I move—

With the customary co-operation of the Opposition I think it will be possible to end the Session by Wednesday night or not later than Thursday. This makes it essential for us to sit a few additional hours. There. will be a few morning sittings and a few evening sittings. J just want to inform hon. members that all the Bills which appear on to-day’s Order Paper, except numbers 20 and 21, must still be dealt with by the House. As we worked out the programme, it seems to me as though we could fairly easily dispose of the remaining legislation, and I am quite convinced that hon. members are very anxious to get away from the unpleasant Cape weather. There is a very strong possibility that we may perhaps be able to rise even before Wednesday, but that depends on how many hon. members are going to speak.

I rise to confirm what the hon. the Leader of the House has said, namely that this motion is being put forward by agreement. It is supported by us on this occasion particularly because it achieves what we believe should be the normal and regular position as far as sessions are concerned, and that is that there should not be an excessive number of days on which the House sits in the mornings and in the evenings at the end of the Session. I think on this occasion we have achieved almost a record in that fewer extra sittings have been imposed on the House than in any previous session. I would also like to say that the co-operation under the Leader of the House at the Whips’ meetings from week to week has been excellent right throughout the Session. There are obviously times when we do not quite see eye to eye but in the nature of this institution that is to be understood. We have the right to differ on occasions, but I think the work in regard to the mechanics of the House has gone smoothly and well during this past Session.

Sir, this motion does give me the opportunity to raise other matters relative to the sitting of this Parliament and I would like to refer to them just briefly. I think there is still room for improvement. Several members of the Opposition during the Session have received representations on Bills before the House after the Bills have actually been passed by the House. In other words, representations have been received after the various stages of the Bills have been dealt with. It seems to me therefore—and I would ask the hon. the Leader of the House to give careful thought to this proposition—that Bills should be published in a preliminary or draft form during the recess. The Cabinet have the opportunity, after we rise, of considering their legislative programme for the next session of Parliament. I believe that this is done and that the decisions in principle are taken by the end of October in each year, in an attempt to let the country know what the legislative programme in the coming session is going to be and in order to enable people to prepare for it. If that is so, then the Government should be in a position to publish many of the Bills in the Gazette in a preliminary or draft form so that interested people may know what is coming and may be able to express their opinions and make representations to the appropriate authorities and to Members of Parliament. I believe that the legislation that we pass here would be ever so much better if that could be arranged and I see no reason why an attempt should not be made to do it. It has been done to a certain extent in the past but I believe that it is not being done sufficiently.

Then, Mr. Speaker, as far as the introduction of legislation is concerned, the allegation is often made that the bottleneck is the law advisers. I do not know whether that is so or not. I do not have the necessary information to be able to say positively that it is so but it is said to be the position. The fault may lie with the law advisers, or the reason may be there are delays within the Department concerned. but it does appear to us that frequently after legislation is announced at the opening of Parliament in the State President’s speech, sometimes after a commission has brought forward a finding on a particular matter, it takes a long time for the legislation to come to this House. It sometimes happens that a Bill is only introduced towards the end of a session although it was announced at the commencement of the session. I think the hon. the Leader of the House should have a careful look at the position to see whether it can be improved. If more law advisers are required, let us have more law advisers, but whatever the cause of the bottleneck is I think an attempt should be made to break through in the interests of Parliament.

Then, lastly, it is obvious that difficulties arise at the commencement of the session as far as the business of the House is concerned. Unless at the end of a session there are a number of Bills which we in Parliament call the “slaughtered innocents”, there is very little legislation to go on with in the subsequent session. For instance, in this particular session. it would appear, from what the hon. the Leader of the House has said, that we will wipe the slate pretty well clean and there will be nothing left over in the way of “slaughtered innocents” to deal with next session. In the nature of the parliamentary machine, the start is always slow, and it seems to me that we probably come together too early in the new year for the session, and I want to ask the hon. the Minister to consider whether it would not be to the advantage of all to delay the opening of Parliament for a week or a fortnight and to come back later when the work is ready. We can then get on with the work of Parliament instead of marking time or wasting time at the beginning of the session. I think when hon. members come to Cape Town, they come here to do a job of work, and they want to do that work. I put forward these suggestions in a constructive manner, hoping that the hon. the Leader of the House may look at them and that we may find some improvement in the working of the House.

I want to confirm what the hon. member for Von Brandis has said, namely that the co-operation between the two sides of the House has been excellent during this Session. I received every assistance and co-operation from the Whips of the Opposition, and from my side I have endeavoured to meet them wherever possible. I am quite sure that co-operation will continue in future.

Have your Whips helped you?

Oh yes, they are always helping me, and by helping me they help the Opposition.

I think this is also a record in that this is probably the first occasion when the Opposition has not lodged a protest against the additional sitting hours.

That is because of the new rules.

No, apart from the new rules. The new rules have been applied since 1964, but the additional sitting hours have nothing to do with the rules of the House. It might interest hon. members to know what the position has been during the past six years. I want to say that we are also establishing a new record in regard to the number of additional sitting hours this Session. In 1960 there were eight morning sittings and seven evening sittings. In 1961 there were ten morning sittings and ten evening sittings. These are additional to the usual sitting hours, and there was also one Saturday sitting. In 1962 there were 12 morning sittings, seven evening sittings and the House sat on two Saturdays. In 1963 there were eight morning sittings and ten evening sittings. When the new rules came into operation in 1964, during that session, in spite of the new rules, there were 11 morning sittings, three evening sittings, and one Saturday sitting. In 1965 there were ten morning sittings, six evening sittings and one Saturday sitting. Last year there were eight morning sittings and six evening sittings in the First Session, and in the Second Session there were three morning sittings, 13 evening sittings and one Saturday sitting. This Session there will probably be three morning sittings and three evening sittings. Therefore I say that we have really established a record, and in spite of that the House will have passed at the end of this Session 111 Bills. So I think that the House, on the whole, has done a very good job of work and I want to pay tribute to hon. members, and especially to hon. members on this side of the House where we have such a very large number of members who are all anxious to speak, for the fact that we still managed to pass 111 Bills within a Session such as this.

The hon. member for Von Brandis said that there was room for improvement and I fully agree with him. I think that if possible Bills should be published during the recess, and I shall certainly take this matter up with my colleagues. If at all possible, they can be published so that hon. members of the Opposition and on our side of the House can study those Bills and be ready for them when they come before the House. The hon. member also complained about Bills coming forward late in the Session, but that is a congenital disease of Parliament, as the hon. member knows. I have been here 24 years and I think the hon. member has been here for over 30 years, and I do not think that in all those years we have had a session where Bills have not come before the House late in the session. There are various reasons for that. It is not only that there is a bottle-neck with the law advisers or with the Parliamentary Counsel. Very often a Bill is drafted and numerous consultations have to take place with outside interests before the Bill can be finally drafted and submitted to the House. Hon. members also realize that urgent matters arise late in the session very frequently and Bills then have to be drafted and submitted to the House. On the whole, during this Session very few contentious Bills were introduced late in the Session. Fairly early in the Session I also gave the Opposition an indication of the Bills which would still be introduced.

The last matter the hon. member raised was whether it would not be advisable to start future sessions a bit later. Great minds probably think alike, because I might tell the hon. member that the Government decided this morning that next year the opening of Parliament will take place on 2nd February. This will be in the nature of an experiment. But commencing the session two weeks later does not mean that we are going to remain here two weeks longer in June. We will still have to finish by about the middle of June. But I agree with the hon. member that it is very often difficult to keep the House occupied during the first few weeks of the session. If we find that it works well next session, starting later will be the usual practice in future. Instead of starting in January we might start in February. But it has been definitely decided that next year Parliament will open on 2nd February.

Motion put and agreed to.

I move—

The House has spent a good deal of time on this Bill, and on behalf of this side of the House I want to say that in the first place we wish the commission to be appointed by the hon. the Minister every success in this new undertaking which is to be initiated by them, for the simple reason that this is something which has never before been tackled in South Africa, and secondly, because it was the subject of an extensive inquiry by a commission which submitted its report in 1964. Because we appreciate the value of the abattoir industry as such, particularly to the stock-farmer, we want to wish these people the best for the future. But over and above the fact that this commission will have an important task to fullfil in future, that they will have to improve the facilities for slaughtering stock, that they will have to apply rationalization, and that we want standardization, I want to tell the hon. the Minister that we think that clause 33, in spite of the amendment made at the Committee Stage, will nevertheless not enjoy the good reception among the stock-farmers of South Africa expected by the Minister and perhaps also by the commission. The reason why that particular clause will not enjoy such a good reception, is obvious. It is because most of the farmers who study this legislation will realize that this Bill which has been passed by Parliament was passed not only in their interests but also in the interests of others, while it is mainly the farmer of South Africa who is asked to pay for the upkeep and the costs of this commission. I want to say that the stock-farmers are pre-eminently the people who have been experiencing difficult times in the past few years and who suffered particularly as a result of the fact that production costs rose. They incurred expenses which were completely beyond their control—most of the cattle-farmers and sheep-farmers have incurred fantastic expenses during the past few years, and they should now actually be coming to a point where they will be in a position to consolidate themselves and to repay their debts. They should be in the position of being able to repay the debts incurred by them in the past number of years. But this clause imposes additional costs on those people. If the hon. the Deputy Minister took a look at the slaughter accounts of most farmers in respect of what they receive for stock sent to control areas, he would see some interesting particulars. He would find that they surrender a considerable percentage of what they receive for the stock sold by them to various concerns. They pay municipal levies, slaughter fees, and in addition a considerable percentage in the form of levies to the Meat Board. I am not taking into account railage. This measure is going to impose an additional burden on those people.

It is true that the farmer has to make a contribution when a service is provided exclusively to him. It is proper that a levy should be imposed on the farmer in respect of the marketing of his stock and the stabilization of the price of his product, because surely he is the man who derives the benefit from that. But here a step is being taken which is also to the advantage of the general taxpayer in South Africa. Clause 33 will have the effect that the farmer of this country will pay for a facility which any other person in the country can enjoy without paying for it. I think the hon. the Minister and his Department are indeed doing the farmer a disservice by placing the burden of this principle, as regards promoting our abattoir industry, on the shoulders of the farmer alone. I should therefore like to make the following appeal to the hon. the Minister and in particular to the new commission. I want to ask them to keep costs as low as possible. If they do so, the effects of this legislation will not be quite so stringent. But unless they do so, they must expect strong criticism from the stock-farmers in the country. The hon. the Minister should realize that he is responsible for keeping an eye on the execution of these important functions by the Abattoir Commission. He bears the responsibility of seeing to it that they carry out their work within a framework which will keep the costs as low as possible for the country and for the stock-farmers. I hope the Minister will give us that assurance to-day.

