National Assembly - 07 March 2000

TUESDAY, 7 MARCH 2000 __


The House met at 14:02.

The Chairperson of Committees took the Chair and requested members to observe a moment of silence for prayers or meditation.


                          NOTICES OF MOTION

Mr N P NHLEKO: Chairperson, I give notice that on the next sitting day of the House I shall move on behalf of the ANC:

That the House -

(1) notes that the Department of Public Service and Administration and the Public Service Commission have completed a rigorous management audit of the Department of Correctional Services, formerly headed by Mr Khulekane Sithole;

(2) further notes the Minister’s announcement of an imminent high-level investigation into allegations of corruption and mismanagement that were highlighted in the report;

(3) commends the Minister for the Public Service and Administration and her team on the decisive action they have taken to restore confidence in the services provided by the department, following the resignation of Mr Sithole; and

(4) expresses its confidence in the Government’s commitment to rooting out and punishing corruption and mismanagement wherever it is found.


Mr D K MALULEKE: Chairperson, I hereby give notice that on the next sitting day of the House I shall move on behalf of the DP: That the House -

(1) expresses its satisfaction at the extremely successful federal congress of the DP at the weekend where a range of new policies and strategies were adopted which are aimed at ensuring that the composition of this House changes at the next election; and

(2) congratulates Tony Leon on his re-election as Leader of the Opposition and wishes him well during his tour of a number of SADC countries, including Botswana, Zimbabwe and Namibia, which is aimed at improving the relationship between the Official Opposition in South Africa and opposition and governing parties in our neighbouring countries.

[Interjections.] [Applause.]

Dr K RAJOO: Mr Chairman, I give notice that on the next sitting day of the House I will move on behalf of the IFP:

That the House -

(1) salutes the heroic struggle of women in the fight against economic poverty, social degradation, abuse and for equality and justice in the celebration of International Women’s Day tomorrow, 8 March;

(2) expresses its pride in Minister Ben Ngubane and Deputy Minister Brigitte Mabandla of the Ministry of Arts, Culture, Science and Technology for commissioning a monument, to be erected in the amphitheatre of the Union Buildings in Pretoria, to commemorate to celebrate the contribution of women in South Africa and their struggle for freedom and justice;

(3) commends the Ministry of Arts, Culture, Science and Technology for accepting the slogan ``You strike a woman, you strike a rock’’ to be inscribed on the monument to honour the 20 000 women who took part in the pass-book marches of 1956;

(4) recognises that the grinding stone of the monument symbolises the ongoing struggle for total emancipation …

[Time expired.] [Applause.]

Miss J E SOSIBO: Mr Chairperson, I give notice that on the next sitting day of the House I shall move on behalf of the ANC:

That the House -

(1) notes with shock the shooting of Brink Ferreira, deputy director of the Directorate of Public Prosecutions’ Human Rights Violations Unit;

(2) further notes reports that the motive for this act is apparently an attempt to undermine investigations into, and prosecutions for, criminal activity; and

(3) denounces this cowardly act and warns those responsible that the Government will not be deflected from its purpose of reducing crime and ensuring a safe, rights-based society for our citizens.


Mr H A SMIT: Mr Chair, I give notice that on the next sitting day of the House I will move on behalf of the New NP:

That the House -

(1) thankfully and appreciatively notes the commendable role that the SANDF has played, and is still playing, in rescue operations in our country, but more specifically in Mozambique;

(2) sy innige meegevoel en meelewing betuig met almal wat geliefdes en waardevolle besittings verloor het;

(3) kennis neem van die verlies aan infrastruktuur, landbougrond, gewasse, huise en persoonlike besittings; (Translation of Afrikaans paragraphs follows.)

[(2) conveys its deepest sympathy and condolences to everyone who lost loved ones and valuable possessions;

(3) notes the loss of infrastructure, agricultural land, crops, houses and personal belongings;] (4) notes that the Air Force personnel deserve special mention if one takes into account that they have already rescued approximately 12 500 people in Mozambique alone; and

(5) salutes those who are working nonstop in order to save lives.


Mr N M RAMODIKE: Chairperson, I hereby give notice that at the next sitting of the House I will move on behalf of the UDM:

That the House -

(1) notes -

   (a)  with grave concern and trepidation the continuous practices of
       maladministration in the Northern Province Department of
       Transport in spite of the revelations and recommendations made
       by the Heath Special Investigating Unit and criminal
       investigations that are being conducted by the Commercial Crime

   (b)  that 27 nonexistent posts have been advertised in two Sunday

   (c)  that some posts have been advertised for the Northern Province
       Traffic College, which was closed by the national Department of
       Transport because the college buildings did not meet the
       required standards and criteria; and

   (d)  that a suspended senior official of the department faces a
       disciplinary hearing but defies the suspension and deliberately
       and intentionally continues to create structures and to appoint
       people to the nonexistent posts and that these include seven
       senior posts, that of deputy director and three directors for
       road transportation, traffic management, traffic control and
       civil aviation and flight ...

[Time expired.]

Adv S P HOLOMISA: Mr Chairperson, I hereby give notice that on the next sitting day of the House I shall move on behalf of the ANC:

That the House -

(1) notes with concern the report that the Transvaal Agricultural Union is to collect more than R3,2 million to fight the estimated 11 000 land claims in Mpumalanga and the Northern Province;

(2) believes that it is this kind of laager mentality that obstructs reconciliation and the upliftment of those who were dispossessed of the land that their forefathers had tilled; and

(3) calls on the members of the Transvaal Agricultural Union to change their us-against-them mindset and to start working towards the socioeconomic upliftment of all rather than waste their money trying to maintain the privileges they enjoyed in the Transvaal of old.


Rev K R J MESHOE: Chairperson, I hereby give notice that on the next sitting day of the House I shall move on behalf of the ACDP:

That the House -

(1) cognisant of the fact that seasonal fires ravage parts of the northern hemisphere that endure long, hot and dry summers, such as the mediterranean climatic regions, and given that we in the Western Cape have to endure similar problems in our summer, requests the Minister of Foreign Affairs to consider the following:

   (a)  North America and Europe have specialist, dedicated fire-
       fighting aircraft that are on stand-by in their summer fire
       season and are stowed away in the winter when the rains and snow
       come; and

   (b)  being in the southern hemisphere, our fire hazards occur in
       summer, which is their winter;

(2) therefore requests the Minister of Foreign Affairs to investigate the possibility of requesting friendly nations to store their seasonally required aircraft and/or equipment in the Western Cape in their off- season, to be available to us to deal with fires;

(3) is of the opinion that -

   (a)  the Minister could request co-operation on the basis of a shared
       world responsibility of the fynbos at the Cape ...

[Time expired.] [Applause.]

Mr B G BELL: Chairperson, I hereby give notice that on the next sitting day of the House I shall move on behalf of the DP:

That the House -

(1) notes with concern that in the Highveld policing area, which serves 27 police stations and 14 satellite police stations and requires 549 vehicles for visible policing, only 297 vehicles are operational; and

(2) urges the Minister of Safety and Security to attend to this unsatisfactory situation to help to bring crime under control in Mpumalanga.


Mr A M MPONTSHANE: Chairperson, I give notice that on the next sitting day of the House I shall move on behalf of the IFP:

That the House -

(1) notes with concern the call by the Gauteng Department of Education on the police to arrest learners who bunk classes and roam the streets;

(2) acknowledges that learner absenteeism in some schools has made teaching and learning an impossible task;

(3) further notes that truancy and absenteeism do not constitute a criminal offence; and

(4) wishes to emphasise that the enforcement of discipline is the responsibility of parents, teachers, governing bodies and student representative councils.

The CHIEF WHIP OF THE MAJORITY PARTY: Chairperson, I give notice that on the next sitting day of the House I shall move on behalf of the ANC:

That the House -

(1) notes the vicious attack on President Thabo Mbeki at the recent DP conference by hon Tony Leon;

(2) believes that democracy is not served by undignified, unfounded and obstructive mudslinging that undermines our efforts to solve the challenges facing our country after centuries of exploitation and abuse;

(3) recalls that the DP was rejected at the polls by the majority of South African citizens, particularly those disadvantaged by apartheid; and

(4) cautions the DP that the majority of the South African electorate is too intelligent to fall for condescending campaigns which denigrate the abilities and achievements of, and the challenges facing, an ANC government while claiming to ``care for blacks’’.

[Interjections.] [Applause.]

Adv A H GAUM: Chairperson …

The CHAIRPERSON OF COMMITTEES: Order! Order, hon members! There is a member on the floor trying to address the House!

Adv A H GAUM: Chairperson, I hereby give notice that on the next sitting day of the House I shall move on behalf of the New NP:

That the House -

(1) congratulates the Protea cricket team on their excellent victory of 2- 0 in the test series against India;

(2) congratulates our new cricket sensation Nicky Bojé on being voted Man of the Match in the test which ended yesterday, 6 March; and

(3) wishes the Proteas the best of luck for and many more victories in the upcoming one-day internationals.


Mr T ABRAHAMS: Chairman, I give notice that on the next sitting day of the House I shall move on behalf of the UDM:

That the House -

(1) expresses its deep appreciation and gratitude to His Grace the Right Reverend Bishop B E Lekganyane for his generous donation of R50 000 and the Archbishop of the Anglican Church of the Province of Southern Africa for his compassionate gift of R10 000 towards the plight of the tens of thousands of victims of the floods in the Northern Province; and

(2) calls upon the other denominations and religious groups to follow this example and throw their weight behind the relief of the suffering endured as a result of this disaster.

[Applause.] Mr R P Z VAN DEN HEEVER: Chairperson, I give notice that on the next sitting day of the House I shall move on behalf of the ANC:

That the House -

(1) notes that the Thabo Mbeki Crossroads Education Fund has provided valuable financial assistance to needy students from all communities to further education at different tertiary institutions;

(2) further notes that through this direct intervention the doors of learning have been opened to more than 350 students at a cost of more than R4,5 million;

(3) commends President Thabo Mbeki for his commitment to assisting the poorest of the poor to realise their dream through education and the goal of realising the African century; and

(4) calls on all patriotic leaders to emulate this hands-on approach to extend the horizons of the poor, enabling them to make meaningful contributions to a better life for all. [Applause.]

Mr N J CLELLAND: Chairperson, I hereby give notice that on the next sitting day of the House I shall move on behalf of the DP:

That the House -

(1) notes the valiant efforts of the many unsung heroes who have willingly risked their lives on a daily basis to rescue flood victims in Mozambique;

(2) commends them for their bravery during a very difficult rescue operation; and

(3) expresses the hope that their efforts will not be in vain as the multination aid operation battles to ensure that those who escaped drowning do not succumb to starvation and disease.


                        FLOODS IN MOZAMBIQUE

                         (Draft Resolution)

The CHIEF WHIP OF THE MAJORITY PARTY: Chairperson, I move without notice:

That the House -

(1) notes with shock and sadness the floods that have devastated our neighbour and fellow member of the Southern African Development Community, Mozambique;

(2) recognises that these floods have caused untold loss of life, injury and damage to infrastructure, setting back the remarkable gains the country has made in recent years;

(3) expresses its sympathy to the people of Mozambique, especially those who lost loved ones, or suffered injury and loss of property; and

(4) pledges its support and commitment to working with the parliament of Mozambique to assist in whatever way possible to aid a speedy recovery from this disaster. Agreed to.


                         (Draft Resolution)

The CHIEF WHIP OF THE MAJORITY PARTY: Chairperson, I move the draft resolution printed in my name on the Order Paper, as follows:

That, notwithstanding the provisions of Rule 29(8), Interpellations and Questions shall not have precedence on Wednesday, 8 March 2000.

Agreed to.

                           POINTS OF ORDER


The CHAIRPERSON OF COMMITTEES: Hon members, before we come to the first Order of the Day, I wish to rule on the two points of order which were raised when I was in the Chair last week. The first one was raised by the hon Mr Schoeman. With reference to the point of order raised in the House on 1 March concerning remarks made by the hon Mr De Lange, I have been informed that, after discussions between the Whip of the party that raised the point of order and the hon Mr De Lange, it was agreed that they do not wish to pursue the matter further.

I have noted that the remark was not directed at another member of the House or any person covered by the Rules. In the light of the request by the hon members, I have decided to regard the matter as closed. A related point of order was raised by the hon member Mr Nel and that point of order has also been withdrawn.

The second point of order I wish to rule on was raised by the hon Dr Buthelezi, the Minister of Home Affairs. I wish to rule as follows. During a debate on 1 March 2000 Minister Buthelezi raised a point of order to the effect that Mr McIntosh had called Rev K M Zondi ``a tribalist’’ and should be directed to withdraw these remarks. Mr McIntosh denied having done so and the Hansard record which I undertook to consult, although incomplete, bears him out. Accordingly, no further action is necessary in this regard. [Applause.]


Order disposed of without debate.

Report adopted.


Order disposed of without debate.

Decision ratified.

                         APPROPRIATION BILL

                       (First Reading debate)

Ms B A HOGAN: Mr Chairperson, in preparing for this debate, I went to look at the Hansard debates of the past several years on the Budget. I had to come to an embarrassing conclusion that for the past three years, this House had sung the praises of each Budget that has come before us. It is almost becoming a pattern now that the Budgets that are presented before us are wonderful and good ones.

The Minister of Finance has, on various occasions, raised with me the question of not liking brown-nosed questions. Members would remember that there was a debate about sweetheart questions being asked by members of the majority party. If I praise this Budget - which would be very well-deserved praise - I am actually afraid that I would be accused of being a sweetheart praiser. [Laughter.] Well, he loves it and I am very happy about it. I am also very glad to know that I am a sweetheart - the DP has never been so kind to me in my life. [Laughter.]

However, on a serious note, I think that we have failed to accept or recognise and acknowledge - and I am not talking only from a party- political perspective, but from that of society as a whole - the extraordinary achievements that have been gained over the last five to six years in macroeconomic management in this country. We arrived in 1994, as the ANC, with a mandate to deliver, not just to the 20% or 30% of people, but to the full 100% of the people. It was logical at that time that the demand would be for an equal expenditure, ie the amount that normally went to the 20% or 30% would go to the 100%. Therefore, the ability of this Government to resist popular spending just for the sake of spending and to meet populist demands has been extraordinary.

I think that there are very few new governments that have come into power and have immediately had to start bringing a budget deficit down and have remained at the levels of popularity that the ANC Government remains at at this stage. [Applause.] I think that we must not underestimate the courage that this has taken - the courage on the part of the Minister, who often had to face a sometimes difficult Cabinet. It is very difficult for a Cabinet Minister who has to deliver to be told by Treasury that there is simply no money, because often the reputation of that Minister depends on delivery.

I think it is very difficult for we as MPs to go out to the communities, be assailed and asked why there is no more money going here or there and for the media to be focused on why there is not more going. The fact that the ANC Government was able to keep focused with a steel will on the longer- term objectives of stabilising this economy, has been one of the most extraordinary achievements of this Government.

In the later years, due to the very competent and professional way in which the Minister has conducted his portfolio and the professional staff which has supported him in the work that they have done, I would like to congratulate him on this extraordinary achievement. [Applause.]

However, we have to look at what is happening in the economy as a whole. Never has the economy looked so good. Inflation is down at its lowest in almost three decades, interest rates are at their lowest in over a decade and GDP is picking up. We have survived the Asian crisis better than most developing economies. The budget deficit is manageable. These macroeconomic fundamentals are beginning to reflect themselves in the real economy.

Only recently, I was looking at the analysis of how we have performed in the last quarter. It is extraordinary to see, for instance, that in the last quarter of last year, the manufacturing sector - and the commentator used the word ``exploded’’ - attained an 11% growth rate, its highest quarterly growth rate in the past decade. This was accompanied by strong growth in domestic fixed investment, exports and consumer spending. Mining output showed a sharp cyclical revival, reflecting increased demand for metals and minerals as a result of the revival of the world economy, and the path of vehicle sales is slowly but firmly on the upward trend. There are also signs that the building and construction industry is starting to revive itself and the picture that emerges is a healthy one, namely a consistent acceleration of GDP growth.

The view of some economists is that the economy is in the throes of a short- term cyclical revival, riding on the back of the longer-term upswing. It is no wonder that business confidence is at is highest-ever measured level in the history of this country, and in some quarters it is even being said - touch wood - that employment might start to grow for the first time in a decade. These are extraordinary achievements in a short period of time, and hopefully they bode well for the future.

It is now two weeks since the Minister of Finance tabled the Budget for 2000-2001. There is no doubt that this Budget has received widespread acclaim, and that it is being praised for boldly and successfully addressing fiscal discipline, equity, growth and redistribution. Indeed, virtually every organisation that made submissions to the hearings of our committee, made reference to the sound achievements of this Budget and congratulated Government on its prudent and sensible macroeconomic management of the economy. Within days of the Budget being tabled, the ratings agency Standard and Poor gave South Africa its first investment grade rating, which is a fitting endorsement of Government’s hard-earned success in managing the economy.

But we have to bear in mind that there are other factors - external shocks

  • which can come and hit this economy. Firstly, we have the US economy where there is talk at the moment of interest rates having to rise. We are talking internally of the impact of the floods in this country, and their impact on agricultural output. We are talking about the impact of the increased fuel prices and how this will fuel and feed into the economy. There is no doubt that this economy is still very vulnerable - as are most economies in a globalised economy - to external shocks. We cannot remain complacent. It is with this view in mind that I would like to address the question: What is our growth strategy? We are at a point now where we have reached a certain level of growth, and this is one of the most promising spurts of growth that we have yet arrived at. These growths can be an 18-months cycle, they can be a short-term cycle, or we can change them into a long- term cycle.

The question is: What is going to be the stimulus that will project forward the short-term growth into longer-term benefits? I would like to say that, in terms of the national debate at the moment, we have almost become obsessed with the debate about macroeconomic fundamentals, the budget deficit and macroeconomic management. I would say that it is time now that we shifted the public debate to the real economy.

What is happening in the real economy? I find a little programme on the radio in the mornings, presented on a weekly basis by Martin Creamer who talks about things that are happening in the real economy, very useful. Those matters do not surface in our debates here. Can we really say that we understand the telecommunications industry and its potential contribution to the economy of this country? Equally, can we say that we understand what role has to be played by the giants of the parastatals in transport and energy? Have we really undertaken a sectoral analysis of this economy to show where the growth points are, to identify them, to track them through with a vigilance bar none, to say that this is where we are going to get growth?

Let us move away from endless debates about whether state intervention is necessary or not necessary, let us find the areas where we can find common ground, and let us identify the obstacles to growth. I am not just talking about labour obstacles or the favourites I have spoken about in this Chamber, but the actual obstacles - in particular the sectors - that we need to be focusing on. In a sense, the Minister of Finance has delivered. It is for us now to take the debate forward.

Equally important is the question of the confidence of the business sector in the economy. Are we engaging with the business sector with the seriousness that we ought to be doing? Does the business sector feel that this institution is open to the issues that they wish to raise, or are we saying that we classify business as one grouping that we cannot divide up and therefore they cannot come to us with the real issues that are affecting them on a daily basis?

We are saying that we want to promote small-medium enterprises. Are we really certain that we know what obstacles small-medium enterprises are facing? Are we engaging in discussion? Are we tracking down the issues that we should be engaged with? I think we still need to go much further on that. In relation to that and the oversight role that we have to play here in Parliament, I would like to say that there has been a lot of debate about the role of Parliament in this budgetary process. In some instances it was almost said that Parliament has become a rubber stamp in these issues, merely because an Act has not been passed which specifies the way in which Parliament can amend the Budget.

I want to say that that is an oversight and we are looking at that issue, but parliamentary engagement in the Budget is a much more fundamental engagement. Members of Parliament are here, not simply to try to amend a Budget, but to track down the quality of delivery, to have oversight over that quality of delivery, to influence issues that arise in hearings around Budget debates and to engage in pursuing matters, and focusing public debates on those issues. That is not just simply an amending power, but a power for MPs to focus national debates on critical issues. Therefore, it is not simply an amendment issue, but of engaging in the issues and focusing on national preoccupation with these issues.

There are many ways in which portfolio committees can engage the public more fruitfully. There is correspondence, hearings, discussions, visiting departments and a whole range of issues in which this oversight issue can be dealt with. I would say that now that we are shifting more swiftly to an oversight role, unless it is through a debate around macroeconomics - although that is still very much an oversight role - we need to be examining what we here in Parliament are doing in terms of the budgetary process. This, obviously, will occupy many of us in this budgetary process.

Finally, a lot of debate has gone on recently - in the last couple of days

  • about inflation targeting, and we certainly had a very vigorous debate in Parliament about it. I must say this latest issue that has suddenly arisen about the Reserve Bank Governor using the word ``being bullied’’, has been taken right out of context. It is such a storm in a tea cup, it is quite frightening.

