MONDAY, 19 JUNE 2000 __

                PROCEEDINGS OF THE NATIONAL ASSEMBLY
                                ____

The House met at 14:05.

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

ANNOUNCEMENTS, TABLINGS AND COMMITTEE REPORTS - see col 000.

                          NOTICES OF MOTION

Mr A MLANGENI: Madam Speaker, 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 President Thabo Mbeki turned 58 years old yesterday, Sunday 18 June 2000, and that he is trying very hard to reach our age;

(2) further notes that his birthday coincides with the anniversary of his inauguration as President of South Africa;

(3) recognises the role played by the President in combating poverty in our country and on the continent;

(4) congratulates the President on his dedication and speeding up change in South Africa and on the rest of the continent; and

(5) wishes him a happy belated birthday.

Ukhule ungakhokhobi, Zizi! [Happy birthday, Zizi!] [Applause.]

Mr D H M GIBSON: Madam Speaker, 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 that it is in the interests of democracy for the ANC Government to be smaller and the opposition to be larger …

[Laughter.] Well, looking around today, it does seem to be very much smaller. I do not know where its members are. I continue:

(2) supports all moves aimed at creating for South Africa a real alternative to the present Government in the light of the increasing numbers of voters who will vote for a strong, principled opposition.

[Interjections.] [Applause.]

Mr J H VAN DER MERWE: Madam Speaker, I give notice that at the next sitting of the House I shall move:

That the House congratulates the Springboks on thoroughly beating the British.

[Interjections.] [Applause.]

Mr V G SMITH: Madam Speaker, 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 -

   (a)  a meeting between the ANC Youth League and Afrikanerbond
       Jeugliga took place on 16 June; and


   (b)  the theme of this meeting was ``Yesterday is a foreign country,
       the future belongs to us'';

(2) believes that -

   (a)  this meeting serves as an important milestone in building a
       united nation, ready to tackle the challenges of the 21st
       century; and


   (b)  this meeting reflects the preparedness of young people to take
       charge of their own future and build a future that is free of
       racism, racial inequality and poverty; and

(3) commends the initiative by these organisations and hopes that initiatives of this nature will also take place at provincial and local level.

[Applause.]

Mnr J J DOWRY: Mevrou die Speaker, ek gee hiermee kennis dat ek op die volgende sittingsdag namens die Nuwe NP sal voorstel:

Dat die Huis -

(1) kennis neem van die ongegronde aanval op Wes-Kaapse boere oor hul verhouding met hul werkers en hul arbeidspraktyke deur die Minister van Arbeid met die Jeugdagvierings;

(2) dié uitsprake, wat op onwetenskaplike en kwaadwillige veralgemening berus, ten sterkste veroordeel as goedkoop politieke propaganda;

(3) meen dat die landbouers van die Wes-Kaap, benewens enkele onaanvaarbare en geïsoleerde gevalle, ‘n voorbeeld is vir die res van die land wat die behartiging en bestuur van goeie arbeidspraktyke betref; en

(4) daarvan kennis neem dat die Nuwe NP van mening is dat ‘n gesonder werksomgewing waarin werkersregte sowel as werkgewersregte gerespekteer word die grondslag van ‘n stabiele ekonomie moet wees pleks van drakoniese arbeidswetgewing wat werkgeleenthede verminder.

Tussenwerpsels.

[Mr J J DOWRY: Madam Speaker, I hereby give notice that on the next sitting day I shall move on behalf of the New NP:

That the House -

(1) notes the unsubstantiated attacks on Western Cape farmers regarding their relationship with their workers and their labour practices by the Minister of Labour during the Youth Day celebrations;

(2) condemns these statements, which are based on unscientific and malicious generalisation, in the strongest possible terms as cheap political propaganda;

(3) is of the opinion that, with the exception of a few unacceptable and isolated incidents, farmers in the Western Cape are an example to the rest of the country as regards the furtherance and administration of sound labour practices; and

(4) notes that the New NP is of the opinion that a healthier working environment, in which workers’ rights as well as employers’ rights are respected, should form the basis of a stable economy, as opposed to draconian labour legislation which reduces job opportunities.

[Interjections.]]

Mr S ABRAM: Madam Speaker, I give notice that at the next sitting of the House I shall move:

That the House -

(1) notes - (a) that elections are to be held on 24 and 25 June 2000 in Zimbabwe and that weekend reports state that the UN mission has withdrawn from monitoring these elections; and

   (b)  the statements attributed to President Mugabe in recent days,
       which do not contribute to the promotion of a climate of free
       participation; and

(2) calls upon -

   (a)  the international community to promote the monitoring of the
       elections;


   (b)  the President of South Africa to urge the UN mission to resume
       its role and assign a more vigilant role to the South African
       mission; and


   (c)  the President of Zimbabwe to desist from making statements which
       contribute towards destabilising SADC countries.

Ms N M TSHEOLE: Madam Speaker, 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 plans by the DP to become a museum for apartheid relics such as Hernus Kriel and others;

(2) further notes that it has become the home of those who simply cannot stomach the need for the fundamental transformation of our country;

(3) recognises that this is entrenched in the launch of their ``swart gevaar’’ campaign aimed at consolidating the white conservative vote; and

(4) calls upon those people who supported the DP for its liberal principles to break ranks and support the party that enhances democracy - the ANC.

[Interjections.] [Applause.]

The SPEAKER: Order! Hon members, your noise is drowning out your own speaker!

Dr M S MOGOBA: Madam Speaker, I give notice that on the next sitting day of the House I shall move on behalf of the PAC:

That the House -

(1) notes that our parliamentary procedure is based on old norms, going back to the old Parliament and even the Westminster model;

(2) further notes that these old models presume a two-party or three- party system and not a nine-party system;

(3) believes that the system of minidebates, which are a repetition of the debates in the portfolio committees and the House when the various Votes are presented, is boring; and

(4) calls on the Rules Committee to review the process and to simplify and systematise it so that in the final instance we have more voting than monotonous debates.

[Interjections.]

Mr M A MANGENA: Madam Speaker, I give notice that on the next sitting day of the House I shall move on behalf of Azapo:

That the House -

(1) notes that -

   (a)  the SABC reported in its radio and television news that Mosibudi
       Mangena failed to turn up for a rally in Botshabelo near
       Bloemfontein on 16 June 2000;


   (b)  contrary to its stated intention, the SABC sent no one to cover
       the said rally;


   (c)  Mosibudi Mangena was at the rally and addressed it as scheduled;
       and


   (d)  the SABC news broadcast on this issue was a lie, pure and
       simple;

(2) calls upon the SABC to stop broadcasting malicious lies; and

(3) implores the board of the SABC to work towards retaining whatever credibility the corporation still has.

Mr N J CLELLAND: Madam Speaker, 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 that -

   (a)  the Zimbabwean election campaign is characterised by ongoing
       political violence and intimidation;


   (b)  the ANC Government has no plan of action to deal with the dismal
       failure of its approach of quiet diplomacy to engage President
       Mugabe; and


   (c)  the situation has deteriorated to such an extent that neither
       Zanu-PF nor the Movement for Democratic Change will accept an
       electoral outcome that does not fall in their favour; and

(2) calls on President Mbeki and the South African Government to assure the people of South Africa and Southern Africa that, should the situation deteriorate any further, they have the plan, means and will to intervene in an appropriate and effective manner.

[Interjections.]

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

That the House -

(1) notes that the Minister of Education, Mr Kader Asmal, is meeting with the MECs of education of the nine provinces to map out the planned demise of Curriculum 2005;

(2) wishes the Minister well in his endeavours to streamline education by introducing Curriculum 21; (3) urges the Minister to encourage the youth of the nation to get back to solid basic education in which learners learn and teachers teach; and

(4) is of the opinion that the Minister must urgently prepare this nation’s youth for the 21st century and the world of work by introducing computers, the Internet and technical education.

Mrs Z A KOTA: Madam Speaker, 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 cold-blooded assassination of Golden Arrow bus driver Michael Magadlela in Khayelitsha last Friday;

(2) further notes that this was the third bus driver and the fourth person to be killed in recent months in the violence surrounding public transport in Cape Town;

(3) expresses its deepest sympathy with the family and colleagues of Mr Magadlela;

(4) condemns the perpetuation of violence in the midst of high-level negotiations; and

(5) acknowledges the commitment of the ANC to work with all forces, including the provincial government in the Western Cape, to ensure an immediate end to violence, the arrest of the guilty parties and a lasting, sustainable solution to the transport crisis in Cape Town.

Mnr F BEUKMAN: Mevrou die Speaker, ek gee kennis dat ek op die volgende sittingsdag namens die Nuwe NP sal voorstel:

Dat die Huis -

(1) kennis daarvan neem dat die leier van die MDC, Morgan Tsvangirai, die ANC skerp gekritiseer het omdat die party vir president Robert Mugabe en Zanu-PF steun en nie die mense van Zimbabwe nie;

(2) dit betreur dat die ANC vir Zanu-PF as sy gunsteling politieke party uitsonder, asook president Mugabe, om die parlementêre verkiesing in Zimbabwe te wen;

(3) ‘n beroep doen op die SAOG-lidstate se regerings om nie aan Zanu-PF voorkeurbehandeling te gee in die huidige verkiesingstryd nie;

(4) ‘n beroep doen op die SAOG-lidstate se regerings om te verseker dat die beginsels van ‘n vrye en regverdige verkiesing in Zimbabwe seëvier en dat veelparty-demokrasie bevorder word;

(5) die huidige voorkoms van menseregteskendings en politieke geweld in Zimbabwe opnuut betreur en veroordeel; en

(6) ‘n beroep doen op die Suid-Afrikaanse regering om direkte politieke en diplomatieke druk op Zanu-PF uit te oefen om menseregte te erken, persvryheid te respekteer, vrye politieke aktiwiteite toe te laat en die regbank se onafhanklikheid te beskerm. (Translation of Afrikaans notice of motion follows.)

[Mr F BEUKMAN: Madam Speaker, I give notice that on the next sitting day I shall move on behalf of the New NP: That the House -

(1) notes that the leader of the MDC, Morgan Tsvangirai, has sharply criticised the ANC because the party supports President Robert Mugabe and Zanu-PF, and not the people of Zimbabwe;

(2) deplores the fact that the ANC has singled out Zanu-PF as its favourite political party, and President Mugabe to win the parliamentary election in Zimbabwe;

(3) appeals to the governments of the SADC member states not to afford Zanu-PF preferential treatment in the current elections;

(4) appeals to the governments of the SADC member states to ensure that the principles of a free and fair election will prevail in Zimbabwe and that multiparty democracy will be promoted;

(5) once more deplores and condemns the present occurrence of human rights violations and political violence in Zimbabwe; and

(6) appeals to the South African Government to apply direct political and diplomatic pressure on Zanu-PF to recognise human rights, to respect the freedom of the press, to allow free political activities and to protect the independence of the judiciary.]

Mr T ABRAHAMS: Madam Speaker, I give notice that at the next sitting of the House I shall move on behalf of the UDM:

That the House -

(1) expresses its appreciation to the Concacaf delegation, which was impressed with South Africa’s chances of hosting the 2006 Soccer World Cup tournament, and believes that this will have a positive bearing during its visit to Zurich;

(2) welcomes the initiative taken by and pivotal role played by Government departments in various spheres to work out ways and means to ensure that South Africa can host this important event;

(3) commends the intervention by the former President, Mr Nelson Mandela, who used his expertise in negotiation with the institutions involved in the bid for the 2006 tournament; and

(4) extends its gratitude and encouragement to the SA Football Association and the 2006 Bid Committee led by Mr Danny Jordaan.

Mr J H MOMBERG: Madam Speaker, 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 -

   (a)  the community of Dysselsdorp has, with the assistance of
       Government, received back the land that was so forcibly taken
       from it in the early 1970s; and


   (b)  the Minister for Agriculture and Land Affairs has announced
       plans to give grants to boost black farmers;   (2) applauds these courageous steps by Minister Thoko Didiza to address
   land reform in South Africa; and

(3) calls on all stakeholders to assist the department in redressing the imbalances of the past.

[Applause.]

Ms R TALJAARD: Madam Speaker, I give notice that on the next sitting day of the House I shall move on behalf of the DP:

That the House -

(1) notes -

   (a)  the growing chain of voices of relatives of victims of the
       Helderberg air disaster, as expressed in a declaration released
       recently in Johannesburg by the families of the Helderberg
       casualties; and


   (b)  that the South African Government must always honour the
       principled search for full disclosure about our past that
       underpinned the letter and spirit of the Truth and
       Reconciliation Commission's processes, hearings and
       investigations and its obligation to take all necessary steps to
       ensure that the families are not victimised twice in their
       tireless search for the truth;

(2) calls on the National Director of Public Prosecutions to ensure maximum transparency during the course of the investigation, including the release of the full transcripts of the in camera evidence of the TRC;

(3) calls on the South African Government, and the Ministers of Transport and for Justice and Constitutional Development in particular, to restate their commitment to relentlessly pursue any new evidence and documentation in the public interest and to commit themselves to institute prosecutions or appoint a new judicial commission of inquiry if the evidence justifies it; and

(4) calls on the parliamentary Portfolio Committees on Transport, on Public Enterprises, on Defence and on Justice and Constitutional Development to leave no stone unturned to aid the victims of the Helderberg disaster to uncover the truth and retain only the memories and not the relentless torment of unanswered questions.

[Time expired.]

Ms N S MTSWENI: Madam Speaker, I give notice that on the next sitting day of the House I shall move on behalf of the ANC:

That the House -

(1) acknowledges the terrible suffering of the people of Prieska in the Northern Cape who worked on or lived near the asbestos mines operated by Cape PLC, resulting in chronic disease and disability;

(2) notes that this week the House of Lords will be hearing an appeal that their suit for compensation be heard in Great Britain, the country in which Cape PLC is based;

(3) recognises that the outcome of this case will have a major effect on the way in which multinational companies conduct their business and the responsibility they bear to the communities in which they do business; and

(4) wishes the victims every success in their pursuit of justice and recompense.

[Applause.]

                        MOTION OF CONDOLENCE

                 (The late Chief Justice I Mahomed)

Mr G Q M DOIDGE: Madam Speaker, I move without notice:

That the House -

(1) notes with shock and immense sadness the passing of Chief Justice Ismail Mahomed;

(2) recognises that the life of Ismail Mahomed represents a long history and contribution to the struggle for freedom, and the current struggle for transformation of our society;

(3) recalls that, as a young lawyer and advocate, he fought for justice by representing many anti-apartheid activists and fighting for a human-rights based judicial system;

(4) further recalls that he made incisive and definitive legal interventions during the constitutional negotiations in South Africa and Namibia;

(5) acknowledges that as South Africa’s first black Chief Justice, he set himself the task of restoring the legitimacy and sovereignty of the law in the eyes of all South Africans; and

(6) pays tribute to the life of one of our land’s greatest children, and sends condolences to the family, loved ones and colleagues of Chief Justice Ismail Mahomed.

Ms D P S JANA: Madam Speaker, Chief Justice Ismail Mahomed is indeed described as a towering jurist. He is well known for his judicial creativity, both nationally and internationally. It is indeed very easy to purvey his monolithic formal achievements. What is perhaps less known is the unstinting, never wavering and never faltering moral courage with which he pursued the arduous struggle for human rights, the rule of law and justice in South Africa. He did so against tremendous odds, which could easily have broken the will of a person with less spiritual reserve.

When he challenged the Attorney-General certificate which prohibited bail in certain circumstances, senior and more experienced lawyers advised him that there was no point in even trying. This certificate was finally found to be susceptible to judicial review.

In another case, he, as a lone figure, tenaciously argued before a formidable and hostile full bench consisting of 11 judges in the Appellate Division to strike down the Terrorism Act, in the then Bophuthatswana, as unconstitutional. And he succeeded. That was certainly a most bizarre finding for a South African court.

He established an international precedent regarding the illegitimacy of kidnapping a person from a foreign country for prosecution - a case which was cited in the English House of Lords.

These are only glimpses of his enormous contributions. He was a progenitor of the culture of human rights, and he was the foremost human rights litigant in South Africa. Even in an impossible situation he always found a cranny, a chink or a nook to challenge legislation. One has only to read the law reports to find his challenges on the draconian emergency regulations in this country over the years.

Ismail Mahomed had an enormous capacity for humanity, which he pursued with an element of self-sacrifice. Even when he scaled his professional Everest, he never ceased to be driven by the ideal of a sharing and caring society - an ideal which manifested itself in an unfulfilled ambition, which would appear bizarre to many, to run soup kitchens for the poor and the hungry.

The cosmic combination of his genius, his energy, his courage and his humanity, made him not only a towering jurist, but a towering person.

Above all, he was the epitome of a true friend - a relationship which he pursued with equal intensity and diligence and for which he demanded the collaborative responses of constant renewal, attention and nurture, but a relationship that was never found to be claustrophobic.

It is a singular honour and privilege for me to treasure and delight in a relationship founded on deep love. I know that more than mourning his death, we will celebrate his life, and he will remain forever the towering person that he is. [Applause.]

The LEADER OF THE OPPOSITION: Madam Speaker, this is a very sad occasion because it seems that Ismail Mahomed was taken from us far too soon. Indeed he was. My own recollections of him really have nothing to do with politics or law, although one has been involved in both, but more to do with universities, because we were both involved with the University of the Witwatersrand.

I was always struck by the late Justice Mahomed’s complexities, which suggested he did not actually have a simplistic solution to anything; mainly because there are not simplified solutions to very complex problems, whether personal, political, constitutional, legal or jurisprudential.

Justice Mahomed was prepared to follow the truth, however uncomfortably it might lead us to certain conclusions. Towering above everything else, whatever we claim of him and for him and for his contribution, was a tenacious search for truth and a refusal to equivocate with lies and falsehood. That, perhaps, is why, more than any of his great credentials and his pioneering attributes which have been so well spoken of and written up in the last 24 hours, he was such an appropriate, such an important and such a commanding Chief Justice - the first truly democratically appointed Chief Justice of the new South Africa.

Therefore I believe that his loss will be huge and that he will, in the President’s words, ``be difficult to replace’’. But we should pay tribute to his memory, we should learn from him, we should look at him, for we will not see his like again. [Applause.]

The DEPUTY MINISTER OF SAFETY AND SECURITY: Madam Speaker, on behalf of the IFP I wish to pay tribute to the late Chief Justice Ismail Mahomed. I first met him when he had just completed his Master’s degree in English and was trying to find something else to do. Because I was doing law I said, ``Why don’t you try law?’’ He proceeded to do that. He was an outstanding lawyer and one of a diminishing galaxy of luminaries who have all passed away, including Issy Maisels and Bram Fischer. I think one of the few left now is Sydney Kentridge, who has just been honoured by the Queen for his outstanding legal work in Great Britain.

The strength of Ismail Mahomed was not just his brilliance as a lawyer, but what the previous speaker has referred to as his moral courage. I would go further and speak of his morality. This was a man of high integrity with a very high code, and this made people totally confident in what he was doing or saying. I have been in courts where he was literally telling the judge what to do in the case. That was the sort of command that Ismail Mahomed exercised wherever he was.

He also acted in many instances outside courts as an arbitrator because people had such confindence in him. I remember that he acted in one celebrated case involving a dispute over a mosque and its financing.

I must in fairness mention that the first head of state to appoint him as judge was Sir Seretse Khama. That has not been generally mentioned in the media reports. They seem to suggest he was only active in Swaziland and in Namibia, but of course he was first appointed judge in Botswana, and I had the honour to appear before him many times when he was a judge in that country.

The President of our country says we will miss him and he will be very difficult to replace. I would say he is irreplaceable. [Applause.]

Mr F BEUKMAN: Madam Speaker, we want to add our voices to those who have spoken and paid tribute to the late Chief Justice of the Republic of South Africa, the hon Ismail Mahomed. Our deepest sympathies go to his family.

Two beacons stand out in his contribution to constitutional law in Southern Africa. In the first instance, the Namibian constitution, of which he was the author, is today a shining example of his contribution in this field. The second instance was his commitment to make South Africa a better place for all its people. This was highlighted during the negotiation process at Kempton Park where his role as co-chairperson was vital in fostering a spirit of co-operation and co-ownership amongst the different role-players. His contribution in making the judiciary representative is another milestone in his tenure as Chief Justice.

In a time when young people are looking for positive role models, it is sad to lose a South African of his calibre and commitment to this country. He led by example, even in times of hardship and despair.

