to the general public in convenient, easy and relatively cheap form, and in the third place, to ensure that gold was collected by individuals who would not lightly resell it, as the large companies would. When one considers the increase in the gold price over the years, one sees that the Kruger Rand has been a good and profitable investment. For example, in March 1970 the price was R27,24, whereas in 1980 it was R511,06, representing an increase over 10 years of 1 776%—truly a sound investment. Due to the increase in the gold price, the Kruger Rand is no longer within the reach of the average man, and accordingly it was decided to mint the smaller units, namely the half Kruger Rand, the quarter Kruger Rand and the one-tenth Kruger Rand. Therefore, we on this side of the House take pleasure in supporting this legislation.

Mr. Speaker, I have listened with interest to what I consider to have been a very interesting debate. I want to thank hon. members on both sides of the House for their constructive approach and I appreciate the support they have pledged for this Bill.

†The hon. member for Yeoville referred to clause 1. I agree that one could do it in more than one way. This was not a deliberate attempt to try to hide a surplus, but we felt that we were so pleased to have this for these two important purposes that we felt we should use it right away. However, I must say in mitigation that I think we have done it several times in the past. I know we did it last year and I think the year before as well. But I can check it.

We shall do it again next year.

We first have to have a surplus. The Minister of Finance can never be sure whether he will have a surplus.

Do you want to take a bet on that one?

However, I take the point. Obviously another way to do it is as the hon. member has said, i.e. one could transfer it straight into the new year and then take it out from there.

The hon. member for Yeoville and the hon. member for Mooi River referred to Richards Bay. I also convey my sincere thanks to the hon. member for Eshowe for the matter which he discussed. I think he put the matter in the right perspective. I should like to say that I would not regard that as a precedent, because I think it is necessary in all such cases that one should examine them on their merits. But on the other hand it does give an indication of official thinking. If similar sorts of cases came up, I imagine one would be inclined to be consistent, but I would not like to regard it as a basic principle that we are laying down. I would rather like to think that we would look at each case on its merits.

The hon. member for Yeoville talked about the Eastern Cape Administration Board being a disaster. I am afraid I do not have much knowledge of the Eastern Cape Administration Board and I have not had the opportunity to see the report of the Select Committee yet; so perhaps the hon. member will agree that I should withhold judgment. I do know that there have been problems. I know that one or two issues were referred to the Select Committee, matters arising from other boards in regard to investment activities, and this is something which we shall certainly look at very closely. The hon. member for Malmesbury referred to the fact that the report of the Select Committee still appears on the Order Paper.

I am glad the hon. member for Mooi River mentioned the Public Debt Commissioners. They certainly do not get much honourable mention. The Public Debt Commissioners are three in number. The Minister of Finance is the chairman and then there is a representative from the Railway Board. He is Mr. Coenie de Villiers. The third appointment is Prof. Franzsen, who was appointed when he was the senior Deputy Governor of the Reserve Bank. He is still doing excellent work there. The Secretary is a Mr. O’Reilly, and there is a small staff of eight who run what, in some ways, is the biggest bank in South Africa. It is an astonishingly well-run office. I can say that, because I am not in the office. I can be objective. I am very pleased that the hon. member raised this, because I am very happy to have the opportunity to pay tribute to Mr. O’Reilly and his handful of dedicated, highly expert officials who run the whole show. They handle thousands of millions of rand and their knowledge of interest rates, investments in general and investments trends is, to my mind, quite remarkable.

I am glad that the hon. member for Orange Grove supports us on clause 19. As one can imagine, the Treasury did not simply lightly leap into that, but those negotiations are still continuing. Certain matters still have to be finally resolved, but Professor Franzsen, among others, has been extremely helpful with his committee, and we are still making use of them. I agree with the hon. member that, probably, it is not strictly a subsidy. It is probably more correct to regard it as a payment for services rendered. I imagine that the Railways, for instance, had they not been looking to official policy in some cases, might well not have put down tracks in certain directions, and felt that that at least was something the State might make some contribution to, especially in the case of losses. That is the underlying thinking in this regard. We shall have more to report on that.

*The hon. member for Alberton gave us some interesting facts with regard to the Kruger Rand. I thank him for his interest.

With those few words, I believe, I have dealt with most of the points that were raised.

Question agreed to.

Bill read a Second Time.

Committee Stage

Clause 15:

Mr. Chairman, I indicated during the Second Reading debate that I should like to move an amendment and I now move as follows—

I motivated that during the Second Reading debate. I do not propose to repeat myself, unless there is any problem in that regard.

Mr. Chairman, I received the amendment of the hon. member for Yeoville earlier on. I have studied it and I am quite prepared to accept that amendment.

Amendment agreed to.

Clause, as amended, agreed to.

House Resumed:

Bill reported with an amendment.

Bill read a Third Time.

Mr. Speaker, I move—

The Sales Tax Act has been in operation for almost two years. As a means of raising revenue it has come fully up to expectations. In the period of nine months ended 31 March 1979 it yielded R654 million, and in the 1980 financial year it is expected that the final figure will be R1 250 million. The collections for the current financial year are estimated at R1 550 million. That means an income of R387,5 million per 1%. The expected increase is due solely to the upsurge in economic activity, as the rate of the tax has remained fixed at the modest level of 4% which, I may mention, compares more than favourably with the rates of similar taxes in other countries. The successful implementation of the Sales Tax Act has been largely due to the fact that it is a general tax in the sense that it is levied on all transactions of the kinds mentioned in the Act, such as sales of goods, financial leases, imports and so forth, without being burdened with numerous exceptions on a commodity basis, and to the fact that the tax is levied at a single rate.