Mr. Speaker, I want to support the hon. member for Newton Park in his comments about the levy that farmers will have to pay for this Abattoir Commission. I feel it is a pity that such a splendid piece of legislation should be spoiled by this levy having to be paid entirely by the farming community. The farming community is going through a tremendously difficult time and I do not believe they are in a position to shoulder any more taxation of any kind. In fact, I believe that if the Government gave the right lead they would do all in their power to curtail the cost of production which the farming community is called upon to face up to to-day. I can only reiterate what the hon. member for Newton Park has said when he points out very clearly that the benefits that accrue from the activities of this Commission will be shared by the whole community of South Africa, the whole consuming community, because they will be getting a better processed product, a product that has been dealt with in a more hygienic manner. This is not a matter of promoting sales or increasing distribution—this is merely a case of providing a better product for all the consumers throughout the country. I therefore think that he is on sound ground when he says that this extra cost should be shared by the whole community. I do not feel that the Government is giving the right lead here at a time when the farming community is suffering from difficult financial circumstances when the Government now imposes extra levies on their frugal income. I think that we on this side of the House are being completely realistic when we point these matters out. I want to support the hon. member for Newton Park when he says that this commission in its activities should keep its costs as low as it possibly can so that the farmer is not called upon to shoulder any additional unnecessary burdens. I do hope that when the Government contemplates legislation in the future which affects the farming community, it will be very careful indeed that it does not introduce measures that push costs up for the farming community. They should rather concentrate on legislation that tends to keep farming costs down. I have only to point out the fact that many hon. members on the other side of the House have raised this serious point, namely the depopulation of the platteland.

Order! The hon. member is wandering far from the Bill now.

Mr. Speaker, I am trying to raise the point that hon. members on the other side of the House …

Order! But the hon. member is not successful in his efforts.

Mr. Speaker, if I am not allowed to raise that particular point, I wish to terminate my few remarks by saying again how seriously we view the fact that this levy which is now being imposed to finance the commission is not being shared by all the consumers in the country.

Mr. Speaker, I wonder when the United Party is going to learn? Yesterday this Party moved an amendment with regard to this clause in which it was laid down what the amount of this levy would be. When we put it to the vote, they voted against the amended clause accepted by the Minister. Now, at this Third Reading, those hon. members are trying to misrepresent the economy. Mr. Speaker, I want to ask you what manufacturer in South Africa or anywhere in the world asks the consumer to help to pay his manufacturing costs by way of a levy. The producer is provided with an opportunity to offer his product to the consumer by way of proper abattoirs. During the Second Reading debate the hon. the Minister pointed out quite clearly that as a result of this commission and the rationalization of the industry which is to be undertaken by this commission, the following benefits will accrue to the producer: He will have the advantage of better abattoir facilities which will be able to charge lower slaughter fees because there has been rationalization. He will enjoy the further benefit that it will be possible to offer the consumer a guaranteed hygienically sound product, and the consumer’s desire to buy will consequently be stronger. Just as there is a levy in respect of the wool industry which is paid by the wool farmer with a view to being able to advertise his product on the world market, the producer is here asked to pay the levy because he will be placed in the position of having a better guaranteed market as a result of improved conditions. But this hon. member contradicts himself. In his own speech the hon. member said clearly that the stock farmers appreciated the value of this abattoir commission because they know that it will provide them with improved facilities, which will consequently ensure them of a better market. The next moment he raised the objection that the farmer, who enjoys these improved facilities, now has to pay for them. Sir, I shall tell you what the position is. Hon. members, like the hon. member for Newton Park and the hon. member for Walmer, who are merely here in an acting capacity, have already been thrown out of the platteland. It is cheap political hawking. [Interjections.] Let me make it very clear. It is cheap propaganda and hawking to get some support from the farmers.

Order! The hon. the Deputy Minister must come back to the Bill.

Mr. Speaker, I am with the Bill. I should just like to say that these hon. members object and say that the farmers and the producer will not accept this clause. I want to make it quite clear: They do so with the primary object of making propaganda.

Motion put and agreed to.

Bill read a Third Time.

I move—

Mr. Speaker. I do not intend keening the House long on this Bill, but I think it is essential to raise one or two points which will flow from the effects of this Bill. I want to make a request to the hon. the Minister once again. In the definition of “animal” we notice that only certain forms of animal life are mentioned. In terms of clause 42 he may exclude a large number of people and animals from the provisions of this Bill. Game, for example, is not mentioned. I want to point out to the hon. the Minister that venison is an important product at certain times of the year. There is also another product of venison. I think all South Africans are familiar with it. This is biltong. If this legislation is passed, it will have the effect that a kind of damper will be placed on the manufacture of biltong, particularly of game biltong. I think the hon. the Minister should tell us quite clearly that clauses 1 and 42 will not be of application to that section of our slaughter-stock industry. The hon. the Minister has the right to exclude them. Because they are not mentioned, we should have clarity as regards people who go in for the venison industry. There are many farmers who do so. For example, there are many farmers who keep wild buck like eland and springbuck. They shoot hundreds every year. They place that venison on our open markets. Even the man who does not do so from a business point of view, but merely for his friends, is involved. If this legislation is passed, to what extent will it apply to those people? The moment this legislation is passed I as a farmer must be certain that if I shoot one or two springbuck and deliver them to my friends for biltong making, and perhaps also give the Chief Whip of the Nationalist Party a piece, I shall not be contravening the Act. I am sorry that it was not mentioned during the Second Reading. It is something which came to our notice afterwards. The hon. the Minister should tell us whether he will really exclude these people in order that they may not be subject to the restrictions which may be imposed on them in terms of the provisions of this Bill.

I want to explain the purpose of this Bill very briefly to the hon. member for Newton Park. It relates to the hygiene of meat which is provided to the consumer public. If the hon. member is the hunter he pretends to be, I want to tell him that I have come across measly eland. Clause 1 provides explicitly that the State President may include any kind of animal by proclamation in the Gazette. If we want to market venison—the Parks Board, for example, is contemplating thinning out the game in the parks area—then surely it is the duty of veterinary services to supervise and inspect with a view to combating foot-and-mouth disease and many other things? As soon as one markets game as venison and handles it commercially, it is therefore going to be essential that it should be possible to exercise the necessary supervision and carry out inspections. But, Mr. Speaker, if the hon. member wants to send you a springbuck, I am not going to hold it against him. He may do so with pleasure.

Motion put and agreed to

Bill read a Third Time.

I move—

The reason is that if we make an exception in this case and accept the recommendation, we shall create a precedent which will result in two things. Similar petitions, which did not succeed in the past, will then have to succeed in future. There are hundreds of cases of this nature. In the second place it will serve as an inducement to others to resign from the Railways Service if they want to be transferred to another Government Department. By accepting it we shall be opening the door wide to them. That, briefly, is the reason why I move that this recommendation be referred to the Government for consideration.

Motion put and agreed to.

Resolutions reported and adopted.

Mr. Speaker, I move—

This Act has given participation bonds a new standing. The result is that 65 of these schemes are registered at present. In order to give you an indication of their growth I may mention that whereas the amount invested in these schemes was R173 million as at 30th June, 1965 (the Act came into operation on 1st May, 1965), that figure had already reached the R289 million mark as at 31st December, 1966. Therefore the increase over a period of 18 months was R116 million or 67 per cent.

The popularity of this form of investment is attributable to the fact that it has given the investor a return of between 8 and 9 per cent, i.e. considerably more than he would have been able to obtain at a bank or building society in respect of a fixed deposit or in respect of building society shares. The reason for that is that the full interest earnings of the bond accrues to the participants after a modest deduction has been made to compensate the manager of the scheme for his services.

A second and very real reason for the large increase in the total investment in this form is the fact that, as the Act stands at present, a participant can easily realize his investment by means of transfer. If it is borne in mind that banks and building societies are prohibited—with certain exceptions—to redeem fixed deposits prior to the due date, and that the holder of an indefinite period share issued by a building society can get his money back after a period of 18 months at the earliest, then it is obvious that investors sooner try to obtain participations in bonds. What this amounts to is that money which is available for reasonably short periods is attracted to participation bonds. This is an undesirable state of affairs which must be rectified. Bonds, and consequently participation bonds too, must, from the nature of the case be financed by long-term funds.

A second matter which has to be rectified is the minimum amount for which participation bonds may be passed. It has been found in practice that even very small bonds are divided in this way—hence the large number of registered schemes—whereas the intention at the passing of the principal Act was that they were to be utilized for large bonds which could not easily be financed by a single mortgagor.

Clause 1:

Paragraph (b) of the proposed definition of “participation bond” now fixes the minimum amount of a participation bond at R25,000. Hon. members will notice that pari passu bonds are being exempted from this limit where the existing bond is a participation bond. This seeks, for example, to enable a farmer on whose property there is a participation bond and who wants to effect further capital expansion, to obtain additional finance.

Clause 2:

The proposed paragraph (b) (i) in section 6 (6) will give effect to the idea, as I have just explained, that participations in bonds must be on a fixed basis for a period of four years.

The proposed paragraph (b) (ii) will enable the Registrar to approve, by way of exception, the transfer of participations before the fixed period has elapsed, for example, where a participation is an asset in a deceased estate.

Clause 3:

The insertion of the proposed words will facilitate the alteration of the rules of a scheme where such an alteration is necessitated by an amendment of the Act. The normal provision is that alterations require the consent of all the participants and the manager.

Since the publication of this Bill various of these schemes have objected to a certain extent. It is being alleged that this period of four years which the Bill now lays down as the period of participation is too long a period, and that we will thereby be restricting the schemes to a larger extent than actually contemplated. The representations were to the effect that that period had to be shortened, and I have agreed that this period may be shortened to three years instead of the four years for which the Bill provides at present. The necessary amendment will be effected during the Committee Stage. As regards the minimum amount of participation bonds, the Bill provides that that amount may not be less than R25,000, and objections to this provision have also been received. It appears that many of these schemes make use to a large extent of smaller bonds, even for the purpose of financing farmers in the rural areas. In this case too I have deemed it fit to effect an amendment and the amount of R25,000, which at present appears in clause 1 (b), will be decreased to R20,000. I shall move the necessary amendment during the Committee Stage. In addition I should just like to point out that it appears that it will be necessary to effect a further amendment to clause 2 in order to ensure that these participation bonds, or the participation in a bond, cannot be called in. As the clause stands at present, it may be possible that it may be interpreted to mean that a participant, although he may not cede his participation in his bond, may in fact call in the bond and in that way may circumvent the provision in regard to the participation period of four years. In respect of that too I shall move an amendment during the Committee Stage.

As the Minister has said this participation bonds practice has increased particularly since the first Bill was introduced in 1964. As the Minister knows the Bill followed a decision of the Appellate Division of the Supreme Court on an appeal against the original decision in the case of Francis in 1930. There has been a considerable development of this type of business. Earlier this afternoon the hon. member for Von Brandis illustrated what could happen when Bills were introduced with too little notice to the general public. This is a case in point. Here is a Bill which affects interested parties and only at this late hour have representations been made asking for further consideration. The hon. the Deputy Minister himself has obviously had representations made to him and he has indicated that during the Committee Stage he intends to move certain amendments to ease the force of this Bill, to reduce the amount from R25,000 to R20,000 and to reduce the period from four to three years. Sir, we have also had representations made to us asking for relief and suggesting that the terms of the Bill are too onerous, particularly for country districts. For a large organization in a city such as Cape Town or Durban or Johannesburg, the provisions of the Bill may not be onerous, but the country districts particularly have felt that the margins provided for in this Bill are unreasonable. The Association of Trust Companies has made representations to us and has indicated in a memorandum that—

Sir, I am told that this measure will particularly affect country areas where “trust companies operating in places like Bloemfontein, Kroonstad, Port Elizabeth, East London, Kimberley and Graaff-Reinet, play a major role in financing farming and residential properties and where bonds are frequently granted for amounts of less than R25,000 as the underlying values of the mortgaged properties are relatively low”.