In the final instance, when we think in the future of the legacy of the late Chief Justice Mohamed, we will remember his deep commitment and outspoken defence of an independent and legitimate judiciary in South Africa foremost. That is a legacy that we all should remember and promote. [Applause.]

Mr S ABRAM: Madam Speaker, the UDM wishes to associate itself with the motion and all the remarks made thus far.

A great Eastern philosopher once said that it is not important how long a person lives and what he attains in his life - riches, material gains etc - but it is extremely important how he lives. Ismail Mahomed was an example of this. He was a person who did not just live for himself, but a person who lived for his fellow beings, for his country and for the rule of law. Human rights issues were dominant in his lifetime. He played a major role in helping to shape human rights legislation. He was a champion of human rights protection and he should be honoured for this particular role.

But there was also another side to the late Ismail Mahomed. We have known him as a person who was always willing to assist with advice. He was willing to assist, particularly in apartheid-orientated cases, in the past. There were many occasions when we had to enlist his support in appearing before the then notorious Group Areas Board, which he did with diligence. In many cases, he was not even prepared to take a fee for the services that he was rendering.

We grieve together with South Africa for the loss of this great son of our country. May we just say: May Allah grant his family strength and solace in their darkest hour. May Allah grant Ismail’s soul eternal bliss. South Africa has lost a great son. We shall all miss him. [Applause.]

Mr L M GREEN: Madam Speaker, on behalf of the ACDP, we pay tribute to Chief Justice Ismail Mahomed today. The nation mourns the untimely death of a great leader and jurist. He was a man with the highest moral standards whom God had given special talents and abilities especially in the field of justice and the promotion of human rights.

He had the remarkable ability to bring incisive clarity to judicial matters which demanded an exhaustive knowledge of not only our own legal system but of many other systems throughout the world. He fully applied all his talents and knowledge when he presided with great skill over the Supreme Court of Appeal and the Judicial Service Commission.

In support of this motion today, we recognise the vital contribution he made in making our justice system more representative. We, in agreement with the sympathies that have been expressed today, also express our sincere condolences to the bereaved, the family and the loved ones, and to the friends and colleagues of Chief Justice Mahomed. May God console them in their time of sorrow. [Applause.]

Dr M S MOGOBA: Madam Speaker, on behalf of the PAC allow me to pay a fitting tribute to the late Chief Justice Ismail Mahomed, a notable son of the soil, who I knew from Pretoria and can actually call my homeboy. His passing is a great loss to this country, a country committed to making sure that the transformation we are talking about does not bypass the judiciary.

Death has again intervened in a very unkind and cruel manner by removing from our midst someone we regard as a legal jewel, someone with a long and rich history of involvement in the struggle for freedom in defence of the victims of oppression and of the misrule of law that was part of the culture of apartheid.

Now that Ismail is no more, the most constructive and fulfilling way in which we can remember him is to make sure that the ideals of social change and principles of democracy and equity that he stood for continue to be embraced by whoever becomes his successor. We are challenged to look not only in the ruling party ranks, but all over for a suitable replacement. It will be very difficult to find one, but that is our commitment. We need to look for somebody of his stature to continue his tradition. [Applause.]

Dr C P MULDER: Mevrou die Speaker, ek betuig graag namens die VF ons opregte meelewing en simpatie met die familie en naasbestaandes van wyle hoofregter Ismail Mahomed. Alhoewel dit bekend was dat hy ernstig siek was, het sy dood in hierdie stadium tog as ‘n skok gekom en was dit ook onverwags. Ons vertrou dat sy familie en naasbestaandes berusting en ook aanvaarding sal vind. [Applous.] (Translation of Afrikaans speech follows.)

[Dr C P MULDER: Madam Speaker, on behalf of the FF I would like to convey our sincere sympathy and condolences to the family and next of kin of the late Chief Justice Ismail Mahomed. Although he was known to be seriously ill, his death at this stage has still come as a shock and it was also unexpected. We trust that his family and next of kin will find peace and also acceptance. [Applause.]]

Mr P H K DITSHETELO: Madam Speaker, on behalf of the UCDP leadership, members and supporters, I wish to take this opportunity to express our deepest sympathy for and condolence to the family of Judge Mahomed. He was not your average career-orientated lawyer and circumstantial activist. He was a bright human rights activist, a social justice advocate who was committed to the creation of a just society based on equality and freedom.

He had the courage to stand up against the oppressive and unjust legal system of South Africa. He fought many of South Africa’s most celebrated anti-apartheid legal cases. He fought for these ideals unwaveringly and tirelessly under difficult conditions. His contributions are bound up in the laying of a solid foundation for the legal system in our country. Justice Mahomed was a scholar of repute. He sacrificed his family life to fight for the poor. He represented our leaders when his colleagues in the legal fraternity were unwilling to do so. He was driven by a desire to see to it that justice was done at all costs and without any fear. [Applause.]

Dr A I VAN NIEKERK: Madam Speaker, the FA would like to pay tribute to the late Chief Justice and to convey our condolences to the family. Dr Louis Luyt, who knew Chief Justice Mahomed personally, says that South Africa has lost a most humane person who conducted himself with great distinction, and who practised and applied law without fear or favour. His guidance for the future of the South African legal system will be sorely missed. His actions will serve as guidance to many not blessed with the same resoluteness. South Africa has surely lost a great son, through the untimely death of this great lawyer and judge. He will be missed. [Applause.]

Miss S RAJBALLY: Madam Speaker, South Africa was absolutely fortunate to have been bestowed with a brilliant legal scientist like Mr I Mahomed. His contribution to the Constitution and democracy in South Africa added a rare dimension to the lives of our people. It is almost impossible to replace a uniquely intelligent Chief Justice like Mr I Mahomed.

Although the departure of Mr I Mahomed is such a devastating loss to our country, he has, at least, left a legacy behind that is the opportunity for us to enjoy justice. May his soul rest in peace. The MF conveys its heartfelt condolences to the bereaved family. [Applause.]

Mr M A MANGENA: Madam Speaker, there is no doubt that Chief Justice Mahomed was a great asset to our country and Southern Africa. His contributions to the development of the legal systems in this country have been catalogued and they are legend. It is obvious that our country has lost a great son, and Azapo joins his family, and the rest of the country, in mourning his passing away. He will be missed. May his soul rest in peace. [Applause.]

The SPEAKER: Hon members, there has been no objection to the motion. It has been agreed to. I wish to associate myself with the tributes paid in this House. The late Chief Justice exemplified the best traditions of those who refused to compromise or distinguish between the law and morality and who repeatedly acknowledged that good law should always promote justice.

Chief Justice Mahomed made a major contribution to the Constitution and jurisprudence of the new South Africa based on human rights. He will be sorely missed throughout our region. The statements made in this House and your condolences will be conveyed to his family.

Debate concluded.

Motion agreed to.

                    TAXATION LAWS AMENDMENT BILL

                       (First Reading debate) Ms B A HOGAN: Madam Speaker, the set of taxation laws before us today is a start of the reforms in the taxation of this country that the Minister announced at the Budget debate earlier this year. It entails the most comprehensive tax reform that this country has seen for 30 years. As our committee has learned during this process, this has been a very difficult, complex and intricate piece of legislation. It gives us a foretaste of the kind of legislation which will be coming before us in the months ahead when we look to the finalisation of all the taxation laws which will have to come into being to meet these reform requirements.

Let me say at the outset that the SA Revenue Service and the Ministry of Finance have adopted a very constructive approach when dealing with people who have made representations regarding this Bill. Time and time again our committee had people who made very strong representations, and when we referred these representations … [Interjections.]

The SPEAKER: Order! Hon member, I do apologise. This should be the First Reading debate. Would you please take your seat for a moment, Ms Hogan. The secretary did read the first order, which is the First Reading debate, and there is no list of speakers. We had better complete the First Reading before we proceed to the second one. Otherwise, I am afraid, some of these tax provisions will not be legal.

Order disposed of without debate.

Bill read a first time.

                    TAXATION LAWS AMENDMENT BILL

                       (Second Reading debate)

The SPEAKER: Order! I now call upon Mr Manuel. That should be Ms Hogan. I am sorry.

Ms B A HOGAN: Madam Speaker, I am getting confused about my identity and role in this Chamber. I wish to associate the comments that I made in the First Reading debate with the Second Reading debate and therefore I will continue. [Laughter.]

As I was saying, the SA Revenue Service and the Ministry of Finance adopted a very constructive attitude towards those people who made very powerful representations. Out of that arose a very constructive period of engagement with these people who made these representations and I do believe that the set of clauses that we have before us is a marked improvement as a result of these representations.

I want to commend, in particular, the NGO sector, particularly the Non- Profit Partnership, who formed a sustained lobby throughout this process, consolidated all the views coming from the NGO sector and were able to drive through a comprehensive programme, and a very welcome programme, of the reform of the taxation system as it affects NGOs. As we know, NGOs have had a very unsympathetic tax treatment up to now. What is before us now is a substantial improvement of the way in which NGOs will be taxed in the future.

My colleague Prof Ben Turok will be speaking more about this, but I think this has been one of the most significant achievements in this particular piece of legislation. And we look forward to the NGO sector being able to contribute productively to delivery in South Africa under this new sympathetic regime which certainly should facilitate their work. Once again, the SA Revenue Service went out of its way to assist the NGO sector, met a number of times with them, accommodated most of what they had to say, and I would like to thank them for the flexible attitude which they adopted.

A major piece of this Taxation Laws Amendment Bill deals with the first phase of the implementation of taxation that moves us from a source-based system to a residence-based taxation system, and this refers to the taxation of foreign dividends. A foreign dividend is defined as a dividend which is received by a person from a company which declares its dividends out of profits that are derived from a source outside of South Africa or from a source inside the Republic that is not being taxed.

There are various provisions within this Bill which differentiate between the kinds of people who will be taxed on this basis, and in order to avoid double taxation, certain complex relief measures have been introduced, either by way of exemption under certain specified conditions or by means of a credit mechanism, the details of which I will not go into now. Let me just say, however, that the complexities of this Bill must not be underestimated and a lot of thought and work went into making sure that the clauses that are now before us are the best that are available to us at present.

However, there are certain clauses which will be reviewed once the Minister and the SA Revenue Service have had an opportunity to consult with relevant players. In that I refer, firstly, to an appeal that was made to exempt past reserves, as most South African multinationals have undistributed reserves in foreign subsidiaries. This would have created an administrative burden on Sars as records would have to be kept of which reserves were accumulated prior to the effective date. Moreover, the introduction of a tax on foreign dividends was also aimed at counteracting certain tax avoidance schemes, one of which was to route transactions through tax haven countries to the detriment of the South African tax base.

Granting a window of opportunity in this regard would therefore not serve the purpose of closing down tax avoidance of this kind. It must also be made clear that the taxation of foreign dividends will not result in double taxation of profits because credit exemptions will be allowed for the underlying tax paid. The taxation on foreign dividends will only be activated by the declaration of a dividend as from 23 February 2000. The tax position of a company declaring a dividend will not be affected either. It is the shareholder who is subject to tax on foreign dividends.

Another issue which was raised very strongly by people who made submissions, is that there should be a delay in the implementation of these provisions on the grounds that South Africans holding funds offshore would be penalised for bringing home their earnings. The Ministry of Finance again was not willing to meet this request for several reasons.

Firstly, the question thus arises as to why these profits have not been expatriated, as surplus profits have to be repatriated in terms of exchange control regulations; although it is acknowledged that foreign holding companies need to keep sufficient funds offshore in order to finance the offshore operations. More importantly, there is a concern that amounts that would be repatriated during the exemption period may be immediately reinvested offshore. This would defeat the purpose.

However, as I said earlier on, there are two other major issues that will still require further research and which we will come back to at a later stage in August. The first relates to the possible nullification of tax incentives granted in other countries through the imposition of a foreign dividend tax. This is especially important for the SADC countries. The Minister of Finance will engage with the SADC countries, in this regard, and we will also receive input from the OECD as well.

Another matter requiring further research is the fact that the existing source base of taxation and the absence of a withholding tax regime serve as an attractive incentive for foreign multinationals to set up their holding companies in South Africa. Sars and the Department of Finance, together with the SA Reserve Bank, will further investigate these issues.

There are a number of less fundamental issues that have been dealt with as a result of submissions received, and some of these have yet to be addressed in the forthcoming legislation which will come before us in August. The complexities of these tax laws and the amount of research that is required to produce sound legislation, as is evident from our experience with this particular tax, lead me to question whether there will be sufficient time to complete the proposed reforms of tax laws by the due date of April 2001.

Whilst the portfolio committee endorses the Ministry’s view that it is necessary to bring in these changes as soon as possible so as to eliminate uncertainty outside as to what the tax position is regarding the numerous players in that field, one is also aware that these are very, very complex tax laws that will need extensive research and going back to, time and time again, depending on the submissions that are made to the committee and to the department.

For this reason, I have arranged to meet with the SA Revenue Service and the Ministry of Finance to ascertain when the portfolio committee will be briefed during this process of the compilation of this legislation to ensure that, by the time the legislation is before us in its final form, we are aware of the intricacies and complexities of this legislation and do not just receive a finished product without being able to have influence or allow the public at large to have the necessary influence they need to have in terms of these laws.

Now, the other most important tax law, I said, is the one on NGOs. I am not going to go into it in detail, because Prof Turok will be doing so, but I must say that there is one issue related to the question of the taxation of NGOs, and that is donor deductability. As members know, people who donate to certain NGOs will qualify for tax exemption if they fall within a specified list to be published by the Minister. It has been pointed out that releasing funding from the private sector or other sectors to the NGO sector by the tax deductability measures is a very important component for unleashing funds that would not normally be available to the NGO sector. I would ask the Minister and the SA Revenue Service to adopt a fairly lax attitude when we are looking at the tax deductability of these various organisations which will be eligible for tax deductability. On the other hand, we did stress to the committee and to the NGO sector that we could not open the gates entirely, because we do not know the fiscal implications; and, therefore, a gradual phased-in approach would be a preferable one.

Finally, I would like to thank the committee members who participated in this very exhausting process of dealing with the Taxation Laws Amendment Bill, and warn this House ahead of time that this Chamber is going to be filled, in the months coming and up to next year, with many debates around the taxation laws. I look forward to engaging in a process which fundamentally aims to reform the taxation process in this country. [Applause.]

The SPEAKER: Order! I apologise to Ms Hogan, the chairperson of the Finance committee, in this House. I am not quite accommodating or have not quite integrated the division of labour that the Minister of Finance is engaging in!

Mr K M ANDREW: Madam Speaker, I must say that there was nothing said in the First Reading to which I could take exception. But there are some matters in the Second Reading on which I would like to comment. I might also note that nobody has actually moved the Second Reading of this Bill, so it gives me great pleasure - on behalf of the DP, and in my capacity as the shadow Minister of Finance - to move that the Bill be read a second time! [Laughter.]

I would like to endorse the comments of the hon Ms Hogan in respect of Sars, their attitude towards representations and their willingness to give people who wish to make representations a full and fair hearing, even if they do not always reach agreement. I would also like to take this opportunity to congratulate the hon Ms Hogan on her chairpersonship of our committee, as well as the arrangements that she has made in respect of tax

• in particular in this Bill - and other matters, for the committee to become fully informed.

I might say, however, that in terms of the parliamentary programme, the amount of time we have available for a Bill as complex as this and with as many facets is still, I believe, insufficient. We need to look at arranging parliamentary timetables in a way that the committee can give these sorts of Bills the consideration that they deserve.

It is a wide-ranging Bill. It has 94 clauses and two schedules covering a variety of topics. I will only have time this afternoon to address a few of these. One of my colleagues, the hon Ms Taljaard, will be addressing some others, and notably the welcome recognition that has been given to the role of public benefit organisations.

The DP has repeatedly emphasised the importance of measuring all economic and fiscal policies against the yardstick of their effect on fixed investment, economic growth and job creation. On Wednesday of last week the hon Prof Turok in a debate correctly said that when he and I look at the same glass of water, he would see it as half-full - this is more than half- full, I am pleased to say - and I, as half-empty. Well, I accept that. He sees that half of the South African working population are employed, and so he is happy. I see that 50% of our people are unemployed, and so I am unhappy - I am not ashamed about that. [Interjections.] He looks and says that 60% of our population are not very poor, and he is happy; I look and see that 40% of our population are very poor, and I say I am unhappy. I am not ashamed of that, and I do not believe that I am a pessimist because I draw attention to those problems. [Interjections.]

I have heard the hon Adv De Lange saying in a meeting that he was a financial ignoramus, and that was one of the most accurate statements he has ever made. So I suggest that he does not interject during the course of the debate. [Interjections.]

The dominant, albeit not the most radical, provision in this Bill is a substantial reduction in personal income tax. The DP welcomes this, and we hope that it is the beginning of a trend to relieve individual South Africans of the excessive tax burden they bear. In contrast, the small increases in the interest income exemption are exceptionally timid and will have little effect on improving our domestic savings, which we need to boost investment.

The DP has called for the interest income exemption to be lifted to R12 000 per year, which should be would be a real incentive for people to save and does not have to remain in place forever. We also welcome the reduced company tax rates applicable to small businesses. We are concerned that the ceiling of R1 million per year of gross income appears to be rather low. We trust that the Minister will keep an open mind on this issue and review it from time to time.

The taxation of foreign dividends to which the hon Ms Hogan has referred is a new and complex issue. In this regard, we have two main concerns. Firstly, that Sars has been saddled with draft legislation and administering a complex new tax such as this without being given adequate time to prepare for its introduction.

Secondly, international holding and headquarter companies may be deterred from establishing themselves in South Africa. We note that the latter issue is subject to further investigation. The DP would urge Government to make it as attractive as possible for holding and headquarter companies to locate themselves in South Africa. The direct and indirect benefits could be considerable, particularly if Southern and Central African countries stabilise and start to achieve their economic potential.

I do not believe that we should simply look at the situation today and say that there are relatively few of these holding and headquarter companies in South Africa. I believe that we should look to the future and try to make the environment for those companies to establish themselves in South Africa as attractive as possible. One need only look at a country like Singapore, which goes out of its way to attract companies to put their regional and even international headquarters there and has derived great benefit from it, to see what assistance can be given to an economy by attracting such companies.

The relief on fuel tax granted to the fishing industry makes good sense. But the DP is not satisfied that sufficient urgency has been evident in resolving the problem surrounding the granting of similar relief to the agricultural sector. It is difficult to believe that the problem of abuse of this tax relief in agriculture is so complex that it is beyond the ingenuity of Sars to resolve it. Agriculture is a critically important industry and high fuel costs impact severely on the cost of essential foods.

As regards departure tax on international air travel, this is acceptable in principle if the revenue obtained is appropriately allocated. However, in practice there are a number of problems. Such a tax appears to be in contravention of an international convention to which South Africa is a signatory. It has been suggested that there are other countries which also break the convention by imposing such a tax and that it is unlikely that complaints will be lodged against South Africa.

We in the DP do not believe that South Africa should break the law or international conventions because we think we will get away with it. We all justifiably complain about low tax morality in South Africa and Government needs to set a clear and good example. It is unacceptable that the state should knowingly break the law because others are doing it and we do not think that we will be reported. I call on the Government to think again in this regard.

I might add that the sums of money relative to the Budget as a whole are not enormous and are not such that the size of the lolly would justify improper action. Because these tax measures will, on balance, in our view, encourage investment, economic growth and job creation, the DP will be supporting this Bill. [Applause.]

Dr G G WOODS: Madam Speaker, the Taxation Laws Amendment Bill is, as we have come to know it, an annual occurence. As such, it is an annual occasion of discomfort for some, if not all of us, in the Portfolio Committee on Finance. Let me advance some reasons as to why this is so.

Firstly, for 12 months each year it seems that Sars officials collect all the problems and bright ideas that they have come across in the course of their work, covering issues of taxes which are administratively difficult, inconsistencies in relevant law, new areas of evasion and avoidance which have risen, and lessons from tax cases in which Sars might not have done too well. From here, they devise amendments to the law in order to address these various situations.

Then further amendments are written to accommodate whatever changes the Minister had announced that year at budget time, as they affect the tax system and the tax rates. And, finally, the officials have also in recent years come to consider changes as proposed through the Katz commission’s work of that particular year. All these changes are then assembled together to make up this Bill before us, which, as its name suggests, introduces amendments to various laws. This year, if one looks at the Bill, it covers changes to 13 different Acts.