The various exemptions that have been provided in the Act are in the main designed to ensure that the burden of the tax falls on the end consumer and to prevent any undue escalation of the tax. Manufacturers, for instance, bear tax on some of their inputs, and this tax is passed on to the end consumer as an element of the price paid by him for the manufactured goods. Where this element has been found to be excessive, an exemption has been provided in the Act, and further exemptions are considered if the element of escalation is shown to be unacceptably high. Exemptions are also granted for other reasons, some of which will be appreciated from the provisions of the Bill, but as far as possible not by reason of the nature of a commodity that is being sold, leased or imported. It is the transaction rather than the commodity that is being taxed or exempted.

I turn now to the more important provisions of the Bill: Firstly, ships. In terms of clause 2(1)(e) an exemption is provided in respect of the sale to or importation of a ship by a resident of the Republic or by a company which is a domestic company for income tax purposes, if the Commissioner for Inland Revenue is satisfied that the ship will be a South African ship under section 14 of the Income Tax Act and that it will be used wholly or mainly as a foreign-going ship. The exemption is to apply with retrospective effect from 3 July 1978. I need not emphasize the importance to the Republic of having its own mercantile marine. Sales tax is, in effect, a tax on the consumption or use of goods within the Republic, and although it applies also to capital goods, slightly different considerations apply to foreign-going cargo vessels because these vessels are operated for the most part outside the territorial waters of the Republic. A further consideration is that the imposition of sales tax on foreign-going ships places local shipowners at a disadvantage when one compares them with their foreign competitors who are not subject to any similar foreign tax. The definition of “foreign-going ship” is amended by clause 1(1)(c) to distinguish them from other kinds of ships and to make it clear that a cargo or passenger ship which calls at more than one port in the Republic is to be regarded as a foreign-going ship if its ultimate destination is a foreign port. This amendment makes it clear that such a ship, including a foreign-owned one, will be able to obtain bunkers and stores free of tax, these being regarded as exports.

Financial leases:

Hon. members are aware that sales tax is levied on the cash value of property let under a financial lease. A cession of the lessor’s rights under such a lease is normally tantamount to a sale of the leased property. The definition of “sale”, however, excludes a cession of a financial lease except where the cessionary is the lessee or is a connected person in relation to the lessee, for example, a company in a group of companies. In terms of the amendment introduced by clause l(1)(f) the exclusion will not apply when the lessor’s rights are ceded under a block discounting agreement. The effect of this is that the cession of a lease under a block discounting agreement will not attract tax, even if the cession is made to the lessee or a connected person in relation to the lessee. Block discounting agreements are normally made with financial institutions and the amendment removes a difficulty which arises where the lessee under one of the ceded leases happens to be a connected person in relation to the financial institution concerned.

When a lessee under a financial lease disposes of his interest in the lease to some other person by delegating his rights and obligations, the effect is that there is a new transaction which should be subject to tax, in much the same way as when there is a substitution of a debtor under a hire-purchase agreement. In terms of the amendment introduced by clause 9 a delegation of the rights and obligations of a lessee under a financial lease is deemed to be a new financial lease and the market value of the leased property will be regarded as being the cash value thereof. An exemption is provided if the lessee’s interest in a financial lease is included in the sale of the assets of a business and the business is disposed of as a going concern. The new provisions will apply to delegations effected on or after the date of promulgation of the amending Act. The tax in respect of any such delegation, which will be 4% of the cash value, will be payable by the lessor and will be recoverable by him from the new lessee.

I turn now to a category of financial leases which I shall call “export leases”. These leases are granted by financial institutions in the Republic in respect of movable goods and machinery or plant situated in other countries. In terms of section 6(1)(1) of the Sales Tax Act an exemption applies in respect of export leases, but the exemption does not apply if the lessor is ordinarily resident in the Republic or is a domestic company for income tax purposes. Furthermore, the lessor under a lease exempted under section 6(1)(1) is required under section 6(1)(f) or (t) to pay sales tax on goods which he purchases or imports for the purpose of letting under a lease which is so exempted, unless there is a liability for sales tax or a similar tax in the country where the goods are situated and the leased property consists of goods of a kind which is registerable under a law of the Republic, e.g. motor vehicles, but does not have to be registered under that law, or the leased property consists of machinery or plant having a fixed location in the country in question.

Clauses 2(1)(a) and (c) introduce textual amendments to sections 6(1)(f) and (t) of the Act in order to overcome certain technical difficulties and clause 2(1)(b) inserts in section 6(1) a new paragraph, numbered (1A), providing an exemption in somewhat wider terms than the present exemption under section 6(1)(1), so as to provide for cases where South African residents or companies hire goods, plant or equipment under export leases for the purposes of their businesses in other countries. The exemption will neither apply to movable goods which are not of a kind registerable under a law of the Republic, nor where no sales tax or similar tax is payable in relation to the leased goods, whether movable or immovable, in the country in question.