In a sense, we have asked for more transparency from the Reserve Bank. We have asked for the Reserve Bank to be open and clear; we have set legislation in place, and the Constitution, which demands that there be transparency and accountability. However, when the Reserve Bank Governor actually mentions something, it is regarded as ``what is this Reserve Bank Governor doing?’’

If one looks at some of the analyses coming from the markets, there is no doubt that there is a very bullish attitude towards the South African economy. I think, as one commentator said on TV yesterday, markets will simply have to get used to transparency, because that is what the issue is about. It is not about a major fallout between the Government and the Reserve Bank.

As regards inflation targeting, there is nowhere it is being said that we are not committed to inflation targeting. This Government is absolutely dedicated to inflation targets, as is the Reserve Bank. We believe that it is good for growth. We believe too, as the Reserve Bank Governor does, that a certain amount of flexibility needs to be built into that process and that will develop over time. We also believe that this Parliament has a very important role to play in terms of inflation targeting for engaging in this debate.

I would prefer to look at the introduction of this inflation targeting as yet another milestone in the macroeconomic management of this country. When we introduce milestones, we always have been aware that those milestones have been accompanied by a great deal of debate. When the issue of reducing the Budget deficit was introduced, it was accompanied by a huge chorus of debate. I do believe that this debate around inflation targeting is exactly in line - a big, welcome and vigorous debate about yet another macroeconomic instrument that we are bringing to this House.

Finally, I would like to congratulate the Minister, his department and the Cabinet as a whole on the work that they have done on this Budget, the courage that they have shown and the extraordinary good result that they have achieved. With these results, we can look forward to growing this country and growing this democracy with confidence, and we can thank them for that. [Applause.] The CHAIRPERSON OF COMMITTEES: Order! Hon members, before I call upon the next speaker to address the House, I am informed that there is a delegation from the Netherlands legislature, led by their Speaker, in the gallery. I wish to recognise them at the present moment. [Applause.]

Mr K M ANDREW: Mr Chair -

Poverty and unemployment cramp individual lives and present major dangers to society. Poverty breeds despair and despair breeds extremism, intolerance, crime and aggression. The central question in poverty alleviation is how to provide people with the means to fight poverty themselves, to lift themselves out of poverty.

These were the wise words of William Wallace in his article The Quality of Liberty in an Open Society.

Minister Zola Skweyiya warned earlier this year that South Africa is sitting on a time bomb of poverty and social disintegration'', and that we havepersistent and increasing levels of poverty’’ and ``low economic growth’’. What can be done about it?

The Minister of Finance, in his Budget Speech, confirmed that ``the underlying goals of fiscal policy remain economic growth, job creation, improved public services and reduced inequality’’. Let us look at those goals of economic growth and job creation.

South Africa’s economy is something of a paradox. Many monetary and fiscal fundamentals are in place for which the Government deserves credit, yet unemployment, poverty and inequality increase year after year.


Mr K M ANDREW: More than a million jobs have been lost in the formal sector since 1994. Average living standards have fallen to below what they were 30 years ago in 1969, and income inequalities grew during the 1990s. This is a recipe for disaster.

The DP believes that sustainable job creation should be the number one priority of economic policy in South Africa today. South Africa can and must get its economic growth rate up to 6% or more per year … [Interjections] … otherwise we will not succeed in reducing unemployment and poverty. [Interjections.] We dare not settle for less.

The Governor of the SA Reserve Bank, Mr Tito Mboweni, last week told the Portfolio Committee on Finance that an economic growth rate of about 3,5 % in the year 2000 is still too low to have any significant effect on the creation of employment opportunities'', and thatserious attention will have to be given to improve the economy’s ability to grow at a more rapid and sustainable rate in order to reduce unemployment’’.

The questions then are: How can South Africa’s economy accelerate to grow at 6% per year or more? What can we do to sustain that 6% growth rate for as long as possible? If we cannot find the answers we are doomed to have to contend with growing unemployment and increasing poverty. To accelerate our growth rate, we have to make it possible and attractive for domestic and foreign investors to make fixed investments in South Africa.

Generally speaking, foreigners are not going to make fixed investments unless they see South Africans doing so first. The problem is that our domestic savings are so low. Part of the reason is the lack of a culture of saving, although domestic savings as a percentage of gross domestic product were 50% higher at their peak in the 1980s. But the primary cause is the low level of disposable income, which has hardly changed in real terms for more than 30 years.

We must have lower personal income tax for savings to improve. Despite the very welcome and frequently trumpeted reductions in personal income tax in this Budget, Government is taking 9,9% of gross domestic product in personal income tax this year, compared with an already high 8,5% in the year before it came into power. The difference of R12,4 billion in current values is extra tax taken from individuals. No wonder their savings are so low!

To add insult to injury, Government is now taking R5,8 billion from retirement funds, which will reduce people’s pensions when they retire. Over five years - just five years - Government will have taken no less than R22 billion of additional tax on people’s retirement savings. The DP believes that personal income tax should continue to be reduced substantially, that Government should stop raiding people’s pension funds indiscriminately, that there should be greater incentives to save, for example by increasing interest exemption to R12 000 per year, and that small and medium businesses should receive more encouragement and assistance.

At this time, in this country, introducing a capital gains tax is most unwise. [Interjections.] The claimed benefits, both direct and indirect, are limited and suspect. We are introducing one of the most complex taxes ever invented. In fact, in other countries that have this tax, the law on that tax alone runs into hundreds of pages. [Interjections.] This we are doing at a time when the SA Revenue Service is improving, but still hardly coping. We will have to recruit and train an estimated 400 additional employees just to handle capital gains tax, while a proper cost benefit analysis has not been done.

As Prof Lynette Olivier, one of the tax experts who gave evidence before the portfolio committee, said, and I quote:

A study should be undertaken as to the compliance cost for taxpayers and Sars. It does not make financial and economic sense to introduce a tax that will not collect much revenue, but which will require considerable effort by Sars and taxpayers to comply with. It may be argued that the introduction of the tax will discourage foreign investments. As South Africa is not an investment country of first choice for foreign investors, one of the few attractions is the absence of capital gains tax.

Foreign direct investment is essential to supplement domestic investment. Faster economic growth, rapid privatisation, labour market flexibility and less crime are the critical elements, and my colleagues will elaborate on the DP proposals during the course of this debate. Taken together, these steps can propel us to a 6% or more growth path. But how can we sustain it?

Bottlenecks on our growth path are caused by shortages of foreign reserves and skilled labour. Neither are insurmountable obstacles. What we need is more foreign direct investment, growing exports and rapid privatisation to reduce government debt and to increase our foreign reserves by billions of rands, and a deliberate campaign to increase the supply of skilled people in our country by going out and attracting skilled immigrants and by channelling resources into developing skills within our society, ranging from basic literacy through to artisan training and tertiary education.

The DP has specific proposals in regard to each of these essential initiatives. We must stop pussyfooting around with privatisation and set as our target an amount of R20 billion per year to be raised in each of the next four years, prioritising price, foreign investment and technology transfers. The days of thinking that half-hearted privatisation, dominated by attempts to retain control, overloaded with conditionality and often incorporating phoney black empowerment, will work, are over if we want to achieve the 6% growth rates which we require. [Interjections.]

The DP proposes vigorous immigration to attract skilled people from other countries, tax incentives to assist people to make tertiary education affordable, and efficient skills development programmes which include special opportunities for the unemployed, youth and rural populations. There are many South Africans who are making fixed investments and creating jobs. The tragedy is that too many of them are doing so in other countries, because, for one reason or another, they have left our shores. We must make our country more attractive to investors. It can be done. It must be done.

The DP recognises that, in the Budget, one has to balance the need to create an environment conducive to economic growth and job creation, with the need to meet the legitimate demands for services and poverty alleviation. In addressing service delivery and poverty alleviation, inefficiency, wastage, corruption and unspent funds are often greater impediments than a shortage of money from the Budget. Hardly a day goes by, at this time of the year, when a new scandal or administrative collapse is not exposed. This represents billions of rands of taxpayer’s money which has been wasted, and it is about time that Government got its house in order.

Short-term poverty alleviation is essential, and the DP will be setting out some of its proposals during this debate. However, only sustained growth will enable South Africa to tackle unemployment and poverty successfully. If the economic goals referred to by the Minister of Finance in his Budget Speech are to be met, he needs the active and high-profile support of the hon the President and the whole Cabinet, in word and deed, in driving the economy forward. It is not good enough that we simply move in the right direction. It is not good enough that we create new elites while unemployment spreads like wildfire. A 6% growth rate is necessary and possible. Government should not confuse the decisive action which President Mbeki has called for with the illusion of easy solutions. They must not confuse the opportunity to make rapid progress in reducing unemployment with illusions of quick fixes. It will require hard work, but, above all, it will require courage to take decisive action.

This Budget tells us that Government is resigned to failure. Its own goal of job creation will not be met. Government projections of an average growth of approximately 3,4% per year, for the next few years, add up to more poverty, more hunger, more homelessness and more crime. [Interjections.] South Africa can and must get its economic growth rate up to 6% or more per year. [Interjections.]


Mr K M ANDREW: South Africa has the potential to alleviate the poverty of millions of its people, to substantially reduce unemployment and to provide for rising standards of living for all its people. However, that potential is not being realised. Tackling unemployment is probably the biggest individual challenge facing South Africa today. It is a challenge which will not be met by being faint-hearted or by kowtowing to vested interests, whatever they may be.

The future of peace and prosperity in this country is at stake, and the DP calls on the Government to summon the courage to do what we all know is necessary. The DP cannot support a Budget which is an integral part of Government’s economic policies which Government itself predicts will lead to rising unemployment and growing poverty in the foreseeable future. [Interjections.] [Applause.]

Dr G G WOODS: Mr Chairman, in recent years participating in debates around the annual Budget has become increasingly difficult. This is because the overall make-up of successive Budgets has raised the desired level of debate to new heights. The 2000-2001 Budget achieves an unprecedented coherence and comprehensiveness in its intended interaction with the economy, and it achieves this while complying with the international conventions now practised in all the world’s successful economies.

For those who wish to critique the Budget, this means that there is now less scope to pursue tactically based arguments and criticism through the use of single issues and one-dimensional theories. It asks of us in turn to relate our arguments to the wider context, and if we are serious about influencing macroeconomic policy, this is what we have to do. It is very important that we do this because if we do not, the appropriate level of debate will not happen and the Ministry of Finance will not benefit from being truly challenged.

In this regard, what was apparent to me from the Portfolio Committee on Finance’s hearings last week on the Budget - and also from the reaction of most media commentators - was the constant lack of appreciation of the necessary balances, trade-offs, relationships and linkages the Budget employs in trying to address the wider economic and socioeconomic reality. When reacting to questions and criticisms at last week’s hearings, the Minister and his team frequently demonstrated the futility of single-issue approaches by explaining how such issues and their particular emphasis factored productively into the bigger scheme of things.

The seriousness of the concern I am expressing was highlighted by the representation made at the Budget hearings by Sacob. Here was the biggest voice of business in the country, at a time when business is being slow to warm to an improving economy. Surely, it was the most appropriate occasion for business to offer a broad explanation for this being ``slow to warm,’’ and to do so against an analysis of the economy and the Budget. Surely, in the absence of good economic growth and job creation, we need to understand better the current attitudes of business towards the economy, and more specifically, towards the fuller implications of the Budget. Instead, however, Sacob’s contribution, both at the hearings and in the media, has been limited to a few select issues which unapologetically argued from a self-interest perspective.

Organised labour too has been disappointing. At a time when big job loss and big job creation issues are at the top of the country’s agenda, they only engage aspects of the Budget and do so from a very narrow approach. While Fedusa did attend, Cosatu continued its boycott of the Budget hearings on a matter of principle. While many may be sympathetic to that principle, their nonparticipation at the highest level of public discussion, which included the committee and Parliament, the Ministry and the media, rings somewhat hollow. But then strangely, a Cosatu economist joined in the debate on inflation targeting last week, notwithstanding their position of principle.

Of course, the need for more rigorous and thoughtful debate over the Budget is also imposed on us members of Parliament, especially if we are to achieve a meaningful level of scrutiny. Whether we succeed in doing this on this occasion remains to be seen. But having expanded as I just have, I now need to be careful that I am not hoist with my own petard by indulging in a disparate and insular argument.

The biggest issue for my party is that of job creation and the lack thereof. To question the Budget on this serious matter, it is first important to recognise the improved state of our economy. Interest rates and inflation reserves, the current account, the deficit, the borrowing requirement and other key aspects of macroeconomic stability have all moved strongly in the right direction. In addition, international rating agencies are projecting our economy in a favourable light, as is the domestic business confidence barometer.

This all points to a situation of potential growth. Against this, the IFP shares the view that after years of taking up slack in available labour capacity, which was exacerbated by the productivity demands of trade liberalisation, we are now at a point where jobless growth will end. That future growth in the productive sector of the economy is likely to show strong labour absorption. Assuming that the many Government and other initiatives towards broadening the available supply of suitably skilled workers has been successful, then the scene would seem to be well set - or is it?

This is where we feel confident in our ongoing debate with the Minister on the growth question. We contend that the Budget should and can do more by way of particular direct initiatives in order to promote growth. We reason that should the economy not have established a stronger growth path by the time the positive domestic and international cyclical movements peak, and before our current comparative advantages over many other emerging economies is overtaken by the more enterprising amongst them, then all the good work done and potential achieved in recent years could be largely forsaken.

The Minister’s management of the macroeconomy has been masterful and it is the stability he has achieved that more than anything else has foreign direct investors noticing us for the first time. But attracting attention and attracting actual investment is not the same thing. The Minister seems to subscribe to a doctrine of a stable economic environment being sufficient to attract fixed investment and sufficient to boost the involvement of the productive sector.

While supporting the view that a stable environment can and will move us into a growth phase - as it now has already begun to do - we nonetheless argue that this, by itself, will see us falling short, and far short, of the growth levels and resultant job creation that is otherwise is possible.

Our argument, which we put forward last year as well, and which also was used by some panelists in the committee hearings last week, is that perceived risk factors are keeping otherwise interested parties at bay. And this is notwithstanding the significant lowering of such risk in the country over the past couple of years. In overcoming such resistance, we believe that strategic microeconomy-related actions are necessary to coax, to lure, to stimulate a greater investment of capital, of technology and of entrepreneurial endeavour into the economy. In other words, such actions are necessary to make it happen.

The methods and practices for doing this are well known to many successful economies, yet there is an expressed reluctance on the part of both the Minister of Finance and the Minister of Trade and Industry to consider the possibilities of going on the offensive in order to gain greater growth impetus for the economy.

We have on a number of occasions listed such measures as have been successfully employed by other successful economies, and we are happy to do so again. Amongst these are a number of tax-type initiatives which have proven investment, savings and job creation track records. In rejection of such proposals, which I made last year, the department said that these would cause distortions in the economy. Now, of course, that is true; but as a short to medium-term drive to secure higher levels of growth - so what? In fact, most forms of taxation have distortionary effects, and especially some of those with equity motives which have been introduced by the Minister in recent years. How about the new NPO tax arrangements as an example - which we incidentally support? The only other issue I will talk about is that of the main tax changes announced in the Budget, and I will do so in broad terms. My party has gained a fair understanding of each of these changes, and we have considered the Minister’s arguments and other arguments that have been put forward, as to the advisability of these taxes. Given the information base that we have at our disposal, we, on balance, tend to support these changes, including that of a capital gains tax and the shift to a worldwide- based system of taxation. Arising out of related public debate over the past week, it is apparent that the theoretical pros and cons of these changes - as with the issue of the inflation targeting - seem too vast to contemplate conclusively at this stage; but, nonetheless, we came to believe that they are moving in the right direction. But it is really a matter of: Time will tell.

Of concern to us, however, as with a number of other observers, is the Sars capacity issue. From an enquiry we have conducted, and from an opinion of experts from the Katz commission, it seems that both the Department of Finance and Sars may have seriously underestimated the legislative and administrative challenges these changes will present to Sars. In this regard, certain views expressed by Sars seem to be factually flawed. For example, they contend that the numerous double tax treaties involved in this change to a worldwide system would not require any negotiations in conversion. I beg to differ. Those conversions will be necessary, and will involve considerable time and work effort.

However, even assuming the concerns to be well founded, it is still early enough to avert possible negative consequences. It is simply going to require greater planning, and greater preparation on the part of Sars, and, of course, it is going to require that resources necessary to undertake this mammoth work are available.

It seems fairly obvious that Sars has not been given a sufficient budget to meet these demands placed upon it by the new tax changes, but we trust that the hon the Minister will come to the party; after all it is his party.

I end by stating the IFP’s support for the Appropriation Bill, and in so doing, our acknowledgement to the hon the Minister, and to his team on a very well-crafted budget. [Applause.] Mr K M N GIGABA: Mr Chairperson, as this year began we insisted that we needed to make meticulous preparations to ready ourselves in the coming year to begin the African century. This we were saying not only in relation to ending wars and dictatorships, but also with regard to the elimination of poverty, illiteracy, ignorance and disease. In making this commitment, we surely had in mind the mobilisation and deployment of all the resources we could muster, both those under the command of governments and those in the private sector, for the achievement of the above noble goals.

The Budget, certainly, is one major instrument that Government can utilise for the achievement of these policies. This Budget has signalled, once more, the greater focus on integration of Government policy and programmes, and its desire, through policy, to address the needs of the South African people, rich and poor, male and female, young and old, holistically and in a co-ordinated fashion.

The central theme of this Budget is the elimination of poverty and inequality. In pursuit of this, all South Africans have been urged to persevere and be resilient. Therefore, to realise the goals of our struggle and to attain the growth and development levels that we need, we have to achieve deep structural change in the economy and in the socioeconomic delivery systems. Accordingly, the results will not be immediate, but might be slow and incremental during the initial stages of this policy change. We must persevere and be resilient, because such deep structural change as we seek will bring about with it some gains and pains at the same time.

In restructuring the economy we have to modernise it, make it competitive and put it on a developmental growth path. This requires that we strive to reduce the level of protection; stabilise our macroeconomic, financial, fiscal and budgetary situation through a wide range of reforms; restructure state assets; reform the labour market; introduce more institutional and financial support for SMMEs; and develop a process of substantial empowerment for the disadvantaged. These things we must do if we are to achieve these high levels of growth and development, attract investment and create jobs.

Today, and from this rostrum, we are able to proclaim for all our people and the youth of our country to know that Government has once more announced its policy choices, and it has chosen the poor. In so doing, Government has reiterated its growing commitment, especially to the most vulnerable and disadvantaged sectors of our society, that is, the youth, children, women and disabled persons.

We must be of a very firm view that the various Budget proposals that seek to raise more revenue, encourage investments, job creation and skills development, and reprioritise Government spending towards social services delivery, will benefit the youth of our country immensely. For instance, most youth, especially in the low and middle-income categories will certainly benefit from the extensive and comprehensive tax reforms which further reduce income tax. In this way most youth will, either directly or indirectly, benefit from this policy that will increase the income that the poor ultimately take home, which will thus lessen their daily burdens.

The youth must sincerely and earnestly heed the message of the Minister that -

… these tax adjustments should promote the culture of savings in our country, in order to reduce our level of reliance on foreign capital and generate the levels of investments required for job creation.

Instead of regarding the extra rands in our pockets as extra cash to offset the rising sin tax, we must hurry to the banks, post offices and other savings institutions to save them.

One of the most urgent challenges of this Government - and of this Budget, in particular - is job creation. In this regard, we are expected, through the Budget, to harness and marshall both the public and private resources for the creation of jobs. Once more, the Government has committed itself to playing an active role in the creation of a climate conducive to investment and employment creation using various policy instruments, including the Budget. Further, it has committed itself to making a decisive contribution to employment creation through education and training, as well as through investment and infrastructure development.

The Poverty Relief Fund, the National Skills Levy and the Umsobomvu Fund will significantly contribute towards the alleviation of youth unemployment and low skills levels. Above all, youth unemployment being a product of aggregate unemployment, will be addressed through increasing aggregate employment in the economy.

Surely, two years after the Presidential Jobs Summit, the youth wait eagerly for visible progress in regard to various measures adopted to address youth unemployment. We trust that from the funds already announced, as well as other programmes announced last year by the President, there will be significant progress in terms of youth employment initiatives this year.

At the same time as we create employment for the youth, we must promote youth entrepreneurship by focusing on the SMME sector, the restructuring of state assets, local economic development programmes and other programmes. In so doing financial and training support for youth involvement at this level - through Khula and Ntsika - should be mobilised.