In considering the Bill the finance committee, I think, finds many of the issues quite complex and technical, as has been referred to by a previous speaker from both a policy and a legal point of view. After all, the tax system is a vast and intricate composition of intricate parts, which are constantly being adapted to new circumstances, and the maze of law which governs the system is acknowledged to be amongst the most convoluted and tortuous areas of law. So, understanding the issues is often rather difficult, let alone trying to exercise objective judgement over the merits of such changes. While we do apply our minds and often do get the gist of the Bill’s more complicated provisions in the committee, it seems that we are better able at this point to exercise our oversight role in the public interest by shifting at least part of our focus from the substantive issues of the Bill to the process of the Bill, in particular to encourage the representative participation of all relevant parties in that process. Here I might differ a little from the previous speaker, because here, notwithstanding the significant list of bodies consulted this year, as it appears in the explanatory memorandum of the Bill, I think there was some reason to feel unsure of the consultative process.

I think, firstly, because Sars is disappointing me again and disregarded the committee’s request also to note the objections held by those consultants. We need to go beyond just saying that we consulted with the following people. We need to know whether any of those people who were consulted had any serious objections. And, secondly, we feel unsure - perhaps some of us do - due to the absence of independent tax experts and tax economists from that list of people consulted. So it was left to the committee thereafter to try and obtain some of these missing opinions by inviting a few outside tax practitioners to a hearing on the Bill, an initiative of the committees. As a result, I think the strength of the views they presented at that hearing caused a few, in some ways, reluctant modifications by Sars to parts of the Bill relating to tax on foreign dividends. Other issues were left unresolved.

To be fair, however, Sars seems to have consulted more thoroughly and seems to have got it right on those provisions pertaining to public benefit organisations and this seems to be to the general satisfaction of all concerned. In the absence of sufficient tax expertise and the power to change such Bills within the committee at this point in time, it is essential that Sars is seen to be testing its more far-reaching proposals within an appropriately wide consultative process prior to the tabling of the Bill.

Another area of concern is the inconsistencies in arguments used by Sars when motivating tax changes. And I think that this has also been a regular feature of Katz commission arguments and recommendations. For example, we have seen occasions where changes are argued on the basis of greater equity, for good reason. But this is done at the expense of a greater administrative burden being placed on Sars. But then there will be another occasion where things work the other way round. We often see desirable changes, which people would generally agree are desirable, being rejected simply on the basis of the additional workload this would place on Sars.

To give another example, last year any thoughts on tax incentives were anathema to the Minister. But in the current Bill incentives are now suddenly selectively OK. I mean, for example, the differential business tax rates and special depreciation allowances on certain industries. I happened to support these, but the inconsistency is there. And in this particular case we do not have any argument pertaining to thoughts of possible distortions and arbitrage gaps, which were the reasons given last year for going the other way.

Neutrality was the guiding principle in tax laws two years back, as was simplicity. Today these qualities seem to be sometimes forgone at any opportunity to widen the tax net. From the outside, as a committee member wrestling with such matters, it is not always easy to understand these interchanges of principles by Sars, especially as the explanatory memorandum which accompanies Bills such as the Taxation Laws Amendment Bill, is so short on explanation. Simple, single-reason justifications should be replaced with wider, quantitative reasoning in the memorandum.

Another disconcerting matter is that, after five years of continuous reform measures, there is still no big picture plan of where the tax system is going. Perhaps there is such a plan, but it certainly is not made public. Perhaps if there was a known model which was made public and which Government aspired to, it might be a little less difficult for people such as the committee and I, and other people outside Parliament, to contemplate many of the sometimes unexpected tax amendments contained in a Bill such as the Taxation Laws Amendment Bill.

I fully appreciate the difficult circumstances that the Sars legal team works under, and especially their heavy workload, and also the fierce competing interests that they do try to entertain. Nonetheless, I would appeal to them to try to rework their time, if at all possible, in order to accommodate the policy and process issues that I have raised. I believe that this would be of much help to my colleagues and I in the finance committee when contemplating such legislation in future. The IFP does, however, support the Bill.

Dr P J RABIE: Madam Speaker, hon Minister, hon members, the Taxation Laws Amendment Bill is a technical Bill. Two key clauses of this Bill relate to section 30 of Act 58 of 1962, to which a number of insertions have been added, particularly in relation to public benefit organisations. The other important amendment relates to the taxation of foreign dividends, which refers to a number of tax issues which relate to our new tax structure, which will be residence-based and not source-based. I think the chairman has already referred to that.

This Bill is the product of a lengthy discussion period and presentations made by a number of public and private organisations. Allow me to thank the members of Sars, the Department of Finance and the public parties who made excellent oral and written presentations regarding a wide range of tax issues.

The main reason for this amendment is that there is an international trend to tax foreign dividends in order to broaden the tax base, to limit tax avoidance schemes, and to prevent double taxation in respect of operating profits from foreign investment. A number of tax issues were raised, such as that the date of implementation should be delayed. The South African economy can be categorised as a developing economy - Sars put two strong arguments against a delay in implementation. If the effective date would be delayed, there would be a massive inflow of foreign currency as multinationals would hasten to repatriate profits tax-free for the last time, and this may have a knock-on effect on the delivery of the economy. The second aspect is that another delay will contribute to more uncertainty around the introduction as a whole for revenue taxpayers and consultants.

The request was also made to the portfolio committee that past foreign reserves in foreign subsidiaries should be able to be repatriated free of tax to South Africa in the form of dividends. This, again, is a very complex issue, which may result in an administrative burden, as officials will have to keep records into the future of which reserves were accumulated prior to the effective date. Whether this is a viable option is highly questionable.

A further argument raised by Sars as a reason for taxing foreign dividends is to counter tax avoidance schemes. Apparently many transactions were routed through tax-haven countries in the past, to the detriment of the South African tax base, and to categorise taxable income into nontaxable income. This is definitely untenable. A request was made to grant unilateral tax sparing, which in essence means that the profits from a subsidiary are deemed to have borne tax at a higher rate and the tax imposed on the dividend by South Africa is correspondingly reduced.

Tax sparing is open to manipulation. South Africa has granted tax sparing to a number of countries, including Mauritius. It was reported that Sars is not entirely satisfied regarding the manner in which tax agreements are implemented in a number of SADC countries. Again, this is a very complex issue. We take note that the hon the Minister will take issue with his counterparts in the SADC countries. We note that Sars suggests that bilateral agreements to avoid double taxation may solve this problem.

Another important issue is a special tax status for international holding and headquarter companies which conduct the major share of their operations outside South Africa and more than 80% of whose shareholders are not residents. This matter was raised by the Katz commission as an important issue for South Africa, as the existing source basis of taxation. It serves as an attractive incentive for foreign multinationals to set up their holding companies as springboards into Africa.

This proposal, again, should be investigated. We take note that Sars and the Reserve Bank will pursue this as a matter of the utmost urgency. May I mention that countries such as Belgium, Denmark, Luxembourg, Mauritius and the United Kingdom have introduced measures to ease the tax burden on foreign companies, and I appeal to the hon the Minister to pursue this matter as well. The danger of this subclause of the Bill is that financial groups with existing holding structures in South Africa may reconsider and move their tax residence offshore.

We welcome the removal of the profit prioritisation rule and the implementation of the Lifo rule to provide the underlying foreign tax credit to which the resident shareholder is entitled. The mixing of profits taxed at high rates with profits taxed at low rates to cover South African tax law will take place, and we encourage this particular activity. There is a carry-forward period of excess foreign tax credits of three years for set-off against income from those specific countries and, again, I think this is a positive development.

The contention that equity share capital held by committed persons should be taken into account in delivering the 10% requirement for the exemption for foreign dividents, is to be welcomed, especially in view of JSE exemption benefits.

‘n Gedeelte van dié wetsontwerp, naamlik klousule 35, verwys direk na belastingverandering rakende nie-regeringsorganisasies wat hulle met skole, welsynsaktiwiteite en dies meer besig hou. Die siening bestaan dat enkele NRO’s wat tans van belasting vrygespreek is op ‘n onregverdige wyse met belastingbetalende instellings meeding. Die kritiek wat myns insiens heel geldig is, is dat die definisie van nie-regeringsorganisasies wat tans van belasting vrygestel is, te eng is. Die begrippe liefdadigheid'' en opvoedkundig’’ is te vaag.

Die gewysigde wetsontwerp tref ‘n onderskeid tussen belasbare en belastingvrye bedrywighede, en bepaal dat daar ‘n belastingvrystelling van 15% van bruto inkomste of R25 000, wat ook al die meeste is, deur die Minister gedoen kan word. Die NRO’s speel ‘n belangrike rol rakende die verskaffing van ‘n verskeidenheid van dienste op ‘n uiters lofwaardige, doeltreffende wyse en ons dank hierdie besondere organisasies vir die diens wat hulle in hierdie sektore lewer.

Die Nuwe NP is van mening dat daar sinvolle beheer oor die dienstesektor moet wees. Dit is egter gebiedend noodsaaklik dat hulle volgens sakebeginsels geadministreer word. ‘n Beroep word op die Suid-Afrikaanse Inligtingsdiens gedoen dat daar met deernis en buigsaamheid na hierdie belangegroepe en hierdie baie belangrike rolvertolker gekyk word. (Translation of Afrikaans paragraphs follows.)

[A part of this Bill, namely clause 35, makes direct reference to tax changes relating to nongovernmental organisations involved in schools, welfare activities and so forth. It is felt that a few NGOs that are exempt from tax are competing in an unfair manner with taxpaying institutions. The critism, which is quite valid in my view, is that the definition of nongovernmental organisations that are at present exempt from tax is too narrow. The concepts charity'' andeducational’’ are too vague. The amended Bill distinguishes between taxable and tax-free activities, and determines that an exemption from tax of 15% of gross income or R25 000, whichever is the greater, may be granted by the Minister. The NGOs play an important role relating to the rendering of a variety of services in an extremely laudable, efficient manner, and we thank these specific organisations for the service that they render in these sectors.

The New NP is of the opinion that there should be meaningful control over the services sector. However, it is vital that they should be administrated according to business principles. An appeal is made to the South African Information Service that these interest groups and this very important role- player should be considered with empathy and flexibility.]

The section that refers to the taxation of foreign dividends is a very technical piece of legislation. Sars has taken steps to address some of the reservations of the private sector. The question remains whether South African taxpayers, however, will not be at a disadvantage in relation to their foreign counterparts, in particular, compared to some of our major trading partners against whom we benchmark ourselves.

We support this particular Bill, but we feel that we will have to review it. It is very technical, and dynamic in nature.

Hierdie wetsontwerp het ook ‘n ander aspek waaraan ons beslis moet aandag skenk. Die agb lid mnr Andrew van die DP het reeds daarna verwys, en dit is die feit dat lugvaartbelasting of die sogenaamde passasiersbelasting bevraagteken word deur die Internasionale Konvensie van Chicago. Ons voel dat hierdie ‘n baie belangrike morele beginsel is waarna ons beslis moet kyk. Ons moet nie afwyk van sogenaamde konvensies nie. Belastingmoraliteit het ‘n binnelandse sowel as ‘n buitelandse verbindelike veranderlike. Ek vra dat daar weer eens na hierdie aangeleentheid gekyk word. (Translation of Afrikaans paragraph follows.)

[This Bill also contains another aspect to which we should definitely devote attention. The hon member Mr Andrew of the DP has already made reference to this, and it concerns the fact that aviation tax, or the so- called passenger tax, is being questioned by the International Chicago Convention. We feel that this is a very important moral principle which we should look into. We should not deviate from so-called conventions. Tax morality has a domestic as well as a foreign connectable variable. I want to ask that this matter be look into once again.]

Dr G W KOORNHOF: Madam Speaker, before I talk about the Bill before us, allow me to share with this House that last Friday, on National Youth Day, I had the privilege not only to participate in my first Comrades Marathon but to finish it and share in the true spirit of comradeship with thousands of South Africans from all walks of life, competing on an equal footing. If South Africans can compete and become one in unity in such an important race, in participation and also in support, we can indeed build one nation in this country. We will all become winners. My wish is that members from both sides of this House will run this ultimate human race next year on 16 June 2001, and I will refrain from nominating certain members who I think may be canditates to run the Comrades Marathon.

One of the outstanding features of this Bill is the fact that business representatives, Sars and the Department of Finance, at the request of the Portfolio Committee on Finance under the leadership of Ms Barbara Hogan, had the opportunity to meet and to discuss the concerns raised at the public hearings. We welcome such frank negotiations on important legislation and urge stakeholders to continue such discussions. Many of the proposals in the Bill before us are in line with current monetary and fiscal policies with which we agree.

On the positive side we firstly applaud the tax relief for individuals and trust that this strength will be continued in the next financial year. Secondly, we support the new definition of public benefit organisations and the extension of donations which are tax deductible to, for instance, certain types of schools, children’s homes, old age homes, care of the aged, bodies involved in the prevention of HIV and the care of people affected by Aids, etc. We trust that these amendments will benefit thousands of existing and new public-benefit organisations. Thirdly, we welcome the increased exemption level for interest received by individuals already announced in the Budget Speech of the Minister and urge the Minister to increase this level further in his next Budget.

Regarding the change to a residence-based tax system, and the introduction of capital gains tax, it may be wise to wait for the discussion documents before we finalise legislation. Regarding the tax on foreign dividends and income, it should be done in such a way that it would not drive skills and capital away from South Africa. Nor should a policy be adopted which will force foreign reserves to be held offshore. Further discussions on this important matter amongst stakeholders is encouraged. The view of the UDM on fuel tax is known and we want to ask the Government to review the whole fuel price system in this country as soon as possible.

In conclusion, when this Bill becomes an Act it will place a tremendous burden on especially Sars as regards the administration of these tax laws. We wish Mr Pravin Gordhan and his staff well in this challenge. The UDM will not reject the Bill for party-political reasons and therefore supports the Taxation Laws Amendment Bill.

Prof B TUROK: Madam Speaker, this Bill introduces a new concept in South Africa’s public life - the concept of public benefit activity. It replaces a concept which existed before in our legislation, namely the notion of nonprofit activity or nonprofit organisations. I think the change is an important one. To identify public benefit activity and public benefit organisations, as opposed to nonprofit organisations, takes us a bit further in the direction that we all want to go, namely that the whole of South Africa should be far more conscious of public benefit activity and that there is a far greater degree of voluntarism and voluntary effort generally throughout the country. Clearly, the Government cannot do it alone. We need the whole country to work together, especially the nongovernmental sector - the NGOs and what was called the nonprofit sector.

I think that this particular section of the Bill gives a help line to the NGO community. They need it; they have been asking for it; they were extremely well organised in relation to this particular Bill; they were very professional; and, like other speakers, I want to pay tribute to the nonprofit partnership for the professionalism that they exhibited in their representations and negotiations with Sars and with the Ministry. They have deserved and received the benefit of that professionalism. I also want to say that Sars has been extremely helpful in the negotiations, and that what has come out of it is an agreed position between the Government, the department and the nonprofit sector and we are very grateful for that.

I want to locate this discussion about nonprofit activity in the context of the President’s speech last week. Perhaps people have not made the connection, but let me remind hon members of what the President said in a debate here just recently. He said: We want the increased involvement of the NGO sector in development.'' He said:We want to build a people- centred society. We want to involve the masses themselves. We want to bring the people into the process of government.’’

This Bill enables us to do that. By giving greater facilities and greater recognition to the public benefit sector, we are building civil society, nongovernmental society, into the whole process of government, and giving them the facilities or some of the facilities that they need.

I also want to draw the House’s attention to a very important statement made by the Department of Finance in the hearings of the Portfolio Committee on Finance. What we were told - and this was in a discussion on unspent poverty relief funds - was that, because the budget deficit is now in much better shape, there is no battle within the Ministry of Finance between those who are seeking macroeconomic fiscal objectives and those who are urging spending on poverty relief. We are very grateful that there is no battle between these two schools of thought and that we can now concentrate far more on how we can get money for the development that we want, and how we can balance that with the macro-economic deficit objectives of Government.

What was also made clear to us is that there is an expectation in the department that Parliament should play its role in ensuring that spending takes place with regard to poverty relief funds in particular - in fact, spending generally - and that MPs have a duty, in their constituencies, to monitor the spending of funds on poverty relief activity and other related development activities. I want to draw the attention of the House to that point.

Therefore, we have a Bill before us which is facilitating the advancement of public benefit activities, and we, as Parliament and as individual MPs, have a role to play in ensuring that that happens. We must exercise oversight, not only over Ministers and directors-general, but also over departments and the actual mechanisms that exist for money to trickle down to the public benefit organisations in that kind of activity.

The point was made - and I think Parliament must accept this - that we, as MPs, are closer to communities and public benefit activities than officials who are sitting in Pretoria. I am sure we all agree on that.

As other speakers have indicated, the Bill has two main aspects. Firstly, the exempt status of nonprofit organisations, and, secondly, the question of tax deductibility for donors - both very important aspects.

Nonprofit organisations or public benefit organisations, which are section 21 companies or trusts, will be exempt from tax if they fall under certain categories. The Minister of Finance will publish a list of such activities and the principles which will guide him, and I ask hon members to listen to this. The principles which will guide him are those of philanthropy, benevolence and the wellbeing of the general public. These are values that this House must espouse. Therefore, those concepts being built into the Bill are of great importance to this House. The public benefit organisations will apply to Sars, which will then approve on condition that these organisations use these funds solely for the stated objects or for investment as approved by the people I will talk about. These criteria will now be incorporated in legislation so that neither the Minister nor the Commissioner of Sars will have total discretion, but they will set down the criteria which govern these activities.

On tax deductibility, the Minister will publish an expanded list, and while we take the point that the hon Hogan made about the trade-off between Government allowing certain deductions and what the state would have had to expend anyway, we do all understand at the same time that what is affordable for the fiscus is the major criterion.

Nonprofit organisations will now be abe to trade under the following tests. Firstly, where trading takes place, the gross income may not exceed 15% of the receipts or R25 000. Secondly, where there is related trading, namely a nonprofit organisation trading in literature and books and commodities of various kinds, it must do so on a cost-recovery basis and there must be no unfair competition.

Thirdly, where there is unrelated trading, like at school fêtes, church bazaars and so on, this must be done on a voluntary basis. If it is not on a voluntary basis, it must be hived off into a separate company. There may be other criteria which will be allowed. With regard to the activities of nonprofit organisations, there is nothing in this Bill - and an awful lot of discussion took place on this issue - to distinguish between those which are funding activities, namely passing funds to others, and those which are public benefit activities as defined.

To sum up, we now have incentives for donations to public benefit activities. These are deductible from income tax. We also have certain rules for those organisations. They may not pay excessive remuneration. Their remuneration must be reasonable in the sector in which they operate and it must be reasonable for the service being rendered. NPOs will now have to change their constitution. They will have five years to do so and they must give certain undertakings. If an NGO has a surplus, it must invest it prudently and it must obey certain rules.

To sum up, let me say that we have an important change in our position with respect to the nonprofit sector, and I ask the House to approve it. [Time expired.] [Applause.]

Mr L M GREEN: Chairperson, hon Ministers and members, the ACDP welcomes the Taxation Laws Amendment Bill because of its many positive features. The fundamental principles of taxation, especially in the context of our South African society and in relation to this Bill, should include the following: Encouraging people to save or promoting the incentive to do so, benefiting the development of SMMEs, fulfilling the obligation to delivery of social services, which is tied to the development of the economy and the creation of jobs to promote sustainable foreign investment, securing sustained interest in the South African economic market, as well as other developmental objectives and good governance.

The taxation laws currently under discussion may create the impression that Government is trying to acquire too much tax income, inviting caution rather than encouraging market excitement and foreign direct investment and savings potential. To what extent, then, is Government the custodian over how much taxation should enter the state coffers? Only to the extent that Government does not impoverish the nation. In this regard, we agree with the Government’s intention through this Bill to curb tax avoidance, especially on the use of tax havens and the recourse to closed corporations for this purpose. It has become a matter of principle that foreign dividends, given the history of South Africa, ought to be affected by certain corrective measures, something which this Bill attempts to do.

We especially commend Government for the relief on fuel tax for the fishing industry and we concur with the Minister of Finance that before a similar relief is extended to the agricultural sector, we must ensure that the illegal mixing of diesel with paraffin will not continue. It is not only illegal, but it is also harmful to our environment. A potential danger with the current interpretation of taxation on foreign dividends is that our neighbouring countries, with their special brand of tax incentives, will probably benefit from our system’s approach.