*Aids for physically handicapped persons

I come now to a matter of deep concern to all of us, viz. the problems of handicapped persons such as paraplegics, quadroplegics, the deaf, retarded children, etc. During Budget Debate the hon. member for Stilfontein set out the problems being experienced by these people very well and asked whether it was not possible for wheelchairs for quadroplegics, which are battery-operated and which already cost approximately R3 000 each, to be exempted from the sales tax payable on them upon importation. The hon. the Minister gave the undertaking that Inland Revenue would be requested to go into the matter. This has been done and I am very pleased to be able to inform hon. members that it has been found possible to accede to the request, as will be seen in clause 10, by means of which a new heading, heading No. 87.11, is being inserted in Schedule 5 to the Sales Tax Act. This covers the importing of invalid carriages which, like those which were mentioned by the hon. member for Stilfontein, have to be imported from overseas. A further exemption is being proposed in the Bill with regard to the sale of invalid carriages as well as other aids which are used by physically handicapped persons. I am referring to the amendments introduced by clauses 2(1)(d) and 11 of the Bill. Apart from wheelchairs the list of aids contains various other items which are also essential to the physically handicapped person.

Hon. members will realize that the exemptions which are being proposed are in reality at variance with the idea that there should be as few exemptions as possible in respect of commodities. In this case, however, it was concluded that it was possible to make an exception, because the exempted items are of such a specialized nature that they are sold in speciality stores. One of the major reasons why exemptions in respect of commodities are being limited is the burden which would be placed on shopkeepers if they had to make a distinction between taxable and non-taxable items. Of course this reason falls away as far as the exempted items are concerned, since they are not sold in ordinary stores.

Taxable services

Clause 7 introduces amendments to schedule 1 to the Sales Tax Act. That schedule stipulates the services which are regarded as taxable services. The changes which are being made, are as follows—

1. (a) Repair, maintenance, installation and other services in respect of any machinery or plant which is used for the generation of power, are taxable services. In terms of the amendment that is being effected by clause 7(1)(b), the transformation of power by certain transformers will also be regarded as the generation of power. This amendment is in accordance with expert advice which was sought.
2. (b) Animal care services are taxable services. In terms of the amendment effected by clause 7(1)(c), services of this nature which are rendered by farmers in the course of farming activities, will no longer be regarded as taxable services.
3. (c) Subparagraph (e) of paragraph 1 of schedule 1 was introduced last year so that certain manufacturing services which were previously regarded as sales could be regarded as taxable services. When they were still regarded as sales, clothing factories which rendered cutting, making and trimming services to concerns outside the Republic in respect of clothing material which is supplied by those concerns and returned to them, were able to render such services free of tax since this was regarded as exporting. The amendment has entailed that it is no longer possible to render these services free of tax. Since it was not the intention to withdraw an existing exemption, the amendment in clause 7(1)(d) was drafted to reinstate the exemption with retrospective effect from 1 August 1979.

Manufacturing enterprises

In terms of paragraph 3 of division I of schedule 2 to the Sales Tax Act, a manufacturing enterprise may have repair services in respect of its manufacturing machinery effected free of tax. It may also purchase any parts for the purposes of such a service free of tax. In terms of the amendment introduced by clause 8(1)(a) it will also be able to purchase materials for the purposes of such a service free of tax, provided that these do not include goods included in the list of non-qualifying goods. The materials being envisaged here are materials such as paint and welding rods.

In terms of paragraph 7 of division I of schedule 2, certain goods which are used in furnaces may be purchased free of tax if they are used in the manufacture of primary iron and steel products or in the production of ferro-alloys or non-ferrous alloy metals. In terms of the amendment introduced by clause 8(1)(b), paragraph 7 will also apply to the manufacture of glass.

Clause 8(1)(c) adds cutting gases to the list of non-qualifying goods, i.e., goods a manufacturer may not purchase free of tax.

It is not always easy to ascertain whether a specific process is a manufacturing process. Clause 1(1)(e) inserts a definition of “process of manufacture” in section 1 of the Sales Tax Act to include process which in the opinion of the Commissioner is similar to a process of manufacture. It is envisaged that the Commissioner will from time to time publish in the Sales Tax Guide the processes which he considers to be such processes.

Services enterprises

Clauses 8(1)(d) and (e) are concerned with the permissible inputs of services. The reason for the removal of herbicides from the list of permissible items specified in paragraph 2 of division 1A of schedule 3 is that herbicides are not used in any taxable service. The insertion of animal feeds which are offered by the provider of animal care services, is necessary because the taxable fees which the provider of the services charges for his services, also includes a considerable component in respect of animal feeds. By allowing the tax free sale of boiler fuels to any laundries and dry-cleaners, neutrality is effected between such enterprises and manufacturers, for example clothing manufacturers, who are able to purchase such fuels free of tax.

The amendment introduced by clause 8(1)(f) is concerned with the inputs of printing enterprises and the amendments introduced by clauses 8(1)(g) and (h) are concerned with the inputs of mining and quarrying enterprises. These amendments are self-explanatory.

The amendments introduced by clauses 8(1)(i), (j) and (k) are concerned with the inputs of farming enterprises and are of a textual nature.

The amendments introduced by clauses 8(1)(1) and (m) are concerned with the inputs of accommodation, hotel and catering enterprises. Where, for example, a hotel has television sets to hire out to its guests, the hotel will be entitled to cause the repair and maintenance services in respect of the television sets to be carried out free of tax. Hotels which use fuel for preparing food, for the heating of rooms and water, for lighting, etc., will be able to purchase such fuel free of tax. A measure of neutrality among hotels which do so and other hotels which use electricity is being effected in this way.