Order! Is the hon. member going to read out the entire memorandum?

Sir, I am quoting from the memorandum and I submit that this is perfectly relevant. I think this should be on record. They go on to say—

Sir, when an organization such as the Association of Trust Companies submits a memorandum making these assertions and indicating that these matters require further consideration and when they suggest that the amount should be reduced to R10,000, an amount which I understand the hon. the Deputy Minister is not prepared to accept, I suggest that this late stage of the Session is not the time to rush through a measure of this kind.

Do you think I should accept it?

I suggest that this is not the time to pass hasty legislation when we are considering the interests of people all over the country. Here an important organization like the Association of Trust Companies points out the difficulties trust companies are having. They point out that they have had representations from country districts. We too have had similar representations. There is no doubt that they are going to be embarrassed by the proposals contained in the Bill, and I feel therefore that there should be an opportunity for inquiry and further consideration. Therefore I as an amendment move—

I submit that the committee would then have the opportunity of having the whole of this memorandum put on record; the Association of Trust Companies would have the opportunity of expressing their point of view; individual trust companies would have the opportunity of expressing their point of view; other people who hold contrary views could give their evidence.

In that way we can be assured of putting on the Statute book a law which is going to be in the interests of all concerned and not only of one section of the community. I suggest that having regard to all the very serious representations made to us we should not at this stage of the session rush through a Bill of this nature without ample consideration and without sufficient evidence before us.

I would like to support the amendment moved by the hon. member for Pinetown. I believe it is a matter for serious consideration when legislation of such a far-reaching nature is introduced into this House at this late stage, especially when that legislation is going to have disastrous effects for so many people. The Participation Bond Act was placed on the Statute Book largely as a result of representations from the big trust companies in South Africa, and I believe that they did it for a very good reason. Obviously there must be some abuse of that legislation. The hon. the Deputy Minister has not indicated to us why this legislation has had to be brought forward at this late stage. He quoted certain figures to show to what extent this kind of financing had increased but I do not believe that we can accept that those figures alone are sufficient justification for bringing this legislation before the House at this late stage. Sir, I wonder if the House realizes what an important role is played in this country by the trust companies. They include some of the oldest financial institutions in this country. They have played a tremendous part in financing many of the important projects in this country and they have made a great contribution to the development which has taken place in this country. Why at this stage should their activities, their very lifeblood, be curtailed by a Bill of this nature? Sir, I want to refer also to the trust companies on the platteland, in places such as Kroonstad in the Free State, Graaff Reinet, and Uitenhage which have been largely responsible for farming finance for almost a hundred years. If this legislation, even with the amendments which the hon. the Deputy Minister has suggested he is going to move in the Committee Stage, is placed on the Statute Book, the activities of these old trust companies which have played such a vital role in the development of the country will be curtailed to such an extent that I believe they might quite easily go out of business. I do not believe that we on this side of the House can possibly accept the reasons given by the hon. the Deputy Minister as to why this legislation must be introduced.

The lack of reasons; he gave no reasons.

We cannot possibly accept the suggested amendments to which he referred because they will in no way help the cause of the trust companies. Therefore, I must very strongly support the amendment moved by the hon. member for Pinetown.

Whenever one interferes with the normal operation of the financial market, it is always necessary to keep adding amendments. Here we have an example of an investment system that suits the platteland of South Africa especially. I do not know to what extent it operates in the cities but it does suit the platteland. I regard it as a “helpmekaar” movement. The man who has money to invest in his community on the platteland can do so through a trust company in one of these participating bonds. I think it is an excellent system of investment. I gathered from the Deputy Minister that one of the objections is that it has been successful, that it has grown to R289 million. He showed us the rate at which it has grown. Surely that is proof of its success. Now it has been felt, I do not know by whom—the hon. the Deputy Minister suggested that it was the banks, the building societies and other more conservative financial institutions—that something should be done to control these people because the rate of interest was over 8 per cent for these bonds. Possibly it is, but that is surely a matter between the mortgagor and the mortgagee. What the rate of interest will be depends on the ordinary law of supply and demand. Here we have a Bill introduced a few days ago, and already the Minister has made two major concessions. He says he does not want the amount to be R25,000, but he is prepared to make it R20,000. Why not make it R10,000? That seems to be the normal amount of a bond. Surely you can have participation in that. Then he says that the period of four years can be reduced to three years. He compromises. I should like the legal men opposite to say why it should not be two years. If it can be three years, why not two years? Now that is the position. The hon. the Deputy Minister has already had discussions. If he is prepared to compromise, then obviously the correct solution is the one suggested by the hon. member for Pinetown, that this should be considered by the financially interested people in the House, in a Select Committee, and that they should hear the representatives of the platteland trusts so that we can get to know what their wishes are. It might mean a great deal to the platteland. It is like the old Helpmekaar movement. That was a movement similar to this, run in the same way but with more charity. I have great pleasure in supporting the amendment.

I do not quite understand the Opposition’s attitude. It seems to me that the hon. members of the Opposition who spoke on this Bill were particularly concerned about the trust companies in the rural areas. The position in respect of these trust companies is that they have been passing bonds, or giving loans on mortgage, all these years and that they have obtained their money from the people in the rural areas at fixed rates of interest. The investors in these trust companies have never participated in participation bonds. They have simply been investing their money in these trust companies at fixed rates of interest. Participation bonds have not formed part of the operations of these trust companies. What we are really concerned with here is a method employed in the financial world which is giving inflation a tremendous boost, and that is why the hon. the Minister has introduced this legislation. I do not believe that this legislation will in any way be to the detriment of these trust companies for which hon. members broke a lance. They are still doing this kind of work in their own way. This new system which originated recently is merely a kind of circumvention which is promoting inflation to a serious extent. We are most definitely opposed to that, hence this legislation.

The hon. member for Kensington said that the participation bonds had been a great success. They have, but I think what is of far greater importance to us is the important role that the participation bonds have played in many aspects of the financial life of the country. In other words, here we had a medium for grouping funds and making them available for investment in fairly large amounts, and they are serving a very important purpose in the normal economic structure of our country. The only possible reason for any amendment, in present legislation, that we have had up to now, is the point raised by the hon. member for Paarl, and that is the question of inflation. It might be necessary to curb inflation by changing the legislation, provided this type of bond is in fact causing inflation. But I do not think that the hon. Deputy Minister has made out a case to the House to show that participation bonds are encouraging inflation. These bonds provide the only source of capital in many spheres to-day. One of the hon. members who has spoken has told the House of the restrictions imposed on building societies in providing funds, so we are left with the private investors, the insurance companies or the trust companies through these participation bonds. It may be said that they are needed for putting up large blocks of luxury flats, but we already have building control to take care of these problems. But there are other aspects also which are worrying. At present, although the people who deal with participation bonds have voluntarily fixed a period of two years, during which you must wait for your money before you are repaid, in terms of the law there is no period stipulated. Everybody is free to do what he likes. So increasing it from two years to three years does not mean an increase of one year; it means an increase from nothing to three years. Up to now there has been no control over the period of the participation bond in terms of the law and now we are suddenly making it three years.

There is also another factor. I know of very few cases, if any, where a man lends his money and he is obliged by statute to keep it lent for a particular time. Even if you buy Government bonds, you are able to sell them on the free market. But here Parliament says that if a man invest his money he must invest it for a minimum of three years, and the only right he has is to go to the Registrar and ask for the right to transfer or cede it. In other words, he is now bound by law in regard to his own funds. The Deputy Minister will know as well as I do that in very many cases where people lend money for periods, they find that they need repayment of those funds, and they can always get repayment by one means or another. In the building society, if you invest on long term, you can sometimes convert it into short term by taking a lower rate of interest. If you have a mortage for a fixed period, you can cede it or sell it or deal with it in some other way, but you have freedom over your own funds. Now we are limiting the freedom of people in regard to their investments.

Another aspect that worries me considerably is this. We on this side of the House have pleaded over the last three years for no control of interest rates, and this seems to me, in effect, to be the beginning again of control of interest rates, because the whole plea of the Deputy Minister really was that the money is borrowed by the building society over a period of 18 months at, say, 7 per cent, and now over the same period, or perhaps over two years, you can get 8½ per cent to 9 per cent. I do not know of any 9 per cent. I wish the Deputy Minister would tell me. I only know of 8 per cent and 8½ per cent, 8 per cent in Cape Town and 8½ per cent in the Transvaal. But if the argument of the Minister is that because of the difference in the period of lending he wants differential interest rates, then he is negating the speech made by the hon. the Prime Minister in Port Elizabeth a couple of weeks ago when he said there was not going to be control of interest rates in this country. This is what this measure is doing, because the Deputy Minister is saying, “On short-term loans you shall be able to earn so much, and on long-term loans you shall be able to earn more”.

Now, I do not think anybody has put a stronger fight to curb inflation than this side of the House. We on this side are with the Minister in any steps which should be taken to assist in curbing and beating inflation. But we really cannot see from this Bill what he hopes to achieve in that struggle. Therefore I think the proposal by the hon. member for Pine-town, that this Bill should go to a Select Committee so that it can be investigated, is a good proposal. We on this side will help the Deputy Minister to find ways so that the Bill will serve the purpose for which the original Bill was passed a couple of years ago, and at the same time serve the purpose of curbing inflation if necessary.

This matter has not been properly inquired into. People have not had an opportunity to put their point of view. The examination of the inflationary aspect has not been properly made, and we should like an opportunity on a Select Committee to examine all the facets and then perhaps we could well agree with the Deputy Minister that steps should be taken.

Mr. Speaker, hon. members opposite are objecting to this Bill and are asking for the Bill to be referred to a select committee. I just want to tell hon. members opposite that if they have not been doing their homework lately and consequently do not know what this is all about because they do not have all the information, they must not come forward with the request that this measure should be referred to a select committee. Surely we cannot constantly refer Bills to select committees.

Now I want to put the following question to hon. members who are opposed to this measure. Is this amount of R20,000, which is being fixed as the minimum amount, really such a large sum of money? Is it really a large amount for people to raise? The idea behind the 1964 legislation was to get people to pool their money and to grant a single large bond. Let us now take for example the rural areas, where there are not many people with a great deal of savings, particularly those rural areas where people cannot obtain assistance from building societies, insurance societies or the Land Bank. They can still be assisted here or by other concerns. I think a minimum amount of R30,000 or R40,000 should have been laid down right at the outset. I think R20,000 is no factor.