The ACDP particularly welcomes the tax exemption for religious, charitable and educational institutions through the amendment of section 9 of the Transfer Duty Act and other measures. It is essential that South Africa tighten up its tax system, and it is the objective of this Bill to do so. We therefore support the Taxation Laws Amendment Bill.

Ms R TALJAARD: Chairperson, hon Minister, hon members, when I was thinking of possible epithets to attach to each and every one of the measures in this Bill, I was left with a rather ironic sentence - the tax world’s equivalent of The Good, the Bad and the Ugly. For those members who glaze over when tax matters are discussed, I hope that they have been roused from their musings by the prospect of a good Western storyline about the men with the smoking guns - our Finance Minister and our commissioner of the revenue service.

I say to the Minister that the tax measures before us today are a mixed bag. We have the good - a commendable tax initiative to grant relief to public benefit organisations. We have the bad - the introduction of a tax on foreign dividends. We have the ugly - South Africa is adopting the international worst practice by introducing an airport departure tax in flagrant contravention of an international convention.

I suspect that the most uncontroversial part of the Bill before us today relates to tax relief which it will award to public benefit organisations. It is the area of this Bill where the SA Revenue Service went through the most trouble to accommodate the concerns of the sector and it shows in the final product. The DP welcomes the broadening of the definition of public benefit organisation to embrace as broad a sweep of philanthropic activity as possible.

We welcome the provisions in the Bill that call on the Minister of Finance to codify the criteria for compliance with the definition of public benefit organisation, as this will make short shrift of any uncertainty that may emerge. We also welcome the increased clarity in the area of trade and trade-related practices which will not fall foul of the provisions of this Bill. We do believe that we must keep a very close monitor on the implementation of these measures in the public benefit organisation sector to ascertain both the efficacy and beneficiality of the provisions.

As the terms of the new revised Lomé Convention showed us, public benefit organisations and NGOs will increasingly become important stakeholders and consultees in the policy-making process when it comes to trade matters, in addition to any other matters that they may be involved in. However, the Minister is holding the smoking gun. It is not that I wish to take the Wild West analogy too far, but the Minister is holding a smoking gun of the tax on foreign dividends. And as the law of unintended consequences would have it, he is aiming at the parastatals as well at a time when they are aiming to privatise, subject to a host of social objectives. As a number of deals laden with conditionalities have proven, conditionalities make deals unattractive. Now we are adding yet another complication. At the same time that we are taking away their tax-exempt status, we are introducing a tax on foreign dividends. It is in this respect that the logical lacunae in the measure are glaringly obvious.

I have to ask the Minister whether the left hand knows what the right hand is doing. Despite claims about the power of interministerial Cabinet Committees and our reconstructed Cabinet office, in the way in which it is in a position to facilitate joint-up policy-making, I have my doubts. Has the Minister consulted the Minister of Public Enterprises on his views on the tax on foreign dividends and how it will impact on the attractiveness of state-owned enterprises given their strategic equity partners, their portfolio diversification, offshore investments, IPOs, service costs and their capital available for reinvestment? Does the Minister realise that the route of strategic equity partnerships that we have chosen as our privatisation lodestar means that all our state-owned enterprises become subjected to this tax, in addition, at a time when we have taken away their tax exemption, as we do with Eskom in this Bill? Does the Minister also further realise that many of our parastatals are undertaking regional infrastructural expansions and that there may be instances where they are making these investments subject to tax breaks and/or tax holidays, particularly in SADC states where they are investing and in other African jurisdictions?

Sars admitted in the finance committee that these types of tax incentives may be nullified by the operation of the tax on foreign dividends and that it is a matter which they are concerned about. While their arguments that this matter should be taken up in double taxation agreements, and not in domestic tax legislation, may have merit, it is an issue that is calling out not only for the Minister of Finance’s but also for the Minister of Enterprises’s urgent attention. I would suggest that the left and right hands convene for an urgent discussion on these matters. Now with regard to the bad, if the Minister does not believe my concern about this matter, let me quote to him what I received as a reply from Telkom, whom I wrote to about the introduction of the tax on foreign dividends and with whom I raised a number of these matters. This is Telkom’s tax division’s verdict, not my own, which I will read to the Minister:

The taxation of foreign dividends will have a significantly negative impact on Telkom’s future foreign business ventures, the planned IPO and on Telkom’s alliances with foreign strategic equity partners.

Telkom has recently established offshore interests and foresees obtaining future offshore interests in order to expand Telkom’s international operations to conform with the latest trend of numerous global telecommunications companies to enable Telkom to remain internationally competitive, especially given the imminent opening of the telecommunications market in South Africa, and to be able to contribute and participate in the establishment of international infrastructure projects of a strategic nature with other global and African operators.

They continue:

Telkom foresees to receive dividends in future as a result of its current and future offshore interests. It is clear from a strategic perspective that offshore investments can enhance Telkom’s international competitiveness.

As a result of foreign dividends having been tax-exempt in the past, Telkom would have been able to contribute significantly to the South African economy by reinvesting these tax-exempt dividends received into the country, because it would be in a better cash-flow position.

However, taxation of foreign dividends will reverse the situation for Telkom. Less funds will be available to reinvest in the South African economy. Less funds will be available to invest in the SADC countries and it will have a negative impact on Government policy to promote the universal and affordable provision of telecommunications services. This is the much-vaunted universal access which we keep hearing about.

Telkom would recommend that transitional provisions be included in the Bill to provide for the commissioner of Sars to evaluate, upon application, such other instances or measures which may promote the Government to provide universal and affordable provision of telecommunications services.

If this is the response of one of our captive investors and one of our parastatals, I shudder to think what decisions an institutional investor may make when confronted with this measure. In addition to many of the other opportunity costs inherent in this type of an investment decision when confronted with other options, I also have specific comments from Telkom applicable to the proposed section 12D and the depreciation allowance which he mentioned relating to new and old assets, and also relating to the possibility of Telkom diversifying its business into a multi-utility realm in which one will have energy, telecommunications and transport networks run on the same network, and whether or not the definition of ``sole business’’ conducted for the purposes of the depreciation allowance to kick in would or would not be sufficient. This is something that, in addition to the other matters I raised, requires the urgent attention of the Minister and the Minister for Public Enterprises. However, let us turn to the airport departure tax. One is tempted to say that the less said about this measure the better. To use the Western analogy even further, it is rather like the sheriff of the town - our Commissioner of the SA Revenue Service - breaking the law and yet telling criminals not to do so in his town. This is the tax morality issue that is raised by the breaking of the IATA convention, the Chicago convention, and I do think that the last word on this illegality has not been spoken. [Interjections.] [Applause.]

The DEPUTY CHAIRPERSON OF COMMITTEES: Order! We are mindful of the dead man’s gun. [Laughter.]

Mr T R MOFOKENG: Chairperson, the House at large, I think we have once again converged on this Parliament to go through this complex and very complicated taxation Bill. In reality, it is very complicated. Even though it is not my duty I find myself duty bound to express appreciation to the DP for endorsing this Bill. I did not expect that. Their positive attitude towards this Bill is really lovely. I really did not think that we would come to an agreement in the portfolio committee on this Bill because it is so complex. First of all, I have to give a vote of thanks, particularly to Sars, the Department of Finance, the NGOs and all those consultants who were around and to all the economists who managed to give their inputs and set up the discussions. I must admit that to me it was like writing a matric examination, and it was really taugh.

Let me confine myself to this Taxation Laws Amendment Bill, especially to the different items which speaks about the foreign dividends. It is true that as one speaker has already mentioned, we have about 90 clauses in this Bill. I thought that we were to be given the whole day, so that every individual in our portfolio committee should talk about a different item, because these items are so complex and so many.

Now, what are the reasons for the Minister to introduce this income tax on foreign dividends? I think that we should really share the difficulties that I have. Maybe, members have a bit of insight into the meaning of these foreign dividends. I think the Minister’s aim and objectives are to broaden the tax base, to phase in residence-based taxation, to limit tax avoidance schemes effected by interposing entities in tax haven countries, and to introduce internationally accepted tax principles for taxing foreign dividends.

To do so, the Minister has realised that he must do it in such a manner that it does not result in double taxation in respect of operating profits from foreign direct investments. But there are some positive and negative aspects to that, as some of the economists argue.

Some argued that the Minister should delay implementation, but the bone of contention, if the Minister could do that, is that this measure penalises South Africans for bringing home their foreign earnings. If the effective date is to be delayed, there will be a massive inflow of foreign currency, as multinationals will hasten to repatriate profits tax-free for the last time with a significant knock-on effect for the economy.

There are some important implications. This would again go against the announcement of the Minister in his Budget Speech. A further delay would contribute to more uncertainty around the introduction of this matter as a whole - for revenue, taxpayers, and also for consultants. It is not always clear why amounts were not repatriated prior to Budget day when it could have been done in a tax-neutral manner. Most surplus profits are required to be repatriated in terms of exchange control provisions.

During the hearings conducted by our finance committee, there were so many arguments. It was, however, realised that foreign holding companies needed to keep sufficient funds offshore to produce healthy balance sheets in order to balance their books. With regard to offshore operations in subsidiaries or branches, the amounts repatriated during a proposed window period may happen to look like paper repatriation or may immediately be reinvested offshore.

I must conclude, because I want to bring to the attention of the House that it would be very difficult to argue this because one must realise that when the STC was introduced in 1993, it was imposed on all dividends declared from 17 March 1993, irrespective of the composition of the underlying profits distributed.

The same principle was applied when the rate was first increased from 15% to 25%. When all dividends were exempted from income tax in 1990, the amendment to the law came into effect on a specific date in respect of dividends received or accrued to taxpayers. [Time expired.] [Applause.]

The MINISTER OF FINANCE: Chairperson, hon members, firstly, I think it is important to express appreciation to all the parties for the support they have indicated for the tax laws amendment. It is also necessary to locate this debate within a wider context. That context was alluded to by the hon Turok in his comments on trying to deal with the position of NGOs within a wider political discourse.

There was a useful article last week in the Financial Times and I would like to quote from it. I suppose it relates, in the main, to issues of policy-making. The article says:

Unregulated global competition, for instance, is destroying the very concept of the career, because all but a fortunate elite are reduced to a chronically insecure existence, a world of part-time and contract work in portfolio employment in which there is no stable relationship with a single identifiable employer.

As work is turned into a commodity, businesses eagerly shed many of the responsibilities that rendered the world of work humanly tolerable in the past, and in the process recreated the horrors of the nineteenth century.

It is important to understand how the debate on economic policy, in respect of both what happens on the revenue side and the expenditure side finds a place. I think many of the comments made can be explained against the backdrop of how we would approach a framework that talks of people within the economic equation. Here, perhaps the first thing to recognise is that some do not have the same view that South Africans have about what has been described as a draconian set of tax legislation. In fact, Brendan Dardes, the Ernst and Young International tax partner, says that Mexicans are of the view that South Africa is a tax haven. They have listed South Africa along with countries like the Bahamas, the Cayman Islands, the Virgin Islands and Libya as a tax haven. Yet we have heard about the good, the bad and the ugly.

We have been told about the unintended consequences of what we do. Perhaps, one of the unintended consequences was an announcement by Didata which has been granted permission to invest offshore to retain their South African tax base for tax reasons because of the United Kingdom’s approach to taxation, notwithstanding what the hon Taljaard has said. Also, very importantly, as part of policy-shaping here in South Africa and elsewhere in the world, we have to guard against the race to the bottom. In many of the tax measures that we have taken, we indicate very clearly that we will stand against that race to the bottom, that we will assist governments to collect taxes that are due and that we will be bold in doing so.

There is no magic bullet. We will take those decisions and engage in them, but we will also engage in a world that we understand differently from the one the hon Dr Woods raised. He spoke of independent tax consultants, and I do not believe that they exist. There may be a few located still in academia, but, in the main, tax consultants respond to who pays the piper. That is reality. So, whatever tax consultants who come to the committees representing tax views on taxation or those who sit in the parastatals offer us, there is no independence in respect of what they offer.

We, as governments, need to take rational views on taxation, and this is the big debate. I take the criticisms the hon Woods raises. I take it that what we need is a policy framework. We need to define it. Against that, we need an organic development towards full implementation. But, at the same time, it must be understood that there is an ongoing duel with those very tax consultants, people who make their money from creating loopholes. As those loopholes are created, we then have to doubly ensure that we can have a tax system that remains equitable at the same time. Therefore, it is not going to be as linear a route from where we have come from, as to where we need to be. But, I think, we need to be alive and alert to the changes and to implement them accordingly.

In respect of the hon Andrew, I am glad that he had this weekend of reconciliation. I said to him on Wednesday evening that I would not like to come back to the debate on soft-headed populism, because in the first reading debate the Democratic Party called for a 7% deficit. He raised expenditure issues on Wednesday, and I am glad that he has come round and is not asking for futher tax cuts today, because, indeed, there is no magic bullet.

In respect of agriculture and taxation on diesel, this is a matter which we dealt with at length two weeks ago in Question Time, and I do not want to repeat that again.

In respect of the Chicago Convention, it is important to recognise that it was signed on 7 December 1944, at the tail end of World War II. Many of the provisions of the Chicago Convention have fallen into disrepute. And so one finds that, notwithstanding the existence of the convention in all its glory, the US imposes a departure tax on people leaving on airlines. The UK does it, and in fact, a number of EU countries do apply this taxation as well. Thus, whilst I take the point that we do not want to be outside of the law, we need to recognise that the world, in fact, needs a convention on international travel more suited to the times we live in than the period that obtained at the end of World War II.

Let me turn to the points raised about the parastatals. Parastatals are state-owned enterprises. They, as any company should, respond to the needs of the shareholders. They do not have a life of their own, and so the shareholders must determine what they do and when they do it. If they do not accept this and if the individuals who work in them at these lucrative salaries do not accept it, then they must be replaced. But the shareholders must not cede their responsibility to give policy direction. And here I feel there are no contradictions. In respect of what they do offshore, they will pay the tax, because they must pay back the shareholders. Thus, whether it comes as a dividend or as a tax, it places the money in the hands of the fiscus and we, as Government, should get value for money and be able to ensure that the policy framework is going forward.

I do not believe that there are any contradictions in that, and I do not think that shareholders, in other circumstances, would behave differently either. I do not think that we need to apologise for it.

In respect of the sole business, it is very important to recognise that Telkom does not become a bank which, apart from providing telecommunications services, also happens to own the railway lines that the railway service provider operates on. Those tax exemptions or the depreciation allowances will only apply exclusively if the business of the company applying for the depreciation allowance is, in fact, the sole business of that company. It is also to ensure that the banks do not continue to construct these huge tax shelters by buying, sometimes, poor infrastructure in order to minimise their tax payments.

We are very clear and we have considered that. In respect of the timing of the implementation, I refer particularly to what the hon Hogan had said in relation to capital gains tax. Clearly it is very important. We have provided the signal and we will continue to work. It is going to be exceedingly difficult for Sars to meet the deadlines, but we are quite determined to show results and to implement the tax, which is not an ugly tax. It is a tax that still obtains in the best parts of the world in the best tax regimes, and we would seek to apply it here in the same way. The unintended consequences of our tax on foreign dividends sees Didata choosing to remain in this country. There will be others who will follow suit.

We will collect the taxes due to this country, continue to draw on the revenues, and continue to provide the best quality of life that we can afford to give to the people of this country. [Applause.]

Debate concluded.

Bill read a second time.

               NATIONAL LAND TRANSPORT TRANSITION BILL
                       (Second Reading debate)

The MINISTER OF TRANSPORT: Chairperson, hon members, I want to acknowledge the presence of members of the executive committees, MECs of transport from a number of provinces who are in the House today. [Applause.]

Land transport, and in particular public transport, has since 1994 been amongst the top five priorities of Government. In the Reconstruction and Development Programme it was recognised that without an adequate transport system, our nation’s vision of a society rooted in the realities of effective and practical nonracialism, democracy and economic prosperity would remain a dream.

We have said on many occasions that redressing the inequities of the past requires serious action in the field of transport at two major levels. Firstly, radically improving our people’s access to mobility. Secondly, fundamentally correcting the misalignment between the infrastructure and services, which continues to hamper the implementation of South Africa’s new economic strategy based upon empowerment and inclusiveness.

How can we hope to grow our economy if large numbers of our people cannot get to the markets and employment opportunities? How do we hope to extend equal opportunities to persons with disabilities, if the transport system is inaccessible? How do we hope to raise living standards if wages are eaten away by high costs in public transport?

Over the past six years the national Department of Transport, together with its nine provincial counterparts, has been working tirelessly to turn the titanic of the apartheid transport system around. We believe that we are now firmly set on a course that will take us towards ever greater efficiency, effectiveness, reliability and affordability.

The National Land Transport Transition Bill which is before this House today represents perhaps the single most significant milestone on the road to the fundamental transformation of land transport that our country has seen. Its basic principles emanate from the White Paper on national transport policy that was adopted by Cabinet in 1996, after 18 months of intensive consultation.

Since the adoption of the White Paper, my department, in partnership with our colleagues in provincial and local government, has worked through an exhaustive process of consultation with stakeholders to bring this legislation before the House. In effect, today hon members have before them the final codification of a set of policy principles that enjoys widespread consensus, together with the critical norms, standards and regulatory provisions that are so necessary to deliver on the vision we have set for ourselves.

As is the case with all transformation processes, this one has been long, difficult and characterised by intensive negotiations around the trade-offs that inevitably have to be made in the complex process of changing the very nature of our society. It was inevitable that vested interests of the past system would resist these changes.

However, I am extremely happy to be able to stand before hon members today to say that, by keeping our eye on the fundamental issues, we can present to the House a Bill which gives us the instruments we need to really start meeting the basic transport needs of our people and the entire transport fraternity - users, customers, communities, operators and Government itself. I am also pleased to say that, after extremely valuable amending inputs by the provincial portfolio committees, the NCOP’s select committee and the Portfolio Committee on Transport, the NCOP unanimously approved the National Land Transport Transition Bill on 18 April 2000. This same version was subsequently approved by the Portfolio Committee on Transport of this House on 17 May 2000, after a detailed process of challenge and interrogation.

Let me immediately express my gratitude to all the committees for the manner in which they have engaged with the legislation, and for the real value they have added to it through their amendments. A special word of thanks is due to the chair of the Portfolio Committee on Transport, Comrade Jeremy Cronin, for his thoughtful, critical but at all times supportive, approach.

As its name implies, the Bill deals mainly with transitional matters, the first building blocks of the new system we are in the process of creating. It will ultimately be replaced by a comprehensive Land Transport Act that will give the fullest possible expression to national transport policy and will enable us to initiate the long-term restructuring of all our land transport systems. The final Act cannot yet be implemented due to the need to dovetail it with new and proposed local government legislation. In the meantime, therefore, our immediate business is to focus all our efforts, with the tools we have on hand, on starting to make significant progress within the context of our current limited resources.

The Bill is based on five pillars: Firstly, the creation of appropiate institutional structures; secondly, planning; thirdly, the introduction of regulated competition and the restructuring of transport modes; fourthly, the creation of conditions that will ensure sustainable funding; and fifthly, effective law enforcement.

By providing for the formalisation and regulation of the minibus taxi industry, this Bill will be an invaluable tool for promoting order and harmony in the industry and providing a framework that will enable this important sector to take its rightful place at the heart of our transport system. The minibus taxi industry has emerged painfully out of hardship and adversity to become the largest black empowerment sector in our economy, carrying 65% of our daily passengers to and from their places of work and their homes. Through this Bill, this industry, for the first time in its history, finds itself truly and properly recognised for the crucial role it plays in the lives of our people. Equally significantly, the Bill codifies the regulatory environment within which the restructuring of the industry will occur. Crucial transformative initiatives, such as the taxi recapitalisation project, will now be located within a clear and unambiguous institutional and regulatory environment.

This is extremely important, not only to give shape to the renewal of the industry’s asset base, but also to enable firm action to be taken against the lawlessness that still afflicts various sectors of the industry, as recent unfortunate events in Khayelitsha have sadly shown. This Bill will empower provincial Ministers to act more drastically in such circumstances, whilst at the same time placing in Government’s hands the appropriate mechanisms to deal with the underlying causes of these problems.