Administrative provisions

There are another two provisions of the Bill which may require further explanation. They are concerned with the administration of the Act.

The first is clause 5 which introduces an amendment to section 26A of the Sales Tax Act. What it amounts to is that where doubt exists as to whether or not an exemption is applicable in a specific case, and the Commissioner, at a time when no applicable general ruling had been given by him, has given a person a particular ruling to the effect that the exemption is not applicable in relation to any transaction concluded by him, the Commissioner will not be entitled to recover any tax from that person in respect of transactions of the same nature concluded by that person prior to the date of such particular ruling, provided the Commissioner is satisfied that the said person acted in good faith on a reasonable assumption that the exemption was applicable, and that there was no question of negligence or an intent to avoid payment of tax. The reason for this provision being proposed is that there have been cases where persons, in all honesty and not altogether without reason, were under the impression that an exemption was applicable, but the Commissioner, when it was brought to his attention, did not agree. Where, for example, an exemption in respect of certain inputs of a manufacturer is not applicable, the price of his product will be affected. If he is under the impression that the inputs have in fact been exempted, but the Commissioner asks him at a later stage to pay tax, the manufacturer will be unable to recover the tax from the person to whom he has already sold his product. The proposed provision will, of course, not apply where it is quite clear that there is no exemption.

The second clause is clause 4, which introduces an amendment to section 16 of the Sales Tax Act. What the amendment amounts to is that where an vendor ceases to carry on the enterprise he must have a tax period ending on the date on which he ceased to carry on the enterprise. This means that the vendor must furnish a return for that period and that the provisions of section 11(5) of the Act shall also be applicable. The latter section provides, inter alia, that the reserve for amounts owing by clients cannot be granted for the final tax period of a vendor. This provision is necessary to avoid tax losses.

Mr. Speaker, the hon. the Deputy Minister has given us a very detailed setting out of the Bill as such. May I suggest to him, however, that a lot of time and a lot of labour by everybody concerned could be saved if in accordance with the practice which exists in respect of the Income Tax Bill and the Finance Bill, an explanatory memorandum was furnished in respect of the Sales Tax Bill? I think the hon. the Deputy Minister will appreciate that some of us have actually had to do a tremendous amount of work to try to understand this Bill—it is of a highly technical nature—before being able to discuss it in this House. If we could have those memoranda we would greatly appreciate it. I suggest that the hon. the Deputy Minister bear this in mind for the future.

Secondly the hon. the Deputy Minister has given us in some detail an explanation of some of the provisions of this Bill to show what a very satisfactory tax from the fiscus’s point of view sales tax is. I can understand that a Minister of Finance or his Deputy will always be anxious to be able to collect the maximum amount of revenue. It has been shown that in boom times the fiscus automatically gets much more revenue because sales increase. I think the best example is the one I gave this morning, namely that if you compare April 1980 with April 1979 you find that there was an increase of more than a third in respect of the collection of sales tax. That shows how money rolls in as a result of this type of taxation. It also shows, of course, that those who spend their money in order to live are actually providing the money with which the State runs the country. Many of those people who provide that money are the poorer people of the community. Many of them are people who find it difficult to make ends meet, and to whom this is important. The hon. the Deputy Minister, on a previous occasion, ventured to suggest that it was only a very small amount of money that was spent by the lower-income groups in respect of the basic essentials of life and on foodstuffs. He also quoted statistics which, with great respect, I have to point out, are in direct contradiction of the statistics collected by the people who determined the various poverty datum lines in South Africa. It is fairly clear that a person who earns approximately R150 a month will pay approximately 66% of that amount towards sales tax. We in the official Opposition have taken the view throughout that we believe that to impose sales tax in those circumstances on the essentials of life is something we cannot support, something we do not regard as equitable.

The hon. the Minister quoted examples in respect of other parts of the world. I think that this form of taxation in countries where there are not the tremendous gaps in income that we have in South Africa, can be viewed in a completely different light from that in a society in which there are these tremendous gaps in income levels between various groups in the community. That is why we take this opportunity of stating our point of view again.

Of course, the Act indeed provides for some exemptions. Some new exemptions are now going to be added in terms of this Bill, and those have our support. We do believe, however, that there should also be exemptions in respect of foodstuffs and other essentials of life, and we feel extremely strongly that that should be done by the Government now, particularly in view of the increases in collection and also in view of the fact that we are heading again this year for a very substantial surplus. I am sure the hon. the Deputy Minister will admit this, because the hon. the Minister of Finance admitted it this morning. Therefore, we can afford concession, and we are able to give it. The argument that this is purely an administrative matter is an argument which we, with respect, do not accept at all. The mere fact that this may involve some administrative situation is no excuse for levying a tax on people who cannot afford to pay it. As far as we are concerned, that is not a valid reason.

That is why I now move the following amendment—

We believe that at this time, in this economy and in these circumstances it would be in the interests of South Africa, and we do appeal, therefore, to the hon. the Deputy Minister to assist us in this regard.

I should like to turn now specifically to some other matters. The first one I should like to put to the hon. the Deputy Minister is the following question. Has not the time arrived for us to make up our minds about the fact that there is either an add-in or an add-on system? Is that not going to be finalized now? Cannot we bring that to an end so that now, after we have gained the experience, everything can be finalized as far as this matter goes?