As regards the minimum period of three years, I just want to say that to my mind it is a good thing from an administrative point of view that participants do not constantly change. That in itself will eliminate a constant change of participants, something which is really aimed at speculation. At the beginning of this year the hon. member for Parktown said in this House that, as far as inflation was concerned, this Government was always doing too little too late. But now that we are doing something to assist in organizing our economy on the right basis, the Opposition is opposed to that—now the Opposition wants to do too much too soon. If we look at our entire financial structure as it is at present and if we consider our building societies and all similar institutions, we find that it is essential for us to pass this legislation as it is. At present our building societies are not getting sufficient savings to satisfy the housing requirements in this country. There is no question about that. These people are struggling to find sufficient money. The “grey market” and other concerns are attracting too much money. The Government will be the first to see to it—as it has always done—that the rural areas will be assisted where necessary. We have various concerns and bodies which provide for our farmers. Therefore I want to give my strong support to this measure and I want to tell the Deputy Minister that this legislation need definitely not be referred to a select committee. What can be achieved if that is done? How much information can be collected by the select committee which the Minister, the Department and we on this side of the House— as well as hon. members opposite—do not already have at our disposal? Therefore I want to support this measure in the form in which it is before us.

Mr. Speaker, I support the amendment asking that this Bill should go to a select committee. I ask the hon. the Minister to give the amendment earnest consideration and not just to dismiss it. The hon. member who has just spoken is to my mind an outstanding example as to why this Bill should go to a select committee. He seemed to me to be making assertions as to what the position was. Yet I do not believe that he knows what the facts are. I do not believe he knows how many bonds under R20,000 are granted under this scheme, the reduced figure suggested by the Minister. I do not have the exact figures but I believe that many of the bonds are well below that figure. By fixing the amount at R20,000 and the period at three years the Minister is endeavouring to kill this scheme. I believe, too, that the Minister has been less than honest with the House when giving the reasons for the introduction of the Bill, because I could find no valid reasons in his introductory speech. Is it one of the Government steps to cause deflation? Is it a deflationary effort? Is that what they are doing?

Yes.

The Minister did not say that in so many words. He did not give that as one of the reasons for it being introduced. Is he trying to kill this type of business? The hon. member for Paarl has said so. Let us hear from the Minister. Is that the urgency? I fail to see the urgency for the Bill. Here we are attempting to interfere in an intricate financial field and it has come into being because there was a necessity for such types of investments. It has been clearly shown that other institutions and organizations do not meet this need. If this Bill goes through and there is then a great curtailment of this type of business, we will be hitting at people with relatively small sums of money who come together for investment. We will be striking at thrift itself, because this has become a very popular method among people who have money to invest, namely estates, widows. All those people, also the trust companies, come together and invest their money in participation bonds.

They are still doing it.

It is a convenient means of doing it. The hon. member can say they are still doing it, but the Government is making it more difficult, and this is an attempt. if it is possible to do it, to kill it. Otherwise why the representations of the trust companies? This is an attempt to curtail it, to stop it. as far as it can possibly be done. In other words, the Government is making the cat believe that chloroform is good for killing fleas. That is what is being done here.

Mr. Speaker, seldom have I seen the Opposition speaking against their better judgment to such an extent as they did to-day. I say this in all honesty and sincerity. They know what object we are trying to achieve, one which must be achieved if it is at all possible to do so. They also know that that must be done now. If that must be done now, it cannot be done by way of a select committee which can only meet next year.

What is the object?

The object is of a dual nature. The object is to prevent institutions such as building societies being deprived of short-term money which has been streaming to these schemes lately and which is not meant to stream to these schemes. The hon. member for Kensington said this was a fine institution—he said we should throw it open. Very well, throw it open, but in that case we must also give all the other concerns, such as building societies for example, which have to compete with this type of scheme, a free hand so that they will be able to compete with these schemes on the same basis. At present building societies are being restricted.

Is this measure being introduced on behalf of the building societies?

To a large extent, naturally; I am telling you that that is one of the reasons, namely that building societies are being restricted by legislation. A short while ago the hon. member for Park-town said that he had never heard of money having to be invested on a fixed basis for a certain period. The building societies are being restricted because money invested with them has to remain there for certain periods. The building societies may only make bonds available for houses. At present they are being restricted by legislation and consequently they cannot compete with these schemes on the same basis. The hon. members ought to know that the purpose of these schemes was to attract long-term money. When one thinks of investments in bonds, one always thinks of long-term investments. That has always been the case. Does anyone differ from me on this point? The reason for that is simply that a bond ought not to be a short-term investment because the man depends on it for his living to a large extent. Furthermore, it is an expensive procedure to take up a new bond each time.

[Inaudible.]

No, of course I will not do that. Here I am concerned with a particular scheme. That is why a bond must be a long-term investment. When this scheme was instituted that was the whole idea. Prior to that people did without this kind of investment to a very large extent. A short while ago I furnished particulars which showed that the amount invested in this field was small a few years ago. Now these investments which were facilitated in 1964 have made fantastic progress up to this stage with the assistance of the schemes. They have been attracting the stream of savings, in the first instance, in smaller amounts, and, in the second instance, as short term money. One may demand such money at any time whereas one has to invest one’s money for a longer period if one wants to get a high rate of interest at other deposit-receiving institutions. Something like that does not exist in the case of these schemes. Therefore we feel that these provisions must be introduced now so that there may be competition on some basis between these schemes and the other institutions which we also need for maintaining our domestic affairs in South Africa. I have in mind the building societies, for example. Therefore these measures must be taken.

May I ask the hon. the Deputy Minister whether the increase in these participation bond schemes is attributed to extra activities by the trust companies in this particular field or schemes outside the trust company movement?

Mr. Speaker, I would say both. The hon. members must not think that we have taken these steps without having had consultations. Some of them received telegrams in connection with this matter. Those telegrams contained the names of two gentlemen as well as their telephone numbers. Those two gentlemen paid me a long visit in my office last week. They agreed, and did so specifically, to accept this period and this amount which I am now going to lay down. I admit that the rural areas subsequently exercised some pressure. Those two gentlemen who are representatives of the schemes, specifically agreed to this amount which I am now going to lay down. I really feel that the hon. members have been arguing against their better judgment here this afternoon.

I want to mention the second point why it is essential to have this legislation. A few moments ago I said that the stream which should really flow in another direction, in the direction of the building societies, for example, should be re-directed to its normal flow, if it is possible to do so. That is naturally also intended to combat inflation because an unhealthy state of affairs is created by using short-term money for the creation of capital. Short-term money which is invested for six months or one year is consolidated and is used for the purpose for which that is utilized by these schemes. That is unhealthy and encourages inflation. Consequently we maintain that that should not be the position. I based my calculations on the following: The investment period in a participation bond must at least exceed that for which one may invest one’s money at another deposit-receiving institution. Consequently I decided on a period of three years. As regards the amount of the bond. I do not think that R20,000 is too large an amount at present. I am also saying this because all the institutions to which the hon. member for Walmer referred were trust companies. If the trust companies are worth their salt, they will have private funds with which to finance these small loans. If they cannot do so, they are not worth their salt and then they ought not to be in existence. That is one of the difficulties with which we are faced. At present we have a number of schemes which undertake this small business when it has never been the intention for them to do so. They have and they ought to have their private funds. Those funds they may use for the small loans and the consolidated funds collected by way of participation can be used for the large bonds as has always been the intention. I am very sorry but these measures must be taken now and not next year. It is simply out of the question for us to consult a select committee first. Therefore I can unfortunately not accept that proposal. Mr. Speaker, I move the Second Reading.

Question put: That all the words after

“That” stand part of the motion.

Upon which the House divided:

Tellers: P. S. van der Merwe and B. J. van der Walt.

Tellers: A. Hopewell and T. G. Hughes.

Question affirmed and amendment dropped.

Motion accordingly agreed to and Bill read a Second Time.

Mr. Speaker, I move—

Clauses 1 and 2 of this Bill deal with unit trust schemes. Hon. members will recall that the hon. the Minister of Finance found it necessary on a recent occasion in this House to address a word of admonition to unit trust schemes in that he said that they over-emphasized the inflation theme in their very intensive advertising campaign and in that way was attracting money which by rights ought to find its way to banks and building societies. What has also proved to play a part in this connection is the fact that these schemes, in comparison with banks and building societies for example, are able to pay their agents a very generous canvassing commission on new investments, as much as 3 per cent. Instead of direct interference, the level of commissions will be left to free competition for the time being and with these two clauses I merely propose restricting the income of the management companies in a very moderate way in the expectation that that will bring them to act somewhat more conservatively.

In connection with clause 1 I just want to say that section 19 (1) of the Unit Trusts Control Act allows a rounding-off accrual of not more than one cent being added to the calculated value of a unit to determine the selling price. The proceeds of the accrual may be taken by the management company on own account and the revenue derived in this way may be considerable as it may amount to virtually 2 per cent on units starting at a price of 50 cents each—a customary size. It was never intended that the rounding-off accrual should assume such proportions. In practice there is no uniformity in this connection. Because of the advantages of a decimalized system of coinage and modern computers, a rounding-off accrual is no longer something essential. Two of the existing six unit trust schemes do not levy a rounding-off accrual, one does in fact levy an accrual but does not utilize that for the benefit of the management company, whereas, in the remaining three cases, the accrual is taken by the management companies. By means of this amendment it IS now being proposed to abolish the practice of levying a rounding-off accrual.

The object of the proposed amendment contained in clause 2 is to lay down in section 22 of the Act that the initial charge may not exceed 5 per cent of the made-up (selling) price of units. The initial charge is taken by the management company on own account to compensate it for expenditure incurred and work done by it in connection with the creation and issuing of the unit. The initial charge which the various management companies levy at present, varies from 5 to 7 ½ per cent of the selling price of units …

Have all initial charges decreased?

Yes, I notice that they have decreased since the announcement. We welcome that. The initial charge varies from 5 per cent to 7 ½per cent of the selling price of units with provision for decreases in the case of larger purchases. Since the establishment of the first open trusts in 1965 experience has shown that a reasonable limit ought to be imposed in respect of the initial charge so as to prevent schemes acting in an extravagant way, but will nevertheless be able to promote their sales on a reasonable basis. The proposed limit of 5 per cent is regarded as being reasonable in the light of the fact that certain of the existing schemes are already operating on that basis. Furthermore, this limit seems to be accepted in other countries. In the U.S.A. a commission which recently conducted an investigation into similar American schemes proposed the introduction of a limit of 5 per cent. I may add that all the unit trust schemes have been given the opportunity of examining the concept of this Bill in advance, as is customary in the case of Bills affecting financial institutions. All these schemes are already taking the necessary steps so as to comply with the proposed provisions.

In respect of clause 3 I want to point out that the hon. the Minister of Finance mentioned in his speech to which I have just referred that plans were being considered which would enable building societies to enlarge their activities. The object is to give them additional sources of income so as to promote their principal task, namely the provision of housing. The necessity for that at the present juncture is clear. On the one hand they have been experiencing keen competition lately for the funds of the public from, in addition to their ordinary competitors, not only unit trust schemes but also participation bond schemes.

Therefore building societies must constantly make their deposit rates correspond to the gradual increase in rates of interest. On the other hand that compels them to effect gradual increases in the rates of interest they charge for advances they make on mortgage. Like all of us, the building society movement itself is only too conscious of the serious results it will have on housing if the rates of interest they charge on mortgages go too high. The sole object of the proposed amendment is to render them temporary assistance in this connection.