We further commend the concentration of Government on improving teachers’ professional abilities and supporting the campaign on the culture of learning, teaching and service. We believe that such an allocation should, however, be clearly targeted and premised on delivering the desired output. Among others, it must help us achieve the goal of making our learning institutions exciting, vibrant and dynamic - real centres of learning, teaching and service excellence. This will be further boosted by the Government’s commitment to spending more money on providing school infrastructure and textbooks.

Additional resources must also be devoted to improving the situation in our tertiary institutions, to ensure that our youth at those levels receive not only quality education, but are also assisted to obtain this level of education and skills. Without fail, we must, commencing this year, strive for an education miracle, yet another renaissance.

The R75 million that was allocated for the campaign on HIV/Aids - which is expected to increase drastically over the next three years - must be used to focus primarily on youth and children as the most affected and vulnerable sections of our society. It must be urgently deployed on the education of this group about the disease and on caring for those already infected with it. However, should we place this greatest and most principal responsibility upon our youth, in particular, in order to defeat this disease? We must, as young people, elevate the practice of ABC; to abstain, be loyal and faithful to our partners or condomise.

Overall, it augurs well for the people of our country, especially the youth, that Government expenditure will rise gradually over the next three years and that many sources of revenue are now available. We trust that we will, this year and in the years to come, avoid inappropriate spending and wastage and rolled-over resources.

This Budget is, however, certainly firmly fixed on the future. We commend it to this House and to the youth of our country. [Applause.]

Dr P J RABIE: Chairperson, hon Minister, hon Deputy Minister, hon members, the Budget for the 2000-01 financial year is an important political and economic document. The Budget can be described as a bold one. It rejects the populist approach of Cosatu as well as the protectionist approach which characterised the South African economy in the eighties and early nineties.

The Budget supports further liberalisation and the opening up of the South African economy. An important aspect is the lowering of the marginal tax rate across the board. All the respective income brackets will pay less tax. We welcome the adjustments regarding the maximum marginal tax from 45% to 42,5%, but feel that sustainable economic growth will only continue if rates can be lowered even further. The New NP’s constituency is representative of all income groups and the positive aspect of these tax proposals is that it will provide additional household income for the high, medium and lower income categories.

An important factor is the setting of a realistic and attainable target regarding inflation. We support a stable economic policy and feel that a commitment to a rate of 4% to 6% over a period of three years is in the interests of the economy. Inflation has had a negative impact and low inflation will benefit all of South Africa.

The fiscal deficit of 2,6% of the GDP shows the need for continued strict monitoring discipline. The New NP believes in contributing in Parliament in a constructive manner and supports the Government regarding prudent macroeconomic management. The projected figure of 3,5% economic growth is a realistic one.

The present Budget contains a number of far-reaching tax proposals which will require considerable effort from Sars. I mention the following: the introduction of a capital gains tax with effect from April 2001, the phased adoption of a residence-based income tax, an increase in the interest exemption to R3 000 a year for tax-payers both under 65 and over, 0,5% tax to finance skills development and training, the extension of tax exemption to a broader range of nonprofit organisations, a departure tax on international travel, fuel levy increases of 5 cents a litre on petrol and 3 cents a litre on diesel, and a diesel fuel rebate for fishing and coastal shipping.

As ons egter alles in ag neem, is die bydrae van individuele belastingbetalers tot die Begroting besonder hoog. Die totale persoonlike belasting as ‘n persentasie van die BNP is nog steeds hoër as 27%. Die Nuwe NP beskou dit as belangrik dat hierdie aangeleentheid dringend ondersoek word en dat die bydrae tot onder die vlak van 25% gebring word, soos in die Gear-strategie voorgestel. In die geheel steun die Nuwe NP die Begroting. (Translation of Afrikaans paragraph follows.)

[However, if we take everything into consideration, the contribution of individual taxpayers to the Budget is exceptionally high. Total personal tax, as a percentage of GDP, is still higher than 27%. The New NP regards it as important that this matter be urgently investigated and that the contribution be brought down to below the level of 25%, as proposed in the Gear strategy. On the whole the New NP supports the Budget.]

I represent a rural area with a core agricultural component. We welcome the diesel rebate for the fishing and shipping industry. The hon the Minister said during our public hearings that one of the reasons why the rebate on diesel was withdrawn in 1997 was that it was abused. I appeal to all concerned to develop a viable system which will address the needs of organised agriculture.

Allow me to mention that the price of diesel has gone up by 52 cents or 26% since March last year. This must be seen in the light of extensive flood damage in the Northern Province, Mpumalanga, KwaZulu-Natal, the Karoo and the Little Karoo, and severe droughts in areas such as the Southern Cape and the Overberg. It is in the national interest that cognisance is taken of the economic plight of some of the sectors of agriculture. The taxation of retirement and pension funds is always a contentious issue. In 1996 tax in respect of pension funds was introduced by the hon the Minister of Finance’s predecessor. It was then stated that the reason was to create more equity. The current tax rate of 25% on gross interest and net rental income has had an adverse effect upon levels of domestic savings.

I appeal to the hon the Minister for a gradual phasing down of this tax. To put this in perspective, it is expected, according to page 78 of the Budget Review 2000, that taxes on retirement funds will only contribute 2,6% to the total 2000-01 Budget.

Die aandag word daarop gevestig dat die belasting op kapitale wins eers in 2001 ingestel gaan word. Ons versoek dus alle belanghebbende groepe om sinvolle insette omtrent die implementering van die belasting op kapitale wins te lewer. (Translation of Afrikaans paragraph follows.)

[Attention is drawn to the fact that the capital gains tax will only be implemented in 2001. Therefore, we request all stakeholders to make meaningful contributions regarding the implementation of the capital gains tax.] It may be advantageous if a thorough cost-benefit analysis of capital gains tax is done.

Die Nuwe NP het begrip daarvoor dat die belasting op kapitale wins ‘n internasionale trefwydte het. Ons versoek dat daar met begrip oor dié vorm van belasting besin sal word, omdat belastings en heffings die geneigdheid het om te vermeerder tot die nadeel van die belastingbetaler. (Translation of Afrikaans paragraph follows.)

[The New NP understands that the capital gains tax has international scope. We request that this form of tax should be considered with a measure of insight, because taxes and levies have a tendency to increase to the detriment of the taxpayer.]

Tax that relates to pension funds is very complex issue, but I want to appeal to the hon the Minister to initiate a thorough investigation about the financial plight of the aged and pension funds in general. An alarming number of my senior constituents have expressed concern about the proposed capital gains tax. My party is not opposed to this tax, provided that it is properly implemented.

When we consider the capital gains tax, however, we must take into account international practice and the fact that South African companies already pay relatively high company tax - 30% at present, which with STD amounts to 37,5%. Let us not allow the capital gains tax adversely to affect our competitiveness.

The proposed introduction of the capital gains tax on retirement funds, unit trusts and life insurance policy funds of 6,25% on their capital gains will force thousands of needy taxpayers to channel more funds towards retirement. A thorough cost-benefit analysis regarding this particular form of tax must be done.

Duisende Suid-Afrikaners belê in eiendom. Baie van hulle is nie welvarend nie, maar poog om sodoende ‘n neseier vir hul oudag te bou. ‘n Beroep word dus gedoen dat die behoeftes van hierdie belangegroep ook geakkommodeer sal word. (Translation of Afrikaans paragraph follows.)

[Thousands of South Africans invest in property. Many of them are not wealthy, but in this manner they try to build up a nest egg for their old age. Therefore, an appeal is made that the needs of this interest group will also be accommodated.]

At present millions of South Africans find themselves unemployed. The only source of income for many households is the old age and social pensions. The New NP noted an increase of R20 from R520 to R540 in welfare pensions. However, this amounts to 3,8%, which is less than the inflation rate. I appeal to the hon the Minister to address this issue and, when possible, to increase pensions. Inflation has had a negative effect on the lives of millions of South Africans.

Poverty affects everyone. The estimated lower increase in welfare spending needs to be examined closely. Our projected economic growth is 3,5% this year and 3,1% next year. I am afraid that this is insufficient to generate enough jobs. We urge Government to step up the privatisation of all parastatals and to encourage savings.

As privatisering sou plaasvind, moet toestande geskep word dat daar nie monopolieë ontstaan nie. Normale, markgedrewe omstandighede moet bestaan. [If privatisation takes place, conditions must be created so that monopolies do not develop. Normal, market-driven conditions should exist.] This country needs a growth rate of between 7% and 8% in real terms in order to reduce unemployment and poverty. Our present savings rate of between 13,5% and 14% of GDP is well below the accepted norm of 25%. The New NP welcomes the fact that the status quo was retained with regard to VAT and that it was not increased. This is an indirect tax that especially affects the underprivileged.

I have read widely and the hopeful and optimistic projection of medium-term economic growth does not take into account the possible negative impact of HIV/Aids on the economy. The projected expenditure of R500 million over three years, of which only R75 million will be made available in this fiscal year, is not adequate. The country is facing a crisis. The Actuarial Society of SA’s Aids model, ASSA 600, suggests that South Africa can expect well in excess of 150 000 Aids-related deaths this year. Many of them will be highly skilled South Africans who perform a vital role in our economy. The health budget needs a considerably greater fiscal allocation to curb the increasing HIV epidemic. It is essential that we introduce antiretroviral medication to prevent the spread of this disease.

In conclusion, the Budget addresses fiscal discipline and provides a competitive economic environment. We support this Budget. [Applause.]

Mr B H HOLOMISA: Chairperson, President, Deputy President and hon members, the presidential speech at the opening of Parliament in the year 2000 was widely endorsed by the established media in South Africa as a breeze of fresh air for the free-market economy protagonists and a reassurance to potential foreign investment agencies that South Africa is a safe destination for those who want to profit through investment in this country.

Like our President, the hon the Minister of Finance has poetically ushered in the new millennium with the policy of Gear which guarantees an economic status quo of privileged economic hegemony and perpetual black subservience. This is the simple and straightforward interpretation of Gear which the President and hon the Minister have placed at the centre of our national economic plan. [Interjections.]

However, Finance Minister Trevor Manuel’s Budget is praiseworthy for increases in education, welfare and housing. Unfortunately, there are serious shortcomings. The Budget is disappointing in that it gives no specific recipe for economic growth, poverty eradication or job creation. A total of R4,4 billion was allocated to costs of RDP projects. Welfare received an increased budget of 23%, of which R300 million is said to be set aside for poverty relief programmes. However, the Budget failed to take available opportunities to stimulate economic growth, such as measures to curb inefficiencies in Government, crime prevention, job creation, or even improving economic growth by encouraging productivity-increasing investments.

While the announcement of a tax relief of R2,8 billion would give earners of up to R60 000 some benefit, the new capital gains tax could end up eroding a large portion of that relief. Capital gains tax will be levied on any capital gain or profit realised when a capital asset is disposed. Capital assets are any assets, either tangible or intangible, owned by private individuals or legal entities, which are not traded in in the normal course of business operations. Legal entities include companies, trusts, and close corporations.

Capital gains tax is well established in countries such as the USA, UK, Australia and Canada, but the debates about economic productivity still rage. Similarly, in the South African context its impact on savings and productivity is suspect since it can negatively influence capital formation, investment in plant and equipment and domestic savings. Especially with a low saving rate of around 14% of GDP, South African businesses are in dire need of savings incentives.

Moreover, the tax is technically complex to administer, and it only makes low-income earners feel better but does not help them materially. The people who are really penalised by a capital gains tax are not the very rich who can employ advisers in order to reduce the impact of any tax. People that are hardest hit are the productive, the industrious and the thrifty who want to save for retirement.

As shares are the only way to protect savings against inflation, the stock market is a logical place in which to store value. This benefit may be wiped out and taxed because, depending on the way in which capital gains tax is structured, there may be an inflation tax embedded in it. Therefore capital gains tax will also create distortions. People and institutions may be reluctant to sell shares for fear of incurring a taxable gain, therefore making a relatively illiquid market more illiquid. [Interjections.]

Mr J P CRONIN: You need a tax consultant! [Laughter.]

Mr B H HOLOMISA: Yes, I will employ your services.

Finally, there is a view that capital gains tax is unproductive. Rather than pay it, people put extra resources and energy into tax avoidance and even tax evasion.

It is generally accepted today that there is no trace of any major RDP infrastructural economic development. It is worth remembering that, when a democratic dispensation was ushered in on 27 April 1994 in our country, the hearts and minds of the long-suffering multitudes were filled with hope because the miracle of the peaceful handover of power by a minority race- based regime to a black majority Government of National Unity promised to begin a process for the eradication and elimination of economic and social inequalities in our society. These expectations were given a hope of fruition in the Government’s widely punted RDP, which sought to improve the quality of life of the disadvantaged people of South Africa. However, the present Government has been under pressure from the advantaged class to address, instead, the concerns of the already privileged classes who want to entrench their economic hegemony with the helping hand of a majority government. As a result of Government’s radical shift in economic policy, which was based on the assumption that economic growth would be around 6% per annum, thousands of workers are now being retrenched. People’s disappointment with Government’s economic policies have forced them to even compare their current plight of poverty and unemployment with previous situations in the country when they could at least realistically expect some form of employment. [Interjections.]

Government must understand and accept the fact that we are not a European country, and that our policies must be tailored to address South Africa’s social problems. Clearly, the sudden withdrawals of incentives in the textile industry and agricultural sectors are some of the root causes of the escalating trend of unemployment. People, including those that elected these hon members, are beginning to ask questions on whether Government is really committed to addressing their problems, especially those of poverty and unemployment. We must remember that railways and harbours were targeted as infrastructural projects by the previous governments in order to urgently address … [Time expired.] [Applause.]

Ms F HAJAIG: Chairperson, hon President, hon Deputy President, colleagues and friends, we are starting the first session of our second democratic Parliament in the new century. The profound changes of the past five years make the distance travelled seem so short. Yet, with the momentous changes that have been made, this period could have taken much longer. We are on a path-breaking process of change, travelling towards a future that we are all trying to build and understand.

I am sure that the road to our bright future will not be easy. In international relations, it is often difficult to indicate quantifiable outputs in terms of moneys spent. Having said that, what have we achieved with the scarce resources at our disposal? The present Government has been able to reposition South Africa from being a pariah state to becoming a progressive team player. The objectives of our foreign policy have sought to avoid conflict and to promote peaceful resolution of disputes. We firmly believe that military intervention only leads to the destruction of life and the wastage of scarce resources on the African continent.

Mr B G BELL: What about Lesotho?

Ms F HAJAIG: Will you be quiet and listen and learn something? [Laughter.]

Mr M J ELLIS: That is very unladylike!

Ms F HAJAIG: Well, behave like gentlemen then!

Mr M J ELLIS: That is very unladylike!

Ms F HAJAIG: Well, then behave like a gentleman. Tell your caucus to be quiet!


Ms F HAJAIG: It is our sisters and children who are paying the major costs for these wars which they have so little say in.

We should be intolerant of destabilisation, armed banditry, foreigners profiting out of the conflicts in Africa, illegal trade, the proliferation of small arms and the various coups. We are under no illusions as regards the problems facing us in Africa. We have to make a start somewhere, and I believe this Government has.

The key challenges and exacerbating elements which promote conflict on the continent are poverty and the poor use of scarce resources. We will not be able to see prosperity in Africa as long as there is poverty and conflict. The other key element of our foreign policy is the promotion of democratisation, disarmament and respect for human rights. People must have a right to choose their government and set the agenda of that government.

Institutions which safeguard democratic principles must be established so as to ensure the sustainability of that democracy. For far too long in Africa have the elite and foreign mercenaries been determining the livelihood of a vast majority of the downtrodden. The overall objective of our Government is to develop a better life for all, by creating wealth and promoting peace and harmony.

Our foreign policy is therefore an outward extension of the above principle. Therefore when we enter into dialogue with countries, for example from Africa or the European Union, we are guided by the objectives of peace and economic growth. This means that we will not involve ourselves in hostile protracted conflict and in the exploitation of the weak and vulnerable. I think that some of our partners in the industrialised North can learn from this principle.

We have a responsibility towards each other in this global community: my concerns should be part of your agenda. The world is too interlinked for countries to detach themselves from the problems of others. John Donne once wrote:

No man is an Island, entire of it self.

Every man is a piece of the continent, a part of the main …

And therefore never send to know for whom the bell tolls; It tolls for thee.

It is in South Africa’s interest to support the all-round development of the African continent. A strong vibrant Africa can only contribute to the development of Southern Africa. We have made a start.

In 1998 South Africa hosted the 12th Nonaligned Movement heads of state summit; we chair the United Nations Commission on Human Rights; we provided leadership and guidance to the Southern African Development Community and the United Nations Conference on Trade and Development; we facilitated the expansions of telecommunications network in Africa; South Africa actively supported the disarmament of the continent; we call for the restructuring of institutions involved in global governance; we have championed the cause of developing countries in the international arena, such as the World Trade Organisation, the World Bank and the IMF; we participated in conflict resolution in Africa and the Middle East; and we assist where we possibly can assist. We thank the SANDF for the sterling work they have done in Mozambique. I believe that we have made a start in the right direction, and we have shown that we are team players on this continent.

It is calculated that South Africa has been involved in 86 projects in 20 African and Middle Eastern countries. These projects range from education, skills training, economic empowerment, medical research and industrial development to emergency aid. The development of our continent is going to take hard work, but we have to make humble beginnings and start somewhere. The continent is far from homogenous and our foreign policy and foreign trade strategy are differentiated. What have been the results to date?

Our export exceeded imports. in December last year by a larger than expected R3,500 billion. This is the highest trade surplus recorded in over 3 years. An economist recently noted that the healthy 1999 surplus put South Africa on an encouraging footing for this year and indicated an export-led recovery. His words are truly encouraging within an international environment that is recovering from a global economic crisis.

The integration process in the Southern African region will send a good signal to our counterparts in the rest of Africa. The Southern African regional bloc is relatively younger than the others, but it has made a number of strides in overcoming its socioeconomic and political challenges.

The Southern African region has shown remarkable resilience in the face of international economic crisis. We are witnessing the results of political stability and a sound regional macroeconomic structure. It is our hope that the conclusion of the free trade and development agreement between South Africa and the European Union will give additional impetus to the economic development of the Southern African region. It is my earnest hope that vested interests in the European Union do not continue haggling over the implementation of this agreement. The ball is in the court of the EU. South and Southern Africa are paying the cost for the delay.

Lastly, I want to quote words said by the Deputy President, Jacob Zuma, at the United Nations Conference on Trade and Development held in Bangkok. He criticised the fact that the World Trade Organisation was moving its feet very slowly in helping smaller developing nations. He said:

It is very difficult. The WTO’s trade talks have suggested that they are making it more difficult to find solutions to global poverty.

He continued:

Vested interests and economic and political power centres in the global community and constitutes a major obstacle to change. It will require enlightened intervention by governments to focus on issues of major importance for the future of humanity. As leaders, we now have the task of mobilising our respective constituencies and overcoming narrow interests for the sake of the greater good.

Lastly, I would like to end by saying that this statement bears reference not only to the global community, but, indeed, to our own, where parties such as the DP are only interested in furthering the agenda of the moneyed few.

Dr P W A MULDER: Madam Speaker, one of the main objectives of this Budget is to make South Africa more investor-friendly for foreign investors. The question is: What are the indicators or criteria that foreign investors use before they invest? I will try to determine what some of these indicators or criteria are that foreign investors use, and then compare them with the Budget.

I must congratulate the Minister on the fact that, to a large extent, he has succeeded in satisfying many of these criteria. Yet the large sums and the large investments that we expect still do not come to South Africa. Why not? I think there are different reasons for that, and will only have time to discuss one of these reasons.

One indicator that is becoming more and more important for foreign investors is not only the stability and growth potential of a country, but that of the country and its region. When this is taken into account, South Africa is in trouble. Just look at our region at the moment. Let us take Zimbabwe and the recent developments there as an example.

An old political trick of governments, when they are in trouble, is to blame someone specifically. Hitler did it in Germany, blaming the Jews. Idi Amin did it in Uganda, blaming the Asians.

Hierdie politieke slenter het altyd net korttermynvoordele. Op die lang termyn het dit altyd negatiewe gevolge. In Zimbabwe het President Mugabe besluit om die blankes die skuld te gee vir alles wat verkeerd is in daardie land. Toe hy die referendum verloor, sê hy dit is die skuld van die blankes. Die blankes vorm skaars 1% van die bevolking.