This brings me directly to the process issue involved in recapitalisation. Although this project is not explicitly mentioned in this Bill, as it is a separate and parallel process, provision is nevertheless made for specification of the sizes of the new public transport vehicles. This means two things: firstly, that existing vehicles with legal permits may be used until 1 October 2006, and, secondly, that on a date not earlier than 1 October 2004, the use of vehicles conforming to the new vehicle sizes will be a mandatory condition for the issuing of all new operating licences.

I am fully aware that this provision has caused some uncertainty in the taxi industry and was certainly a cause for debate in the committee stages of the Bill. Let me first explain why it is a logical provision. Firstly, market idealists will argue that choices about vehicle size and capacity should be left entirely to the market. Unfortunately, we do not have the luxury of this option because the market which has, in fact, been making the choices up till now, has failed to deliver adequately, both as regards safety and as regards ongoing replacement of vehicles.

In an industry of some 135 000 vehicles, the annual purchase of at most 2 000 vehicles is totally inadequate. For this reason, we have had to trade off freedom of choice against the need to generate sufficient demand through a focused intervention scaled to justify the initial investment. The prime motivating factor in this regard is undoubtedly the safety of the commuter.

Secondly, and on a related basis, the nature of public transport operations is such that the revenue earning capability of a particular vehicle in a particular environment is based on the operator’s ability to generate adequate fair revenue from customers. Size, as determined by the number of revenue-earning seats, plays a crucial role in this regard. It is for this reason that the regulations governing vehicle size are seat-based rather than being based on other criteria, such as weight, vehicle type etc.

In addition, the most effective way of determining the existing or proposed frequency of services available to customers is to use the measurement of seat volumes on routes in combination with the size of the vehicles being used. In this regard it is important for Government to play a role in ensuring that the level of service to users is maximised rather than compromised by an inappropriate mix of vehicle sizes, which could result in either an unacceptably low frequency of service or an unacceptably high fare.

Let me, however, remind the House that this provision is suspensive in nature in that while it enables the Minister to make a determination it does not require her or him to do so. The provision is there as a clear signal of Government’s intentions, given the nature of the market. Our view might well change in the event that the demand for new vehicles matures to a level that makes this kind of provision and intervention unnecessary. In the absence of such maturity in the market, however, I will announce the actual implementation dates of these phases in consultation with my provincial colleagues.

I also want to make it clear that I am fully aware that these envisaged vehicle sizes might not be suitable for all circumstances, even now. And it is precisely for this reason that provision is made in the Bill to enable the national Minister, again in consultation with the provincial MECs, to provide for special categories of vehicles to cater for exceptional cases, whether in rural areas for tourists or other courtesy services.

In order to prepare the taxi industry for recapitalisation, special procedures for legalisation have also been provided for. These procedures, drawn together in what we have called the be legal campaign, may vary from province to province to take account of the uneven progress rates in the legalisation process. Without the Bill no further progress can be made with the formalisation of the industry through the conversion of permits to operating licensers, the implemention of the Be Legal Campaign or the recapitalisation process.

With regard to the bus industry, we see that the crucial contribution that the Bill makes is to pave the way for the implementation of regulated competition and the provision of bus transport through the process of competitive tendering. In order to effectively restructure the parastatal and municipal bus companies, the Bill enables the national Minister in consultation with his or her provincial counterparts, to grant exemptions, especially with a view to promoting persons previously disadvantaged by unfair discrimination.

Except for planning and concessioning, commuter rail is not included in this Bill. This is because on the issue of rail industry structure Government is locked into a number of processes that should not be pre- empted at this stage. Members will be aware that this is a sector dominated by a single infrastructure provider and a single operator, both of which are state-owned enterprises. Acccordingly, in terms of the national framework agreement, Government is committed to a process of piloting concessioning. A commuter rail institutional reform study is also currently under way, and as soon as it is finalised detailed legislation in that regard will be published. It is also envisaged that legislation establishing a rail safety regulator will be tabled later this year.

My department, in collaboration with the Department of Finance, is also currently in the process of addressing the funding crisis in this industry. The first step will be the take-over of the total debt of the South African Rail Commuter Corporation, for which legislation will be tabled in this House in the next session.

Let me briefly turn to the formal structure and composition of the Bill. The Bill is divided into four chapters. Chapter 1 deals with introductory provisions. Chapter 2 deals with matters of national concern, focusing on matters contemplated in section 146(2) of the Constitution, setting national norms and standards and applying national land transport policy, and will take precendence over provincial laws dealing with similar matters. Chapter 2 will therefore apply in all provinces and cannot be amended or repealed by provincial legislation.

Chapter 3 deals with matters of provincial concern, and this chapter or sections thereof will apply in each province unless that province has its own legislation to replace it or parts of it. This chapter was drafted to act as a stop-gap legislation until such time as all provinces have their own legislation which is fully complementary to Chapter 2.

Chapter 4 deals with general matters, such as law enforcement, and will apply uniformly in the provinces. [Applause.]

Mr J P CRONIN: Chairperson, I can see that you have been running the Comrades Marathon as well. Hon Minister of Transport, MECs for Transport, hon members, this legislation will begin to change the landscape of public transport provision in our country, and we are therefore very pleased and indeed relieved finally to bring the National Land Transport Transition Bill before this National Assembly. It has been cooking in the pot for some three years now. As the hon the Minister has already explained, and as my colleague hon Mrs Shilubana will explain later, this time delay has been partly justified by the complexity of this legislation, and by the wide range of stakeholders that it has been necessary to consult. It is also legislation that gives substance to the notion of co-operative governance between all three spheres, national, provincial and local, and that sometimes necessarily delays the process.

This is a section 76 Bill and it comes to us now via a quite intense process through the NCOP. There are a number of very important and extremely positive things about this legislation. In the first place, what we want to underline is that this law establishes the strategic institutional and regulatory framework for the provision of safer, affordable and environmentally friendly public transport. It places a clear obligation on the Minister to promote public transport. It emphasises for instance, and I quote:

For the purposes of land transport planning and the provision of land transport infrastructure and facilities, public transport must be given higher priority than private transport.

Central also - and this is a very important positive feature of the National Land Transport Transition Bill - is the idea that integrated planning is critical for the provision of public transport. This legislation provides for the establishment of what I call transport authorities, or TA. They will be established by a founding agreement between one or more municipalities, as the case may be, and the relevant provincial MEC, or MECs when the transport corridor flows across different provinces. Where funding is to be provided by the national level, it will also be an agreement entered into with the national Minister of Transport.

These transport authorities will be separate legal persons and they will have various compulsory functions, notably the preparation of transport plans for their particular geographical areas. These transport plans will be municipal, or interim municipal, and provincial, and will all be planned within a general national framework. They will, of course, also have to link intimately with other spatial planning for infrastructure, housing development and industrial development. They will need to help to foster densification, overcoming the tremendous, inefficient and costly sprawl that characterises so many of our towns and cities as a result of so-called apartheid planning.

This kind of planning will also help to change the whole deeply contested permit system, because linked to the municipal transporting authorities and their planning function will be new operating licence authorities, which will have to be established. They will be much more representative structures than the present structures that are issuing permits, such as the Cape Town Local Road Transport Board, which is currently a bone of contention.

These new operating licences will be awarded transparently, we hope, in terms of the plans that are set in place by the transport authorities. They will involve the interlinking of multimodal systems and they will involve taxis, minibuses, midibuses, buses and rail, according to passenger needs and density, so that we will end up with the optimal mix of transport carriers. Operators will tender for routes, and we will generally move away from radius or area permits to route-specific permits or licences. No one will be entitled to a new commission as a matter of right, and the current practice of permits being hired out to other persons will be ended. The underlying emphasis is to have competition, but regulated competition. It should be competition for the right to operate on a route, but not competition on the route itself, which is what is unfortunately happening in Cape Town at the moment.

There is one area that we in the ANC study group thought about three and four times. The Minister has already alluded to it. This is clause 31, which states that the Minister of Transport ``from a date not earlier than 1 October 2004’’ will, by notice in the Gazette, stipulate that the only vehicles entitled to operating licences will be, firstly, taxis carrying fewer than nine persons excluding the driver; secondly, minibuses with 18 seats excluding the driver; midibuses with 35 seats, again excluding the driver; and then buses, which will have 46 seats and more. Not earlier than two years after that declaration - that is, not earlier than 1 October 2006

• these will be the only vehicles allowed for public transport purposes.

There are still a good six years at the least to go. However, the question we as the ANC have asked ourselves is: Why should we be this specific - particularly with regard to minibuses and midibuses - in legislation? Are we not trying to second-guess what may well prove to be a very fluid market situation? In asking these questions of the department, we have had several complementary answers, and the Minister has repeated some of these.

As far as we are concerned, the main answer is that we are trying to second- guess or rather influence and help to mould the public transport market. The present 16-seater minibuses are not designed for passenger transport. Amongst other things, their chassis base is too narrow, and this creates a liability to tip in cases of accidents. Of course, there is no magic in the 18-seaters. But those who have done the technical research and economic modelling assure us that an 18-seater is safety-wise and economically an optimal size.

By signalling our intent to move towards 18-seaters - and, of course, 35- seaters when it comes to midibuses - through this legislation, we are signalling to potential manufacturers and investors in our economy that we are serious about taxi recapitalisation, and that there is every prospect of a sizeable local market for such vehicles and, indeed, of exports, presumably to the rest of Africa as well. We are, therefore, trying to help shape a market and in this way encourage investment and job creation. Despite these arguments, we did consider amending this clause. However, any firm declaration from the Minister cannot happen before four years at the earliest, and full implementation is still six years away.

The Minister has assured us - and he has said so again this afternoon - that if realities on the ground have moved in different ways, then we shall have to review this particular aspect. He further stated that the provision is of a suspensive nature. This legislation is a transitional Bill. It deals with land transport and, in particular, with passenger transport. But the emphasis here is on taxis, minibuses and buses. The reasons for giving priority to these dimensions of land public transport, should be obvious to anyone living in Cape Town.

However, there are other critical dimensions to land transport that need to be covered by effective planning and regulation, none more so than rail. Once this legislation is approved, the intention is to have it moved to the rail sector. The Minister, in his budget speech earlier this year, emphasised the central importance of getting rail right for both freight and passenger transport.

There are very serious challenges in the areas of public transport in our country. The events here in Cape Town over the last three months are a stark reminder, if we needed one, of the seriousness of these challenges. The National Land Transport Transition Bill has taken its time to come before the National Assembly. But already, we are pleased to note that MECs, metro councils and others have begun to move towards what is envisaged in this legislation. For instance here in the Western Cape over the weekend, the transport MEC, the hon Piet Meyer, announced several measures he intends taking in the coming period, partly in response to the bus and taxi conflict. But we are pleased to note that, in addition to them being immediate responses, they are also very much in convergence with where this legislation is trying to go. We wish him well in his endeavours.

Clearly the enforcement of law and order and dealing decisively with perpetrators of violence is essential. But on their own, such law-and-order measures will not assure millions of daily commuters in our country the safe, affordable and user-friendly transport that they deserve. We trust that this legislation will go some way in contributing to the realisation of that vision.

In conclusion, I would like to thank all members of the portfolio committee for their constructive contribution to this lawmaking process. I would like to thank the Minister and the members of the Department of Transport for their diligence and patience. They patiently pushed this piece of legislation through the previous portfolio committee, and they had to do it all over again with a set of newcomers, not least myself. We would like to thank them for their patience in that respect. The ANC supports the National Land Transport Transition Bill. [Applause.]

Mr S PILLAY: Deputy Chairperson, the DP has stated and states again that only a nationally integrated approach to transport will ensure that the economy is assisted by the system rather than hindered by it. The evaluation of each segment of the system is done through proper checks and balances.

This Bill is filled with very good intentions, which obviously makes a welcome change. Accountability by the Minister and MECs is contained in this Bill, which also ensures that objective benchmarks could be used to gauge the performance or nonperformance of the relevant Ministers and MECs. I am pleased to say that this Bill does not try to single out and look for scapegoats, in the way some attempts were made to try and look at the Western Cape as a specific scapegoat where transport problems occur. This Bill has the potential to cover a myriad of problems and offer some solutions. However, my question is: Is this enough?

The Bill creates the framework for regulating the transport industry. It brings about a flexible environment for managing transport as a whole and, more importantly, makes taxi permits conditional on the place on a wider transport picture. The Bill, being transitional in nature, forms part of an incremental process for the ultimate phasing in of the taxi recapitalisation scheme. This will ensure that all new permits after 1 October 2000 must be in respect of the new classification and, slowly but surely, the present minibuses will be replaced with 18 and 35 seaters, thus reducing the number of taxis operating in many of our overtraded towns and cities. The result of this can be seen throughout the country, where conflicts recently resulted in deaths and mayhem between taxi operators and again the commuters were the ones who suffered.

The Bill promotes proper structuring of land transport plans and the accompanying appropriate institutional structures. This will hopefully lead to prioritised public transport permits based on transport plans, routes and regulated competition. All of this sounds wonderful, but any formalisation and restructuring of the public transport industry requires proper management and organisation in order for it to work.

The DP believes that unless this is clearly representative and democratic in nature, the undisciplined taxi associations will make a mockery of any attempt by the department or the Ministry to effect its plans. The exclusion of any of these taxi associations in the formation of the mother body will result in dissension and conflict with, once again, the poor innocent commuter being left as a scapegoat and victim.

The key element in controlling this is to ensure that no stone is left unturned in ensuring that all parties are included in the representivity and election of Sataco. In this regard we hope that the Minister will ensure that the elections due to take place later in the year have the necessary public and taxi association representivity and are free and fair.

The DEPUTY CHAIRPERSON OF COMMITTEES: Order! Hon members, please pay attention to the debate.

Mr S PILLAY: It is not enough merely to go through the motions and a properly planned information campaign must be relaunched among the commuters themselves, where they can have their say.

Any Bill passed will be futile unless the capacity to implement it is effectively in place and the abilities of some smaller municipalities to undertake various aspects of the Bill are put in place. Here we refer to the composition and structuring of the transport authorities, permit boards, taxi registrars, provincial transport appeal bodies and the transport appeal tribunals, which will all need competent and impartial officials, coupled with the financial resources to effect the respective rules. Because of the nature of the industry, it is imperative that the basis for the issuing of permits is complied with and of necessity this will require the co-operation of other departments, such as Sars, to fulfil such aspects as furnishing proof of tax registration, and, in the case of roadworthy certificates, adequate law-enforcement officers and test stations to do the necessary checks.

The DP supports the Minister’s recent announcement to introduce regular roadworthy checks, not only public on transport but on private and heavy vehicles as well. The DP prosposes that this be effected as soon as possible, and that only accredited test stations with equipment that complies with the standards laid down by the SABS be used. Unscrupulous and underequipped stations should be closed down and outlawed. This could be a tremendous boost for the private sector and the economy as a whole, and will undoubtedly have an impact on the reduction of road accidents caused by defective vehicles. Corruption in these test stations would be a major problem but, with the correct controls in place, and the ability for licences to be revoked as a deterrent, this could partially solve the problem.

The DP has concerns about the establishment of the transport authorities, and these were raised at the committee level and at various public hearings in the provinces. We understand the need for representatives to be elected councillors only, owing to treasury conditions and having regard to budgeting and financial control, but we still question their neutrality and ability to ensure fairness, and their level of expertise. Therefore the establishment of the support structures, such as the registrar, provincial transport bodies and the transport appeal tribunals would be essential and paramount in order for recourse and appeals to take place. The DP will obviously monitor the formation of these bodies closely to ensure that impartiality exists and that adequate training mechanisms are in place.

As a note of concern, although the Bill reflects briefly on aspects of the railway, the DP believes that this mode of transport could be given more priority, as a means of reducing the devastating damage that overloaded trucks cause to our roads, which are already behind in maintenance and repairs to the tune of over R35 billion. Existing rail links could be put out to tender for successful bidders to hire, and the same subsidies in regard to routes offered to them as an alternative cheap mode of transport.

Again, I would like to go back to a basic question: Who stands to gain from the introduction and acceptance of this Bill? Commuters will gain; the business sector will gain; national, provincial and local government will gain. In essence, the passing of this Bill ushers in a new era in road traffic management. However, what is not properly defined here is exactly how this legislation will be properly funded. Perhaps the hon the Minister will provide more details in his address.

In terms of this Bill, authorised officer means an inspector contemplated in section 123, a member of the SA Police Service, including a member of a municipal police service, as defined in section 1 of the SA Police Service Act, Act 68 of 1995, a person in the service of a provincial department or a municipality whose duty is to inspect motor vehicles or licences for motor vehicles or to control traffic. The definition is broad.

However, the Minister needs to provide clear mechanisms that will ensure that the vacant posts - approximately 8 000 of them - are filled. If this Bill is to be meanigful and successful, this element has to be dealt with once and for all. The Arrive Alive campaign has long campaigned that the vacant posts referred to should be filled without delay. The DP supports that call. The hon Douglas Gibson has also long called for adequate personnel to be employed. We also support that call.

As much as an integrated approach is called for in this Bill, the one major problem still stands out - implementation and law enforcement. The SAPS’s manpower shortage is a well known and documented fact. The Minister needs to provide an enabling mechanism that will ensure that this Bill that is passed here today does not gather dust for want of implementation.

In conclusion, the DP supports this Bill. [Time expired.] [Applause.]

Mr J H SLABBERT: Mr Chairman, hon Minister, colleagues, the IFP supports this Bill, but we do have some concerns which I will now raise, and I trust that this will be seen by the hon Minister as constructive criticism.

The first general point in relation to this Bill that needs to be raised is that the Bill provides that the Minister of Transport must determine, formulate, develop and apply land transport policy for South Africa and then publish the policy in the Gazette. This seems strange because, normally, legislation would flow from an already established policy, but in this case it appears as if policy will only be created after the Bill has been passed. This raises the question whether a land transport policy actually exists at all at the moment and if it does not, why it has taken the department six years to come up with the process to create a policy through legislation.

The National Land Transport Transition Bill is a highly complex piece of legislation that is intended to provide for the transformation and restructuring of the national land transport system in South Africa. This transformation is to be achieved by a complicated system of interaction between the national Minister of Transport and the MECs for transport in the nine provinces. The Bill therefore establishes the powers and functions of the Minister and the MECs, and divides these into matters of national concern and matters of provincial concern. This also deals with the registration of the minibus-taxi industry and related matters. It is highly doubtful that such a complex piece of legislation can be successfully implemented on both national and provincial level.

It is no secret that Government at all levels suffers from the so-called capacity and resource problems. The lack of experience of qualified personnel makes it unlikely that this Bill would be implemented speedily. It will probably follow the recent trend by which legislation is only implemented years after it has been passed by Parliament.

Furthermore, this implementation problem is increased by the countless procedures and systems that the Bill prescribes and which must be created at ground level, and the regulations that have to be drafted before the legislation can be implemented. The fact of the matter is that more than enough legislation to my mind already exists to ensure an effective land transport system in South Africa and it is questionable whether yet another piece of legislation is really needed.

A second general point that has to be raised in respect of this Bill is enforcibility. Over the past few years we have seen time and again that legislation created at national level can simply not be enforced at ground level. This is not just a problem of capacity or lack of resources. It is also a problem of setting unrealistic goals and a complete disregard for the law by certain sectors of the transport industry, and one need not mention a better example than some in the minibus-taxi industry who apparently claim to have the sole right to illegal actions and demonstrations.

This Bill creates a complex structuring of transport authorities, licences and regulations of the minibus-taxi industry. It is possible that these processes would lead to even more conflict among some taxi operators and between taxi operators and other public transport operators such as bus companies, like we all experienced in Cape Town last Wednesday. The fact of the matter is that the taxi violence resulted from flawed legislation, regulations and permit systems in the first place, and to think that another set of laws and regulations would stop taxi violence or create a better industry is unrealistic. The only thing that would end the violence and confrontation in the industry is effective and strong enforcement of the country’s laws.

This brings one back to the question of whether the provisions of the National Land Transport Transition Bill with regard to the taxi industry could and would be enforced by the authorities. The recent history in this regard is not very promising. The taxi industry is characterised by lawlessness as fierce competition for scarce resources such as permits and routes spill over into violence, accompanied by a total disregard of the law.