The next matter with which I should like to deal is a pleasant one. That is that I do want to point out that this Bill introduces for the first time the new capacity of a Commissioner for Inland Revenue under the new structure. I do want to welcome this new post which is to be created in terms of the new system. I do not think it means much of a change in the function of the official concerned, but it does fit in properly into the new structure. Therefore I should like to take the opportunity of welcoming this new development. In the same way in which the hon. the Deputy Minister referred earlier this evening to the image of certain of the customs people in South Africa, I believe it is fitting to point out that there is perhaps no one who is more of an ogre to people in South Africa—or is alleged to be—than the Commissioner for Inland Revenue.

Hear, hear!

We hear the “hear, hears!” from the hon. NRP benches. The hon. member for Hillbrow says it is his partner, and I should not speak in an evil way of his partner. [Interjections.] I must say, however, that the image of the Commissioner and his officials is in many ways quite a wrong image, because I believe that the Commissioner for Inland Revenue and his staff endeavour to treat the community fairly. The experience that people have had who deal with them on a daily basis is that they are afforded a fair and courteous reception at all times. To those people who do not try to hoodwink them, I think they are more than co-operative and helpful in dealing with their problems. I would like to say that this evening because I think that image that is created is unjustified in the circumstances in which they operate.

Turning to some of the other provisions of the Bill, may I ask the hon. the Deputy Minister why, having now dealt with the Credit Agreements Bill, which has a definition of a financial lease, and having dealt with the Limitation and Disclosure of Finance Charges Amendment Bill, which he himself piloted through the House, we cannot have the same definitions in respect of financial leases in all the pieces of legislation? I think it would make it so much easier for everybody, and the whole interpretation of these laws would be made very much easier in the operation of the system.

The next point I should like to deal with is in clause 2, on page 5, right at the bottom of the page, and relates to the differentiation which is applied when there is a sales tax or a substantially similar tax which is levied on the rentals in such foreign countries. I believe that this is a dangerous provision, and experience in the international tax field indicates that when one creates that kind of provision, what happens is that a minimal rate is instituted in the other country, merely in order to escape the tax provisions applying to the country of origin. I want to give an example of this. In a country such as Cyprus, e.g., they have deliberately not had a no-tax position. They have deliberately had a tax which is a nominal tax, because in the laws of many of the countries of the world there are provisions which say that where there is no tax one does not receive certain taxation benefits and pays at a different rate, but where a tax is payable one is, in fact, exempted from that. Therefore I believe we are opening the door here to a method of evading tax, a state of affairs which to my mind is not desirable.

I should like to talk for just a moment about the question of foreign-going ships. I have a difficulty in this regard, and I hope that the hon. the Deputy Minister can explain the position to me. Certain exemptions are provided for, and in this connection I should perhaps quote directly from his speech where he says—

I have a grave difficulty in appreciating how one actually assesses, other than from the nature of the ship itself, whether it is going to be a foreign-going ship or not. For example, there can be coastal vessels which can ply purely to and from two South African ports, and there can also be coastal vessels which can ply to foreign ports. If, for example, Transkei had a port to which there could be a service, would that then be regarded as a foreign-going ship? I also have some difficulty in regard to determining when a ship, when it is bought, is a foreign-going ship.

Secondly, I also have a difficulty in regard to the application of the second part of this provision, i.e. when the ultimate destination is a foreign port, because that again to my mind is open to abuse. The ultimate destination can be a foreign port, but the immediate destination could be a local port, and that to my mind opens the matter up to abuse. The hon. the Deputy Minister must either assure me that I am wrong in suggesting that this possibility exists, or perhaps we should do something to deal with it. The hon. the Deputy Minister correctly pointed out that the exemptions which are being suggested in the Bill, in regard to certain goods which had to go to physically handicapped persons, would obviously be welcomed on both sides of the House, and so they are.

Here again I have some difficulty as to why he only chose those particular items. I should like to suggest to him that crutches, for instance, should be exempted. I believe that if one exempts the hearing-aid, one should also exempt pacemakers and other mechanical aids to organ functioning. There are many of these now; many are being evolved. The people who have to use them are, to my mind—and I do not in any way want to play down the problem that these people have—in as serious a position, if not more serious, as people who are deaf. Then I thought that it might be satisfactory if we gave the Commissioner a discretion here. He does have a discretion which is given in terms of a different section of the Act, in regard to the process of manufacture, for example; so here I thought that any other item which, in the opinion of the Commissioner, is an article used exclusively for a physical handicapped person, should also be exempted. That gives him the discretion to decide, and as an article arises which is worthy of exemption, he can deal with it in this form. I have proposed to move that amendment in the Committee Stage. For the rest, however, while we have serious objections to some principle matters relating to the sales tax, if a tax is to be enforced, it should be enforced correctly and equitably. We believe that, as far as the technical provisions of this Bill are concerned, they meet with our approval. However, we still maintain that there should be the exemption from tax on foodstuffs and other essentials of life, and that is why we have moved the amendment.