Wat is die langtermynprobleem as ‘n mens ‘n groep identifiseer as die oorsaak van al jou probleme? Hitler moes later optree teen die Jode, en agb lede ken die tragiese geskiedenis van die gaskamers. Idi Amin moes optree teen die Asiërs en het hulle uit die land gesit. President Mugabe het die blankes die skuld gegee, en nou sit sy volgelinge druk op hom om op te tree. Ons het in die afgelope ruk gesien hoe ou vryheidsvegters met selfone en regeringsvoertuie nou blankes se plase beset, en dan sê die president daar sal nie teen hulle opgetree word nie.

Watter boodskap van onstabiliteit in Zimbabwe, en so ook in hierdie streek, stuur dit die buiteland in? Dit is ook tot nadeel van Suid-Afrika. Daar is sprake dat Suid-Afrika Zimbabwe met ‘n bedrag van R800 miljoen wil help. In Begrotingspos No 11 - Buitelandse Sake, onder program 3, word begroot vir noodleniging in die buiteland. Die VF is nie daarteen as daar pogings is om stabiliteit in Zimbabwe te bring en die land so te red nie. Dit is ook tot Suid-Afrika se voordeel en dit moet gedoen word. Daar is egter ‘n groot verskil tussen om Zimbabwe te red en om president Mugabe te red. Dit is nie dieselfde ding nie. As geld uit hierdie Begroting gebruik gaan word om president Mugabe te red, sal ons in die VF dit heftig teenstaan.

Tydens Zimbabwe se bosoorlog het Mugabe Mosambiek as ‘n belangrike basis gebruik vanwaar hy geveg het. Noudat Mosambiek weens die oorstromings in die moeilikheid is, is Zimbabwe die een land wat nie daar gaan help nie. Hy het wel geld om oorlog te maak in die Kongo, maar nie om daar te gaan help nie.

Hierdie Regering moet Suid-Afrika se sterk posisie in Suidelike Afrika gebruik om stabiliteit in hierdie streek te vestig. Dit bly ‘n voorwaarde vir buitelandse beleggers. Kom ek gee vir agb lede ‘n paar syfers. Suid- Afrika het net 22% van die bevolking van Suider-Afrika, maar ons dra 80% by tot die totale bruto binnelandse produk van hierdie streek. Suid-Afrika beslaan slegs 13% van die oppervlakte van hierdie streek, maar ons wek 88% van die elektriese krag op. Ons beskik oor 90% van die spoorlyne, 60% van die teerpaaie en so kan ek voortgaan. Ons kan nie toelaat dat onstabiliteit en onverantwoordelikheid in ons buurstate maak dat Suid-Afrika ekonomiese beleggings nié kry en nie verder kan ontwikkel nie.

Ek wil ook verder waarsku: die ANC-regering moenie dink dat hy dieselfde speletjies as president Mugabe kan speel en die negatiewe gevolge sal ontkom nie. [Tussenwerpsels.] President Mbeki het rassisme in sy toespraak as ‘n groot probleem in Suid-Afrika geïdentifiseer. Ons stem daarmee saam, en ons sal met ons volgelinge daaroor praat. In Suid-Afrika is daar ernstige voorbeelde van rassisme aan blanke en aan swart kant. Ongelukkig het die President toe egter besluit om slegs die een kant te noem. Dit is ‘n fout, want nou loop hy dieselfde risiko dat een groep geïdentifiseer word wat later probleme skep.

In die krygshof in Lesotho verlede week het Beskuldigde 42, Thabo Masito, getuig dat hulle in hulle weermag opgelei word dat die Boere'' - die Afrikaners - die werklike vyand is. Hy sê:When we fire at targets we know that we are firing at the Boers’’, en toe hy gevra word: Is that what you are taught in training?'', antwoord hy:That is so.’’ Ons moenie in Suid-Afrika met vuur speel en dieselfde foute maak wat ander maak nie. [Tussenwerpsels.]

Kom ek vat saam. Een van die redes waarom Suid-Afrika nie beleggings kry nie, is onstabiliteit in ons streek. Zimbabwe is een van die groot probleme in hierdie verband. Suid-Afrika moet sy sterk posisie in Suider-Afrika gebruik, asook sy begroting, om stabiliteit in Suidelike Afrika te vestig vir beleggings. [Tyd verstreke.] (Translation of Afrikaans paragraphs follows.)

[This political trick always has only short-term advantages. In the long term it always has negative consequences. In Zimbabwe President Mugabe has decided to blame the whites for everything that is wrong in that country. When he lost the referendum, he said it was the whites’ fault. The whites comprise barely 1% of the population.

What is the long-term problem when one identifies a group as the cause of all one’s problems? Hitler later had to take action against the Jews, and hon members know the tragic history of the gas chambers. Idi Amin had to take action against the Asians and he expelled them from the country. President Mugabe has blamed the whites and now his followers are putting him under pressure to take action. We have recently seen how old liberation fighters with cell phones and government vehicles are now occupying the farms of whites, and the president has said that no action will be taken against them.

What message of instability in Zimbabwe, and similarly in this region, is this sending to the outside world? This is also to the detriment of South Africa. Mention has been made that South Africa wants to help Zimbabwe with an amount of R800 million. In Vote No 11 - Foreign Affairs, under programme 3, overseas relief assistance is budgeted for. The FF is not opposed to efforts to achieve stability in Zimbabwe and in this way save the country. This is also to South Africa’s advantage and should be done. However, there is a vast difference between saving Zimbabwe and saving President Mugabe. This is not the same thing. If money from this Budget is going to be used to save President Mugabe we in the FF will vehemently oppose it.

During Zimbabwe’s bush war Mugabe used Mozambique as an important base, from where he fought. Now that Mozambique is in trouble, owing to the flooding, Zimbabwe is the one country that did not go and help there. It has the money to wage war in the Congo, but not to lend assistance there.

This Government should use South Africa’s strong position in Southern Africa to establish stability in this region. This remains a prerequisite for foreign investors. Let me give hon members some figures. South Africa has only 22% of the population of Southern Africa, but we contribute 80% to the total gross domestic product of this region. South Africa comprises only 13% of the surface of this region, but we generate 88% of the electrical power. We have 90% of the railway lines, 60% of the tarred roads and I can continue in this vein. We cannot allow instability and irresponsibility in our neighbouring states to be the cause of South Africa not getting economic investments and being unable to develop any further.

I want to issue a further warning: The ANC Government should not think that it can play the same games as President Mugabe and escape the negative consequences. [Interjections.] President Mbeki, in his address, identified racism as a huge problem in South Africa. We agree with that, and we will talk to our followers about that. In South Africa there are serious examples of racism on the part of whites and on the part of blacks. Unfortunately the President decided, however, only to mention the one side. This was a mistake because now he runs the same risk that one group is being identified, which can cause problems later on.

In the military court in Lesotho last week Accused 42, Thabo Masito, testified that in their army they are taught that the Boers'' - the Afrikaners - are the real enemy. He said:When we fire at targets we know that we are firing at the Boers’’, and when he was asked: Is that what you are taught in training?'', he replied:That is so.’’ We must not play with fire in South Africa and make the same mistakes that others are making. [Interjections.]

Let me conclude. One of the reasons that South Africa is not getting any investments is instability in our region. Zimbabwe is one of the great problems in this respect. South Africa must use its strong position in Southern Africa, as well as its budget, to establish stability for investments in Southern Africa. [Time expired.]]

Prof B TUROK: Madam Speaker, it is clear to all of us that the Budget debate is not a simple technical exercise nor a moment when we discuss minor details about budgeting. It is actually an occasion when parties have an opportunity to give an overall response and to adopt a posture in relation to the major issues that are being placed before us.

Of the parties that have spoken so far, it is quite remarkable that the DP and the UDM are the only parties which have taken a negative posture in this debate. That is quite remarkable. There must be something about these benches that causes people who speak from here - and in the old days it was the NP, now it is the DP - to take a negative posture whereas the people down there tend to moderate their criticisms. I was quite interested in the speech from the NP which supported capital gains tax and some of the other measures, whereas the hon Holomisa, for some obscure reason - perhaps he does not understand what capital gains tax is - is against it. [Laughter.]

I also do not understand why the hon Holomisa says that this Budget contains no stimulus to the economy. Has he not noticed that R9,9 billion has been handed back to the taxpayers precisely for the purpose of generating a stimulus and allowing people to buy goods, which is nothing other than creating a stimulus.

I also want to say that the hon Andrew, who I thought was a member of the Finance committee and I thought had heard the speech by Prof Abedian when he said that economists can always massage figures to get the answer they want, in his comments on poverty was doing exactly that. He was massaging the figures and his ego and not addressing the Budget. [Interjections.]

Mr M J ELLIS: Whose ego are you massaging? [Interjections.]

Prof B TUROK: The Budget is a very complex issue. I want to raise two very simple matters. [Interjections.] I am actually quite used to shutting this ear when the hon Ellis is talking.

I want to raise two very simple matters. The first one is: What will this Budget do for my constituency? My constituency is Muizenberg in the south of the Peninsula. All the time I have been reading the material and listening to the Minister, I have been asking myself that very simple question. The second question … [Interjections.]

Mr T D LEE: [Inaudible.]

Prof B TUROK: Yes, I am coming to that. The second question is: What sort of policy guidelines does this Budget provide for my constituency? I want to address those two simple issues. In other words, I am taking what one might call a bottom-up view of the Budget. I represent a quite extraordinary constituency. Muizenberg was the premier holiday resort in South Africa: it had 28 hotels and was the home of the white elite of South Africa - Cecil John Rhodes had a house there, and so did the Oppenheimers and Sir Alfred Beit. It was the pleasure resort for the richest people in South Africa, and with good reason. [Interjections.]

Bathing is very safe - this is not a commercial - and the sea is warm. The beaches are large, the mountains are beautiful, the winters are warm and so on. That is why the elite came to Muizenberg. But then came air travel, and suddenly these rich people, with their millions of rand, discovered that they could have holidays in the south of France, in Bermuda, the Seychelles and so on. So they slowly drifted away from my constituency and left destitution, an absence of ratable properties and so on. The effect of that is degradation, and now poverty, in the centre of Muizenberg.

So I asked myself in the light of this Budget: What do we do? I have noticed that the Budget actually provides support across the population of Muizenberg. There is only a small pocket of white, wealthy people left in Muizenberg, but there is quite a large number of middle-income people and an even larger number of lower-income people and the unemployed. So what has the Budget done for them? As far as the wealthy community are concerned, there is considerable personal income tax relief and last year their companies got tax relief. They are now going to face capital gains tax and some of them are a bit worried about that, but then they should read the comment of the Actuarial Society to the Finance committee hearings. Perhaps the hon finance members here will remember what they said. They said:

At present investors spend a fair amount of intellectual resources in seeking ways to turn income into capital gains tax from an investment, thereby hoping to escape tax.

And so the actuarial society has said: Let us support the capital gains tax so that the business community, especially the wealthy ones, will not waste quite so much energy on avoiding tax.

Middle-income people have also had tax relief. There will be lower taxes on small and medium enterprise, and that will help them. Low-income people have had a tax relief. The unemployed women in our area have had a tax relief. Vat, which is an important issue, has not changed - I was very glad that the New NP supported that point. There are increased poverty-relief programmes, such as the Umsobomvu Fund, and some of the other measures that other members have raised.

However, one very interesting thing has been brought up by the Department of Finance, and that is that they have began something called incidence analysis of expenditure. They have shown in the Budget Review that in the first five years of this Government there has been a large and significant shift of social spending from the affluent to the disadvantaged. Let me quote some figures.

Firstly, there has been a sizeable increase in per capita social service expenditure on the poorest fifth of the community of about 34% between 1993 and 1997, while the per capita expenditure on the richest fifth declined by more than 21%. Similar figures can be seen if one takes a racial breakdown. So there has indeed been a reprioritisation. There has been a shift from the rich to the poor, and this is what this Government is all about: to create an equitable society.

Let me turn to my second point, and that is: What kind of principles should guide us? The question I ask myself, in all genuineness and all sincerity is: Should we in Muizenberg - which is run down and degraded - depend on the private sector or on Government? That question is a very important one for us, because there we are, sitting in Muizenberg waiting for renewal or a renaissance, and we want to know who is going to do it. In their policy document last year, the DP had this to say, and I quote from page 4:

The DP believes a market-oriented, private-enterprise-driven economy with a minimum of government interference and a high degree of individual economic freedom will best enable South Africa to advance.

``Hear, hear!’’ you say. Fine, fine! Now, sitting in Muizenberg - the degraded Muizenberg - where there are slums, crime and poverty, could the DP tell us how individual private enterprise is going to change it? [Interjections.]

The truth of the matter is that in our particular situation, where there is deprivation and degradation, the private sector says, and I want members to listen carefully: Let the Government come in, get rid of the crime and the slums, and we will come in.'' They do not say:We will come in and invest in order for crime or degradation to disappear.’’ Therefore as I sat there - and this is not a matter of ideology - I came to the conclusion that unless the municipality, the provincial government and the national Government come in and combat crime and prevent slum landlords from immense profiteering, unless those three layers of government come in and do their work, the private sector is not interested.

It is clear that we are in favour of private-public partnerships. We are in favour of private-sector investment - do not mistake me at all. We are seeking private investment in Muizenberg, but the reality on the ground now is that business will not move in until the Government acts. Therefore one of the conclusions one comes to when one looks at the Budget is that that element of the Budget which is state intervention, state capitalisation and state-led policy is terribly important for the deprived communities, and the poor.

There is nothing that the DP can say, what with all their nonsense about private enterprise, which is relevant to Muizenberg at this moment. Let us first call upon the Government at all levels to do their work, to assist the poor people of Muizenberg, to eradicate crime, to get rid of slum landlords and to enforce municipal bylaws which are going to prohibit the exploitation of the poor and political refugees that we have in our area, and the private sector will then come in.

Using the last few seconds of my time, I would like to tell the House that I convened a meeting of businesspeople in Muizenberg. I got all the investors to come to a meeting and said to them: ``Here I am as the ANC MP. What are you people going to do for us?’’ They said that they were very happy to come back to this wonderful resort that Oppenheimer, Cecil Rhodes and all those other people enjoyed, and which they left behind. But they said, firstly let the municipality, the provincial government and the national Government get rid of the criminals and the poverty, and then they will come in and make their profits. [Applause.]

Mr G E BALOI: Chairperson, President of South Africa and Deputy President, this Bill is meant to appropriate amounts of money for the requirements of the state in respect of the financial year ending 31 March 2001. Subject to the provisions of the Public Finance Management Act of 1998, this Bill is called the Appropriation Bill of 2000.

We heard the Minister of Finance, the hon T A Manuel, on national Budget day. We congratulate him on presenting such a wonderful Budget on 23 February 2000. Although the Budget did not cover all that was expected by the people of the Republic of South Africa, we should remember that one could never satisfy all the people at one time. However, the Minister made mention of education, health, welfare and other social needs which will take about 56% of noninterest allocation in the 2000-2001 financial year, and which are projected to grow steadily over the MTEF period.

We hope that the money will be utilised in a correct manner and that we will profit from the way it has been used, more especially in the education of our children. The Minister also increased the defence budget, which got about R30 billion to use in modernising defence equipment. The budget for defence increased by R2,8 billion in 2000-01. We are expecting to see changes and development, and our children being employed by the Defence Force.

Unemployment is at its highest level in our country, South Africa. Crime fighting was also looked at when the hon the Minister made available an amount of R1,1 billion over the next two years, which is above the 1999 projection. Once again, I congratulate the Minister. This will help the Minister of Safety and Security, the hon Steve Tshwete, to fulfil his duties promptly in fighting crime or rooting it out completely. Our country is counted amongst countries with the highest crime rate. Let us help the police with the information at our disposal. Without resources, the department might as well close its gates.

The Justice department will also receive an additional amount of R470 million over the next two years to help in crime fighting and law enforcement. I wish to tell the Minister that although the Budget is not to our expectation, it will, however, alleviate the burden that was there. Hon Minister Maduna will see to it that law enforcement is carried out and those who are found guilty are sentenced. We would like to see justice prevailing in our country. South Africa is a beautiful country, but is being ravaged by lawlessness and crime. We ask the Minister to do everything in his power to enforce law and pass heavy sentences in our courts of justice. We are a developing country, nation and we are at the dawn of a new era.

Allow me to touch on the Health department, whose budget allocation of R75 million is also not to our expectation due to the HIV/Aids epidemic, including education and welfare. Our children and youth are the culprits when it comes to HIV/Aids in our country. We will not have leaders tomorrow.

The chairperson of the Portfolio Committee on Finance announced that poverty relief, jobs and development will get an increased Budget allocation of R1 billion from 1999-2000, R1,2 in 2000-01 and R1,5 in 2001-

  1. For the year 2002-03 the same amount of R1,5 billion will be allocated. This will enable the Government to alleviate poverty in our country and create jobs for the unemployed. Credit must be given to the hon the Minister of Finance and his advisers. The UCDP accepts the Bill in totality.

Ms N M TSHEOLE: Madam Speaker, hon President and Deputy President, comrades and colleagues, the fact that I am today addressing this House in English makes me feel guilty and ungrounded. I wish to extend an apology to those whom I represent, and my parents, for denying them an opportunity to hear and understand what I have to say today. I request the relevant radio stations to convey my message.

I wish to add my voice in commending the Minister and the Deputy Minister of Finance for the work well done. The Minister is right in saying that our history teaches us courage and resilience. It demands that we lift our sights far above the horizon, that we embrace the challenges, that we overcome fear and that we embrace the power of transformation. True to his words, the Minister is a good example of one who lifts his sight far above the horizon.

There are many challenges which our Government is confronted with, regarding making a better life for all a reality. These challenges are so great that even the attention of a very focused person may be distracted. However, our Minister’s resilience has withstood such a challenge and kept him on course. This is evidenced by the constant improvement in allocations for social services.

The introduction of the Medium-Term Expenditure Framework by the ANC has been a sign of the far-sightedness of this Government; and an acknowledgement that overhauling the old apartheid system will not go smoothly. I would like to highlight what I have raised above by referring to some aspects of social service allocation which have become a bone of contention. These are, firstly, care and protection of the most vulnerable members of our community - the women, the elderly, the disabled and children; and, secondly, fighting poverty.

With regard to the aspect of care and protection of the most vulnerable, the Budget covers that from different angles. The increase in the allocation for social services, and for safety and security and justice, ensures security through, not only the apprehension of criminals, but also the ensuring that these criminals are convicted.

The Government’s message to our senior citizens, and the most vulnerable, is loud and clear. It assures them of their safety. We know of the abuse of children. We know of the abuse of women. Recent records have revealed that the statistics of homicide are intolerably high. Criminals kill their families - their children, their wives, their mothers-in-law and everybody

  • and we know that the increase in the budget for justice and safety and security will ensure that such criminals, who display such cowardice, are, as I said earlier, not only apprehended, but also convicted.

The Budget, in addressing the vulnerable, is also looking at the tax exemptions for those who donate to good causes through the NGO sector. The Government has forged a partnership in the delivery of services to the communities with the NGO sector by passing an Act relating to NGOs in 1997. These tax concessions will encourage those who donate to good causes, and it will also encourage communities to work for themselves by establishing community-based organisations.

With these words I would like to pass a special message from our Government to our senior citizens. It says: Through their resilience we are who we are and what we are. Therefore, our message is that they are valuable to this generation and to our nation. We appreciate them, with their advancing age, and they are very invaluable to us.

The second aspect that I would like to refer to is fighting poverty. This is the most contentious and topical issue. In addressing poverty, there are issues that have to be taken into consideration. The first one is, who has to be targeted amongst the poorest of the poor? There are many ways in which this can be worked out. Do we target children in the age group zero to 18 years, or do we target children in the age group zero to six, as the Government has opted to do? Secondly, do we target families?

These are questions that have to be considered by the Government in fighting poverty. This Budget makes a paradigm shift from the old relief- based method of addressing poverty. According to the old apartheid method, fighting poverty only looked at alleviating poverty symptoms, forgetting development. As a result, it created dependencies. This Budget looks at the developmental paradigm, which in turn comes with a number of challenges. In developing people, money is allocated, but the question is: To whom should it be disseminated? It requires, first of all, financial management skills. How long will it take Government to establish such skills - both within Government and in the communities?

We find that this Budget is addressing this issue, because there is a special allocation for development. So we are on course, which is why we congratulate the Minister. We also find, on this issue of fighting poverty, that although we know that in the latest report - as I indicated earlier - reference has been made to understanding, it has to be taken into consideration that even in the survey itself it is said that the Auditor- General’s report reflects on the Budget as it was at the end of the 1998-99 financial year.

Up to now part of that money has been spent, but the issue is: should the Government now, having allocated the money, spend it just for the sake of spending it? The paradigm shift which the Minister has made in budgeting allows for development. It also means that, at the end of the financial year, the Government will not have to go and spend just for the sake of spending - buying expensive furniture, silver, cutlery, to name but a few. One will find that this Government, with the Minister’s guidance, is not afraid of taking the reports to the Auditor-General, so that he can reflect the transparency route that the ANC has taken and tell people what is still left.