The Department of Transport tacitly acknowledges the problem of enforceability and lawlessness in clause 116 of the National Land Transport Transition Bill, in which a code of conduct for taxi associations and operators is created. To expect taxi operators, whether legal or illegal, to respect a code of conduct against the background of the conflicts of the past twelve years or so is, to say the very least, ludicrous. There is one truth about the taxi industry and that is that it is out of control. A code of conduct will not change the situation for the better. Strong law enforcement, however, would change it.

Part 12 of the Bill, from clause 54 to clause 63, provides for the registration of minibus-taxi associations. The part is, however, completely silent on what action Government will take when existing registered associations split into different associations. It has long been a feature of the taxi industry that a disagreement between members of an association invariably leads to the creation of a rival association consisting of the disgruntled members. The existing and new associations often then find themselves in conflict after the split, which leads to violence in some cases.

The DEPUTY CHAIRPERSON OF COMMITTEES: Order! Hon Ms Hangana, please pay attention to at least part of the debate. [Interjections.] Order! Please continue, hon member.

Mr J H M SLABBERT: Part 18, from clause 122, provides for law enforcement. Amongst other things, it allows authorities to co-operate in law enforcement, something which should really be welcomed. However, clause 122 states that the provision enabling agreements between enforcement authorities applies despite the provisions of any other law. It is doubtful whether this is legal or possible, considering the provisions of the Road Traffic Act, the Administrative Adjudication of Road Traffic Offences Act and other legislation that provides for specific roles for the traffic police, the SAPS and other law-enforcement agencies in all transport matters. There lies a very, very big challenge ahead of the Minister. The country looks up to him with high expectations to bring stability in transport. We wish him well.

Mnr J J NIEMANN: Mnr die Voorsitter, hierdie wetsontwerp was dringend noodsaaklik om ‘n fundamentele transformasie en integrasie van die padvervoerwette van ons land in plek te kry. Ons glo dat die regulering van die padvervoerstelsel daarin kan slaag om orde te skep uit die chaos wat tans onder andere die taxibedryf dwarsboom.

Niemand wil die rol wat die taxibedryf in Suid-Afrika gespeel het en tans nog speel, beswadder nie. Uit letterlik niks het die bedryf gegroei tot ‘n reus - of is dit eerder ‘n monster? - ‘n reus wat daagliks verantwoordelik is vir 65% van alle padvervoerpendelaars. Die reus verskaf werk aan duisende mense.

Die reus het gegroei tot ‘n multimiljoenbedryf, maar die doodsengel klim ook in elke taxi. Die reus is verantwoordelik vir ongeveer 1 600 padsterftes elke jaar. Daarom is dit uiters belangrik dat die bedryf georden word. Die ander sy van die taxibedryf is die monster. Ek het onlangs in ‘n blitsdebat wat gehandel het oor die taxi-cum- busprobleme in Kaapstad gesê dat Suid-Afrika siek en sat is vir die houding wat tans in die land ‘n tipe agtergeblewe kultuur geword het. As daar nie aan ‘n mens se eise voldoen word nie, dan staak en toyi-toyi jy in die strate tot ergenis en ongerief en verlies aan inkomste van wetsgehoorsame burgers van die land.

Dit is ook die monster in die taxibedryf wat onskuldige mans en vrouens en selfs kinders voor die voet skiet, en onskuldige mense met petrolbomme bestook. Vaders met gesinne, wetsgehoorsame burgers wat net hulle dagtaak wil verrig, word sonder enige rede koelbloedig doodgeskiet.

Soos ‘n sekere spreker van die ANC by die Jeugdagvieringe gesê het dat die Regering gatvol is vir sekere Boere, so is ek en miljoene ander wetsgehoorsame burgers behoorlik gatvol vir sekere agtergeblewenes, moordenaars, verkragters en sekere taxi-operateurs wat hulle verbeel hulle is al mense wat ‘n reg het in Suid-Afrika, en dit as ‘n voorreg beskou om ander se regte te vertrap. [Tussenwerpsels.]

Die Nuwe NP steun die wetsontwerp omdat daar hopelik ordening in die vervoerbedryf in sy geheel in Suid-Afrika sal kom, maar blindelings steun ons ook nie die wetsontwerp nie. Daar is etlike kwelvrae wat ons gefrusteer het. Een kwelling wat ek in die kort tydjie wat tot my beskikking is, wil noem, is finansiering.

Hoe de duiwel die Minister hierdie wet afdwingbaar wil maak op provinsies en veral munisipaliteite en die te stigte vervoerowerhede sonder om baie definitief die geld oor te dra na die provinsies en die munisipaliteite, weet nugter alleen. Nege tiendes van alle munisipaliteite in Suid-Afrika is bankrot! Of dink die Minister en die Regering dat die munisipaliteite met grondbelasting hul skuldlas sal uitwis en nog genoeg geld gaan oorhê om hierdie wetgewing te implementeer? Die wetsontwerp bepaal nie dat die Minister geld móét oorbetaal nie, asook nie die wyse waarop hy dit moet doen nie. (Translation of Afrikaans paragraphs follows.)

[Mr J J NIEMANN: Mr Chairperson, this Bill was urgently needed to effect a fundamental transformation and integration of the road transport laws of our country. We believe that the regulation of the road transport system can succeed in creating order out of the chaos which is at present, inter alia, hampering the taxi industry. Nobody wants to denigrate the role which the taxi industry has played and is still playing in South Africa. The industry grew literally out of nothing into a giant - or is it rather a monster? - which, on a daily basis, is responsible for 65% of all road transport commuters. This giant employs thousands of people.

The giant has grown into a multimillion rand industry, but the angel of death is also a passenger in every taxi. The giant is responsible for approximately 1 600 road deaths every year. For that reason it is extremely important for the industry to be regulated. The other side of the taxi industry is the monster.

Recently, in a snap debate on the taxi-cum-bus problems in Cape Town, it was said that South Africa was sick and tired of the attitude which has become a kind of deprived culture in the country. If one’s demands are not met, then one strikes and toyi-toyis in the streets, to the annoyance and inconvenience and loss of income of law-abiding citizens of the country.

This is also the monster in the taxi industry which indiscriminately shoots innocent men and women and even children, and throws petrol bombs at innocent people. Fathers with families, law-abiding citizens who simply want to do their job, are shot dead in cold blood for no reason.

In the same way that a certain speaker of the ANC said at the Youth Day celebrations that the Government is sick and tired of certain Boers, I, and millions of other law-abiding citizens, are really sick and tired of certain deprived persons, murderers, rapists and certain taxi operators who think that they are the only people who have rights in South Africa, and consider it a privilege to trample on the rights of others. [Interjections.]

The New NP supports the Bill because it will hopefully bring regulation in the transport industry as a whole in South Arica, but we do not support the Bill blindly either. There are several thorny issues which frustrated us. One issue that I want to mention in the short time at my disposal, is funding.

How on earth the Minister wants to make this Act enforceable on provinces and in particular on municipalities and the transport authorities which are to be established without very definitely transferring the money to the provinces and the municipalities, heaven alone knows. Nine-tenths of all municipalities in South Africa are bankrupt! Or do the Minister and the Government think that the municipalities will eliminate their debt burden with property tax and will still have enough money left over to implement this legislation? The Bill does not provide that the Minister must transfer money, nor the way in which he must do so.]

Clause 15 in part 6 states that the Minister must use moneys appropriated by Parliament and may make money available to provinces. About transport authorities of municipalities, clause 16 states that transport MECs may provide funds to land transport from the money recieved from the Minister or appropriated by the relevant provincial legislature for that purpose.

Daar is geen fondsbestuursliggame in die provinsie in plek vir hierdie doel nie en hierdie wetsontwerp maak ook nie daarvoor voorsiening nie. Dit is ‘n besliste leemte in die wetsontwerp dat daar geen spesifieke aanduiding is van wat die bron van inkomste is nie, en hoe die fondse bestuur en aangewend moet word nie. Daar is nog ‘n paar punte wat ‘n mens graag in die wetsontwerp sou wou uitlig, maar ek glo dat my kollega ‘n paar van hulle ook hier sal noem. (Translation of Afrikaans paragraph follows.)

[There are no fund management bodies in place in the provinces for this purpose and this Bill does not make provision for them either. It is a definite shortcoming in the Bill that there is no specific indication of what the source of revenue is, and how the funds are to be managed and utilised. There are a few more points in the Bill which one would have liked to single out, but I believe that my colleague will also mention a few of them here.]

Mr T ABRAHAMS: Chairperson …

Mrs Z A KOTA: Chairperson, on a point of order: I want to ask if it is parliamentary for the speaker to mislead the House by saying that the ANC is gatvol'' of farmers, and whether it is parliamentary to use the word gatvol’’ in Parliament in any case.

The DEPUTY CHAIRPERSON OF COMMITTEES: Order! That is not unparliamentary. [Interjections.]

Mr G Q M DOIDGE: Chairperson, on a point of order: What is the meaning of ``gatvol’’ in English? [Interjections.]

The DEPUTY CHAIRPERSON OF COMMITTEES: Order! Hon members, the word uttered by the speaker is not in the list of unparliamentary words that we have. The Chair is not here to interpret for you whatever the speaker says. You can follow the interpretation or put it in writing so that we can look at it and give you further advice on the matter.

Mr G Q M DOIDGE: Chairperson, to follow up on your ruling, the intepretation did not cover the word ``gatvol’’, and I am not Afrikaans- speaking.

The DEPUTY CHAIRPERSON OF COMMITTEES: Order! Neither am I. So, I depend on the interpretation. [Interjections.] We will look at it and if it is particularly offensive and unparliamentary I will rule on it.

Mr T ABRAHAMS: Chairperson, this Bill has been a long time coming, and the UDM therefore welcomes it with its minor imperfections. Some of the reservations we have about the Bill have been expressed, especially by the colleague who spoke just before I came to the rostrum. However, we believe that the planned integrated approach to transport in this country is crucially needed. All over the world in First World countries, it is possible for commuters to move about the country so freely and easily that one feels that this approach must be adopted in this country.

The UDM will support the Bill because the need for this legislation is clear and the party has no wish to oppose it for mere party-political purposes. We realise that in the next few years the clear distinction, especially, between the functions of national government and the provincial authorities is going to become critical, and these distinctions are clearly made in this Bill. We, however, wish to urge the Government to accept that the time for probing, investigating, buck-passing and even party-political point-scoring is long past. Commuters and the public at large have had enough of the mobility of the people being violently disrupted and of the development of the country as a whole being stifled. [Interjections.]

The UDM envisages South Africa taking its place in the competitive and unforgiving global sphere. How can this goal be attained if its systems of transportation remain in a state of chaos. If restructuring of the industry will foster this aim, and this Bill will address the situation, the people themselves must be sold the concepts contained in the Bill.

The vast majority of the people expect decisive action from the party which it gave its mandate to last year. The people are not particularly interested in which tier of Government must take action. Restructuring, and therefore also recapitalisation or formalisation, must become meaningful to everyone. We believe that, by means of this Bill, an opportunity presents itself to bring the people into understanding the need for this total onslaught on the problems inherent in transportation.

It is clear that the people are aware of the fact that the ongoing feuding over several years - it is nothing new; it has been going on for years - and its manifestation in several parts of the country point towards nationwide dissatisfaction and widespread anxiety surrounding the taxi recapitalisation programme. The enforcement provisions are therefore expected to play a crucial role in the next few years.

With the imminent phasing in of the Government’s restructuring of the transport systems and taxi recapitalisation plan, it is hoped that the Government will prepare itself for the probability of an increase in conflict, disruption and hostile actions until the year 2004 and beyond. Any dithering or any limp-wristed action in the following, forthcoming, few years, at any level, will delay our march towards a modern, progressive South African state with a highly improved transportation system.

The conversion from permits to operating licences to be awarded by tender is a critically misunderstood factor, and yet it is one of the greatest factors in this Bill. Every effort must be made to ensure that this provision is not disrupted in the next few years by unscrupulous people. [Time expired.]

Mr P F MBONGO: Mr Chairperson, hon Minister, hon MPs, this Bill before us is, in many ways, a Bill which endeavours to demonstrate the extent to which the ANC-led Government has brought about change in this country. The inseparable relationship between reorganisation of land transport and infrastructure development could be one of the key performance indicators used to determine the successes and failures of Government in the sphere of the transport system. The ANC cannot insinuate, and it has never done so, that changes are an event. In fact, its 1999 manifesto acknowledged that we are not complacent as a result of changes that have taken place. As we continue to build on what has been achieved over the past six years, nothing, and emphatically nothing, will stop us from changing all the apartheid policies until the better life for all is realised.

The ANC Government is always disturbed by the violence that has continued to tarnish the image of the taxi industry. It is an indisputable fact that the industry conveys more than 60% of the workforce in this country. And, in addition, it is a known fact that thousands and thousands of families in our country derive their income from this industry.

In 1995, the Government, together with all stakeholders directly and indirectly affected by the violence convened and produced a document in pursuant to the recommendations of the National Taxi Task Team. The National Land Transport Transition Bill recommendations entailed a number of resolutions which, among others, were the registration, formalisation, regulation and control for the legalisation of this industry. The question which remains to be asked is whether the National Land Transport Transition Bill has yielded any positive results. The answer is neither yes nor no, but it gives, most fundamentally, the extent to which the Government has demonstrated its commitment. Many of the provinces, through their MECs, have created registrar offices to undertake the task of formalising the industry. For example, Gauteng has created such an office. Two hundred and three associations in this province underwent what is commonly known as Operation Vuka, while 150 of those organisations are currently registered conditionally.

The process has not stopped and, indeed, this enthusiastic commitment should be a lesson to other provinces who may still harbour illusions, such as the Western Cape which believes that this Government has not delivered. There is, surely, benefit in so far as this exercise is concerned? Accordingly, we call on the MEC responsible for transport in this province to be sufficiently sensitive to the violence between the Golden Arrow bus company and the taxi industry, which violence has so far claimed the lives of more than three bus drivers, as has been reported. Whilst we do recognise that the onus lies with the parties involved, some form of intervention is critical. This Bill raises a number of other related matters that are of critical importance to the transformation and restructuring of land transport. The Bill requires the establishment, by the Minister, of permission boards which would be responsible for the issuing of permits within the taxi industry. Members who will constitute the board must be impartial, have no direct or financial business interests in the industry and may not decide on or adjudicate in a matter in which they have an interest.

The permission boards, as they currently stand, require drastic transformation. In some of the provinces, a legitimate outcry from the taxi operators who applied for special legalisation has been that of unfair exclusion. If this had persisted it would have defeated the system, hence we have the Bill we are considering this afternoon. The Bill again states categorically that a licence is not a right. Clause 34(2) states that a licence in respect of a minibus-taxi-type service may be granted only to a person who is a member of a provisionally or fully registered association, or to a registered nonmember, or to a person who has applied for registration as a nonmember and has been granted a certificate contemplated in clause 113(2) of this Bill. [Time expired.] [Applause.] The DEPUTY CHAIRPERSON OF COMMITTEES: Order! Before I call the next speaker, I would like to make a ruling on a matter that came before me. It has to do with an utterance by the hon Mr Niemann which Mrs Kota raised in terms of the appropriateness of words used in this Parliament. According to the dictionary, the words he used simply meant fed up to the back teeth with'' orhave had it’’. If he did not have any back teeth, maybe Mrs Kota could object. But, on the whole, I will not make a ruling that this is unparliamentary. Thank you. [Laughter.] [Applause.]

Rev K R J MESHOE: Chairperson, hon Minister, there is no doubt that this Bill has been well drafted. But we all know that a piece of legislation that is well drafted only cannot solve our taxi problems. If the relevant authorities do not regulate and enforce current laws, then the introduction of new legislation will not alter the status quo when the rubber meets the road.

We in the ACDP are very concerned about the continuing lawlessness and violence in the public transport industry, especially in the Western Cape. Bus drivers are being attacked and killed while serving their communities and the public does not hear about the prosecution of the perpetrators of these crimes. Until when will murderers get away with their crimes? There were reports that the hon the Minister had announced a six-point strategy to tighten up the taxi industry. This, it was reported, included the cancellation of weekend bus services in the townships, as demanded by taxi operators. This was subsequently denied by the provincial ministry of transport.

I therefore want to call upon the Minister to personally assure members of the public, specifically the commuters who are affected and inconvenienced by this impasse, that the constitutional right to choose their mode of transport will not be undermined by an agreement with taxi operators who are only looking at their pockets, and not the needs of commuters.

It was unfortunate that Golden Arrow bus drivers resorted to blocking traffic on two major routes into Cape Town on Wednesday last week as a last resort to put pressure on the provincial transport minister to take action to end the attacks on buses and commuters, apparently by taxi operators.

The accusation that the Government is spineless in dealing with taxi operators is not far-fetched. I want to echo the words of Golden Arrow’s spokeswoman, who said:

The company does not condone the blockage and we apologise profusely to commuters for the inconvenience, but we can understand why the drivers are doing it. They are at the end of their tether, because neither the national nor the provincial government is doing anything to ensure their safety.

We heard today that bus drivers are planning to suspend their bus service for the whole week in protest against the killing of another of their colleagues this weekend.

What must the vulnerable drivers do before Government acts against people who are terrorising them? Closing taxi ranks at this stage will not solve this crisis, as the people behind this violence know where the drivers live. They will target their homes and family members. It is the responsibility of both provincial and national governments to hunt down these criminals and lock them up. Government must not be allowed to dilly- dally any further when they have a moral responsibility to enforce the law. They must act now because the lives of innocent commuters and bus drivers are at stake.

While supporting this Bill, which seeks to restructure the laws that regulate transport in our country, the ACDP calls on Government to ensure that the safety of commuters is guaranteed. If members of the Defence Force have to be used, then so be it. Everything possible has to be done to stop this senseless violence, and criminals must be taught that crime does not pay. [Applause.]

Miss S RAJBALLY: Mr Chairperson …

Mr M J ELLIS: Break the alliance, Miss Rajbally. Vote against the Bill!

An HON MEMBER: Don’t let the DP swallow you!

Miss S RAJBALLY: No, they can’t!

Mr Chairperson, like any other component in South Africa, the management strategy implementation and economic and service viability of land transport require equal priority.

The National Land Transport Transition Bill prioritises core issues such as transport authorities, operating licences, the minibus taxi industry, funds, regulated competition and law-enforcement to rehabilitate the problematic transport system that we are currently confronted with in South Africa.

The Bill takes into consideration key elements such as the new municipal demarcation, the replacement of road traffic legislation and efficient service delivery to labourers and the public at large. The implementation of the National Land Transport Transition Bill has the potential to create healthy economic competition and the prevention and reduction of conflict between public transport operators.

The Bill is basically indicating that South Africa needs to upgrade the transport network holistically to international standards. The MF supports the National Land Transport Transition Bill. [Applause.]

Mr S SIMMONS: Mr Chairperson, the New NP supports this Bill with reservations, but also believes that the Bill, when accepted and signed into law, can go a long way to rectifying the present chaos that the taxi industry finds itself in.

Having said this, I would now like to focus on the concerns of the New NP.

Die President het tydens die opening van die Parlement klem daarop gelê dat die grondslag nou gelê is, dat dienslewering op alle terreine van die samelewing voortaan die erns van die Regering gaan wees, en as sodanig word daar verwag dat gestalte hieraan gegee sal word.

Te veel wette is in die jongste verlede geproklameer wat meer verwarring veroorsaak en die breë gemeenskap ongelukkig maak. Hoe meer wette geproklameer word, hoe ongelukkiger die gemeenskap.

Die huidige Suid-Afrikaanse vervoerpubliek is vrotgereguleer oor vervoer en dit is duidelik dat wetstoepassing nie behoorlik en deeglik toegepas word nie. Huidig is daar landswyd ‘n tekort aan 8 000 verkeersbeamptes, waarvan 400 poste in die Wes-Kaap is; een van die groot redes waarom wetstoepassing nie behoorlik en deeglik toegepas kan word nie. Geen wonder dat die taxibestuurders geen respek vir wet en orde het nie!

Wette word op nasionale vlak gemaak, maar moet op plaaslike regeringsvlak toegepas word sonder om die versekering te kry dat fondse vanaf nasionale vlak voorsien sal word vir die toepassing daarvan. Die agb Minister is bewus van die haglike toestand waarin die meeste plaaslike en sommige provinsiale regerings hulle bevind. Sommiges is op die punt om in duie te stort, onder meer as gevolg van ‘n tekort aan finansies en uiters swak finansiële bestuur.