Section 36 (1) of the Building Societies Act, 1965, places an obligation on permanent building societies to build up and maintain a statutory reserve from their profits. Ten per cent of their net profits must be set aside for this purpose until the reserve amounts to 10 per cent of the total obligation (including paid-up capital). This obligation comes from the old Building Societies Act of 1934. Experience gained since 1934 has shown that the requirements, with due allowance for the nature of the building society’s business and the kind of security held, in regard to the statutory reserve are possibly over-conservative.

At present the building society movement together with the Financial Institutions Office is giving consideration to, inter alia, the suitability of the requirements in regard to the statutory reserve. Proposed permanent legislation in this connection will only be ready at a later stage but in the meantime the obligation to contribute to the statutory reserve may safely be suspended for the current financial year for the purpose of assisting building societies under the present economic circumstances not to increase the existing rates of interest they charge on mortgages.

The hon. the Deputy Minister has explained in some detail the reasons for this Bill and we support the Second Reading.

I am pleased about the concession which is being made here to building societies in order to make more generous provision in respect of the provision of housing. I just want to raise one small point and I want to ask the hon. the Deputy Minister whether he will not give that his consideration. We are trying to combat inflation by keeping as much savings as possible out of the hands of the public. It used to be the position that money invested in subscription shares with building societies was automatically re-invested after the due date of the subscription share. The question has now arisen whether that may be done. The general idea is that the money has to be paid back to the person after the period has elapsed and that he may then re-invest that money, but once the money has been given to a person, the temptation is always present …

Order! What has that to do with this Bill?

Mr. Speaker, we are effecting an amendment to the Building Societies Act.

The amendment has no bearing on the point which the hon. member has just raised. The hon. member must confine himself to matters dealt with in this Bill.

I want to ask the hon. the Deputy Minister to consider making provision for this in the amendment we are effecting here.

Order! That is not under discussion now.

Motion put and agreed to.

Bill read a Second Time.

I move—

The Bill before the House seeks to establish a statutory board to control and promote the marketing of South Africa’s canned fruit on export markets.

Britain still remains the most important single market for our canned fruit. It is a highly competitive market with the result that British buyers are compelled to keep a constant and close watch on the prices they and their competitors pay for canned fruit. As a result of this the British buyers are also constantly informed about the offers made by foreign suppliers at prices revealing a downward trend in the general price structure. The result is that any foreign offer at reduced prices soon becomes common knowledge amongst British buyers, thus encouraging them to adopt a waiting attitude before placing orders in the hope that more profitable offers will come to the fore. Such lower offers complicate the position of buyers who previously bought at higher prices, giving rise to a position of total uncertainty because of the free price competition which is detrimental to the marketing of our products.

Besides, British buyers know that canners throughout the world, with comparatively few exceptions, are financially incapable of carrying stocks in their stores for any lengthy period of time. As a rule the canners pay cash for the fresh fruit they purchase from farmers, and they cannot afford to bear for an indefinite period this and other financial burdens such as labour costs and expenditure on tins, packing materials, and so forth, while their products remain unsold in expectation of favourable prices. Canners are therefore essentially an outstanding example of the well-known concept “financially weak sellers”, who, once a state of uncertainty has developed, are at the mercy of the buyers.

Apart from South Africa, Australia is the most important producer of canned fruit in the Southern Hemisphere. South Africa’s and Australia’s total sales to Britain amount to roughly 60 per cent of that country’s total imports of canned fruit from all sources. Many years ago already Australia found it necessary to establish a statutory board with powers to have control over the prices at which Australian canned fruit was to be offered to British buyers. In the Southern Hemisphere Australia is, from the nature of the case, our most important competitor in the British market; but there is also a common interest between the two competitors as regards the maintenance of reasonable prices for their canned fruit on that market.

South Africa is dependent upon the British market for the marketing of approximately SO per cent of its total production of canned fruit. It is obvious, therefore, that measures that will ensure the orderly marketing of South African canned fruit on the British market, are indispensable for the welfare of the producers of canned fruit. As long ago as the 1953-’54 marketing season the canning industry itself realized that this was essential, and after voluntary marketing agreements had been tried out unsuccessfully during the 1954-’55 and 1955-’56 seasons, it approached the Government in 1956 for the establishment of statutory control over the export of canned fruit so as to eliminate disruptive price competition amongst South African canners. Such an organization would be in a position to exert itself after a warning sounded by the Australian canners and thus to bring about a measure of price stability for canned fruit on the British market.

Consequent upon these representations the Canned Fruit and Vegetables Export Control Act was passed in 1956 in terms of which marketing agreements in respect of sales on the British market for the 1956-’57 and 1957-’58 seasons were entered into. Since the 1958-’59 season no further agreements have been entered into in terms of this legislation, mainly because the agreements could not be applied effectively.

Under these free marketing conditions there was keen competition both among South African farmers themselves and with Australian canners on the British market, until the industry realized anew during the 1962-’63 season, after a warning sounded by the Australian industry, that orderly marketing on the British market was essential for the welfare of the industry. Consequently the introduction of a non-statutory minimum price agreement was proceeded to for the 1963-’64 season in respect of sales on the British market, an agreement that was renewed for the subsequent seasons up to this year.

Although a considerable degree of success was achieved under the latter non-statutory agreements as regards the elimination of disruptive price competition among our exporters and therefore also as regards the maintenance of reasonable prices for South African canned fruit on the British market, it was felt from the very beginning that the success of these schemes was very closely bound up with the effective application thereof, which would suffer under a non-statutory body the moment competition on the British market intensified. Therefore most canners of deciduous fruit pressed from the very beginning for the introduction of a statutory scheme and the Government has now decided to convert into legislation the provisions of the existing non-statutory agreement reached by the canners of deciduous fruit, since clear indications of intensified competition on the British market have become noticeable and the application of non-statutory agreements have already proved that with the aid of arrangements of this kind a reasonable degree of success can in fact be achieved as regards the orderly marketing of our canned fruit on the British market.

The Bill provides that the Canned Fruit Export Board has to be appointed by the Minister from nominations submitted to him by the Canners’ Association and organizations representing co-operative societies owning canneries, respectively. The provision for one member who is a representative of the cooperative societies owning canneries, as against four members who are representatives of private canneries, is based on the respective shares the two classes of canneries have in the export of the classes of canned fruit in respect of which the non-statutory minimum price agreement obtains at present.

The most important powers with which this board is vested, are in respect of the determination of minimum prices at which and the conditions subject to which canned fruit may be sold on foreign markets and the introduction of a levy on canned fruit that is being exported. The Board is in addition vested with the necessary powers, including the power to establish an agency in London, to enable it to carry out effectively its task of arranging and promoting the marketing of South African canned fruits on foreign markets.

To enable the board to gain control over canned fruit that is being exported, it is being provided that no person who has not been licensed by the Minister may export any canned fruit to countries specified by the Minister. Export licences are issued by the Minister after considering the recommendation of the board, and any person to whom an export licence has been refused by the board, may lodge an appeal with the Minister against the decision of the board. In addition it is being provided that if a licensee fails to comply with the conditions relating to minimum prices determined by the board, or does not want to furnish the information the board requires for performing its task, or fails to pay an imposed levy, his licence may be suspended or cancelled. Apart from suspending or cancelling export licences on the grounds of the said offences, provision is also being made for the court to impose fines and imprisonment in the event of a licensee being convicted of the relevant offences.

From what I said, it will be noticed that the Bill is of a very simple nature, but I am convinced that it does nevertheless contain the essential powers necessary for putting the foreign marketing of our canned fruit on a sound basis, not only for the benefit of the canning industry, but also for that of our producers of fruit for canning purposes.

I want to say at once that on this side of the House we are very far from convinced of the need for such a measure as we have before us. The position is that the need for this Bill has not arisen now as the result of recent developments in the fruit canning world. It has a history. The hon. members for Kensington and Pinetown and I are the only members on this side of the House who sat on the Select Committee for three years dealing with this question of the fruit canning industry, some 11 years ago. There is a history behind the whole of this problem. I want to say quite frankly that the then Minister of Economic Affairs, the present Minister of Finance, appointed us thinking that we would get our work done in time during that session of Parliament which would allow the Government to introduce an amending Bill to deal with the situation which had arisen, and we were told that we had to work under pressure. The markets in Britain and other countries where we were trying to open up markets for our canned products were in difficulties, and we had to hurry up. We tried to meet that position, but with the best will in the world we had to report that we could not finish our work the first year. It went on to the second year, and then it went on to the third year. I had an interview with the hon. the Minister of Economic Affairs at that time, and at the end of the third year I asked him what he was going to do now and whether he was going to appoint us again for a fourth year. He said: No, I have been following the evidence you had before the Select Committee and I have been in touch with the Chairman of the Select Committee, but this is not the way out. He said he could go no further with this. He said the present position would have to remain.

What were some of the things we learned on the Select Committee about this particular branch of our economy? It was that we were dealing with one of the most involved and intricate matters in international commerce. If hon. members believe for one moment that what is involved in the question of the sale of our canned fruit is a simple matter, they are making a big mistake. For the moment

I want to deal with this Bill itself purely on the basis of our peaches, apricots and pears, which are the immediate subject matter of this Bill. If hon. members think that what we are dealing with is the question of fruit which is produced by a grower and sent to a factory where it is canned, then it is put on a ship and sent to a market overseas and then we get paid for it, then by jove, they have another thought coming. That is the simplest kind of concept, but that does not touch upon either the production or the marketing of canned fruit from South Africa. I am not going to dwell on it; other speakers no doubt will go further into it, but what I learned about sellers’ labels and selling according to sellers’ labels, and selling to purchasers’ labels, and conditional selling, and purchasing by conditional selling, and the way the private and individual wholesalers in Britain and on the continental markets dealt with the firms who were producing here in South Africa, and how our South African fruit could be sold as the produce of California, made me realize that for a poor simple farmer from the platteland there was a great deal to learn, when I started to poke my nose into these very involved economic matters associated with the international marketing of canned fruit. This, then, was the position we found, so can you, Sir, blame us if to-day we say that we sat for three years on that Select Committee and we learned such a lot about the difficulties that the then Minister decided to go no further with his plans for amending the law. And may I say that the argument used by the Deputy Minister just now was the same argument that was put to us 11 years ago, that we had to come to an agreement with Australia, and if you have one body here in South Africa handling the export of fruit here, then you will have the one body which can deal with the one body in Australia. We learned a lot about that body in Australia, and we got evidence from our trade attaches in London and elsewhere to see exactly where we stood.

We got evidence as to what was being planted in the way of peach trees all over the world which were going to flood the peach market with tinned peaches when the time came, including the precise statistics for the planting of peaches in China, in Afghanistan, and all the other places where there was a likelihood that peaches in canned form would come into the market which South Africa was now coming into. In those days we had a certain pre-emptive right which we do not enjoy to-day, now that we are out of the Commonwealth. This question is a most involved and intricate one. What must the Opposition do under these circumstances? If we look at the Bill before us we see that at the moment it provides for three types of fruit, namely peaches, pears and apricots. Where provision is made for other types of fruit to be included by proclamation of the Minister, we must remember that he is not a free agent. He cannot simply say that he thinks the time has come to include pineapples; he can only act when the board which he is creating has said to him, “That is what we want you to proclaim”. Until he gets that positive recommendation from the board he cannot act. It does not even say that it will stop there. I do not know, for example, what the Minister thinks a tomato is—is it a vegetable or is it a fruit? This is an argument which has been waged right down the years.