We in the ANC have indicated in our election manifesto that we acknowledge our weaknesses, but we are still on course. We are determined to bring about a better life for all. It is from the acknowledgement of our weaknesses that we can improve on them. We are not going to sweep our weaknesses under the carpet by buying things which are not relevant to the development of the people. I am saying this in anticipation of what is going to happen: I know that members of the opposition parties will come here and hammer us for underspending, without looking at the paradigm shift which this Government has made in moving away from grant-based poverty alleviation to a developmental paradigm, which requires a lot of thinking. [Applause.]

One other thing that I would like to refer to relates to the research which was done at the University of Cape Town by Horan Borant, who indicates that if poverty is to be addressed, it should not just be alleviated, it should be uprooted. If we have to uproot poverty, are we going to look at poor families, and, if we look at poor families, how much are we going to give such families to alleviate poverty? Are we going to assess the family income, as people always do? Are we going to look at complete families that have no income, and, if we do that, how much is it going to cost? According to this research, looking at the present number of families it will cost the state about R10 billion per annum. Can we afford that? That is the easiest method: targeting families.

The second method that people always bring in is that of targeting children. I know that there has been criticism of the policy of targeting children up to six years of age, while excluding children between the ages of seven and eighteen years. However, if one looks at the total number of poor children, according to the research, it is around 25% of the South African population. And if one takes that into account, how much money are we going to give to those children? How much is it going to cost the Government if poor children make up 25% of the population?

So I would like to say that whoever comes here and looks at this Budget and criticises it, has to think first, because it is not as easy as people imply, and we know that. We are on course as the ANC, and we are not ashamed to acknowledge our weaknesses, because it is on the basis of the knowledge of our weaknesses that we will be able to deal with the challenges facing this country. [Applause.]

Dr S E M PHEKO: Madam Speaker, hon President, the tax relief, while welcome, is problematic in that the sliding scale is slanted in favour of the rich. The result is tax losses of approximately R9 billion. For example, a person earning half a million rand a year will pay R16 500 less income tax this year, while a person earning R25 000 will only pay R340 less. These sorts of tax structures widen the gap between the rich and the poor. The tax system in this country needs overall equity on issues of poverty. Company tax has received the biggest tax holidays despite being subsidised by individual taxpayers for the past five years.

The PAC is disturbed that while so much has been said about the aged, the pension for the aged has been raised by a shameful R20. The previous monthly amount of R520 already put old age pensioners in a very precarious financial predicament. The Government must consider increasing the old age pension, taking inflation into consideration. The increase of pension and disability grants from R520 to R540 per month is insensitive. It indicates that pensioners will receive, in real terms, a decrease of 1,5%.

The money to increase old age pensions can be found by reducing the military expenditure which has been increased from R10,7 billion to R13,7 billion. The Defence budget has received the highest increase, at 28%. Potential aggressors against our country must be deterred by maximum military preparedness, but it is ludicrous in times of peace to spend so much money at the expense of the poorest of the poor. The R30 billion arms purchase will further increase the national debt for the next eight to ten years.

The Budget has ignored victims of apartheid which the Government’s own TRC recommended should be paid reparations. Failure to pay these reparations is naked betrayal of the victims. This raises a question with very serious human rights law implications. Does this Government believe that a crime against humanity applies to Africans?

It is strange that the apartheid debt which was incurred to further the crime of apartheid is attended to with religious zeal, but there is utter apathy and contempt concerning reparations to the victims of apartheid. The apartheid debt is odious, and there are several precedents in international law where odious debts have been repudiated.

The Pan Africanist Congress of Azania continues to advocate the cancellation of the apartheid debt which was incurred to perpetuate colonialism and apartheid, which was regarded as a crime against humanity. A debate on this odious debt must be tabled in this Parliament.

The DEPUTY SPEAKER: Order! Hon member, I regret that your time has expired.

Dr S E M PHEKO: We will get more time here, here in Azania! [Laughter.] You can go ahead with your colonial thing! [Laughter.]

The DEPUTY SPEAKER: Order! Hon members, please come back from Azania. [Laughter.]

Mr B NAIR: Madam Speaker, hon President, Deputy President, hon Cabinet Ministers, hon members and friends, firstly, allow me to add to the accolades showered on our hardworking financial team of the hon the Minister Trevor Manuel, Director-General of Finance, Ms Maria Ramos, and Mr Pravin Gordhan, the Commissioner of Sars, and their numerous advisers and experts for producing a Budget that has cut taxes, provided social relief, reduced budgetary, deficit and imposed financial constraints that, hopefully, will help growth, development and employment.

My task today is to deal with the myth of globalisation, which the Conference of the Nonaligned Movement held in Durban in 1988 aptly described as having no social conscience, that it takes no cognisance of the environment and is ignorant of international responsibility and social justice. In a similar vein President Thabo Mbeki declared in Davos that the developed nations ``have lost all sense of the noble idea of human solidarity’’. Deputy President Jacob Zuma also lashed out at the First World for ignoring the plight of the developing or Third World.

The Nonaligned Movement observed that universal insecurity resulted from the role played by global capital and that financial globalisation is a law unto itself and manipulated by unprincipled speculators. Transnational corporations, many of which control more money than national economies, are not accountable to anyone. They lobby and influence governments and world bodies without being morally or socially accountable to the public. David Korten, the American economist, points to the irony that economic growth has brought in its train unemployment, poverty, crime and environmental destruction.

Let me now mention some figures. The Shell oil company owns or leases 400 million acres of land, making it larger than 146 countries. Only 27 countries have a GDP greater than the combined sales of Shell and Exxon. Four companies control 90% of the global export of maize, wheat, coffee, tea, cotton, tobacco and forest products. The richest fifth of the world receives 82,7% of the total world income, while the poorest fifth receives 1,4% of the total. To add fuel to the fire, the IMF programmes prescribe lay-offs, high interest rates, privatisation and belt-tightening for the poorest, the most vulnerable and defenceless.

Recently, the Group of Seven was prepared to cut debt service costs to Mozambique, providing its government cut poverty relief programmes, imposed water tariffs on the rural people and cut subsidies to the ailing cashew nut industry. The World Bank’s reaction to the appeal by the world’s churches during Christianity’s jubilee year for debt relief of two trillion dollars owed by developing countries was met with a curt response. They just said that it was ``whimsical’’.

Large conglomerates, led by giant speculators and driven by the profit motive, wreak havoc on emerging economies. Malaysia, Indonesia, Singapore, Thailand, the whole Pacific Rim, Mexico and Brazil are some of the recent examples of rampant speculation. South Africa too, was not spared this onslaught. The run on the rand in 1998 prompted the Reserve Bank to borrow billions of rands to defend the currency. Interest rates shot up and economic growth stagnated. It is to be welcomed that Mr Tito Mboweni, the present Governor of the Reserve Bank, is going to allow the rand to find its own level on the market without intervention by the Bank. This may prevent speculators from profiting from a destabilised rand.

Minister Alec Erwin’s four-year battle with the European Union for a trade agreement, although successful, was not without hitches. We have to cease using ouzo and grappa labels. Port and sherry have come under attack. There is a looming war over fishing rights. Where will it stop? What is clearly demonstrated is the cold-bloodedness of the imperialist monster that dictates to a developing country, emerging from the throes of apartheid, to cease producing certain commodities. The EU also forces us to drop tariffs and protective measures, while it heavily subsidises its farmers so that our agricultural products do not compete with theirs.

The total subsidies paid to support agriculture in the OECD countries averaged 350 billion dollars in 1996-1998. Other products are similarly subsidised. Agricultural exports of developing countries, which have a comparative advantage over European farmers, totalled only 170 billion dollars. The WTO Ministers refused to remove tariffs on goods from 48 of the least-developed countries. How long will the multitudes of suffering poor and unemployed simply gaze at shop windows displaying their wares, smack their lips and go away satisfied?

The massive demonstrations at the WTO in Seattle, at Davos and at the recent conference of Unctad in Thailand, if they are anything to go by, are showing up the lopsidedness of globalisation.

Michael Camdessus, the IMF managing director, got a cream pie smeared on his face at the Unctad conference. Even Mr James Wolfenshon, the President of the World Bank, was moved to call on the rich nations to make concessions on trade and for the economy to be given -

… a human face to help the 3 billion people who live on less than $2 a day.

He went on to say:

It makes no sense to exhort poor countries to compete, to pay their way, while we deny them the means to do so by restructuring their market access in areas such as agriculture, where they have a comparative advantage.

There is no denying that we are part of this global village, exporting, as we do, most of our products to the developed world. For instance, a downturn in the economy of any one of our trading partners means a slowdown in our export of primary production.

Similarly, our being forced to phase out Ouzo and Grappa, as repugnant as the concession is, has to be looked at in the wider context of our export drive to Europe. The hon Alec Erwin is right that the developing nations should band themselves as trading partners and make their voices heard at WTO, Unctad and other world fora. The Nonaligned Movement, along with the OAU and other organisations, must similarly join hands to improve the lives of the people. Pressures need to be applied to reorganise and democratise the United Nations and its agencies. Similarly, the IMF, World Bank, WTO and other world bodies must, through our incessant pressure, be transformed from instruments of globalisation to ones that will serve humankind.

Five to six billion people do not have the minimum requirements of food, clothing, housing and health care. There are no market solutions to poverty, unemployment, sexism, war and racism. All that the conventional market does is to shift the problem to the beggars’ market.

Our economy is one of contrasts. We have a modern, sophisticated, hi-tech, First World group - fairly well educated upper and middle class. Then we have 80% of the poor, uneducated, unskilled, unemployed mass of people - mainly the African people. In-between is the emerging middle-class, whose existence is dependent on financial support from the First World.

Government’s macroeconomic policy may be right, but at the micro level there is anarchy in production, large layoffs, and shutdowns - as with the mines and large factories - thus exacerbating the unemployment crisis. Opening our economy to foreign investments should spur our local entrepreneurs to sharpen their competitive skills. The lower interest rates, lower taxes and a large labour force should provide the catalysts for investment and growth. The support of the 34 Afrikaner businesspeople for President Mbeki’s leadership, and confidence in the Government’s economic policies, if emulated by other businesses, may set the tone for economic revival.

We do not have to beg for capital. We have it right here in South Africa in the vaults of banks, life assurance companies and the corporate world. Business people should invest here, and not shift funds offshore. They should make South Africa the workshop of Africa. Along with Africa and the Middle East, they should make India, the People’s Republic of China, the Pacific Rim, Brazil and Latin America partners in the drive to improve the lives of the people.

The time is right to promote with greater vigour the SMMEs. More attention must be paid to the informal sector, which engages over 5 million people. Co-operatives, like the kibbutzim in Israel, should be encouraged in the rural areas, especially for agricultural production. Banks must open their doors to SMMEs and not refuse them loans because their ventures are small and risky. The alternative is to thrust them onto the laps of the informal micro lenders, with harsh consequences. [Time expired.]

Ms R TALJAARD: Madam Speaker, Mr President, Mr Deputy President, hon members, it is often said that a week is a long time in politics. But it seems equally true that a few months could make a dramatic difference in the politics of finance. Over the past fortnight we have seen the spin doctors of the politics of finance hard at work to reassure us that a 3,4% growth rate over the next few years would be a commendable, sustainable performance. The congratulatory atmosphere was enhanced by taxpayers buoyed by tax relief and the long-awaited and coveted Standard and Poor’s rating upgrade.

Between the MTEF and the Budget not much has changed, with the Budget projecting a growth rate of 3,4% over the next three years. But what has changed? The key change has been the absence of the willingness to freely admit that 3% is simply not sufficient. It is a suboptimal economic performance that will not create the jobs we desperately need. Only massive job creation will save us from facing an eventual investment downgrade due to the scope of increased social instability and spiralling crime. In the words of Standard and Poor:

Although South Africa’s growth performance is expected to improve gradually, it will only begin to ameliorate the country’s chronic unemployment and serious social problems.

Yes, if Minister Manuel, would pardon the pun, investment ratings are erratic creatures and they too float freely, coming and going rather rapidly. There is never room for self-congratulation or complacency when we present a budget of missed opportunity.

A mere amelioration of the social ills spawned by high unemployment will not suffice. And that is exactly what this Budget has given us - a mere amelioration of chronic social conditions. I think it is time to refresh our memories. Last year when the MTEF was released, the Minister told us that the economy was operating, in his words, at suboptimal levels'' in terms of job creation, and that a task team had totry to distill what we are missing’’.

At that time the Director-General of Finance backed up the Minister’s statements and told us that, South Africa must have a 5% growth rate to cope with joblessness levels,'' but thata sustained performance of 3,5% could make some inroads into unemployment’’. Earlier this year the Minister and the director-general were both backed up by the Minister of Trade and Industry.

Tydens ‘n onlangse middagete in Johannesburg het minister Erwin dit duidelik gestel dat die Suid-Afrikaanse ekonomie in die komende paar jaar ‘n groeikoers van 5% tot 6% sal moet handhaaf om die strukturele probleme te oorkom wat tot nou toe werkskepping en die uitwissing van armoede in die land aan bande gelê het. In die President se openingsrede het hy ook ‘n 6%- groeikoers in die vooruitsig gestel. (Translation of Afrikaans paragraph follows.)

[During a recent luncheon in Johannesburg Minister Erwin stated clearly that the South African economy would have to maintain a growth rate of 5% to 6% in the next few years in order to overcome the structural problems which up to now have restricted job creation and the eradication of poverty in the country. In his opening speech the President also held out the prospect of a 6% growth rate.]

Read through the lens of their collective assessments, a budget that provides for a projected growth rate of merely 3,4% over the next three years can never be a call to arms to job creators, entrepreneurs and investors. [Interjections.]

But what happened to this blunt honesty on Budget day? It was buried in the feel-good factor of tax relief. The tax relief was most welcome, but it has left the poorest of the poor and the unemployed untouched. They have received the worst of both worlds. Neither will their needs be addressed by the small widening of the social security net provided in the Budget, in an environment currently subject to inflationary pressures, nor will they be lifted out of poverty and social exclusion by substantially higher levels of economic growth. Surely budgeting for a growth rate this low must be rated as a policy failure.

However, what do we need to break through the glass ceiling of constrained growth? The DP believes there are a number of clear-cut key ingredients: First and foremost is the need for economic leadership which will demand courage and a steely political will. Welcome in the House to the hon the President; this responsibility will continue to rest squarely on his shoulders. We need a less onerous tax regime. [Interjections.] We need a real reformed and improved labour market - we need an enhanced skills base inclusive of a positively skewed immigration policy. And above all, we need speedier privatisation both to reduce our debt and to build up our foreign reserves in preparation for expanding economic growth. [Interjections.] The hon member is entitled to his opinion. Since November 1997, proceeds of the restructuring of state enterprises paid to the exchequer to reduce debt totalled a mere R9,5 billion, a fraction of the estimated value of state- owned enterprises.

Over the past few days we have been starkly reminded of the reality of the golden straitjacket of globalisation, and the impact of the information age on markets. Uncertainty about the mixed signals emanating from the Ministry and the Governor of the Reserve Bank about our readiness to implement inflation targeting sped around the worldwide web of global finance, causing confusion and capital outflows adversely affecting our reserve position and the value of our currency. These are unnecessary costs to our economy that can and must be avoided.

A weak foreign reserve position will be one of the most significant bottlenecks en route to stronger rates of economic growth, unless we clear the way in advance. A vigorous privatisation programme is thus a non- negotiable quid pro quo to create room to expand our performance.

To the doubters and the nay-sayers of privatisation one only needs to point to the boost of our foreign reserves received in September last year when it jumped to R2,6 billion, due in part to inflows from the sale of 20% of SAA to Swissair. The virtues of a vigorous privatisation programme has also not been underestimated by Standard and Poor. Due to the politics of finance some of these gains will continue to be understated and a clear-cut commitment to privatisation will not be forthcoming.

After the crucial December interministerial Cabinet meeting, Government identified the end of March as a target date for releasing the specifics of the privatisation of the key parastatals: Eskom, Transnet, Denel and Telkom. Other than continued assurances that they have been earmarked for an - accelerated restructuring'', there has been little action thus far. It is no understatement, and yet again with apologies to Dickens, that the end of March deadline will have to deliver ongreat expectations’’ indeed.

Government must grasp the nettle now; only then will be benefit in terms of debt reduction, an improved foreign reserve position and, judging by Standard and Poor’s provisos, a further favourable credit rating. I would like to quote in detail from the statement that was released in addition to the Standard and Poor upgrade:

Importantly, privatisation of state enterprises should accelerate in coming years, helping to keep the public debt burden in check, attract more substantial flows of foreign equity investment, and strengthen the Reserve Bank’s international reserve position.

Standard and Poor have sounded a warning signal on privatisation that underscores the fact that we are performing at sub-obtimal levels, and that our grading could improve even further only if we stick to our guns on privatisation. I quote from the release again:

The Government’s credit standing could further improve if the scope of privatisation is widened and progress faster than currently expected, allowing the Reserve Bank to build its international reserves to more substantial levels.

I share this implicit scepticism that privatisation could plod along at a pace that will ultimately hold us back. It is of even greater concern that the list of ``expected outputs’’ on the Department of Public Enterprises’ Vote contains a contribution to the national debt as the last item on its list of priorities. Yet again our priorities are the wrong way around.

These expected outputs will not earn us the further improved credit ratings that Standard and Poor considered possible while an alignment of public enterprises with Government's objectives'' as anexpected output’’ will engender uncertainty in the investment environment at a time when we need certainty. I agree with the hon Barbara Hogan; we need a debate on energy, telecommunications and transport in particular, and on whether or not the social policy objectives that are desirable can be achieved through a regulatory framework, and if so, what that regulatory framework will look like, and how these entities can ultimately be placed in private hands subject to a regulatory framework. [Applause.]

Adv A H GAUM: Madam Speaker, while the ANC Government has built up a relatively good general human rights record over the past five years, the same cannot be said for its minority rights record.

Die ANC-regering, en hierdie Begroting, doen ook maar min om aan die grondwetlike plig te voldoen om praktiese en positiewe maatreëls te tref om die status van inheemse tale te verhoog en hulle gebruik te bevorder. [The ANC Government, and this Budget, are also doing little to meet the constitutional obligation to take practical and positive measures to enhance the status of indigenous languages and promote their use.]

Ms M VERWOERD: [Inaudible.]

Only a week ago we witnessed an example of the ANC’s attitude towards minority rights. After the New NP leader called for the protection … [Interjections] … of minority rights in schools, the hon Benjamin moved a motion in this House in which the protection of minority rights was deliberately confused with apartheid education. It is this unfortunate attitude of the ANC that has led to great discontent and calls for better accommodation from several quarters.

Our Constitution also does not make a sufficient contribution to proper minority protection. Amidst growing international support for collective or group rights since traditional human rights are not able to intersect some of the most complex minority problems, the Constitution follows the archaic traditionally liberal approach of simply protecting minorities by means of individual rights.

Boonop het ons individuele regte wat minderheidsregte moet beskerm verskeie tekortkomings. Hoewel ons 11 amptelike tale het, bied die Grondwet self die grondslag vir die afskeep van sommige tale en die verengelsing wat ons tans in Suid-Afrika beleef. Die Grondwet bepaal bloot dat alle amptelike tale gelykheid van aansien moet geniet en billik behandel moet word, konsepte wat klaarblyklik ligjare verwyder is van die tussentydse Grondwet se aandrang op die bevordering van die gelyke gebruik en benutting van al ons amptelike tale. Dit is daarom nie snaaks nie dat die SAA Engels tot enigste gebruikstaal kon verhef, dat die SABC Engels tot oorheersende taal kon verklaar en dat die agb Penuell Maduna heel moontlik sal wegkom met sy planne om Engels tot enigste taal van rekordhouding in ons howe te verheerlik. (Translation of Afrikaans paragraph follows.)

[In addition to that our individual rights which must protect minority rights exhibit various shortcomings. Although we have 11 official languages, the Constitution itself provides the basis for the neglect of some languages and the anglisisation we are currently experiencing in South Africa. The Constitution merely provides that all official languages must enjoy equal status and be treated fairly, concepts which apparently are light years away from the interim Constitution’s insistence on the promotion of equal use and utilisation of all our official languages. It is therefore not unusual that SAA could elevate English to the only language used, that the SABC could declare English the prevailing language and that the hon Penuell Maduna will almost probably succeed in his plans to have English elevated to the only language of record in our courts.]