Mr. Speaker, the hon. member for Yeoville asked quite a number of relevant questions here in respect of this Bill. In my opinion many of those questions have a great deal of merit. I am referring in particular to the question of the handicapped and the question of the pacemaker which he mentioned. I believe these are matters which have a great deal of merit and I believe that if they have merit, the hon. the Deputy Minister will give special attention to them. I support the hon. member in particular in the case of the handicapped. Since we are speaking about the handicapped, I believe the hon. member for Stilfontein will permit me to convey a special word of gratitude and very great appreciation to the hon. the Deputy Minister and the Department for the immediate reaction in providing for tax exemption, even though it is an exception to the rule in this case. On behalf of the hon. member for Stilfontein, who made a moving appeal for this concession, we want to convey our very sincere gratitude to the hon. the Deputy Minister and his department.

The hon. member for Yeoville also referred to the explanatory memorandum and I want to associate myself with what he said in that respect. I think that the hon. the Deputy Minister’s Second Reading speech gave a fine and extremely comprehensive elucidation and after the hon. the Deputy Minister had made it, all these clauses were perfectly clear to me. I should like to associate myself with the hon. member for Yeoville in this regard. It would have meant a great deal to us if we could have had it. I wish to associate myself with the hon. member for Yeoville in respect of another matter as well. It concerns the image of the tax-collector, or the Commissioner, as he is now known. I think that we should say from this Parliament that we should like to build up the image of this gentleman for I think that the distorted image which is very often given to his activities, is unfair. During the past five years in this House I had a couple of extraordinary experiences which gave rise to serious tax problems. I took them up personally with the department and the Commissioner. I must say that the treatment, the leniency, the sympathy and the humaneness with which the Commissioner dealt with those two cases, speaks volumes for the fact that he ought not to have a distorted image among the public. I should like to appeal to the public, when they think about the Commissioner, which is his present title, to do so with the same attitude with which he considers them when they have tax problems which are justified.

Furthermore the hon. member for Yeoville also referred to the exemptions—this is a problem which I too experienced when perusing the Bill—when machinery and equipment for use in other countries are used outside the Republic and there is a taxation tariff in that country. My representations in this regard are very briefly that if such exemption is made, it should at least be comparable to the tariff in South Africa. I should like to associate myself with the hon. member for Yeoville, for if this is not the case, then we are going to experience the problem of exploitation, the introduction of a “token tariff” in the other countries simply in order to obtain exemption in the RSA.

Then the hon. member once again advocated a greater measure of exemptions on specific commodities. He may also have had the idea that there should be a differentiation in rates when we examine this tax structure. I maintain that although one is sympathetically disposed towards that possibility, large Government subsidies from other sources are being paid on food in order to maintain the prices to the public on a low level. I believe that four fundamental principles are involved in this taxation. In the first place—this is not really a principle, but what I want to call a preamble—this tax was one of the pillars of the Government’s tax reform programme to take the place of the old sales duty and to keep the financial burden on the consumer which resulted from the old sales duty as light as possible and ultimately to remove it, which the department has recently been doing.

The first real principle, of the four principles which I consider of cardinal importance in this tax structure, is that there must definitely be a uniform rate of taxation. The second cardinal principle is that exemptions and exceptions should be confined to the absolute minimum. The third principle, which accompanies the second, is that the tax structure, because it forms part of a tax reform programme, should be distributed as widely as possible among the consumer public, i.e. the contribution to the Exchequer must be obtained from the largest number of consumers in the Republic. The fourth principle is that this tax structure with its exemptions, exceptions and uniform rate, should be as simple as possible. In reply to the appeal made by the hon. member for Yeoville, I want to say that the reason why I say the system should be simple, is that the simpler it is, the easier it is to administer. Three factors are involved in this. The first factor is the vendor himself, the person who has to sell the commodities. These people are really the collectors. The simpler the system, the easier for the salesman behind the counter to apply the tax system and to maintain uniformity in his whole structure, instead of having to apply an expensive, intricate process of calculation. If more exceptions are made and if differentiated rates are levied, this would mean more administrative costs, costs which the vendor is simply going to recover from the public, the consumer. Consequently I consider it of cardinal importance that it should be a simple structure.

The second group involved in this matter are the consumers themselves. There are two things the consumer wants. In the first place it must be understandable to him. He must know what he is paying on what commodities. The simpler the system, the easier for the consumer to be able to ascertain the commodities on which he pays tax and those on which he does not pay tax.

Furthermore, I want to refer to the collector himself. The more intricate the tax structure, the more difficult it is to exercise control. The more control points there are, the more labour-intensive the whole system becomes. For these three reasons the appeal made by the hon. member for Yeoville is unacceptable to me. His motion is unacceptable as it will make the structure too intricate and will make its administration too difficult.

There is another argument I should like to advance, viz. that I think that this tax is not intended to be a tax on commodities, but in fact a tax on the consumer. This is not a commodity-orientated tax system.

I now wish to refer to the proposed paragraph l(b)(ii)(ee), as contained in clause 7(1)(b). I examined this subitem very closely. It concerns machinery and plant which are used for the generation of power, including transformers. I cannot understand why the transformer capacity should be restricted to 3150 KVA. If the transformer capacity has to be restricted, why then is the generator capacity not restricted as well? Surely the generator and the transformer in a power generating system for, a unit. Why is there no restriction on the size of the generator, whereas the unit capacity of the transformer, which forms an indispensable part of a power-generating system is restricted to 3150 KVA? I should like the hon. the Minister to examine this aspect very carefully. He must examine whether the unit capacity of the transformers which concerns the generation of power, not the distribution, should not also be unrestricted, as in the case of the generators. What it will, amount to therefore is that this provision which restricts the unit capacity to 3150 KVA, must simply be left out.