Can you tell us?

No—I am not here to answer questions: I am putting a case, and at the moment I say that here is a simple matter like the tomato that has been argued about by the scientific authorities who are associated with botanical research for decades, and they still have not decided. But if and when the board comes along to the Minister and it says to him that they want a certain type of produce included, and there may be other things of a like nature, then, and only then, can the Minister act. I say he is not a free agent. What is he creating? Not a body representative of the two groups referred to in the Bill. He is going to select representatives from a group of names that have been submitted to him. These good folk here are not permitted to make their recommendations, and the Minister appoints the people whom they recommend. They have to put up a long list of people from which the Minister will pick those whom he wants. What kind of representation is that going to be?

I want to move at this stage the following amendment—

I move this amendment because of the past history of this matter and the fact that since 1956 we have had another 11 years go by. I say it is not going to hurt anybody if we wait for another period while the matter goes to a Select Committee. The experience which has been gained as a result of what has happened over the past 11 years can be put before the Select Committee, and thereafter we can have a Bill before this House.

Will it have to sit for a further three years?

Have I got a better advocate for my case than the hon. member who has made that interjection? He says by implication that if this matter is referred to a Select Committee, it may take three years before it can report. Why?

You said so.

No, I did not say anything of the kind. I said the Select Committee which was appointed at the time sat for three years. It is there on the records. It can be seen.

Why did it sit for three years?

If the hon. member thinks the Committee will sit for three years, then I want to ask him: What will the Select Committee be doing during those three years? Will it not be listening to evidence? Is it not worth listening to? I am a great believer in Select Committees before Second Readings when we have this kind of legislation before us. I say and prophesy here and now that the Minister will be coming back here with a smile all over his innocent face in nine months’ time telling us that he wants amendments to this measure, amendments which he will find it necessary to ask for, if he proceeds with this Bill as it is now, because of the fact that certain “leemtes” have been found, that certain difficulties have been encountered which were not anticipated, yes, blah, blah, blah, blah. I know only too well. The truth of the matter is that because it is half-baked at this stage, and because we do not know what we are legislating for, I move the amendment referred to earlier on. I move this amendment to give Parliament the opportunity of grappling with the problem on the basis of the facts. We will then be legislating for something which we know something about because the facts will be before us. But now the facts are not before us. I defy any hon. member in this House to give us a lecture for, say, 60 minutes, about the real, fundamental principles upon which our export trade of tinned fruit is based, including the marketing. I say there is not one hon. member here capable of doing it. What has transpired during those 11 years since we sat on that Select Committee is knowledge which should be before Parliament. They are facts which we should have.

With respect to the hon. the Minister, I wish to say we know that the industry is divided, the canners themselves are divided.

Why?

It is not for me to say why, nor is it germane to this Bill that we have before us. It is a fact—and the hon. member does not deny it, I notice.

The hon. member says that the industry itself is divided. Can he tell me whether there are important canpers who are opposed to this legislation and, if so, how many of them are opposed to this measure?

It is not necessary for me to say how many there are or how important they are. [Interjections.] No. What I am concerned with—and hon. members know it—is that there is a difference of opinion. I will tell you where I think part of this difference of opinion comes from. Where we have, as we found on the Select Committee 11 years ago, private enterprise exerting itself here in South Africa under the complex conditions in which it has to compete in the world—under the complex conditions of finance and trade and commerce in which it has to compete in the world markets—that private enterprise will not easily surrender its claim to self-sufficiency in finding a market for its goods. When we have a firm in South Africa which is competing favourably, making a satisfactory profit, and getting a good market for what it is producing, in other words when we have private enterprise at its best succeeding in the world’s markets in establishing a sale for South African tinned fruits then, as I say, that firm will not willingly easily give up its claim to self-sufficiency in finding a market for its goods. I go so far as to prophesy that if this Bill is passed in its present form it will lead to mediocrity in the products of South African canning factories. There is nothing in this Bill to urge a factory to produce a better class article. There is such an incentive at the present time, but there will no longer be that urge once this measure is passed. Here we will have not a leveling up but a leveling down.

The clause providing for a minimum price will, as we all know, result in that price becoming the market price. The minimum price will be the market price. We are now by law fixing the conditions under which the entrepreneur who has got into the world markets because of his own drive and capacity to participate and compete successfully in international trade, will now simply be put in with the rest of the span. His products will go in with the rest. What kind of parliamentary support and approval is there for a factory under those conditions? They are simply thrown in with the mass and their product is thrown in with the mass—and that is that. Whether it is a good product or not, a minimum price is fixed, that price will become the standard price, and in the result that will be the end of that private enterprise and the entrepreneurs’ desire to get something better on the market and thus be able to fix a market price on the basis of the better quality product being produced. That desire is surely what we should be aiming at in South Africa—we should aim at achieving continually higher standards.

Our producers are to-day producing fruit which is second to none in the world. I want to say—and I accept that—that to a very great extent the producers of the fruit believe that a central marketing board like this will assist them in marketing their products. I accept that. I know that that is so. But do they appreciate exactly what will happen in terms of this Bill? I doubt it very much indeed. Not long ago I had a talk with one of the gentlemen who led a deputation to give evidence before the Select Committee 11 years ago. He came from the pineapple producing areas of the Eastern Cape.

When he gave evidence before the Select Committee he was a very cross man indeed because we did not seem to be favouring the direction he wanted us to favour which was in line with the proposals here. To-day he says: “By Jove, how right the Select Committee was in the line that it took.” This would have been fatal. I repeat that when you get into the intricacies of that market, you hear new terms which are commonplace in the markets of the world. The language which they use is commonplace. They do not have to explain it to one another but it is strange to our ears. When you begin to ask yourself what it means, you go down into the lower depths of the convolutions of international finance to find out just what is behind all this international market for our products. This is at a time when we are facing a world which has boycotts against us and other troubles of that kind. I want to assure hon. members that the South African producer has not yet been excluded from the markets which are boycotting South African produce. The South African produce which has been getting on to the markets which boycott us does not get there because it is marketed by a board appointed under parliamentary legislation. It gets there because it has behind it the driving force of highly skilled and highly experienced agencies which are available to the private entrepreneur for the marketing of his products in those markets.

But we are not going to exclude them now.

Mr. Speaker, that is really a joke. That is something at which I can laugh and I have been trying to get something to laugh at all afternoon. I wonder if the hon. member has read the Bill. Does he really think that those people under the control of this Bill are going to remain as private market agents finding markets under the conditions laid down in this Bill? There is a provision in the Bill already which virtually says that the Board will have its own agency office in London. All the sales will go through that office. In other words, it will be dealt with in that ham-handed manner which always clamps down when the Government takes charge of an industry. It is inevitable. All the trappings, the levy and the right to do this and the power to do that are part and parcel of the same pattern. We are so used to it with all these boards with their levies, etc. This is not the way to deal with the problem before us. We shall vote for the amendment which I have moved. We say that there is no case yet made out for this Bill. We say that Parliament is not seized of the facts of the case and that there is a proper parliamentary procedure to enable us to get to know those facts.

There is a way of getting both the Government and the Opposition to adopt a common viewpoint and to put our weight whole-heartedly behind the drive to export our tinned fruits. That is what is necessary. We will then have a ceiling as far as the farmer is concerned and as far as the canner is concerned. As far as the operational board is concerned, if it is ever to be constituted, it will have Parliament solidly behind it in finding a market for the produce of South Africa under the best possible conditions. I hope that the Minister will accept this amendment. I hope that he will show himself wise beyond his years and that he will accept this amendment. If we deal with the matter in that way it will not hurt anybody. If he refuses to accept the amendment, we cannot vote against a Bill which organized agriculture and the producers have been asking for, but we wash our hands of it. When the Minister comes back to this House, as I forecast he will inevitably, and probably during the next session, we are going to stand up in this House and club him thoroughly because he is not taking advice from his uncles who are old enough to be able to advise him in regard to a matter with which we have had so much experience ourselves.

Mr. Speaker, one can accuse the hon. member for South Coast of many things, but there is one thing, though, of which one can never accuse him, namely that he does not defend the interests of his farmers heart and soul. Nor can I accuse him of not having made at least an interesting contribution, even though his facts were not always quite correct. One rather enjoys listening to him, even if it is only for the wholeheartedness of his speeches. I also had the privilege of serving on that Select Committee to which the hon. member referred. The only difference is that he started serving on it in 1956. I was only elected to this House in 1958. Therefore I only started serving on that Select Committee in 1958.

The fact of the matter is that the main objectors to the Bill, as it was before the Select Committee in 1958, were in fact people who canned a product which has not been included in this Bill. They are people who can, amongst other things, pineapples, which have not been included in this Bill. The hon. member for South Coast said that the Minister could include those other canners as well, if his board recommended such a step. That is true, but only after such a board has had talks with the canners of pineapples or grapes, for instance. These are types of fruit that have not been included in this Bill. I am assuming that those canners will ask to be included. Only after they have asked to be included, the board will consider it and then make the necessary recommendations to the Minister. Before they themselves ask to be included, they will not be affected. What has happened to those people who were the main objectors to the legislation we considered in the Select Committee in 1958? Most of them have since disappeared from the scene. They disappeared from the scene because they did not want to co-operate. They wanted the right to cut prices on the overseas markets. Subsequently they were granted the right to cut prices on the overseas market.

The result was that they went bankrupt. Now we want to put the affairs of this industry in order. The hon. the Minister has introduced a Bill for which the industry asked. We want to put the industry in order. There are always a few people in any society—and that is simply human nature—who want to be wrong-headed. We can do nothing with them. They can only cause their own downfall. That is exactly what those people did. They did cause their own downfall. Now the hon. member for South Coast, who is a very good fighter at all times, wants to help those people to cause their own downfall. But unfortunately they will cause the downfall of this entire industry in that process. We are not game for that sort of thing. I am speaking here on behalf of the Western Cape which produces these very types of fruit that have been included in this Bill. With all due respect I do not want the hon. member for South Coast to wreck our industries. I concede that he is a very good fighter, but in the course of his life he has also found out that he made mistakes. What he should not do, is to start marching for the sake of these wrong-headed people. We shall not allow them, to wreck this industry.