Another cause for concern is that several minority-related charter rights suffer under additional inherent limitations. While section 30, for example, states that everyone has the right to use the language and participate in the cultural life of their choice, in the same breath this right is made subject to other rights in the charter. Another example is the right to state-subsidised mother-tongue education which, according to the charter, would only be available where it is reasonably practicable. It is possibly because of this loophole that the ANC Government is doing so little to promote mother-tongue education, which is, once again, reflected in the noticeable absence of a provision in this regard in the Budget.

Minderheidsregte is ooglopend steeds van ‘n laer, ondergeskikte orde. Dit is egter van groot betekenis dat die Grondwet die deur oophou vir persoonsgebonde minderheidsoutonomie. Terwyl artikel 235 in dié rigting mik, bepaal artikel 185 dat die te stigte Kommissie vir die Bevordering en Beskerming van die Regte van Kultuur-, Godsdiens- en Taalgemeenskappe die instelling of erkenning van gemeenskapskultuur - of soortgelyke rade moet aanbeveel.

Rade soos dié kan die mees betekenisvolle minderheidsbeskerming en minderheidsbemagtiging meebring. Daar is egter twee dilemmas in hierdie verband. Eerstens, die ANC Regering sloer nou al lank met die instelling van die minderheidskommissie en die huidige Begroting swyg oor die finansiering daarvan. [Tussenwerpsels.]

Tweedens, daar hang ‘n groot vraagteken oor die potensiële kultuurrade se bevoegdhede. Ons Grondwet het reeds bykans alle taal- en kultuurverwante bevoegdhede soos tradisionele leiers, kultuuraangeleenthede, alle aspekte van onderwys, taalbeleid, biblioteke en museums aan bestaande regeringsfere uitgedeel. Dit is mos dié soort bevoegdhede, of minstens aspekte daarvan, wat binne die raamwerk van koöperatiewe regering en nasionale lojaliteit by kultuurrade tuishoort. Dit help nie as kultuurrade op ‘n blote blufspul van adviesliggame sonder invloed afstuur nie.

Die Regering moet die waagmoed en die insig hê om van hierdie rade outonome en selfstandige instellings van die Suid-Afrikaanse staatsreg te maak. (Translation of Afrikaans paragraphs follows.)

[Minority rights are conspicuously still of a lower, subordinate rank. However, it is of great importance that the Constitution keeps the door open for personal minority autonomy. While section 235 has this as its aim, section 185 provides that the envisaged Commission for the Promotion and Protection of the Rights of Cultural, Religious and Linguistic Communities must recommend the establishment or recognition of cultural or similar councils for communities.

Councils like these can bring about the most meaningful minority protection and minority empowerment. However, there are two dilemmas in this regard. Firstly, the ANC Government has delayed the establishment of the minority commission for a long time already, and the current Budget is silent about the financing thereof. [Interjections.]

Secondly, there is a large question mark regarding the potential cultural councils’ powers. Our Constitution has already allocated virtually all powers related to language and culture, such as traditional leaders, cultural matters, all aspects of education, language policy, libraries and museums, to existing spheres of Government. Surely it is these sorts of powers, or at least aspects of them, which should be vested in cultural councils, within the framework of co-operative governance and national loyalty. It is of no use if cultural councils are destined to become merely ineffectual advisory bodies without influence.

The Government must have the courage and the insight to make these councils autonomous and independent institutions of South African constitutional law.] We should also seriously consider reintroducing some form of inclusive government in South Africa. In view of the composition of political parties in South Africa, which still reflects strong cultural, linguistic and ethnic divisions, inclusive government could mean that most minority groups are represented in the executive which will, in turn, allow minorities to feel secure and accommodated within the constitutional framework, also as far as their ideological and philosophical perspectives are concerned. [Interjections.]

May the new millennium bring a new realism to our Government regarding the accommodation of our country’s rich diversity. [Interjections.] [Time expired.]

Mr M WATERS: Mr Chairman, hon President, hon Deputy President, hon members, if we are going to unleash our ambitions and dreams for South Africa to attack the scourge of poverty, eliminate unemployment and provide decent living standards for all our people, achieving and maintaining a 6% growth rate, double the present growth rate, is an essential prerequisite.

How do we achieve this? How do we close the gap with our competitors? The answer is quite simple. We need to create the right conditions to attract skilled people to make South Africa rich in human capital, a country in which innovation, entrepreneurism and commerce flourish. The brain drain must be reversed and turned into a brain gain.

Despite South Africa’s high level of unemployment, there is an alarming skills shortage that, in the short to medium term, can only be supplemented by attracting skilled people from overseas. It does not follow that attracting skilled people to our country will put South Africans out of work. The Government deliberately presents a false antithesis. They say there is a choice between employment for our people on the one hand or embracing skilled people who want to come here on the other.

New Zealand, Canada and Australia are examples of countries that have minimum regulations and have attracted many valuable and talented immigrants. We say that if a person adds real value to South Africa, they are welcome here. In the global knowledge economy, we simply cannot and should not try to keep the world out.

Our principle objection to the Government’s immigration Bill is the proposed tax levy that is a percentage of the foreign worker’s salary. It is both inequitable and economically illiterate, as all companies are already required, by law, to pay into the training fund. Having to pay an additional training levy on skilled foreigners is not only punitive, but will actually lead to a reduction in what companies are already spending on training in this country.

Moreover, the Bill is characterised by timidity and incoherence. The hon the Minister, in order to appease the Government, has signally failed to draft a Bill that provides a framework to actually encourage direct inward foreign investment. Rather, he offers them rafts of complex regulations and requirements.

Whilst the DP has always articulated the need to attract skilled people and investment, we recognise that our people are our best asset. Affirmative action has clearly been an unmitigated disaster. [Interjections.] It clearly damages …. [Interjections.] Phansi! Phansi! [Down!] … those the most that it is intended to help. It will be the creation of a world-class education system that will provide South Africa with the broad skills base to compete for the world’s very best.

However, we also need to help young people who are not going into tertiary education. One of the initiatives of the DP is that we are proposing the introduction of training vouchers for young people who are leaving school. Receivers of the vouchers will be able to trade the voucher for training at any accredited institution for the purpose of starting a micro enterprise business or in exchange for skills. The purpose is to shift public financing from providers of training to the demand side of the market.

I would like to refer to the tragedy of HIV/Aids that is destroying the lives of so many of our people and could wreck all our aspirations in this country. The disease is projected to cut average life expectancy by ten years in most of the sub-Saharan countries and to shrink economic growth by 2%. We believe that the Government must develop a programme to assist businesses by estimating the size and the potential impact of the epidemic on the business workforce; develop, implement and manage scientifically sound, efficient and afforable HIV/Aids prevention and care programmes; and institute strategies to minimise and manage the impact of the epidemic on business, its workforce and the employees’ benefits. [Interjections.] So why are you not doing it then?

Experience from other countries has shown the value of early preparation and intervention. We strongly recommend that every organisation should start this process now. In politics there are never any easy answers or solutions. I do believe, however … [Interjections] … with courage and determination … [Interjections.] Phansi! [Down!] It might help you to listen for once.

The CHAIRPERSON OF COMMITTEES: Order! Order! Hon member, please carry on with your speech.

Mr M WATERS: I do believe, however, that with courage and determination to implement sometimes difficult and unpopular measures and to welcome those who add real value to South Africa, we can realise our ambitions. Let us not forget that the people who put you and I here, deserve nothing less. [Applause.]

Mr S A MSHUDULU: Madam Speaker, hon President, hon Deputy President, hon members, ladies and gentlemen, I stand here today on behalf of the ANC in order to join this debate. I therefore wish to dedicate my speech to the working class and small business in this country.

South Africa, before 1994, was a country characterised by a scourge of poverty; inequalities in income; crime, which included rape and abuse of women and children, and unemployment. To this day, people of the calibre of the DP members, who have resisted change, are causing a situation in which these appalling conditions still exist.

This poverty manifested itself in a form of the poorest living in shacks without access to electricity - as compared to those who live in towns - without access to modern sanitation, high inequalities in education and health facilities. It was for this reason, amongst others, that in 1994 the majority of the people of this country voted for the only credible political organisation, which is the ANC. [Applause.]

It was at that juncture that the swing of a political and social pendulum changed direction towards the poorest of the poor. Because apartheid was legislated in, and those who enforced it were complying with the law, the ANC Government had to prioritise the constitution-making process which had a Bill of Rights that restored the dignity that was taken away for so many years, and many fundamental rights were guaranteed.

Further to the above, the ANC adopted a policy framework which laid a foundation for transformation. This document represented a shared vision by the ANC, its allies and South Africans at large. This mandate for a better life for all could only be fulfilled through a broader policy framework which demanded the following: an integrated and sustainable programme of delivery, as we have in the integrated development plan; a people-driven process, Batho Pele; peace and security for all through the establishment of community police forums; nation-building; Masakhane; and delivery that is developmental for the empowerment of the disadvantaged blacks.

The above can be translated into meeting our basic needs with regard to water, electricity, sanitation, health services, education, etc; developing our human resources for efficiency; a low rate of TB, or none at all, within the poorest, because they are the ones who are usually afflicted by malnutrition and other health conditions which result in a high mortality rate amongst them - predominantly blacks - the disabled and children. Whilst the wealthy had a great quality of life, the poor communities paid the price for their lifestyle.

Xa ubani angajonga ubukhulu nokuzala kwamangcwaba abantu abamnyama, aze uthelekise nalawo asezidolophini, kuyacaca ukuba xa abantu bebulawa yindlala abaphili bade babe badala. [If one looks, comparatively, at the sizes and the congestion of the cemeteries for blacks and those in the suburbs it becomes clear that people who have endured hunger do not live until old age.]

The rich, because of high income and strong buying power, monopolised a greater slice of the GDP, whilst the poorest, with their meagre wages or nothing at all, had little or no buying power at all to access these commodities. We should not forget that blacks are producers as well as consumers at the same time, hence a fair distribution of wealth is necessary.

We should aim at building the economy through the creation of an enabling environment and democratising the state and society through transformation. It is against this backdrop that we need a budget different from the apartheid NP budget.

As we all agree that the best part of doing anything is in the planning, the ANC had to introduce a budgetary process that would address the imbalances of the past, and this is called the Medium-Term Expenditure Framework. This is the framework that links planning to budgeting both immediately, and in the medium and long term. It creates certainty in funding because we have room to object today. It guarantees sustainability because it reflects on the future costs of programmes. It allows for the early detection of fiscal problems because it is a transparent process.

As the ANC is the elected representative of the majority of South Africans, this Budget supports a political decision-making process through the will of the people. It further promotes sectoral co-ordination, because it gives consideration to the needs of all stakeholders. As members would know, we have the disabled, the aged, the youth and the poorest of the poor. It allows for the reprioritisation of needs to suit circumstances prevailing within the country within the budgeted time frame. It also allows for fiscal discipline, because it includes monitoring mechanisms based on an outcomes-based approach that sets standards. We all know that in the past we did not even know how the country was governed, let alone how the money was used. Lastly, through transparency, accountability and monitoring mechanisms roll-overs are reduced.

It is therefore relevant, under these circumstances, for me to share with the House the real facts in relation to the aims and objectives of the Department of Labour, as budgeted for in the year 2000. This department will play a significant role in reducing unemployment through legislated protections. We have section 23 in the Constitution of the country, section 185 regarding the right not to be dismissed, section 189 that directs a process of retrenchments, the code of good practice on dismissals and Schedule 7 that deals with unfair labour practice.

Amalungu ayayazi into yokuba, ngaphambili, xa umsebenzi efike emva kwexesha, ebexelelwa ukuba umsebenzi uphelile. Ibingekho indlela yokuba akhalaze okanye ambuze umqeshi. [Uwele-wele.] [Members know that in the past, if a worker arrived late, he was told that there is no more work. He could not express his dissatisfaction or question the employer. [Interjections.]]

This department plays a significant role in reducing poverty through the restructuring of the UIF fund, and its extension to all workers, including domestic workers.

Futhi, mandichaze ukuba, nanjengoko i-UIF ibingabakhuseli abasebenzi, ngakumbi abasebenzi basemakhitshini, iza kukwazi ngoku ukwenza ukuba nabo bazuze kule UIF ngokuthi xa bengasebenzi babenakho ukukhuseleka. [Furthermore, let me also say that whereas the UIF never used to protect workers, especially domestic workers, it will now be able to include them as its beneficiaries so that they will be protected when unemployed.]

The Government will further reduce poverty through the extension of the Basic Conditions of Employment Act, and the Presidential Jobs Summit and the Umsobomvu trust.

Nanjengoko amalungu esazi ukuba ikhona ingxowa-mali yabasebenzi, ikhona ingxowa yoongxowa-nkulu kananjalo nekaRhulumente, ezi ngxowa-mali zenzelwe ukuba kubekho imisebenzi. [As members know there is a fund for employees, a fund for the wealthy and the Government fund. These funds are meant to create jobs.]

This department has started reducing inequalities in South African workplaces through the introduction of the Employment Equity Act that benefits designated groups of workers …

… oomama, ikakhulu oomama basemakhaya, abantu abakhubazekileyo nolutsha. [ … women, especially rural women, the disabled and the youth.]

This Act removes discrimination in employment in its totality.

Nanjengoko sisazi, umntu omnyama ebengaqeshwa xa ehamba nomntu omhlophe. [As members know, a black person who was with a white person would never be employed.]

Recruitment practices also used to work against women who had to offer some favours before they were employed. Training was also biased in favour of a certain category of workers.

Ngaphambili, xa ubani engayenzanga iti yomlungu ebenganyuselwa. [Before, if one did not make tea for the boss one was not promoted.]

On the issue of incomes and other benefits in all workplaces of designated employers, the Department of Labour further developed programmes aimed at improving economic efficiency and productivity through a skills development strategy.

Through this Act …

… abasebenzi banakho ngoku ukuba bangaqeqeshwa ukuze babe nolwazi lokwenza umsebenzi. Xa sikhumbula, kudala sasingomatshayela, hayi ngokuba sasizizidenge, kodwa ngenxa yokuba sasingakwazi ukuthi sifikelele kuqeqesho ukuze siwazi umsebenzi.

Okwesibini, iimali esasizihlawulwa zazixhomekeke ekubeni umntu unamagunya kangakanani na. Ngoko uphuhliso lwezakhono luza kuqinisekisa ukuba abantu banolwazi, nokuba nabo bayakwazi ukuba bangalandela ubizo oluthile. (Translation of Xhosa paragraphs follows.)

[… workers can now be trained so as to acquire knowledge of doing the work. If we remember, in the past we were sweepers, not because we were stupid persons, but because we would not have access to training so as to enable us to know the work.

Secondly, the wages that were paid to us depended on how much power one has. Therefore, skills development will ensure that people have knowledge, and that they are able to follow a particular calling.]

The department, in its budget this year, has also prioritised efficient administration in all its labour centres which have been upgraded to centres of excellence.

Baza kukhumbula abasebenzi ukuba kudala sisithi makuhlaziywe ngokutsha iSebe lezabaSebenzi. [Workers will remember that we have long been saying that the Department of Labour should be renewed.]

That has been done. Their second priority is occupational health and safety of persons. Their third priority is social insurance, which includes the UIF, accident insurance and the IOD for state employees. Their fourth priority is employment and skills development services. Njengokuba amalungu esazi, abaqeshi kufuneka bakhuphe isiqingatha sepesenti basifake kule ngxowa-mali. [As members know, employers must contribute half a percent to this fund.]

Mr G B D MCINTOSH: [Inaudible.]

Mr S A MSHUDULU: Their fifth priority is labour policy that relates to collective bargaining, minimum standards, inspections and so forth, more so to farmworkers. Their sixth priority is labour policy which includes research, policy planning, library services, labour matters, statistics and publications. It also includes the promotion of productivity through the National Productivity Institute.

Their seventh priority is auxiliary and associated services.

Njengokuba sisazi ukuba u-Nedlac … [As we know, Nedlac … ]

… is a structure where all stakeholders meet to discuss all socioeconomic issues. All this good, progressive and noble projects only demanded R748 million from the national Budget.

Before I leave this podium, I shall have failed small and medium enterprises if I did not deal with or cover the most central component of economic development at local level, which is, of course, the launch of the Economic Development Forum.

Ke tla itlhalosa ka Sesotho. Ha ho na ho re thusa haholo hore re nke tjhelete re e behe ka thoko feela re se na metheo ya ho etsa hore re fihlele moruo ona. Ho a hlokahala hore mebuso ya selehae e thehe ``di-local economic development forum’’. Di-forum tsena di lokela hore di thuse batho ba sa sebetseng, ba kojwana di mahetleng hore le bona ba tsebe ho rutwa ka dikgwebo tse nnyane, ba rutwe hape hore ba tebele tlala jwang. Ba kgone ho hlokomediswa le ho rutwa ka tse etsahalang.

Re lokela hore re tsebe hore na di-local economic development forum'', kahare ho mafapha ana kaofela a ikentseng ngatana e le nngwe ho thiba tlala, di thusa jwang. Hape di lokela ho aha tshebedisano mmoho hore re ye nqa e le nngwe. Hape ho hlokahala hore re hlokomele horedi-local economic development forum’’ tse ding di etsetswa hore bo-mme, haholo hobane re tseba hore ke bona ba hlokang mesebetsi mme e le bona ba bangata, e be bona ba rupellwang hore ba kgone ho fihlela ditjhelete tsena. Ke ka hoo ke reng beng ba dikgwebo tse kgolo, ``formal businesses’’, ke bona feela ba fihlelang ditjhelete tsena hobane ba kgona ho kadima ditjhelete dibankeng.

Ho a hlokahala hore mmuso wa rona wa selehae o kgone ho bontsha hore o na le boikarabelo, haholo ka hore o etse hore batho ba sa sebetseng le dikgwebo tse nnyane ba kgone ho fihlela menyetla eo e behilweng. [Nako e fedile.] [Mahofi.] (Translation of Sesotho paragraphs follows.)

[I will explain myself in Sesotho. It will not help us much to save money or put it aside if we do not have the economic foundation. It is necessary for local governments to start local economic development forums. These forums should be there to help the poor and unemployed people with the training and informing of small businesses and how they can avoid poverty. They should be trained and informed about what is going on around them.

We have to know how the local economic development forums, in all the closely knit departments which are working together to combat poverty, can help people. The forums also have to develop unity for us to move in a single direction. We must also ensure that some of the forums are established for the training of women to help them gain access to funds, especially because we know that they are the ones who need jobs more and they are in the majority. That is why I say that only people in formal businesses have access to funds because they are able to borrow money from the banks.

It is necessary for our local governments to show some responsibility, especially by making sure that unemployed people and small businesses do get the above-mentioned opportunities. [Time expired.] [Applause.]]

Ms S C VOS: Chairperson, our President and Deputy President, all governments, as we know, commit themselves in one way or another to attempting to create conditions conducive to increasing employment and reducing poverty and inequality, among other noble objectives, and our Government is certainly no different.

But we in this country face two other onerous tasks, that of putting an end to racism and to sexism, both legacies of our painful history. We have to ask ourselves whether this Budget is really going to better the lives and the lot of the majority of citizens in this country, and for the most part they are black women, black rural women in particular, as well as their children and grandchildren, for whom many elderly women are primarily responsible. Now, if the plight of women is seen as an insular, single- issue approach to this Budget, so be it.

The hon Barbara Hogan was entirely correct when she spoke earlier in this debate about our responsibilities as members of Parliament to focus on quality of delivery. On the eve of International Women’s Day I can only draw attention to a few subject matters which dramatically affect the lot of women in our country. I ask: Is it not time that we saw some delivery facts coming out of our allegedly engendered budgets.

We pass wonderful laws and amend other laws which still need total overhauling. For example the Domestic Violence Act is good, but the Maintenance Act should be totally be rewritten. However, do the intended beneficiaries of this legislation and the intended recipients of fiscal allocations actually benefit from our efforts? The answer, sadly, for the most part is no. We are six years into our democracy and we still have not got it right. Women are still the poorest of the poor in our country. It is our women who, according to all the research available, bear the greatest burden of the curse of poverty and caring for the victims of the HIV/Aids epidemic.

Our aged women are said to be the most physically and economically abused persons in our country. Having borne the brunt of apartheid, they are now, with our endemic unemployment, at the mercy of relatives who prey on their pensions for their survival. Others in this House may delve deeper into the murky waters of the myriad reasons why our Welfare Department is unable to find or create capacity to deliver. This is a fact. The problems are openly acknowledged. We all know that something has to be done, and something has to be done fast in this regard. We obviously wish the Minister and the new director-general well in their gargantuan task.

But, what about all that is not openly acknowledged in other departments? Why are some things just left to bumble along with hard-pressed Government officials on the ground floundering in a sea of heightened public expectations without the real human and economic resources needed to deliver? Why is that invariably problems that are inevitably problems specifically relating to women are failing to get resolved? The issue of rape is a classic example.