I am actually speaking on behalf of the manufacturers of Rosslyn now for I know that some of them also had problems in this regard. What the three concessions made in clause 5 amount to is that where a suspicion exists that a person who failed to pay tax was in that way trying to evade tax, or was negligent, or that the failure was in good faith, the tax will not be recovered from him. I wish to convey my sincere gratitude to the hon. the Deputy Minister for the concession that when a decision is made in this regard, the tax will not be retrospective, for if it were it would place a tremendous financial burden on the manufacturer. The only cause of concern to me in this clause, concerns the word “doubt”. I consider the word “doubt” to be subjective. What it amounts to is that if the Commissioner has doubt in his own mind, or confusion exists, the manufacturer has to pay the tax, and then it is retrospective, which still means the same financial burden. I do not have any proposals to make in this regard, but I am gravely concerned about the word “doubt”. I consider it far too subjective, and I should like to ask the hon. the Deputy Minister to take a careful look at that word in particular.

Mr. Speaker, we will support the Second Reading of this Bill. This tax is something which I support totally. I believe intensely in the effectiveness of sales tax, in the way it is administered, and I too believe that there should be an absolute minimum of exemptions. Therefore I cannot support the amendment moved by the hon. member for Yeoville. I believe there is another way in which the very real problem which he raised can be met. If the income to the State from this tax is running at the level which he mentioned and there has been a considerable increase in the takings compared to this time last year, it is entirely within the realm of possibility that the hon. the Deputy Minister could undertake to reduce the rate at which the tax is levied. I think if it is proved that the income is in excess of what has been budgeted for, it is entirely within the power of the hon. the Deputy Minister to bring down the level of tax, thereby lessening the burden which is imposed upon people who have to pay tax, as the hon. member for Yeoville said, on the necessities of life. I do not support the idea that there should be exemptions made for foodstuffs, or anything like that. I want to see the minimum of exemptions from this tax, because in that way I believe we are streamlining the administration of the tax and rendering it more effective. I believe we need a tax which is effective and which will not cause administrative bother and headaches. We will therefore not be supporting the amendment of the hon. member for Yeoville, but we will certainly support the suggestion which he has made that things like pacemakers should be added to the list of aids to handicapped people which will be exempted from tax, because I regard that as being a compassionate case, and a very good case could be made out for it.

What perturbed me a little about the question of the definition of leases, and so on, is that we will be moving out of the simple and direct administration of the Sales Tax Act. One will be getting into the more complicated and finer points of it. It will almost be like getting to the “sum of sales tax” where one will be moving away from the general administration and defining further and further points as to where it must be limited. That worries me a little bit. I think the definitions are a very good idea because that would certainly streamline the whole matter, settle it for once and for all and remove the element of doubt which requires constant interpretation from the Commissioner.

I now want to turn to the question of the image of the Commissioner. I am assured by people connected with the Department of Internal Revenue that they are like dentists. They never feel a thing when they take your money from you, as a dentist also does not feel a thing when he extracts your teeth. I think the public should think of him as a kind of genial dentist who is helping one along in life. None of us are pleased to go to the dentist, but when we have been there and come away, we are pleased we have been.

I am not so sure.

Well, most of the time anyway. However, sometimes when there is something wrong, one is in for a hard time and one has to accept it. I do think that the image of the Commissioner and his department sometimes acquires a wrong colouring and we must do everything we can to put that right.

I want to refer to two specific matters which I am grateful to see put right in this Bill. I regard them as anomalies which came in under the previous administration of the Act. I refer to the exemption now granted in respect of animal care. Farmers who in the course of their normal farming practice take care of animals can now purchase animal feeds on an exempted basis. An exemption is also granted for hotels when they purchase coal or solid fuel for the heating of water for the hotel. The hon. the Deputy Minister will know that I have made representations to the department in the course of this session in this regard. The people running the holiday resorts in the Berg in Natal were up till now not allowed to buy coal exempt from sales tax for purposes of heating water. To me that is absolutely inexplicable. Anyone who thinks of running a hotel in the Berg area of Natal without providing hot water is simply out of his mind. The provision of hot water in any hotel and particularly in hotels in the Berg area of Natal where the cold nips one as one gets there, is essential. That is now being put right and those hotels will now be on an equal footing with hotels that use electricity for heating water. I welcome very much indeed this provision which puts right that anomaly, as I regard it. We shall support the Second Reading of the Bill.

Mr. Speaker, we on this side of the House do appreciate responsible speeches, and the speech by the hon. member who has just sat down, falls within this category. I thank him for his positive contribution.

*This Bill was clearly elucidated in the hon. the Minister’s Second Reading speech. The purpose of the Bill is to amend the principal Act in many respects. Not only do I support the Bill, but I also welcome it.

I wish to single out certain points to indicate why this Bill is to be welcomed. The hon. member on this side of the House who has already spoken, also did so and he thanked the hon. the Minister for the concessions which were made in answer to the touching request made in this House less than three months ago by the hon. member for Stilfontein. If one examines the proposed Schedule 6, one sees a list of goods which are being exempted from tax. It refers to articles required by handicapped persons. The hon. Minister has, therefore, responded to the appeal made by the hon. member for Stilfontein. Invalid carriages, whether or not motorized or otherwise mechanically propelled, have been included in this schedule. However, the hon. the Minister is extending the concession to include hearing aids, artificial limbs as well as corrective bracing or support for skeleton deformities.