The hon. member also objected to the constitution of this board. He objected to the fact that the Minister had to appoint this board. Does the hon. member not know that of the 19 control boards that exist at the moment only three elect their own members? All the others are appointed. Now he suddenly objects to the fact that the Minister has to appoint these members. Did the hon. member not do his homework? I know him as a thorough person. He usually knows what he is talking about. This time, though, he is very wide of the mark. Of the 19 existing boards, there are only three where the producers elect the board members. All the other boards are appointed. Even in the case of these three boards, many board members are still appointed. Only a few of those members are elected. In all the other boards the board members are appointed and not elected by the producers. The hon. member tried to make out a very weighty case, but he does not know his facts. For that reason I want to ask him to withdraw his amendment so that we may continue to protect and develop the interests of this industry. He quoted Australia as an example. For many years already the Australians have had such a board, and for them such a body is much less essential than it is for South Africa, because Australia merely exports a small percentage of its canned fruit, whereas South Africa exports approximately 85 per cent of its canned fruit. Therefore South Africa is in much greater need of such a board than Australia is. All the arguments the hon. member quoted this afternoon against regimenting such a board, have also been advanced by our fruit farmers against the establishment of a deciduous fruit board to control the export of deciduous fruit. And how were we not put to shame, because now, after 17 years, we are prepared to admit that we could never have continued in the old way. The hon. member referred to the development of markets. When the Deciduous Fruit Board came into operation, it exported approximately— I merely want to mention one type of fruit that is controlled by the Deciduous Fruit Board, namely grapes—300,000 boxes of grapes a year. At present more than 6 million boxes are exported. Those markets were developed by this Board. All those arguments the hon. member advanced against the establishment of such a board, had also been advanced at that stage. There are some farmers who are still advancing them to-day. I said that it was merely human nature that some people had to be wrong-headed all the time. There is a further very good reason why this board has to be established now. Britain has recently applied for admission to the Common Market. Whether she will be admitted, remains to be seen. If there is one of our products that will definitely be jeopardized, it is indeed canned fruit. I do not foresee such great dangers for the export of fresh fruit, but I do foresee very great danger for canned fruit. As far as fresh fruit is concerned, we do not compete with the European producers in the same season. Consequently we ought to be able to negotiate good conditions with the countries of the E.E.C. But as far as canned fruit is concerned, one simply carries over the tinned product from one season to the next. The expensive methods of carrying over stocks by means of refrigeration are not used. It is much cheaper to carry over canned fruit from one season to the next. That is why I say that, if there is one product for which there is trouble ahead if Britain were to be accepted as a member of the E.E.C., then it is canned fruit. For that very reason we must establish this board to co-ordinate all the interests of the producers of canned fruit and to develop and manage them jointly.

I am convinced that we have now taken the right road. According to my information the industry as such, with the exception of one single producer, is asking for this legislation. I am referring to the producers of canned apricots. peaches and pears. I am not referring to pineapples, grapes, and so on. The Canner’s Council, which looks after the interests of the canning industry, has lent its wholehearted support in this regard. Who are we to go against the wishes of the people in the industry? Let me add to that at once that the one single exception is not even a purely South African canning company. Should we now withhold this Act for the sake of this one single exception, which is not even a major canner. when it is so imperative that this legislation should be placed on the Statute Book in order that a board may be established which will be able to look after all the interests of the canning industry and thus also after the interests of the fruit farmer of South Africa? I support this Bill wholeheartedly.

It is very interesting to note that three of us who are taking part in this debate at present were members of at least one of those Select Committees. I was a member of the three Committees which were appointed, and I have their reports here. In 1957 we heard 24 witnesses, representatives of the industry. In 1958 we sat again and made a similar recommendation. Our recommendation was that it was a difficult market and a very involved question, one that we had to tackle very carefully. The hon. member for South Coast is not opposed to the industry becoming a flourishing industry. He is saying what we did in those years. We learnt, and the then hon. Minister agreed with us, that this was a matter for extreme caution, and in that spirit we approached it. And we were unanimous in our desire to do the best we possibly could for the canned fruit industry. I acquired one very important interest while on those three Select Committees, and that is an interest in the sale of canned fruit that I have maintained ever since. Last year when I was overseas in England I visited supermarkets and village shops where they sold canned fruit. The Britisher eats a lot of canned fruit. He has a long winter and he naturally likes to have canned fruit. South Africa supplies him, with Australia and chiefly California. There are other countries as well, but those are the three big ones. South Africa is at present unpopular in Britain. When we first began our investigations, we were confronted with a buyers’ market; in other words, the prices were down. The buyers could say what they liked, they could offer what they liked and we had to sell. A year or two later it was a sellers’ market. There was a great demand for South African canned fruit. The situation had changed. Now the position in Britain is that we as a country are unpopular. It is quite true what the hon. member for Paarl said, namely, that our fresh fruit is in demand, especially Outspan oranges. Wherever one goes one sees that the Citrus Board has succeeded in getting an orange which is excellent for export.

And Cape fruit.

Yes, and Cape fresh fruit is very popular indeed, because, as the hon. member for Paarl says, it comes on the market in Britain when there is little competition. But that is not true of canned fruit. I saw in one of these big stores, and I followed it up in several other stores, our canned fruit with a wonderful brand of a famous English canning firm which is popular throughout England. I examined a tin and saw in very small print near the bottom that it was canned in South Africa for the firm concerned. In other words, it was canned in this country under labels put on over there. And South Africa is doing good business that way. Certain people have been selling fruit and have created a very big market in this way. On the Select Committee we approached the subject in the manner which we are doing to-day. But when we finished after three years the then hon. Minister was not prepared to introduce legislation. The position was very complicated. Towards the end of our inquiry I proposed the following amendment—

That was my proposal, and I had one very strong and courageous supporter, the hon. member for Paarl. I want to make it clear that in all our discussions there was agreement across the party line. This is not a party matter. It is a matter of business. It is a question of marketing our fruit and doing the best for our producers. Eventually the Chairman submitted a report to which we all agreed. This was the final report of 1959. No Bill was drafted, because the Minister was not prepared to accept it. The report reads inter alia as follows—

What does the export of fruit either canned or intended for canning mean? It means that this fruit which the hon. member for Paarl referred to as being sent overseas to the overseas’ market, may be canned there, and given a British brand. That is the manner in which the industry operates. That is why, while I do not doubt for a moment that the Bill is an excellent one, we consider this subject as a matter for caution. I think the amendment we propose is a constructive one. I should like the hon. the Deputy Minister to give this consideration. I think the hon. members over there referred to a period of two years in which to report. There will not be two years to report. We have a heap of evidence here already. There may be repetition and they can call certain people here and ask whether their views are still the same. It will be quite a simple matter. They could report and the Bill could be introduced at the beginning of next session, which will be before Britain enters the European Economic Market. I think that is a constructive suggestion. We have given much thought to this. I have gone through all the reports again and I think the suggestion we put forward is one that deserves the very serious consideration of the hon. the Minister.

The hon. member for Kensington and also the hon. member for South Coast are experienced people, and that is why it baffles me so that people for whom I have so much appreciation can admit here that 11 years ago already we started working on this matter and that we also appointed a committee in this regard at that time. Time and again they say that we have been studying this matter for 11 years. Eleven years has passed and now they are asking for an even longer extension. After all, one should be positive and if we are anxious—I can see the hon. members are anxious—then I want to confirm what the hon. member for Paarl said, namely that the canners in this country are asking for this Act. In talks and in consultations with the Department of Commerce and Industries the South African Fruit and Vegetable Canners’ Association devoted hours to finding a formula to see whether we could deal with this situation in a practical way by means of legislation. When at that stage a deciduous fruit board was asked for, everybody was dissatisfied. I remember that when a milk board was asked for, there was a stream of protests in the Transvaal. To-day one cannot conceive of the marketing of milk without such a board. Therefore I feel that these hon. members made a mistake to-day. They slipped up completely and I think that the fruit farmers are ashamed to think that the United Party—I think their intentions were good— are requesting that it should be postponed once again, because if it does not appear to be practicable, it can be altered at a later stage. At this early stage I can mention to you one thing that may perhaps be wrong, namely the exclusion of pineapples. I feel that everything should be controlled.

But the pineapple producers want to be excluded.

I can tell you why some of them want to be excluded, and I should like the Department of Commerce and Industries to take note of this. The problem experienced with marketing in countries abroad has always been that prices are cut. The canners of South Africa are blowing hot and cold. Canner A has a price of R2 a dozen; B has the same quality; he feels that he cannot sell at that price and then he reduces his price to R1.90 a dozen, and in that way we cut one another’s throats. Why should one feel anxious if the Australians already have a scheme which functions successfully and much along the same lines as our scheme? I can already foresee what will happen. The person who struggles to sell peaches also has pineapples, and then he tells the buyer, “My dear chap, I shall let you have my peaches at that price, but I am giving you my pineapples at a special price”. I can foresee that this scheme will have its birth pains, but I am sincerely convinced that this will be to the advantage of the industry and the fruit farmers of our country.

At this stage the fruit canning industry is in a very critical position as far as overseas prices and sales are concerned. Some canners have so far not had 50 per cent of last year’s sales abroad, owing to the economic conditions there and owing to the competition which is becoming more and more drastic. Why will it not be a good thing to have a board which can impose a levy, which can effect orderly marketing and which can tell the canner, “We are going to use so much for advertising; we are going to act jointly.” Overseas marketing requires intricate study, as the hon. member for South Coast rightly said. The people over there speak a language of their own. I agree with the hon. member that it is a fine art today to effect sales abroad, but there are two factors that are ultimately the most important ones, i.e. quality and price. This board is going to confine itself mainly to getting the right price and to advertising our products, and we must concentrate on improving the quality. The hon. the Deputy Minister set out the matter very clearly and pointed out why we could not wait any longer with this legislation. We must have orderly marketing now and we must stop cutting prices. Hon. members on that side are very unhappy about the way this board is appointed, but I want to point out that of the 19 boards we have, all of them were appointed. If the Minister were to appoint a person whom certain people do not like, it would not matter, because hon. members must remember that the Department of Commerce and Industries will definitely do nothing to hamper our exports of canned fruit. After all, on the strength of their experience in the past, hon. members should at least have that measure of confidence in the Department. That is why I want to lend my wholehearted support to the request of the hon. member for Paarl, namely that this matter should be settled to-day.

I find myself completely confused listening to the hon. member for Standerton because he gave two very good reasons why he should have supported the amendment moved by the hon. member for South Coast, namely his concern about the fact that pineapples are not included in the Bill and, secondly, his concern about the composition of the Export Board. Sir. let us be quite clear that we on this side of the House are absolutely 100 per cent in favour of orderly marketing on the oversea markets for our canned products in order to obtain price stability on those markets. There is no difference of opinion between us in that regard, but we do doubt the advisability of the Bill in its present form. I want to appeal very earnestly to the hon. the Deputy Minister to heed the plea made here by the hon. member for South Coast and to refer the Bill to a Select Committee so that we can put our heads together and eliminate what could be weaknesses in the Bill.

What is your criticism of the Bill?

I am coming to that if the hon. the Deputy Minister will give me an opportunity. I am speaking very largely as somebody who represents a constituency where a very great proportion of our pineapples which are used for canning are produced.

They are not covered by the Bill.

I know that but they could be; I am coming to that point too. Sir, the hon. member for Standerton has mentioned the difficulty in regard to price cutting overseas. What happens at the moment is this: At the moment you have a voluntary scheme for peaches, apricots and pears. When a canner finds himself in the position that he cannot hold stocks because of financial difficulties, what happens? A buyer comes to him and says that he must cut his price. What happens then? He maintains the prices which have been agreed upon in respect of the peaches, apricots and pears, but very often the pineapple price is cut, and therefore pineapples to-day are being made the whipping boys of the industry to a great extent. Sir, I mention this because obviously there is something wrong when an important part of the canning industry is not covered by the Bill. It may well be that a select committee may decide that pineapples should be covered by the Bill. We know that the pineapple commodity subcommittee of the S.A. Agricultural Union, together with the fruit and vegetable canning committee of the S.A. Agricultural Union, has pressed for years for some sort of orderly control; we admit that, but again that does not mean to say that we must come with legislation which may not achieve its purpose.