Let us ask ourselves how the Maintenance Act is working out. The regulations are finally in place, long after the Act was passed, but is there sufficient money for maintenance investigators? No. Are our courts user-friendly to the majority of women who turn to them for help? No. Is it possible for overworked, underresourced and mostly inexperienced maintenance officers to adequately represent the hundreds of thousands of women who try to seek relief through our courts? The answer again is no. Research shows that many women just give up.

Why is there little acknowledgement of the fact that if we successfully tackle child maintenance and as Government make it known that we demand citizens to acknowledge the shared obligations of parenthood, many other welfare and social issues totally relevant to our Budget will also be addressed simultaneously? Why do we not consider it a national priority that many more than a million men throughout our country evade and avoid probably not only their taxes, but all the obligations of fatherhood, and as a result impoverish our women, our children and our nation. And our Government lets most of them get away with it. Just tell me when has this Government openly tackled the fact that the majority of families throughout South Africa are single- parent families, headed by women.

Why not? We have the highest recorded incidence of single-parent families in the world, and what are we doing about it? We spend millions on unco- ordinated HIV/Aids campaigns and we spend yet more millions on eradicating alien vegetation - both worthy causes in their own right - yet we do not seem to be able to put the moral, social and financial obligations of parenthood high on the national agenda as well.

Is it because we are not, first of all, addressing the issues of basic values, of our humanity, of good citizenship, of respect and of discipline, and because we are not placing enough value on parenthood and on the rights of our children? Is this why we are failing to insist that it is not only this Government that has obligations and responsibilities, but that every citizen does too? [Applause.]

Mong S J LEEUW: Ke a leboha Modulasetulo. Tsatsing la kajeno bongata ba baahi ba Afrika Borwa ba motlotlo ka Mmuso ona oo ba o kgethileng, ebile ba bontshitse le hore ba na le tshepo ya hore boetapele ba ANC bo tla ntshetsa naha ena ya rona pele. [Kena hanong.] Ba na le tshepo ya hore Monghadi Trevor Manuel, jwalo ka ha a behilwe mono jwalo ka motsamaisi wa matlotlo, o tla etsa bonnete ba hore o fumana ka hohle-hohle thuso ya ditjhelete e tla ntshetsa maphelo a batho ba rona pele.

Ha re sheba ka mahlakoreng a mang, haholo ka lehlakoreng la DP, re fumana hore ke banna le basadi ba batlang ba lahlehile tseleng ya ho nahana. [Kena hanong.] [Mahofi.] Ha esale ho tloha ka selemo sa 1994 ho fihlela honajwale, kelello ya bona e ntse e batla e eya fatshe. Ba ntse ba fellwa ke maqiti ao ba ka bontshang Mmuso ona hore na ke dintlha dife tse tla ntlafatsa moruo.

Mongahadi Waters mona o bontsha hore, hore re tle re fumane kgolo ya moruo e potlakileng ke ntho e bonolo ka ho fetisisa. Empa ha o mamela ditsebi tsa ikhonomi, di bolela hore ha ho mang kapa mang ya tsebang hore na kgolo ya moruo re e fumana jwang. Empa yena o ema mona a thetsa setjhaba ka hore ho bonolo hore re ka fumana kgolo ya moruo.

Ha ke tla ho Ntate Ken Andrew, ke monna eo ke mo hlomphang haholo, empa letsatsi le letsatsi o ntse a ntshwabisa ha ke bona bohlale ba hae bo ntse bo eya fatshe. [Ditsheho.] O bua ka hore re potlakise thekiso ya dithepa tsa Mmuso, re sa kgathalle boemo ba hore na ha re rekisa thepa ya rona, ebe re tla fumana tjhelete e tla re thusa ho qeta bofuma na. Ha a e kgathalle taba eno. O batla hore re rekise diphahlo tsa rona tsa Mmuso ka tahlehelo.

Nahana feela, ha re rekisa SA Airways ka sente. Na ke bohlokwa bofe ba hore re e rekise? Empa ka baka la hore re ile ra dumela hore re fetole tsamaiso ya SAA hore e be e etsang kgwebo le hore e kgone ho ikemela, re kgonne ho atleha ntlheng eo. Hona jwale re bona ba se ba batla ho reka difofane tse ntjha tse theko e kana ka R4 billion. Empa ha re ne re e rekisitse ka theko e tlase, ke sefe seo Mmuso o ka beng o se fumane? Ke re ho ANC, re seke ra ba ra tla lahlehiswa ke banna bana ba sa tsebeng moo ba yang teng. [Kena hanong.] Ho Mofumahatsana Taljaard, ke bomadimabe hore a tlo ema mona a bolele hore ha re ntshetse ``privatisation’’ pele ka mokgwa o potlakileng. Ke dife ntho tsa Mmuso tseo a batlang hore re di rekise ka tahlehelo? Ha re nka Mmuso ona, ho ne ho sena le ha e le yona pampitshana e bontshang hore na re na le eng. (Translation of Sesotho paragraphs follows.)

[Mr S J LEEUW: Thank you, Chairperson. Today most South African citizens are proud of the Government they elected, and they have indicated that they believe that the ANC leadership will develop our country. [Interjections.] They believe that Mr Trevor Manuel, in his position as the Minister of Finance, will make sure that he obtains financial assistance to improve the lives of our people.

When we look at other parties, especially the DP, we find that they are men and women who are rather lost in their manner of thinking. [Interjections.] [Applause.] Since 1994 their manner of thinking has been deteriorating. They are losing their ability to show this Government the correct way of improving the economy.

Mr Walters here has insinuated that it is very easy to achieve good economic growth quickly. However, when one listens to economic experts, they say no one knows how economic growth is achieved. He stands here lying to the people by saying that we can achieve economic growth easily.

Coming to Mr Ken Andrew, he is a man for whom I have great respect. However, he disappoints me every time, when I see how his level of intelligence is deteriorating.[Laughter.] He says we have to sell state assets without considering whether or not we will realise enough money from it to fight poverty. He does not care about that. He wants us to sell our state assets at a loss.

Just think what it would be like if we sold SA Airways for one cent. Why is it so important for us to sell it? However, because we agreed to change SAA into an independent business, we succeeded on that score. Right now they want to buy new aircraft costing R4 billion. If we had sold SAA at a low price, what would the Government have got out of it? I say to the ANC we must not be misled by these people who do not even know where they are going. [Interjections.]

To Ms Taljaard I say it is unfortunate that she should stand here and say that we are not promoting privatisation quickly enough. Which state asset does she want us to sell at a loss? When we took over this Government, there was not so much as a document to show what we had.]

We did not even have the asset register to indicate what it is that we have.

Re ile ra tlameha hore re hlahlobe, re bone hore na ke dife dintho tseo re nang le tsona. Re ne re ka rekisa jwang dintho tseo re sa tsebeng hore na di hokae kapa tseo re se nang tsona?

Bomadimabe bo tla hlahela Mong Lee, ke e mong wa batho ba sa tsebeng moo ba emeng teng. Ha ho hlokahale hore ke mamele ha a ntse a duletse ho nkgweheletsa jwalo ka ha eka ke sethotsela jwalo ka yena. [Ditsheho.]

Ho Ntate Holomisa wa mokga wa UDM, ke bomadimabe, ke a kgolwa le moo a leng teng o ntse a mametse, hore a tlo ema mona a bontsha hore ha ho letho leo bafutsana ba tla le kgola bajeteng ena. Haeba ho se motho ya tsebang dipalo- palo mokgeng wa hae, mokga wa ANC o moholo, re tla mo thusa hore a kgone ho bala. [Ditlatse.] O bua hape ka lekgetho la ``capital gains’’ moo a reng ha re rekisa dithoto bafutsana e tla ba bona ba amehang. Le hona moo o sa ntse a fumana sekere se seholo. Ha a tsebe ntho eo a buang ka yona.

ANC e motjheng, Mopresidente wa naha o ile a bolela a re ``we are on course’’. Le nna ke a dumela, re motjheng. Bofutsana bo teng kahare ho Afrika Borwa le hlokeha ha mesebetsi ho teng ha ho a bakwa ke ANC. Ke bohlaswa boo re bo fumaneng ka hare ho naha ena ya rona. Ba bang ba ditho tsa DP ba ne ba le teng ha ho ntse ho etswa maano a etsang hore batho ba rona ba lahlehelwe ke mesebetsi.

Ntate Waters o nkutlwisa bohloko ha a bua ka hore Affirmative Action'' ke ntho e mpe, kedisaster’’ [kodua] mme ha e a tswela pele. Ha ke jwetse monghadi Waters hore ke ne ke sebetsa posong dilemo tse leshome le motso o mong kaofela, ke ne ke le counter clerk'' [mosebetsi wa khaontareng]. Ke ile ka rupela makgowanyana a manyane, a tshwanang le yena. [Ditsheho.] Ba bararo ba ile ba fumana nyollo mme ba nkokamela empa ba mphumana ka hare ho poso, ke sa thole nyollo. Jwale hosane ha Mmuso ona wa rona o re affirmative action’’ e thuse batho ba tshwanang le nna, ba neng ba tseba hore ba na le bokgoni, empa, ka lebaka la kgatello ke ne ke sa kgone hore ke ntshetse bokgoni ba ka pele. Ha ke re ke thuswe, ba re seo ke ntho e dihlong. [Keno hanong.] (Translation of Sesotho paragraphs follows.)

[We had to investigate, to find out what we had. How could we sell things if we did not even know where they were or if we did not have them?

Misfortune will befall Mr Lee, because he is one of the people who do not know where they stand. I do not have to listen to him howling at me as if I am a soulless creature like him. [Laughter.]

To Mr Holomisa of the UDM, I think he is listening where he is, it is a pity that he should stand here and indicate that the poor will get nothing out of this budget. If nobody knows figures in his party, the ANC is a big party, we will help him with his figures. [Applause.] He also talks about capital gains, saying that the poor are the ones who will be affected if we sell property. Even there, he is still very wrong. He does not know what he is talking about.

The ANC is on course. The President of the country did say that we are on course, and I also agree, we are on course. The poverty in South Africa and the lack of jobs were not caused by the ANC. That is the mess we found in our country. Some of the DP members were there when schemes and plans were devised for our people to lose their jobs.

Mr Waters hurts me when he says that affirmative action is bad, it is a disaster and it is not modern. Let me tell Mr Waters that I worked at a post office for 11 years, as a counter clerk. I trained a few white people like him. [Laughter.] Three of them were promoted to positions above mine, despite the fact that I was working at the post office when they arrived, and I was never promoted. After that, our Government said affirmative action should help people like me, who knew that they had the ability, but could not develop because of oppression. When I say that I should be helped, they say that is embarrassing. [Interjections.]]

Mr M J ELLIS: [Inaudible.]

Mr S J LEEUW: The problem with Mr Ellis and Ms Taljaard … [Interjections.]

The DEPUTY CHAIRPERSON OF COMMITTEES: Order! The hon Donald Lee, please give the member at the podium a chance. Please continue, hon member.

Mr S J LEEUW: The problem with Mr Lee is that he is one of the most stupid people that I have ever met in this Parliament. [Laughter.] [Applause.]

The DEPUTY CHAIRRPERSON OF COMMITTEES: Order! Hon member, continue with your speech.

Mong S J LEEUW: O ka bona kae motho ya sa tsebeng moo a yang teng a nahana hore o tla jwetsa rona ba tsebang moo re yang teng hore ke eng tseo re tlamehang ho di etsa? [Keno hanong.] Ha ke utlwe hore na o reng, ke tla mo araba hosane.

Ha re fihla ho lekgetho, tsena tse re bontshang hore Mmuso ona wa rona o ikemiseditse ho phahamisa moruo wa naha, re bona jwale ho na le ditheolelo tshebedisong ya diphahlo ``depreciation’’ ho dikhamphani tse neng di sena monyetla ona ho o sebedisa pele. Tsena tsohle ke ntshetsopele e bontshang hore re ikemiseditse ho hatela pele.

Ha re fihla ntlheng ya ho phahamisa maphelo, ditsela le tsohle tseo re nahanang hore di ka re thusa, ke bomadimabe ho lemoha hore mathata ana a re hlahetseng a dikgohola a tlile ho beha kgatello e kgolo ho Mmuso hore o leke ho thusa ho ntlafatsa ditsela le marokgo moo di sentsweng ke metsi ka lebaka la dipula tsena tse fetileng.

Empa le ha ho le jwalo, Mong Trevor Manuel, Kabinete le Mopresidente wa rona ba bontshitse hore ho na le banna le basadi ba kgonang ka hare ho Kabinete. Ho na le tjhelete e nnyane eo ba e beheletseng ka thoko e tla thusa ha re hlahetswe ke mathata a tshwanang le ana a re hlahetseng. Tseo tsohle di bontsha hore ha re ntshetsa pele ntlafatso ya rona ya ``infrastructure’’ re lokela hore re leke ho kopana le ho theha mesebetsi, hobane ntho e kgolo hona jwale ke hore re leke ho ntlafatsa maphelo a batho ba rona le ho leka ho thusa ka mesebetsi.

Ke ile ka thabela taba e nngwe eo ke ileng ka bona e etsahala mane Harrismith moo ho nang le ntho e bitswang ``build, operate, train and transfer’’ [aha, sebedisa, rupella mme o fetise]. Ha re ka ela hloko hore re matlafatse ntshetsopele eo, re ka bona re ruisa basebetsi tsebo, jwalo ka se ileng sa etsahala mane Harrismith. Ho na le tselanyana e ileng ya ahwa moo ke khamphani e nngwe e ahang ditsela. Ka hare ho khamphani eo ho ile ha kwetliswa basebetsi hore na ha ba batla ho aha tsela ya mofuta o itseng, ke mokgwa ofe oo ba tlamehang hore ba o sebedise. Ka mora hore basebetsi bao ba qete ho aha moo ba ile ba fumana lengolo le pakang hore ba tseba mosebetsi wa ho boloka ditsela tsa rona di le ntle.

Phephetso hona jwale ke hore ha re tlo kenya ``training levy’’ [lekgetho la thupello] e be mokgwa o mong oo re tlang ho ipiletsa ka ona ho boramesebetsi, basebetsi le rona re le setjhaba hore re leke ho ikopanya re be ntho e le nngwe le hore ha projeke e se e fedile re tsebe ho tswela pele ka tsebo eo re ileng ra e fuwa, mme re leke ho etsa di-tender ho diprojeke tsa mofuta o jwalo, tseo Mmuso o tla di etsa. (Translation of Sesotho paragraphs follows.)

[Mr S J LEEUW: Where has one ever encountered someone who does not know where he is going, telling people who know where they are going, what to do? [Interjections.] I cannot hear what he is saying. I will answer him tomorrow.

Coming to tax, what indicates to us that our Government is determined to uplift our economy is that there is now a depreciation in the companies that did not have this privilege before. All of this is a development that shows that we intend to go forward.

Coming to the improvement of health, roads and everything else that we think can be of service to us, it is a pity that the flood disaster is going to put Government in a difficult position, where the roads and bridges that have been swept away by the floods will have to be rebuilt.

Despite that, Mr Trevor Manuel, the Cabinet and our President have shown that there are able men and women in Cabinet. There is a small amount of money that they have put aside, which will help us through difficulties like this one. All of this shows that when we develop our infrastructure, we have to try and unite, and create jobs, because the important thing right now is to improve the lives of our people and to try and help with jobs.

I was happy to see something which happened in Harrismith, called ``build, operate, train and transfer’’. If we could concentrate on developing such things, we would be developing the skills of the workers, as happened in Harrismith, where a road was built by a road building company. In that company, workers were trained to know which skills to use to build one road and which to use to build another. After building the road, the workers were given certificates to certify that they can keep our roads in good condition.

The challenge right now is that a training levy should not be included. This is a way of calling on our employers, employees and the whole nation, to try and unite and work together; and when the project has been completed we should be able to use the skills we have been taught, and we should then try to tender for projects like that, which the Government will have.]

May I also refer to the Sunday Times where recently the shipping industry has indicated that their infrastructure is not up to speed and that they need up to R15 billion to upgrade or replace that infrastructure. So this is a clear indication that prioritising our infrastructure is critical in order to get our economy growing. It also indicates that if as a country and economy as a whole we embark on a full-scale upgrading and replanning of the infrastructure, we might contribute to job creation.

There is no doubt that development and application of new technology will continue to be a challenge to the country. The question is: How do we develop technology in such a way that it does not misplace working people? If it does, then it does not benefit the majority. I am vividly clear that some of the projects are machine based, but I am convinced that the combination of both is critical in our situation. The maintenance, rehabilitation and upgrading of roads and bridges is more serious and critical than before. We have seen an increased rate of accidents in our roads caused by negligent drivers, high speed, faulty vehicles, and unfavourable conditions on our roads. This Budget takes seriously all the above and provision has been made to improve this area of concern.

The Government needs to be encouraged to do more, and, indeed in partnership with people and the private sector. Whilst we are faced with these major backlogs, we have plans and strategies to deal with them. The key question which is equally relevant is: How best do we engage in development in such a way that we create enough jobs? We have learned that the public works programmes implemented for the past five years have, to a certain extent, created employment and impacted on poverty in the rural areas, and even in the towns where such programmes have been undertaken.

As a member of the governing party, I acknowledge the progress and impact we have made over the past five years, but I will be the first to acknowledge that the backlog is beyond ordinary imagination, as Mr Ken Andrew thinks. Because we have resolved to provide for a better life for all, there is no turning back or shortcut to prosperity. The Medium-Term Expenditure Framework indicates that spending on this programme will continue to increase, and that is encouraging.

Lastly, I would like to thank the Government for this Budget. [Interjections.] Mr Donald Lee is lost in the mist.

The DEPUTY CHAIRPERSON OF COMMITTEES: Order! Hon member, remain at the podium. Hon Mr Leeuw, please remain at the podium. Order! To say that the hon Donald Lee is ``stupid’’ is unparliamentary. Please withdraw the words. [Interjections.] Please withdraw the words, hon member.

Mr S J LEEUW: I will take note of what Mr Lee has said.

The DEPUTY CHAIRPERSON OF COMMITTEES: Order! Please withdraw the statement that Mr Lee is ``stupid’’. Order! Hon member, please withdraw the words first.

Mr S J LEEUW: I withdraw it, but he is a fool. [Applause.]

Debate suspended.

The House adjourned at 17:29. ____


                       THURSDAY, 2 MARCH 2000


National Assembly and National Council of Provinces:

  1. The Speaker and the Chairperson:
 (1)    The following Bill was introduced in the National Assembly on 2
     March 2000 and referred to the Joint Tagging Mechanism (JTM) for
     classification in terms of Joint Rule 160:

     (i)     Competition Amendment Bill [B 10 - 2000] (National
          Assembly - sec 75) - (Portfolio Committee on Trade and
          Industry - National Assembly) [Explanatory summary of Bill and
          prior notice of its introduction published in Government
          Gazette No 20903 of 17 February 2000.]

 (2)    The Minister of Communications on 2 March 2000 submitted a draft
     of the South African Communications Regulatory Authority Bill,
     2000, and the memorandum explaining the objects of the proposed
     legislation, to the Speaker and the Chairperson in terms of Joint
     Rule 159. The draft has been referred by the Speaker and the
     Chairperson to the Portfolio Committee on Communications and the
     Select Committee on Labour and Public Enterprises, respectively,
     in accordance with Joint Rule 159(2).

National Assembly:

The Speaker:

  1. The following changes have been made to the membership of Committees, viz:

 Appointed: Dowry, J J.
 Discharged: Morkel, C M.

 Constitutional Review:

 Appointed: Bakker, D M (Alt).


 Appointed: Ellis, M J; Lee, T D (Alt); Ntuli, R S; Seremane, W J (Alt).

 Report 13 of Public Protector:

 Appointed: Oliphant, G G.
 Discharged: Dlamini, B O.

 Sport and Recreation:

 Appointed: Morkel, C M.
 Discharged: Gaum, A H.


National Assembly:


  1. The Minister of Housing:
 Government Notice No 304 published in the Government Gazette No 20828
 dated 21 January 2000, Call for nominations of persons to serve on the
 new National Home Builders Registration Council, made in terms of the
 Housing Consumers Protection Measures Act, 1998 (Act No 95 of 1998).

 Referred to the Portfolio Committee on Housing.

                        FRIDAY, 3 MARCH 2000


National Assembly and National Council of Provinces:

  1. The Speaker and the Chairperson:
 (1)    Dr Z P Jordan has been elected chairperson of the Constitutional
     Review Committee with effect from 1 March 2000.