This specific provision of the Bill is an admonition to us as private members of this House. It indicates to us that if we have a deserving cause and we champion it here, positive action will be taken. As a result of an appeal made by the hon. member for Stilfontein the hon. the Minister has met the need within three months. This has been done by means of the Amendment Bill which is now before this House for discussion and approval. This is an example of meaningful, ideal co-operation and interaction.

A second accommodation I should like to emphasize is the exemption of general sales tax on the laying-in of stores by a foreign-going ship. The amendment Bill provides that a foreign-going ship may now lay in stores, exempt from general sales tax, at any South African harbour. Previously the situation was that stores for a foreign-going ship were exempted from general sales tax only at the harbour of departure. However, circumstances are such that a foreign-going ship at times calls at more than one South African harbour to lay in stores. In terms of the Bill the stores will now be exempted from general sales tax.

A commendable principle of the Bill is that it seeks to promote and maintain the Government’s neutrality as far as competitors are concerned. That is why the Bill seeks to eliminate any measures which entail discrimination. In terms of the Principal Act a foreign fishing boat may be classified as a foreign-going ship, with the result that foreign fishing boats which merely laid in fuel and provisions in passing, were exempted from general sales tax. In terms of the substitution of the definitions as incorporated in the amending Bill, all fishing boats which are not registered as vessels belonging to a South African concern, will pay general sales tax on fuel and will pay general sales tax on stores which are laid in, in exactly the same way as South African fishing boats. Registered vessels belonging to South African enterprises have the advantage that certain inputs are exempted from general sales tax, as laid down in the principal Act.

In order to bring the legislation into line with the rationalization process, the Bill seeks to do away with the designation “Secretary” and to substitute for it the designation “Commissioner”.

Furthermore the Bill seeks to clarify certain provisions. It is not clearly defined in section 16 of the principal Act when a vendor ceases or is supposed to cease to pay general sales tax. A vendor often ceases to carry on his enterprise without complying with certain provisions as laid down by the Act. It happens for example that the activities of a vendor are not always ceased as a result of death, bankruptcy, dissolution of partnership or the sale of the enterprise. A vendor may, without any of these things happening, cease his activities. How is the date of the liability determined in that case? In section 16(1)(a)(iii) the following words are incorporated by clause 4 of the Bill, which defines such a date in a distinguishable way. It reads—

This side of the House says to the hon. the Deputy Minister and all his officials: Well done. This is an excellent piece of work. Act No. 103 of 1978, generally known as the Sales Tax Act, is indeed a prestigious accomplishment. There is little with which to find fault, and whatever faults there may be are rectified without delay.

Mr. Speaker, I should like to congratulate the hon. member for Griqualand East on the positive contribution he has made to this debate. In supporting the hon. member for Yeoville’s amendment to the Second Reading, I must confess to being somewhat surprised that the members of the NRP see fit not to support the amendment, particularly as it has to do with the cost of basic foodstuffs being increased by the original Sales Tax Act.

It is not being increased.

The point is that the original Act did increase the cost of basic foodstuffs, and that is the point that I was making.

This Bill does not.

No, certainly this Bill does not. At the same time the hon. member for Yeoville has moved an amendment which specifically brings in the relationship between sales tax and basic food costs. I also want to point out that the hon. member for Mooi River has on many occasions in this House said that we must do what we can to keep the input costs of the farmers down. If one does not then, obviously the inevitable happens. It costs the farmer more to produce the basic foodstuffs to feed this country, and I must add not only to feed this country, but also to feed other nations to the north of us who are finding our exports of maize most useful at the moment. The position with regard to sales tax is of course that the farmers’ input costs are most definitely increased by this tax. For instance, there is a general sales tax on fuels that the farmer might use, not necessarily in his tractors for production, but in getting his produce to the market. That is just as much a cost of producing, for instance of milk. Milk out on the farm is of no value, but milk in the community, in the town or in the closest centre, is of value, and this is part of the costs.

You have been reading my speeches.

The hon. member for Mooi River says that I have been reading his speeches. I have certainly been listening to them over a few years and I know he has made this particular speech on a number of occasions, and very good speech it was indeed, because it is basically true. Another way by which the farmer pays by way of the general sales tax is in terms of new machinery which he purchases to carry out his production. And we know for instance that tractors are extremely expensive at the moment. If another 4% is added to the price of tractors, one arrives at a very much larger figure. Coupled with the fact that we will shortly be getting the Atlantis diesel engines, which are going to increase the cost of tractors tremendously, I believe that the cost of basic foodstuffs, because of general sales tax, is certainly going to keep escalating all the time.

There is one point I should like to query with the hon. the Deputy Minister, and this is in relation to the first clause of the Bill, where he has redefined “foreign-going ship”. Later in the Bill, on page 9, he has added a paragraph to subsection (1) of section 6 of the Act in terms of which—

Now, obviously that exempts them from general sales tax under those circumstances. What I would like to query is why they have decided to single out a ship that goes from port to port over and above an aircraft which flies from port to port, because, of course, aircraft do precisely the same job. Aircraft fly from one country’s airport to another country’s airport. They transport goods or passengers, and therefore I should like to ask the hon. the Deputy Minister why he has singled out the one and not the other.