Sonder die versekering van genoegsame finansiële steun aan plaaslike regerings sal die toepassing van enige nuwe wette met watter edele en goeie bedoelings ook al wat plaaslike en provinsiale regeringsvlak toegepas moet word, dus liederlik faal. Daar moet weer besin word oor hoe veral plaaslike regerings finansiële sekerheid kan kry. (Translation of Afrikaans paragraphs follows.)

[The President emphasised when he opened Parliament that the foundation had now been laid, that in future the Government would concentrate on the delivery of services in all spheres of society, and as such would concentrate on, and as such it is expected that substance should be given to this promise.

Too many laws have been promulgated in the recent past, which are causing more confusion and are making the community in general unhappy. The more laws that are promulgated, the more dissatisfied the community becomes.

The present South African travelling public have been regulated to death and it is clear that law enforcement does not take place properly and thoroughly. At present there is a country-wide shortage of 8 000 traffic officers, of which 400 posts are in the Western Cape; one of the main reasons why law enforcement cannot take place properly and thoroughly. It is no wonder that the taxi drivers have no respect for law and order!

Laws are made at the national level, but must be enforced at the local government level without the assurance that funds for their enforcement will be made available by the national level. The hon the Minister is aware of the desperate situation in which most local and some provincial governments find themselves. Some are on the point of collapsing, inter alia, as a result of a shortage of funds and extremely poor financial management.

Without the assurance of adequate financial support to local authorities the enforcement of any new laws, no matter how noble and sound their objectives may be, at the local and provincial government levels, will fail utterly. More consideration must be given to how local governments, in particular, can gain financial certainty.]

We must stop unfunded mandates, as they impoverish local communities. The poor in the townships must further finance Government experiments.

Die agb Minister se departement slaag nie daarin om nasionale paaie, waarvoor hy en die departement verantwoordelik is, behoorlik in stand te hou nie. Hoe kan die agb Minister verwag dat plaaslike regerings en veral dorpe wat in twee verdeel word deur hoofpaaie wat deur swaarvoertuie beskadig word, in staat sal wees om paaie in stand te hou? Plaaslike regerings, soos reeds genoem, trek reeds noustrop om finansieel kop bo water te hou. Met hierdie addisionele funksie, sonder die finansiële steun van die sentrale Regering, gaan baie plaaslike regerings definitief bankrot speel. (Translation of Afrikaans paragraph follows.)

[The hon the Minister’s department is not succeeding in properly maintaining national roads, for which he and the department are responsible. How can the hon the Minister expect local authorities, and especially towns that are divided into two parts by national roads which are damaged by heavy-duty vehicles, to be able to maintain roads? Local governments, as has already been mentioned, are already hard-pressed to survive financially. With this additional function, without the financial support of the central Government, many local authorities are definitely going to go bankrupt.]

The road funding situation, in general, is extremely grave, with a mounting backlog of necessary rehabilitation. At the current rate of funding the backlog will increase at an alarming rate, accelerating as the lack of sufficient maintenance compounds the need for rehabilitation.

The infrastructure of roads in South Africa may appear to be in a reasonable state, but overwhelming scientific evidence reveals that many roads in all provinces are approaching the end of their useful life. A point in time will soon be reached when the roads will experience sudden, rapid deterioration, so that it becomes impossible for one to use these roads in maintenance activities. The seriousness of the situation can be fully appreciated when it is realised that over 60% of our road infrastructure is now beyond its designed life. We are, without any doubt, living on borrowed time.

Mrs T P SHILUBANA: Madam Speaker, hon members and comrades, I stand before you in support of the piece of legislation before the House this afternoon. The publication of working documents for the national land transport legislation and a model document on provincial land transport legislation, documented on 20 December 1996, has already been mentioned by the hon the Minister.

A series of stakeholder meetings were held subsequently, and a list of these is available upon request from the Minister. Here is a list for the convenience of those who might not know that we have held a series of consultations, which included many stakeholders. The list is very long. We have consulted with organised labour, the bus industry, the rail industry, Government departments and many others.

Therefore, in terms of process this Bill has come a very long way to where we are today. I will quote dates as we go along, because I want people inside and outside this House to understand that when we in the ANC committed ourselves to upholding the principles of democracy, we knew what we were talking about. We fought to achieve democracy, so that our people can be consulted about matters that affect our lives. Therefore, I want members to bear with me, when I go through the processes followed to bring this Bill to where we are today.

In March 1997, Mincom, after consideration of all views presented to them by the working group, decided that the National Land Transport Transition Bill should contain a clause dedicated to provincial mandates so that we could expedite delivery in order to promote and test the principles of co- operative governance.

The second series of stakeholder meetings was held soon after this and what was then known as the National Land Transport Bill was taken to the Cabinet, which approved it. It was also certified by the state law advisers. It is at this stage that it became apparent that the White Paper on Local Government and subsequent legislation, that is the Local Government: Municipal Demarcation Act and the Local Government Municipal Systems Bill flowing out of this, would have a direct impact on the National Land Transport Bill.

Consultation continued and eventually all stakeholders agreed that there was a need to put in place interim measures so that planning could begin. Hence, the title of the Bill before this House is called the National Land Transport Transition Bill, because it only deals with short- to medium- term, transitional issues like the formalisation of the minibus taxi industry and the reconstruction of municipal and parastatal bus companies which are still regarded as transitional.

Another element which is outstanding, even though it forms part of the national transport, is the rail sector. It is not dealt with in this Bill, because of the current restructuring of the rail industry. It was at this time that Mincom decided to establish a drafting committee which was tasked with a duty to deliberate and reconsider the division of responsibilities between the three spheres of government.

In September 1999, the National Land Transport Transition Bill was published in the Gazette and workshops were held in all the nine provinces with various other stakeholders and interested parties. The summary of this Bill was published in February 2000 and workshops were held with provincial standing committees. In April 2000, it was approved by the NCOP, adopted by the Portfolio Committee on Transport, and was duly referred to this House for final adoption and approval.

This whole process is not the end of this Bill. This Bill is going to normalise a lot of things in matters related to land passenger transport in our country. We will begin to see the integrated planning which, for the first time in this country, will take into consideration things such as planning for intermodalism and linkages between land use and transport planning. This is a first for our country, and I would like to indicate that planning will be demand-driven, which means, basically, that where there is a need for public transport, local transport authorities of a particular area will plan accordingly, so that our people can be able to access essential amenities such as clinics, hospitals, schools, work, employment and so on.

Nkulukumba Mutshami wa Xitulu, Ndzawulo ya Magondzo yi tiyimiserile eka ku aka rixaka. Hi Nawumbisi lowu a swi na ku kanakanisa leswaku mfumo lowu rhangeriweke hi ANC wu navela ku ncica eka swilo hinkwaswo leswi a swi nga khathaleki eka vanhu va Afrika Dzonga, ngopfu ngopfu eka va nhlonge ya vantima.

Nawumbisi lowu wa National Land Transport Transition Bill, wu ta tumbuluxa maendlelo yo fambisiwa ka mathekisi na mabazi hi nawu. Maendlelo lawa ya nga kona sweswi laha mphikizano wa tindlela a wu endliwa etindleleni hi toxe, a swi nga ha vi kona. A ku nga ha vi na ku phariyeta. Leswi hi swona a swi vanga madzolonga na ku dlayana eka vanhu va ka hina va vantima. Mavandla yo kaneta lama nga kona hala, a va si tshama va khandziya kumbe ku tirhisa mathekisi. Hikokwalaho van’wana va ngo vulavula hi milorho. Ku fana na leswi nkulukumba wa NP a nga ku kanakaneni ka ku amukela Nawumbisi lowu. (Translation of Tsonga paragraphs follows.)

[The Department of Transport is prepared for nation-building. With this Bill there is no doubt that this Government which is being lead by the ANC is interested in effecting changes to all things which were neglected and which affect people in South Africa, especially black people.

The National Land Transport Transition Bill will establish proper control over the operation of the taxis and buses. The present operation of taxis where they always compete on the roads will come to an end. Pirating of taxis will no longer exist. That was the cause of conflict and murder among our black people. Members of the opposition parties were never in taxis and they never used taxis, that is why some of them speak as if they are dreaming. Like that NP member who is in doubt about accepting this Bill.]

The principle of competitive tendering is being introduced in the bus industry and this will enable the taxi industry also to participate in this scheme now.

The recapitalisation process will assist in levelling the playing fields. The Bill also allows for assistance to previously disadvantaged operators and the restructuring of municipal and parastatal bus companies. The formalisation and regulation of the taxi industry is provided for in this Bill and the linkage with the recapitalisation process is established through the new vehicle sizes included in this Bill.

Proper model integration cannot be achieved without integrated ticketing, which is another concept included in this Bill. The Minister of Transport will promulgate regulations regarding the norms and standards, to make such a system workable. The best thing about this Bill is that it gave our people an opportunity to participate in creating enabling mechanisms for putting in place proper plans for public transport in our country.

Again, I say this may seem like an insignificant development to some people, but for our people it means a lot. After apartheid this is a milestone for us. There is sufficient buy-in from all affected stakeholders nationwide, and we feel, as a people, that we own our destiny, and this is as it should be, at last.

I would like, in conclusion, to thank our chairperson, Comrade Jeremy Cronin, for the able manner in which he is leading the portfolio committee, and also to compliment Comrade Minister Dullah Omar and his department on the huge effort they have put into this landmark legislation. It is destined to transform land transport in our country for the better. [Time expired.] [Applause.]

Mr M A MANGENA: Madam Speaker, people in countries much richer than ours do not rely on private vehicles for commuting as much as we do in this country. Part of the problem with us is that our public transport system is unco-ordinated, chaotic and often dangerous. So those who can afford to do so, avoid public transport. The rail, bus and taxi modes of land transport are not harmonised, co-ordinated and regulated in such a way that they efficiently and comfortably feed into each other.

Public transport is unsafe, because many buses and taxis are not roadworthy. They often drive recklessly or too fast. They are often plagued by the shooting of both drivers and passengers, and commuters on trains are often terrorised by thugs, to the extent that the National Land Transport Transition Bill seeks to attend to these problems and help to build a better, efficient, safer and affordable public transport system. It is very welcome indeed.

However, there will be many and formidable challenges in the process of building such a desirable public transport system. One of the most important challenges is law enforcement in our country. The violation of the law and regulations by role-players in the transport sector is breathtaking indeed, and it happens most of the time with impunity. One can look at what is happening in Cape Town. People are being murdered, properties destroyed and thousands of people intimidated and inconvenienced daily, but very little is happening to protect life and limb.

Beyond that, many of us have practical knowledge of how taxis in particular are a law unto themselves on the roads. It seems that the solution to every problem and dispute in this sector is resolved by a gun or the threat of a gun. There seems to be a general understanding in our country that if one owns or drives a taxi or a bus, or one owns some kind of business, one is entitled to owning a gun. I wonder if we cannot change this notion. This is in part responsible for the proliferation of weapons that are now such a serious menace to society. Some of these issues should not be placed on the plate of the Ministry of Transport. They belong elsewhere, but they do have a huge impact on the success or otherwise of the Bill being debated here today.

If the provisions of this Bill are generally disregarded or violated by role-players, then the country will not succeed in establishing a good, co- ordinated, safe, efficient and comfortable public transport system, as is envisaged by this Bill. Azapo will support the Bill. [Applause.]

The MINISTER OF TRANSPORT: Madam Speaker, hon members, I would like to thank all members who participated in this debate, and thank them particularly for their support. I also want to thank my officials who have done a tremendous amount of work in bringing this Bill to Parliament. Many members of Parliament had to bear with us while we debated the measure, but I think that hon members will take heart from the fact that the hon Simmons from the New NP said in closing that we were living on borrowed time. He was obviously referring to his party. [Laughter.]

I want to say that, in the couple of minutes available to me, I just want to identify one or two key issues. The first relates to law enforcement in general. Mincom met today, for the whole morning, and one of the big issues on our agenda was law enforcement. We referred to the problems which had arisen in relation to Khayelitsha in particular. Mincom was absolutely unanimous in condemning the violence and intimidation unconditionally and in the strongest terms.

Secondly, we are of the view that no negotiations can take place at gunpoint. Whilst it is true that there are genuine grievances and concerns of taxi operators that need to be addressed, such negotiations cannot take place under the threat of intimidation or violence. So we believe that the law enforcement authorities must act, and act decisively, so as to ensure that law and order and tranquility prevail, and that the right of commuters to choose their mode of transport will be respected.

I also want to express the wish that no buck-passing will take place. There is a responsibility on the part of provincial government. They must carry out that responsibility. There is a responsibility on the part of the national Government and we, for our part, must carry out our responsibility. I want to give the House the assurance that, from our side, we will seek to do this at every turn.

The issue of funding has been raised with regard to this Bill and it is a very important issue. I should say to the House that in previous versions of the Bill we did have a comprehensive section that dealt with levy- raising powers and other forms of taxes for transport authorities. These earlier provisions were in line with international trends and best practice on transport funding. I believe that there should have been such a provision in the Bill. However, in the process of preparing this legislation, we were compelled to delete these provisions after being alerted to the wider and unwanted impact of adding to a multiplicity of taxes in our economy. So we were compelled to remove those provisions.

We have proceeded with the Bill in its present form, because we believe that we must do our best to ensure that we extract every possible efficiency from our existing system, and also because a number of processes are dependent upon the Bill being implemented. At the same time, it is not an unfunded mandate that we are talking about. The planning for transport, constitutionally, is a function of local government. Furthermore, forming transport authorities is not compulsory, but voluntary. So proper planning can take place, and local authorities can satisfy themselves that funding arrangements are adequate before they do so.

My hope is that the funding situation will improve, and that we can once again look at bringing in a mechanism that will ensure that transport authorities - and, in particular, local governments - are able to raise the necessary funds. Our provisions in part 18 of the Bill and the articles from 122 onwards, do strengthen capacity for law enforcement as well. So in that regard, I think we have taken all possible steps to ensure that we have adequate provisions to deal with the many concerns which members have raised. I thank all members for their participation. [Applause.]

Debate concluded.

Bill read a second time.

                          MEAT SAFETY BILL

                       (Second Reading debate)

The DEPUTY MINISTER FOR AGRICULTURE AND LAND AFFAIRS: Madam Speaker, I was just worried about the stomach problem which the hon Niemand has. Perhaps from our side in the Department of Agriculture, we could suggest that he eat less beans and more meat. Since we are dealing with the Meat Safety Bill, perhaps he would care to listen, as a real farmer should. We had a few technical problems getting this Bill together, because of the way Schedules 4 and 5 of the Constitution were formulated. Schedule 4 stipulates that consumer protection is a concurrent functional area, while abattoirs is a functional area of provincial legislative competence.

On the other hand, we have international obligations regarding meat safety

• especially for imports and exports - and in that regard we had to set national standards. This proposed Meat Safety Bill makes provision for measures to promote meat safety and the safety of certain animal products. The measures we have in place are aimed at consumer protection and at determining national standards for abattoirs.

We were very lucky in this Bill to get an intergovernmental system of relations regarding meat safety together so that the administrative system is completely compatible with the Constitution and will probably give the best administrative results that are possible.

We must look at meat safety in a broader context. We are making a paradigm shift in looking at abattoirs and meat safety as such. We all know that, throughout the world, people are becoming more conscious and aware of food quality and safety issues regarding food. People are realising the need to be selective about the foods they eat. It is now quite common practice for consumers to demand that Government take legislative action to ensure that they buy safe food, that it is of an acceptable quality and that the risk of food-borne health hazards is kept at a minimum.

What is actually happening is that food has been put on political agendas all over the world. Now, please, I am not talking about party-political agendas, but political agendas in the sense of the common weal, of the interests of society at large. It is becoming a major matter on political agendas. In fact, governments must be extremely conscious of the political consequences - what can be expected if things go wrong, if governments fail to heed consumers’ concerns regarding the foods they eat.

In this regard what has developed all over the world is nothing less than a universally accepted maxim that people have the right to expect their food to be of a safe quality, of a good quality and suitable for consumption. In actual fact we have a fundamental right in section 27(1)(c) of our Constitution, which states that people have the right to access to food which is safe, and we intend with this Bill to give effect to that.

At the moment the national Department of Agriculture is responsible for the present Act, which is called the Abattoir Hygiene Act of 1992. It is necessary for us to repeal and replace this Abattoir Hygiene Act, and perhaps I should just say why we are doing so. The first reason is that the needs of the total population must be served. We must capture this culture of hygiene and food safety, and the problem is that several loopholes exist in the present Abattoir Hygiene Act. Let me give hon members an example, namely imports of meat. At the moment one can import fresh meat under the Abattoir Hygiene Act. However, I can, quite legally, import unacceptable meat just by sprinkling a bit of pepper on it and putting some garnish on it, and then I am outside the Abattoir Hygiene Act, because it is then processed food or reworked meat. I can, therefore, get around the Abattoir Hygiene Act, and that is the type of thing that we are going to avoid with this new Bill.

The Bill which we have before us promotes the safety of meat and then, very importantly, assigns powers and functions to provinces. In other words, provinces are really going to be the implementers, as was the original intention of our Constitution. Nationally, we put in the frameworks and the standards, while in the provinces they are going to implement this. The essential national standards which are written into the Bill are perhaps the heart of the whole Bill. The Bill provides for regulation in terms of those national standards which we really trust will give the consumer the confidence which he is entitled to in terms of his right to safe food.

Perhaps I should explain it in the following terms. What the present Act does is to look at the structures of abattoirs, the buildings and the processes needed to promote the hygienic slaughter of animals. It actually had a major impact on the affordability of meat and of hygienic services. It made access to affordable hygienic services very difficult if not impossible for the majority of new, upcoming entrepreneurs in South Africa. We are now looking at the safety of the end product leaving the abattoir rather than looking at the architectural structure. The current Act is outdated in quite a few aspects. For example, it is not in line with the international trend to examine and promote good management practices when slaughtering takes place and to examine the application of hazard analysis at critical control points at slaughtering facilities.

The aim of the Bill is to rectify these shortcomings which we have at the moment and to support a holistic approach to meat safety - a kind of farm- to-fork approach which we are sure is going to give better results.

The General will be very glad to note that provision is made in this Bill to accommodate the needs of a diverse society and different cultural needs in respect of meat and the way meat is prepared, by taking on board all the collective commitments which we have in this country with regard to meat.

I wish to address a few other matters. A wider scope of responsibility in trying to establish the meat safety concept rather than just abattoir hygiene, is implied throughout this Bill. This will enable functionaries who are involved with meat safety aspects to bring deboning and meat processing facilities under the same umbrella.

Another important principle in this Bill which we are introducing is that provision is made for the assignment to agencies and nongovernmental organisations of the delivery of meat inspection services. The concept is not well established and is actually restricted in the current Act. However, by using agencies outside the sphere of government, the state will be able to perform functions by harnessing capacity which exists in the private sphere without having to expand the public sector to utilise the scarce resources with regard to the veterinarians and other health professionals whom we have in South Africa.

Let me just say a few words about the advantages of this Bill for previously disadvantaged communities. The practice which we had of concentrating only on costly structures, rather than on the end-results and the hygiene management, led to a disparity between meat safety standards for urban and more affluent areas, and rural and poorer communities where such facilities do not exist. This Bill addresses this fundamental problem in the South African society by shifting the focus to the safety of the end- product rather than the costly structures.

All slaughtering practices where meat is sold to consumers will now be covered by this legislation, and the same standards will be applied to all abattoirs, whether they are big or small. All consumers, whether they are urban or rural, rich or poor, ought to benefit thereby.

The reality of the past is that the health and the wellbeing of poorer communities were often compromised according to their ability to pay for the services. This Bill wants to do away with the considerations of ``Are you able to pay for safe meat?’’ as the determining factor to obtain safe meat. Proper meat handling practices and an awareness of the hygienic aspect of meat among all levels of the community should be the consideration, rather than the consideration of costs.

The result of this is that opportunities are created for new entrepreneurs. New entrepreneurs in the meat industry can now be accommodated - something that did not happen before - because the measure is not the costly structures any more. Rather, the measure is that even if one has a small business such as an abbatoir as a small business, the process will be controlled. The end product of even a small abattoir will be safe if these systems are put into place. In other words, opportunities will come up in rural areas and abattoirs may be set up as small businesses in those areas.