 (2)    Mr M J Bhengu has been elected deputy chairperson of the
     Constitutional Review Committee with effect from 1 March 2000.

National Assembly:

  1. The Speaker:
 The following papers have been tabled and referred to the relevant
 committees as mentioned below:

 (1)    The following paper is referred to the Portfolio Committee on
     Public Enterprises for information:

     Report of the Auditor-General on the Financial Statements of Vote
     25 - Public Enterprises for 1998-99 [RP 149-99].

 (2)    The following paper is referred to the Portfolio Committee on
     Correctional Services for information:

     Report of the Auditor-General on the Financial Statements of Vote
     10 - Correctional Services for 1998-99 [RP 133-99].

 (3)    The following paper is referred to the Joint Monitoring
     Committee on Improvement of Quality of Life and Status of
     Children, Youth and Disabled Persons for information:

     Financial Statements of Vote 2 - Deputy President and the National
     Youth Commission for 1998-99 [RP 127-99].

 (4)    The following paper is referred to the Portfolio Committee on
     Public Service and Administration for information:

     Financial Statements of Vote 27 - Public Service Commission for
     1998-99 [RP 151-99].

 (5)    The following paper is referred to the Portfolio Committee on
     Finance for information:

     Financial Statements of Vote 7 - Central Statistical Service for
     1998-99 [RP 157-99].

 (6)    The following paper is referred to the Portfolio Committee on
     Communications for information:

     Financial Statements of Vote 8 - Communications for 1998-99 [RP

 (7)    The following paper is referred to the Portfolio Committee on
     Environmental Affairs and Tourism for information:

     Financial Statements of Vote 13 - Environmental Affairs and
     Tourism for 1998-99 [RP 136-99].

 (8)    The following paper is referred to the Portfolio Committee on
     Housing for information:
     Financial Statements of Vote 18 - Housing for 1998-99 [RP 142-99].

 (9)    The following paper is referred to the Portfolio Committee on
     Safety and Security for information:

     Financial Statements of Vote 20 - Independent Complaints
     Directorate for 1998-99 [RP 144-99].

 (10)The following paper is referred to the Portfolio Committee on Sport
     and Recreation:

     Financial Statements of Vote 32 - Sport and Recreation for 1998-99
     [RP 155-99].

 (11)The letter of the President of the Republic on the employment of
     the South African National Defence Force dated 24 February 2000
     and tabled on 29 February 2000, is referred to the Joint Standing
     Committee on Defence.

 (12)Programme 4: National Youth Commission and under Programme 5,
     Subprogrammes Status of Disabled Persons and Status of the Child
     of Vote 1 - "Presidency", are referred to the Joint Monitoring
     Committee on Improvement of Quality of Life and Status of
     Children, Youth and Disabled Persons.

 (13)Subprogramme: Status of Women under Programme 5 of Vote 1 -
     "Presidency" is referred to the Joint Monitoring Committee on
     Improvement of Quality of Life and Status of Women.


National Assembly:

  1. Report of the Portfolio Committee on Health on the Chiropractors, Homeopaths and Allied Health Service Professions Amendment Bill [B 2 - 2000] (National Council of Provinces - sec 76), dated 3 March 2000:

    The Portfolio Committee on Health, having considered the subject of the Chiropractors, Homeopaths and Allied Health Service Professions Amendment Bill [B 2 - 2000] (National Council of Provinces - sec 76), referred to it and classified by the JTM as a section 76 Bill, reports the Bill without amendment.

                      MONDAY, 6 MARCH 2000


National Assembly and National Council of Provinces:

  1. The Speaker and the Chairperson:
 (1)    The following Bills were introduced in the National Assembly on
     6 March 2000 and referred to the Joint Tagging Mechanism (JTM) for
     classification in terms of Joint Rule 160:

     (i)     Remuneration of Public Office Bearers Amendment Bill [B 11
          - 2000] (National Assembly - sec 76(1)) - (Portfolio Committee
          on Provincial and Local Government - National Assembly).

     (ii)Road Accident Fund Commission Amendment Bill [B 12 - 2000]
          (National Assembly - sec 75) - (Portfolio Committee on
          Transport - National Assembly) [Explanatory summary of Bill
          and prior notice of its introduction published in Government
          Gazette No 20962 of 6 March 2000.]

 (2)    The Joint Programme Committee on 29 February 2000 took a
     decision, in accordance with Joint Rule 216, that the Remuneration
     of Public Office Bearers Amendment Bill [B 11 - 2000] (National
     Assembly - sec 76(1)) and the Tourism Amendment Bill [B 3 - 2000]
     (National Assembly - sec 76(1)) be fast-tracked.

In terms of Joint Rule 216(4) this decision must be tabled in both Houses for ratification.


National Assembly and National Council of Provinces:


  1. The Speaker and the Chairperson:
 (1)    Report and Financial Statements of the South African Human
     Rights Commission for 1998-99, including the Report of the Auditor-
     General on the Financial Statements.

 Referred to the Portfolio Committee on Justice and Constitutional
 Development and the Select Committee on Security and Constitutional

 (2)    Youth Manifesto for the Twenty-First Century adopted by the
     World Parliament of Children on 24 October 1999.


National Assembly:

  1. The Speaker, as Chairperson of the Rules Committee of the National Assembly, presents the First Report of the Rules Committee of the National Assembly, dated 1 March 2000, as follows:
 The Rules Committee of the National Assembly, having considered
 proposals for the amendment of the Rules of the National Assembly,
 recommends the following amendments to the Rules:
 1.     Rule 161: Functions and Powers
 To amend Rule 161(1)(e) by the addition of the words underlined:

 161.   (1) The Rules Committee may -

 (e)    lay down guidelines, issue directives, and formulate regulations
     regarding any aspect of policy referred to in this Rule.

 2.     Rule 162: to change the heading to: Implementation of policy
     (delete: "Control and management of administration").

 To amend rule 162(1) by the deletion of the words in bold brackets:

 162.   (1) The responsibility for the implementation of policy
     determined by the Rules Committee [and the control and management
     of all matters relating to the administration of the Assembly]
     vests in the Speaker subject to the decisions of the Rules
     Committee and resolutions of the Assembly.

 3.     Rule 165: Subcommittees

 Insert a new subrule 165(4), as follows:

 (4)    A subcommitee of the Rules Committee may not issue directives
     relating to any aspect of the control and management of the
     administration of the Assembly.

 1 March 2000

 Report to be considered.

3 Report of the Portfolio Committee on Finance on the Appropriation Bill [B 7 - 2000] (National Assembly - sec 77), dated 3 March 2000:

 The Portfolio Committee on Finance, having considered the Appropriation
 Bill [B 7 - 2000] (National Assembly - sec 77), referred to it and
 classified by the Joint Tagging Mechanism as a money Bill, reports as

 A.     Introduction

     1. The Committee held hearings on the Budget from 28 February 2000
          to 2 March 2000, and wishes to express its appreciation to all
          participants for their contributions. Written presentations
          submitted form part of the records of the Committee Section.
          The Committee would also like to express its appreciation to
          the Minister of Finance, the Deputy Minister of Finance, the
          Director-General of Finance, the Acting Director-General of
          State Expenditure, the Commissioner of the South African
          Revenue Services, the Chairperson of the Financial and Fiscal
          Commission, and their staff, for their presence and
          contributions during the hearings. A list containing the names
          of those who made oral submissions is included in paragraph E
          of this Report.

     2. The Budget tabled in Parliament by the Minister of Finance for
          the year 2000-2001 represents another significant step in the
          ongoing budgetary reforms initiated by the Ministry of Finance
          and enhances the macro-economic management of the economy in
          several very important ways.

          For the first time in many years, the government has been able
          to table a budget that is strongly supportive of growth and
          which also introduces one of the most comprehensive sets of
          tax reforms ever undertaken, which, inter alia, affords
          significant tax relief to middle and lower income tax groups
          and to small business. By announcing a 3% to 6% inflationary
          target and achieving a lower than expected budget deficit, the
          government continues to demonstrate a progressive commitment
          to sound and prudent macro-economic management. Greatly
          improved revenue collection, lower interest on State debt and
          stronger economic growth have combined to enable the
          government to raise spending on public services by more than
          R8,3 billion per year. This increased expenditure in the
          medium term will go towards strengthening and modernising the
          justice system, consolidating provincial education, health and
          welfare services, maintaining public infrastructure and
          reinforcing safety standards on roads, public transport and
          public buildings, phasing in sectoral skills development
          programmes, responding to the challenges of HIV/Aids, and
          supporting rural development, poverty relief and employment

          The Budget as a whole continues to show a redistributive shift
          towards spending on social services such as education, health,
          welfare and housing, representing a total of R109 billion.
          Interestingly, the Budget also reflects a welcome upward shift
          in spending on economic services, including water,
          agriculture, fishing and forestry, transport and
          communications, thus demonstrating a commitment by the
          government to building and maintaining economic
          infrastructure. Protection services receive a total of R33
          The issue of poverty reduction has received considerable
          attention. While the Budget Review indicated increased
          spending on poverty reduction, the rate of change was
          questioned in a presentation to the Committee. Further
          research is required to established real spending, and on a
          per capita basis, as well as the quality of delivery of social
          services. The Committee welcomes the innovation of expenditure
          incidence analysis, which will determine the proportion of
          services delivered to social categories.

          The government has committed itself to moderating the level of
          government consumption spending relative to the GDP, including
          public service personnel expenditure. In line with improving
          efficiencies in service delivery, the Ministry of Finance will
          set up a unit that will assist other ministries and spheres of
          government in the setting up of public/private sector

          The Committee has had to draw up this Report under severe time
          constraints, and is thus unable to report in detail on all the
          relevant matters that arose during the four days of hearings.
          However the Committee intends earmarking some of the issues
          for further consideration. The matters mentioned below were
          some of the major issues that received attention during the

 B.     Taxation

     The taxation proposals contained in the Budget arguably constitute
     the most comprehensive overhaul of the country's tax system in our
     recent history. The proposals are both redistributive in nature
     and pursue the principle of equity in the tax system.

     Most popular of the tax changes is the relief granted to
     individual taxpayers, in the order of R9,9 billion. 41% of this
     relief will be to the benefit of those earning below R70 000 and
     38% to those earning between R70 000 and R150 000. The Committee
     welcomes this relief, believing that it will have a positive
     impact on both savings and aggregate demand in the economy.

     The Committee acknowledges the introduction of a Capital Gains Tax
     for the equity it will engender in the tax system and its
     "backstop" effect. We also welcome the one year's grace before the
     introduction of the tax, as it became clear in the hearings that a
     number of details remain to be resolved. These include the

     1. The complexities created by the proposed procedures to exempt
          capital gains accrued prior to 1 April 2001.

     2. Aspects relating to principal residences owned through private
          companies, close corporations or trusts.

     3. The status of the tax in relation to new immigrants.

     4. The tests for and definition of residence.

     5. The complexities of and capacity for valuations of gains.

     6. The potential double taxation of certain types of share

     SARS and the Department of Finance have gone to considerable
     lengths to enable all interested organisations and individuals to
     comment on the proposed tax. We encourage all stakeholders to do
     so as this will greatly enhance the ability of SARS and Parliament
     to resolve these issues.

     The shift from source-based to residence-based taxation is to be
     introduced on 1 January 2001. This shift will continue the process
     of aligning the South African tax regime with international best
     practice. The delay in implementation is to be welcomed, as a
     number of issues remain to be resolved. These include -

     (1)     the treatment of income from countries which have a
          similar tax regime to that of South Africa, but with whom we
          do not have a double tax agreement; and
     (2)     the criteria for and definitions of residence.

     A critical issue for the Committee in relation to both these
     proposals is the capacity of SARS to implement these changes. The
     Commissioner stated before the Committee that the changes will
     impose a "formidable burden", but that SARS will be equal to it if
     given adequate resources. SARS indicated that they will require
     770 extra staff to successfully manage the new demands. The
     Committee urges the Minister to ensure that the additional
     resources are made available. This investment is certain to bring
     greater returns.

     The Committee welcomes the tax exemption proposed for certain non-
     profit organisations (NPOs). Consultation is required on the
     specific NPOs which will be eligible for income tax relief, and
     this will require ongoing review.

     The Committee further welcomes the lower, graded levels of
     taxation for small and micro enterprises, which we believe will
     assist in stimulating the growth of this critical sector. We
     request the Ministry to assess whether the threshold for
     qualification should be raised in future budgets.

     The Committee expresses its concern at what appears to be an ad
     hoc approach to the taxing of retirement and pension funds. When
     an additional tax was introduced in 1996, it was stated that this
     was to create greater equity between these and other instruments.
     It was further stated that consultation would take place and the
     issue of taxation of these funds would be comprehensively studied.
     It appears that this has not occurred. As a consequence, increased
     taxation of these instruments is perceived as undermining the
     development of an improved savings culture in the country. The
     Committee is of the opinion that a stable approach on this issue
     is essential, and therefore we request the Ministry to initiate
     the consultative process as a matter of some urgency and to
     present to us with a coherent view on the future tax status of
     these instruments.

     The Committee welcomes the creation of the interministerial task
     group to improve the levels of savings in the South African
     economy. We look forward to receiving concrete proposals in this
     regard in the near future.

     The Committee notes the concerns raised by organised agriculture
     with respect to the continuing exclusion of agriculture from the
     diesel rebate. We further note the Minister's desire to develop a
     viable system that meets this need but that is not open to the
     misuse that led to the withdrawal of the rebate in 1997.

 C.     Inflation targeting

     The Committee welcomes the introduction of inflation targeting. We
     believe that it is a mechanism that will create greater certainty
     and stability in the economy and act as a solid foundation for
     sustainable growth. It further engenders greater accountability in
     respect of the way in which the South African Reserve Bank
     executes monetary policy.

     As a means through which to improve the co-ordination of macro-
     economic policy, this framework will further enhance the
     credibility of the way in which the macro-economy is being
     managed. This is reflected by the announcement that South Africa
     has been granted an investment grade rating by Standard and Poors.

     The issue of inflation targeting generated the most substantial
     debate of the hearings. The relationship between growth and
     stability was extensively discussed, with divided views on the
     impact that inflation targeting might have on growth performance.
     What is clear, is that South Africa must pursue job creating
     growth with minimal inflation to ensure its sustainability.
     Evidence was led that low inflation is compatible with sustainable

     No evidence on the advisability of the specific target band was
     led. The Committee is of the opinion that we do not have
     sufficient information at this point to engage in a meaningful
     debate on the range itself or the time period over which it will
     be implemented. Our preliminary, instinctive view is that the
     period of almost three years to achieve the target is probably
     practical and the band is reasonable. We welcome the fact that the
     target and the timing of its achievement will be assessed on an
     annual basis as part of the Medium-Term Budget Policy Statement.

     The Committee noted that the targets specified were based on
     prelimenary modelling, and that this process will be concluded
     later this year. The Committee welcomes the invitation from the
     Governor of the Reserve Bank to engage meaningfully with the
     assumptions underlying the specific target and the timing of the
     introduction thereof.

     Making this information broadly available will facilitate
     constructive public discussion on the issue and have the benefit
     of engendering broad consensus in our society around inflation
     expectations. International experience suggests that the key to
     the success of inflation targeting is that it is achieved in a
     transparent and accountable manner. The Governor of the Reserve
     Bank's endorsement of this view is to be welcomed. So too is his
     flexible approach to the manner in which he might deal with
     exogenous effects on the economy during any target period.

     The Committee will not only deepen its knowledge of the issue but
     will also closely monitor the implementation of the target and its
     effects, both positive and negative, on economic sentiment and the
     real economy.

     The Committee will also seek greater clarity on the institutional
     and operational arrangements between the Reserve Bank and the
     Department of Finance as they evolve over time.

 D.     Conclusion

     In conclusion, the Committee wishes to commend the Ministry and
     the Department on a Budget that has been well received across a
     wide spectrum of local and international opinion. We urge all
     portfolio committees of Parliament to engage meaningfully with the
     Budget and especially the Medium-Term Expenditure Framework and
     the National Expenditure Survey. With the extent and quality of
     information provided, it should serve as the centre-piece of
     Parliament's oversight of the executive arm of government.

     The Committee commits itself to identify key issues raised by
     organisations and interested parties during the hearings on the
     Budget, and take these up as part of its parliamentary programme
     during the course of the year.

 E.     Oral submissions

     1. Mr N Barnardt, African Merchant Bank.
     2. Prof I Abedian, Group Economist: Standard Bank.
     3. Mr M Power, UCT.
     4. Dr N Makgetla, Cosatu.
     5. Mr M van Blerk, Chamber of Mines.
     6. Mr B Gasa, Chamber of Mines.
     7. Adv A Meiring, Chairperson of SACOB Parliamentary  Panel.
     8. Mr B Lacey, Economic Consultant.
     9. Mr K Warren, Policy Executive: Parliament.
     10.     Mr G Bosch, Parliamentary Official: Agri SA.
     11.     Mr Y Waja, Black Business Council.
     12.     Mr L Mondi, Black Business Council.
     13.     Ms G Humpries, Fedusa.
     14.     Mr A van Zyl, Idasa.

                        TUESDAY, 7 MARCH 2000


National Assembly and National Council of Provinces:

  1. The Speaker and the Chairperson:
 (1)    The following Bills were introduced in the National Assembly on
     7 March 2000 and referred to the Joint Tagging Mechanism (JTM) for
     classification in terms of Joint Rule 160:

    (i)      Lotteries Amendment Bill [B 13 - 2000] (National Assembly
           - sec 75) - (Portfolio Committee on Trade and Industry -
           National Assembly) [Explanatory summary of Bill and prior
           notice of its introduction published in Government Gazette
           No 20961 of 6 March 2000.]
     (ii)    South African Communications Regulatory Authority Bill [B
           14 - 2000] ((National Assembly - sec 75) - (Portfolio
           Committee on Communications - National Assembly)
           [Explanatory summary of Bill and prior notice of its
           introduction published in Government Gazette No 20915 of 18
           February 2000.]

 (2)    The Joint Tagging Mechanism (JTM) on 7 March 2000 in terms of
     Joint Rule 160(4), classified the following Bills as section 76

     (i)     National Land Transport Transition Bill [B 5 - 2000]
           (National Council of Provinces - sec 76(2)) - (Select
           Committee on Public Services - National Council of

     (ii)    Remuneration of Public Office Bearers Bill [B 11 - 2000]
           (National Assembly - sec 76(1)) - (Portfolio Committee on
           Provincial and Local Government - National Assembly).

 (3)    The Joint Tagging Mechanism (JTM) on 7 March 2000 in terms of
     Joint Rule 160(3), classified the ollowing Bills as section 75

     (i)     Financial Institutions (Investment of Funds) Bill [B 6 -
           2000] (National Assembly - sec 75) - (Portfolio Committee on
           Finance - National Assembly).

     (ii)    Nonprofit Organisations Amendment Bill [B 9 - 2000]
           (National Assembly - sec 75) - (Portfolio Committee on
           Welfare and Population Development - National Assembly).

           Note: This Bill was introduced as a section 76 Bill.

     (iii)   Competition Amendment Bill [B 10 - 2000] (National
           Assembly - sec 75) - (Portfolio Committee on Trade and
           Industry - National Assembly).

     (iv)    Road Accident Fund Commission Amendment Bill [B 12 - 2000]
           (National Assembly - sec 75) - (Portfolio Committee on
           Transport - National Assembly).
     (v)           Lotteries Amendment Bill [B 13 - 2000] (National
           Assembly - sec 75) - (Portfolio Committee on Trade and
           Industry - National Assembly).


National Assembly:

  1. Report of the Portfolio Committee on Finance on the Division of Revenue Bill [B 8 - 2000] (National Assembly - sec 76), dated 28 February 2000:

    The Portfolio Committee on Finance, having considered the subject of the Division of Revenue Bill [B 8 - 2000] (National Assembly - sec 76), referred to it and classified by the JTM as a section 76 Bill, reports the Bill with amendments [B 8A - 2000].

  2. Report of the Portfolio Committee on Provincial and Local Government on the Remuneration of Public Office Bearers Amendment Bill [B 11 - 2000] (National Assembly - sec 76), dated 7 March 2000: The Portfolio Committee on Provincial and Local Government, having considered the subject of the Remuneration of Public Office Bearers Amendment Bill [B 11 - 2000] (National Assembly - sec 76), referred to it and classified by the JTM as a section 76 Bill, reports the Bill with amendments [B 11A - 2000].

    The Committee further reports that although certain Clauses are technically rejected in order to fast-track Clauses 2 and 4 of the Bill, the rejected Clauses need to be deferred. To this end the House is requested to grant permission for the Committee to introduce the rejected Clauses in a separate Bill.

 Report to be considered.