Recently I was in Britain to look at the question of bovine spongiform encephalopathy or mad cow disease. I think by now it is quite well known that we will not lift the ban on the import of British beef to South Africa. However, I was struck by the tremendous dangers of not handling meat correctly and not following the correct slaughtering processes.

We must also consider that if we want to eat meat we must look at what cattle and sheep are eating. The whole problem of BSE or mad cow disease in Britain was caused by scrapie, a sheep disease which was caused by the processing of bone-meal as part of cattle feed.

That is a worldwide practice, to use up everything that is slaughtered, up to the hooves of the cow. In South Africa at the moment we still use mammalian bonemeal, and I think this is something on which we should have a debate.

In Britain the problem arose when bonemeal, that is bone-plus-meat-meal, was made to obtain high-protein feed for cattle and this was fed to the cattle. The problem arose when they changed the industrial processes through which the bonemeal was manufactured. They lowered the level of the heat and they lowered the level of the pressure, and that is one of the theories on how the genetic jump to cattle happened, how mad cow disease jumped to human beings, resulting in Creutzfeldt-Jakob Disease. We must look at what goes into our food, and I think this is a matter which should be investigated further.

Regarding the financial implications of this Bill for the state, I am very glad that I am in a better position than the Minister of Transport when he reported on his Bill today. Although we will have a far broader client base than is provided for under the current Act with this Bill, this Bill does not hold any more financial implications for the state than is the case at the moment. The infrastructure, the budget and the personnel capacity for the implementation of the Bill are already in place, nationally and in the provinces. We are going to work on the basis of this system of assignees to perform certain functions in terms of the Bill.

The DEPUTY SPEAKER: Order! Hon Deputy Minister, you have already cut into your second slot. The DEPUTY MINISTER: Thank you, Madam. [Applause.]

Adv S P HOLOMISA: Somlomo, okwam kukwaleka nje umsundulo kuba usekela- mphathiswa uwaqwelile. [Madam Speaker, mine is merely to reiterate, because the hon Deputy Minister has said it all.]

The Portfolio Committee on Agriculture and Land Affairs has, once again, entrusted me with the task of reporting to this House on its work as a committee. Having considered the concerns of all concerned, we have approved the Meat Safety Bill unanimously.

As has been said by the Deputy Minister, the Bill seeks to repeal and substitute the Abattoir Hygiene Act of 1992. The current Act places more emphasis on expensive structures than on processes required for the promotion of the hygienic slaughter of animals, while the Bill is aimed more at promoting meat safety and the safety of animal products.

The Bill provides for the establishment and maintenance of national standards, the regulation of importation and exportation of meat, and the creation of meat safety schemes. Through this Bill the needs of our diverse society will be accommodated. More and more of our previously disadvantaged entrepreneurs will be allowed entry into the meat industry, and the collective commitment to the creation of a culture of hygiene and meat safety awareness will be stimulated. The Bill sets out mechanisms for the realisation of these objectives. The Minister for Agriculture and Land Affairs will work closely with her counterparts in the provinces for the purpose of implementation of the Act.

Several Government officials, people in the private sector and elsewhere, who have specialist knowledge and skills on meat and animal matters will be appointed to carry out functions which are aimed at the promotion of meat safety. The principal officer to be appointed in this regard will be a national executive officer who will be assisted by provincial executive officers. Some of their powers and functions will be assigned or delegated to other officers or persons.

Of particular significance is the provision to the effect that meat for sale will only be of animals which were slaughtered in an authorised abattoir. Meat for own consumption or for cultural or religious purposes, however, need not be of animals slaughtered in an abattoir.

The Minister is required to set up essential national standards which must be adhered to by all persons involved in the meat trade industry. These will apply to both imported and exported meat. However, where, in the view of the Minister, it becomes necessary to grant exemption in respect of certain areas, in respect of grade of abattoir, in respect of certain owners or persons, in respect of certain categories or groups of owners or persons, or in respect of a certain kind of animal, the Bill provides for such exemptions to be granted provided that the relevant MEC has been consulted.

For purposes of the proper implementation of the Bill when it becomes an Act, it has been found to be necessary that the word ``animal’’ be defined. Schedule 1 to the Bill contains a list of animals to which the provisions of the Bill apply. Members will notice, when they look at the Bill, that, in addition to the other animals which have been conventionally considered suitable for human consumption, the list contains such other animals as the kangaroo, mule, zebra, elephant, crocodile and hippopotamus, because it has been found that several people in fact do consume these animals.

The Minister is empowered to add more names to the schedule should it turn out that there are other animals which are found to be suitable for human consumption. Owing to the fact that agencies outside of Government can be assigned to provide meat inspection services, the state will be able to perform its statutory functions without having to expand the Public Service or incur more costs. We accordingly commend this Bill to the members. [Applause.]

The DEPUTY MINISTER FOR AGRICULTURE AND LAND AFFAIRS: Madam Speaker, I just want to thank everyone and I hope that they are going to support this Bill. Sometimes there are not so many people here, but I think that these are the really important things that we do. I am sure that this very intelligent Bill is going to contribute significantly to the betterment of humankind in South Africa, and it will be recorded as one of the finer achievements that we have done. [Applause.]

Debate concluded.

Bill read a second time. The House adjourned at 17:49. ____

            ANNOUNCEMENTS, TABLINGS AND COMMITTEE REPORTS

                       THURSDAY, 15 JUNE 2000

ANNOUNCEMENTS:

National Assembly and National Council of Provinces:

1. The Speaker and the Chairperson:

 The following papers have been tabled and are now referred to the
 relevant committees as mentioned below:


 (1)    The following papers are referred to the Portfolio Committee on
     Education and to the Select Committee on Education and Recreation:


     (a)     Government Notice No 207 published in Government Gazette
          No 20945 dated 1 March 2000, National Policy for designing
          school calenders for ordinary public schools in South Africa,
          made in terms of the National Education Policy Act, 1996 (Act
          No 27 of 1996).

     (b)     Government Notice No 208 published in Government Gazette
          No 20945 dated 1 March 2000, School calender for public
          schools for the 2001, made in terms of the National Education
          Policy Act, 1996 (Act No 27 of 1996).

     (c)     Government Notice No 252 published in Government Gazette
          No 20994 dated 24 March 2000, Appointment of a replacement to
          serve as a member of the South African Qualifications
          Authority, made in terms of the South African Qualifications
          Authority Act, 1995 (Act No 58 of 1995).

     (d)     Government Notice No 400 published in Government Gazette
          No 21093 dated 20 April 2000, Revision of the policy document:
          Norms and standards for instructional programmes and
          examination and certification thereof in technical colleges,
          Report 190 (92/04), made in terms of the National Education
          Policy Act, 1996 (Act No 27 of 1996).

     (e)     Governmenmt Notice No 401 published in Government Gazette
          No 21093 dated 20 April 2000, Provisos for the Senior
          Certificate programme, made in terms of the National Education
          Policy Act, 1996 (Act No 27 of 1996).

     (f)     Government Notice No 402 published in Government Gazette
          No 21093 dated 20 April 2000, The deletion of the category
          providing for foreign candidates as contained in the policy
          document, a Résumé of instructional programmes in public
          schools, Report 550 (97/06), made in terms of the National
          Education Policy Act, 1996 (Act No 27 of 1996).

     (g)     Government Notice No 449 published in Government Gazette
          No 21143 dated 4 May 2000, Appointment of persons to serve as
          members of the Review Committee to review the National
          Outcomes-based Curriculum and Progress with its
          implementation, made in terms of the National Education Policy
          Act, 1996 (Act No 27 of 1996).
     (h)     Government Notice No 404 published in Government Gazette
          No 21093 dated 20 April 2000, The inclusion of a continuous
          assessment component in the final Senior Certificate
          examination at Grade 12, made in terms of the National
          Education Policy Act, 1996 (Act No 27 of 1996).


 (2)    The following paper is referred to the Portfolio Committee on
     Education and to the Select Committee on Education and Recreation.
     It is also referred to the Joint Monitoring Committee on
     Improvement of Quality of Life and Status of Women for comment:
     Government Notice No 448 published in Government Gazette No 21143
     dated 4 May 2000, Call for comments on the draft document -
     National Curriculum Framework for further Education and Training,
     made in terms of the National Education Policy Act, 1996 (Act No
     27 of 1996).


 (3)    The following paper is referred to the Portfolio Committee on
     Education and to the Select Committee on Education and Recreation.
     It is also referred to the Joint Monitoring Committee on
     Improvement of Quality of Life and Status of Children, Youth and
     Disbaled Persons:


     Government Notice No 403 published in Government Gazette No 21093
     dated 20 April 2000, Approval of an extension of the Gauteng Youth
     College Programme, made in terms of the National Education Policy
     Act, 1996 (Act No 27 of 1996).


 (4)    The following paper is referred to the Portfolio Committee on
     Communications and to the Select Committee on Labour and Public
     Enterprises:


     Report of the Government Communication and Information System for
     1999 [RP 58-2000].


 (5)    The following papers are referred to the Portfolio Committee on
     Justice and Constitutional Development and to Security and
     Constitutional Affairs:


     (a)     Regulation No R.14 published in Government Gazette No
          20997 dated 24 March 2000, Establishment of Investigating
          Directorate: Corruption, made in terms of the National
          Prosecuting Authority Act, 1998 (Act No 32 of 1998).

     (b)     Regulation No R.16 published in Government Gazette No
          21039 dated 31 March 2000, Commencement of certain sections of
          the Witness Protection Act, 1998 (Act No 112 of 1998).

COMMITTEE REPORTS:

National Assembly:

1. Report of the Portfolio Committee on Provincial and Local Government on the Local Government: Cross-boundary Municipalities Bill [B 37 - 2000] (National Assembly - sec 75), dated 14 June 2000:

   The Portfolio Committee on Provincial and Local Government, having considered the subject of the Local Government: Cross-boundary Municipalities Bill [B 37 - 2000] (National Assembly - sec 75), referred to it and classified by the Joint Tagging Mechanism as a section 75 Bill, reports the Bill with amendments [B 37A - 2000].

2. Report of the Portfolio Committee on Finance on the Taxation Laws Amendment Bill [B 38 - 2000] (National Assembly - sec 77), dated 15 June 2000:

   The Portfolio Committee on Finance, having considered and examined the Taxation Laws Amendment Bill [B 38 - 2000] (National Assembly

   • sec 77), referred to it, reports that it has concluded its deliberations thereon.

                  MONDAY, 19 JUNE 2000
     

ANNOUNCEMENTS:

National Assembly and National Council of Provinces:

1. The Speaker and the Chairperson:

 Assent by the President of the Republic in respect of the following
 Bill:



     (1)     National Youth Commission Amendment Bill [B 25 - 2000] -
          Act No 19 of 2000 (assented to and signed by President on 15
          June 2000).

National Assembly:

1. The Speaker:

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


     Private Members' Legislative Proposals and Special Petitions:


     Appointed: Abrahams, T.
     Discharged: Ramodike, M N.

     Trade and Industry:

     Appointed: Frolick, C T; De Beer, S J (Alt).


 (2)    A vacancy has occurred in the National Assembly owing to the
     death of Mr T S Khosa on 28 May 2000.


 (3)    The vacancy which occurred owing to the resignation of Mr P J De
     Vos, has been filled with effect from 13 June 2000 by the
     nomination of the following member:


     Jankielsohn, R.

COMMITTEE REPORTS:

National Assembly:

1. Report of the Portfolio Committee on Transport on the Administrative Adjudication of Road Traffic Offences Amendment Bill [B 31B - 2000] (National Council of Provinces - sec 76), dated 19 June 2000:

   The Portfolio Committee on Transport, having considered the subject of the Administrative Adjudication of Road Traffic Offences Amendment Bill [B 31B - 2000] (National Council of Provinces - sec 76), referred to it and classified by the Joint Tagging Mechanism as a section 76 Bill, reports the Bill without amendment.

2. Report of the Portfolio Committee on Transport on the Road Traffic Management Corporation Amendment Bill [B 32B - 2000] (National Council of Provinces - sec 76), dated 19 June 2000:

   The Portfolio Committee on Transport, having considered the subject of the Road Traffic Management Corporation Amendment Bill [B 32B - 2000] (National Council of Provinces - sec 76), referred to it and classified by the Joint Tagging Mechanism as a section 76 Bill, reports the Bill without amendment.

3. Fifth Report of the Standing Committee on Public Accounts, dated 22 May 2000:

 The Standing Committee on Public Accounts, having considered and
 examined the Report of the Auditor-General on the Financial Statements
 of Vote 32: Sport and Recreation for the year ended 31 March 1999 [RP
 155-99], as well as certain papers referred to it, and having heard
 evidence, reports as follows:


 1.     Unauthorised expenditure
     [Page 2, paragraph 2.2.1]

     The Committee notes the unauthorised expenditure of R36 602,80
     which arose as a result of the verbal appointment of the members
     of the Boxing Transformation Task Team. The Committee is deeply
     concerned about the fact that departmental officials approved the
     expenditure relating to the activities of the task team without
     that task team having been appointed as required. In addition, the
     Committee is also deeply concerned at the fact that, once the
     expenditure was identified as unauthorised, the Accounting Officer
     has as yet not applied for ex post facto approval. The Committee
     notes the Accounting Officer's assertion that the report produced
     by the task team serves as a basis that the State had received
     value for the money spent.


     The Committee recommends that the Accounting Officer ensure that -


     (1)     regulations relating to expenditure control and proper
          financial management are adhered to at all times and that, if
          uncertainty exists, advice be sought from the Department of
          State Expenditure;

     (2)     all senior management, as well as himself, urgently
          receive the necessary training so as to ensure proper
          financial management in future, especially in view of the more
          demanding requirements of the Public Finance Management Act;

     (3)     the maintenance of proper financial control systems become
          one of the key performance areas of all senior management
          within the Department, as was directed by the Department of
          Public Service and Administration in July 1999;

     (4)     all financial management positions in the Department
          (including the internal audit component) are filled as a
          matter of the greatest urgency, that the staff in question
          receive the necessary training to administer their respective
          responsibilities effectively, and that, within a month of the
          adoption of this Report by the House, the dates on which the
          respective positions will be filled be submitted to the
          Committee;

     (5)     the chairpersonship of the Audit Committee and other
          requirements be finalised forthwith in terms of section 77 of
          the Public Finance Management Act, and that advice in this
          regard be obtained from the Department of State Expenditure;
          and

     (6)     rules and regulations are adhered to in awarding
          contracts.


     The Committee recommends the authorisation of the R36 602,80, and
     strongly urges the Accounting Officer to acquaint himself and the
     relevant staff with the detail of section 64 of the Public Finance
     Management Act.


 2.     Transfer payments
     [Page 2, paragraph 2.2.2]


     The Committee notes that more than 70% of the Department's total
     budget is transferred to bodies outside the Department. The
     Committee wishes to stress that strict adherence to Treasury
     Instruction K5 is required, as it is meant to provide assurance to
     the taxpayer that departments exercise some element of control
     over money transferred to outside bodies. However, the Committee
     doubts the seriousness with which the Accounting Officer regarded
     his role as steward of public funds, given his admittance that
     other factors such as "negative publicity" influenced him to
     approve the transfer of funds to a number of bodies, in spite of
     advice to the contrary from his Finance Section. While the
     Committee recognises the significance of sports activities in the
     life of our community, it cannot accept that basic financial
     controls be flouted.

     The Committee recommends that the Accounting Officer ensure that
     financial regulations of whatever kind are adhered to at all times
     in future, and that he report to the Committee any similar
     incidents (that may have occurred since the 1998-99 financial
     year) in time for the Committee to consider them timeously, not
     only once the Auditor-General is obliged to report thereon.
 3.     Unspent funds
     [Page 4, paragraph 3.3.2]

     The Committee notes that 13,3% of the Department's funds remained
     unspent during the year in question. As this is normally
     indicative of inaccurate financial planning, the Committee
     recommends that the Accounting Officer ensure that proper
     budgeting procedures are followed so as to ensure that the
     percentage of unspent funds are limited to the minimum, or at
     least to 5% or less of the total approved budget.


 The Committee recommends accordingly.

 Report to be considered.

1. Sixth Report of the Standing Committee on Public Accounts, dated 22 May 2000:

 The Standing Committee on Public Accounts, having considered and
 examined the Report of the Auditor-General on the Financial Statements
 of Vote 12: Education for the year ended 31 March 1999 [RP 135-99], as
 well as certain papers referred to it, and having heard evidence,
 reports as follows:


 1.     Unauthorised expenditure
     [Page 2, paragraph 2.2.1]

     Unauthorised expenditure amounting to R850 000 occurred as a
     result of the non-renewal of a number of licence agreements for
     the use of film and video material. Although the Department of
     Education acted on the advice of the State Attorney to pay the
     amount of R850 000, ex post facto approval for the payment was
     declined by the State Tender Board owing to the fact that arrears
     of licence fees originated as a result of negligence and improper
     administration of the licence agreements.

     The Committee noted the evidence provided by the Director-General
     regarding the circumstances which resulted in deficient control
     over administration of the above agreements. However, the
     Committee is concerned that the Accounting Officer has not taken
     adequate steps to ensure effective transfer of responsibility to
     the Gauteng Provincial Education Department. In evidence it was
     indicated that, owing to the rationalisation process, there were
     currently still a number of cases where allocation of
     responsibility at national level was not defined clearly.

     Notwithstanding the above, and in view of the special
     circumstances, the Committee noted that, in addition to a
     considerable saving to the State, value for money has been
     received and that the State did not suffer any loss. The Committee
     therefore recommends that -


     (1)     the Accounting Officer ensure that adequate measures exist
          to prevent a recurrence; and

     (2)     the payment of R850 000 be authorised by Parliament.


 2.     Internal audit
     [Page 3, paragraph 3.1]

     The Committee noted the steps being taken to finalise the
     establishment of an internal audit function, and that an
     independent chairperson has been appointed to the Audit Committee.
     It also noted that the Accounting Officer expressed uncertainty
     about the level of quality assurance expected from an internal
     audit function, with a view to reliance being placed on that
     internal audit work.

     The Committee recommends as follows:


     (1)     That the new chairperson of the Audit Committee, by the
          end of June 2000, provide a brief report to the Committee on -


          (a) the results of the Audit Committee meeting of 29 February
              2000;

          (b) whether the Audit Committee further fully complies with
              the requirements of section 77 of the Public Finance
              Management Act;

          (c) the effectiveness and efficiency of the internal audit
              function in the Department (including the quality of
              staff and the appropriateness of staffing levels, if
              necessary having consulted with the Monitoring Unit:
              Internal Audit and Audit Committees established in the
              Office of the Accountant-General); and

          (d) the effectiveness of the internal control systems in the
              Department.


     (2)     That the Auditor-General indicate to what standards
          internal audit work must comply in order for it to be reliable
          for external audit purposes.


 3.     Financial guarantees
     [Page 3, paragraph 3.2]

     Evidence was heard regarding outstanding balances of loans
     guaranteed by the State, and it appears that there is uncertainty
     regarding the possible liability which these loans to higher
     educational institutions may hold for the State as far as the
     interest payments are concerned.

     In view of the impact which these loans may have on the State, the
     Committee recommends that a thorough investigation be conducted in
     this regard and that a detailed report be submitted to it, upon
     completion of such investigation, by the end of June 2000.


 4.     Special audit investigation at six universities
     [Page 3, paragraph 3.3]

     The Committee is seriously concerned about the fact that
     approximately 94% (R6 048 898 000 during 1998-99) of the
     Department's budget was paid over to higher education
     institutions, a number of which were unable to administer the
     funds properly. The Committee is especially concerned about the
     fact that, at some of the universities which formed part of the
     special audit investigation, there does not seem to be the
     capacity to carry out the corrective steps set out in the business
     plans developed as a result of the special audit. The Committee
     notes that section 41A of the Higher Education Act, 1997, empowers
     the Minister of Education to intervene in cases of "financial or
     other maladministration of a serious nature".

     The Committee therefore recommends that -


          (1) the Department continue its endeavour to establish a
              process of greater control over funds transferred to
              higher educational institutions, thereby ensuring greater
              accountability, and that the Committee be kept abreast of
              developments in this regard; and


          (2) where there are clear signs of maladministration at higher
              educational institutions, the Minister of Education be
              kept informed timeously, and at all times, by the
              Director-General and the Chief Executive Officers of the
              universities in order for the Minister to consider when
              it would be appropriate to invoke section 41A of the
              Higher Education Act.


 The Committee recommends accordingly.

 Report to be considered.