Secondly, I want to deal with the question of representation on the board which the hon. the Deputy Minister says was based on more or less the percentages which were being marketed by the co-operatives and what I would call the private canners on the United Kingdom market under the present voluntary scheme. Sir, there you have one person representing the co-operatives and four persons representing the other canners. This is based on the fact that the share of the co-operatives of the United Kingdom market for those particular sizes of packs which come under the voluntary scheme, namely consumer-size packs, is in the region of about 20 per cent, which would be a fair reflection. But this control scheme, if it is going to be effective, and if there is this danger of the United Kingdom entering the European Common Market, will at some stage or other surely have to operate on the European market also; and if one goes to that market one finds that the cooperative share at the moment is very much higher. It is something like 45 per cent. These are facts which should have been taken into account when this Bill was drafted, for both these reasons, namely the fact that no provision is made for pineapples except that in future the Minister may include them on the recommendation of the Export Control Board, and secondly, the fact that there seems to be an imbalance as regards the representation on the Board with regard to the overall share of the market. These in themselves are two good reasons why the Minister should listen to the plea of the hon. member for South Coast and refer this matter to a Select Committee instead of rushing it through the House.

The hon. member for Albany mentioned two objections to this Bill. The first is that pineapples, too, should possibly be included in this legislation. The hon. member went so far as to say that if this Bill were referred to a select committee, it might happen that the select committee would arrive at the conclusion that pineapples should also be included. But I do not think the hon. member has a problem there. Clause 1 (1) provides that any other type of deciduous fruit may be included. Consequently the inclusion of pineapples is no problem and a select committee need not be appointed for that purpose. Representations may be made for the inclusion thereof, and it is possible that it may be included. I should like us to realize that this legislation is being introduced primarily in the general interests of our sales of canned fruit, but it is really directly in the interests of the canner himself. It is for that very reason that we feel that this matter should be left in the hands of the canners themselves, without any unnecessary interference by any Government Department. It is also for that reason that the board is being appointed in this manner.

I just want to deal briefly with the question of the appointment of the board. That was the second objection raised by the hon. member for Albany. I said explicitly that the representation on the board was more or less and as closely as possible in accordance with the interest the co-operative companies, in relation to the other canners, have in the exports. I emphasize that these are the total exports at the present moment. That is the way it was constituted. Initially there were misgivings in regard to the representation on this board, and it was in fact the co-operative societies which felt that they should have better representation, but in actual fact the co-operative societies’ interest in the exports amounts to 21.6 per cent. That is as close as one can get to one-fifth, and for that reason it is both correct and fair that one member should be appointed to the board to represent the co-operative societies.

As regards the appointment of members, an objection was also raised by the hon. member for South Coast. These members are appointed by the Minister from nominations submitted to him. Surely, one cannot have a more equitable set-up than when the industry itself submits to the Minister the list of names of the people from whom he has to appoint representatives to the board. Objections were also raised as regards the London agency. I should like to point out that the London agency itself will not handle the fruit. The fruit will still be handled by the individual canners themselves. As regards the standard of the fruit supplied, this is being regulated by the instructions issued by the Department of Agricultural Technical Services, and I do not think the hon. member for South Coast need concern himself any further about that. But if I have to summarize, the greatest objection that may possibly be raised against the establishment of the board, as it is being envisaged at present, is the fact that there is difference of opinion as a result of which it is not desirable to come with this board at the present moment. As I have said, this board is being established for the canners, to be controlled by the canners, and I should like to indicate to what large extent unanimity did in fact exist in regard to the establishment of such a board. In July, 1963, the Canners’ Association appointed a committee to investigate possible statutory control and the committee found that the time was ripe for statutory control, and I just want to read an extract from the report submitted by that committee—

It is a lengthy report and I shall only read the relevant paragraph. The heading of this paragraph is “Export Marketing of Canned Fruits”, and it reads as follows—

Since then the Canners’ Association itself has dropped this recommendation that was made here, but on several occasions individual members of the Association made representations to the Government as a result of which a meeting of the various canners was convened in 1964. I must point out to hon. members that on several occasions during the past 12 or 13 years attempts were made to bring about a non-statutory agreement, since it was found to be so essential, but it did not work because it was not enforceable. This is the only significant element which is in actual fact being introduced by way of legislation. Subsequent to that a meeting was convened, and I should like to read out to you what happened there, as described by the Secretary for that Association—

Therefore I do not think that there is any need for hon. members to suggest now that there is no unanimity in respect of the industry in South Africa. That is not true. At a later stage the Secretary, on behalf of the Association. wrote a letter to the Minister in connection with the question as to when this legislation would be introduced, and, inter alia, the following was written in that letter—

I am quoting from the letter written by the Secretary for that Association to the hon. the Minister of Economic Affairs. This letter is dated 7th May, 1965. Because it is important for the industry—both the canner and the farmer—that there should be orderly marketing of canned fruit on this highly delicate international market, it is to my mind desirable that such control should be exercised, and to my mind the objection that there is supposedly no unanimity, is totally unfounded. According to my information the people who are opposed to this measure are, with the exception of South African Preserving, people who are canners of pineapples. As far as South African Preserving is concerned, we know that to a large extent they give preference to a different system of marketing.

Therefore it will serve no purpose to appoint a select committee on this matter. Unfortunately I cannot accept this amendment, and I move that this measure be read a second time.

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

Upon which the House divided:

Tellers: P. S. van der Merwe and B. J. van der Walt.

Tellers: A. Hopewell and T. G. Hughes.

Question affirmed and amendment dropped.

Motion accordingly agreed to and Bill read a Second Time.

Mr. Speaker, I move—

The amendments contained in this Bill deal with two principles only, namely, in the first place, the facilitation of the incorporation in the Republic of overseas companies who have the majority of their shareholding, directors and assets here in this country and who also conduct their business virtually exclusively in the Republic; and, secondly, authorization of the Registrar of Companies to grant institutions for higher education exemption from the payment of certain fees for inspection of company documents kept by him.

The first amendment arises from representations made to the Government by South African Breweries Limited. Before dealing any further with the details of the representations and problems of the South African Breweries, I may just mention that there is a statutory precedent for the proposals before the House at the moment. Hon. members will recall that in 1961 Parliament passed an amendment to the Companies Act in order to facilitate the incorporation of the Shell Company in the Republic. At the time the problems of the Shell Company were restricted mainly to the practical obstacles it encountered with regard to the re-registration of its motor-car and trade licences, permits and other concessions, upon its incorporation in the Republic in terms of the Companies Act, as it read before the 1961 amendment.

Upon its application for incorporation in South Africa S.A. Breweries will, however, not only have to cope with these problems, but the form of its shareholding, as it now appears, is going to create a considerable deal of other problems, to such an extent, even, that the entire scheme may fail, that is, unless the Act is amended.

From its establishment in 1895 until 1951 S.A. Breweries had its headquarters, which are now situated in Johannesburg, in London, but through all those years, as still at present, it conducted all its business in the Republic and to a lesser extent in Rhodesia and Zambia. In fact, all its assets were also situated in these three countries, but mainly in the Republic. All but three of its directors are South African citizens, resident in the Republic.

Inhabitants of the Republic and locally registered companies hold the following interests in the capital structure of the S.A. Breweries—

The majority of its voting power and virtually all its loan capital are therefore held locally.

Until 1951 South African Breweries had to pay British income-tax as well, which means that from a South African point of view investment in the company was rather unattractive. Approximately 80 to 90 per cent of the total capital was in fact held by concerns outside the Republic in that period. Since 1951, however, the position has changed rapidly, as I have just indicated.

The present state of affairs also means that the company is prohibited from deducting non-resident shareholders’ taxes from the dividends to those shareholders. As a result some R160,000 leaves the country every year at the expense of S.A. Breweries and to the detriment of the Republic’s foreign reserves and local shareholders.

In the light of all these circumstances S.A. Breweries now wants to have itself registered in the Republic and have its incorporation in England cancelled, but the problem is that neither the South African nor the British Act provides specifically for the summary transfer of incorporation of a company from one country to another.

Several methods of achieving the proposed transfer of the incorporation of S.A. Breweries without further legislation on the part of South Africa or Britain have therefore been investigated, but all of them are not only hazardous but also unpractical, apart from the fact that it will be an expensive, time-consuming and complicated process. I do not think I should take up the time of the House unnecessarily by giving full details of these methods.

The fact of the matter is that the conclusion was arrived at that for the most successful execution of the S.A. Breweries’ plans it was necessary to amend the South African Companies Act as proposed in the measure before the House at the moment, and that the British Parliament should provide by way of a private Act for the cancellation of the registration of the company in England, simultaneously with the registration of the company in South Africa.

In this regard I may mention that representatives of S.A. Breweries have already had consultations with the British concerns involved and that they were informed that the necessary British legislation would be introduced by the end of the year and would in any event be passed no later than July next year.

The commission of inquiry into the Companies Act has also been consulted on the principle involved here and pledged its full support for it.

Does the British Government agree?

I have just said that although we can give no assurance it has already been intimated that a private Bill will be passed there by July next year at the latest.

The provisions of this measure have been set out very clearly and are easy to understand. In the main they amount to the following—

It will be noticed that I refer to “a foreign company”—in other words, this does not apply to South African Breweries only, but also to any other company in similar circumstances.

1. (ii) that it conducts the major portion of its business in South Africa;
2. (ii) that the greater part of its assets are situated in South Africa;
3. (iii) that the majority of its directors are South African citizens and are resident here;
4. (iv) that by a majority decision its shareholders have expressed the desire to have the company incorporated here;
5. (v) that its registration abroad will be terminated as soon as it is registered here; and
6. (vi) that it has lodged all documents required by the Registrar of Companies; that it has paid all fees payable and has complied with all the other requirements of the Registrar, in addition to the requirements of section 201 of the Companies Act.
7. (b) Hereupon the State President then issues a proclamation providing that as from the date of the cancellation of its registration abroad, the foreign company shall be deemed to be registered in the Republic.
8. (c) All rights and commitments of members of the company, all actions for or against them or the company, and all contracts, agreements, etc.; shall remain unaffected upon the transfer of incorporation.
9. (d) Ohlsson’s Cape Breweries, which is a full subsidiary of South African Breweries and is also registered in England at present, is also included in the present scheme and will be incorporated in South Africa along with S.A. Breweries.

I think it should be clear to everybody that the Republic has nothing to lose but a great deal to gain by the incorporation of these two companies and of course also by other foreign companies which may in future seek registration here under similar circumstances.

Clause 2 of the Bill is quite simple. Its aim is purely to confer on the Registrar of Companies the right to exempt institutions for higher education, for research purposes, from the payment of fees for the inspection of company documents kept by him. Taking into account the value of research work by the universities to our country, I am of the opinion that this is a reasonable concession.

Mr. Speaker, earlier this afternoon the hon. member for South Coast asked that I should listen to the “uncles” on that side. Unfortunately I could not do so then, but now I want to express the hope that Uncle Douglas and Uncle Flippie will agree with me.

Mr. Speaker, as the hon. the Minister has indicated, this Bill mainly concerns one particular company. Although one company is affected, namely the South African Breweries, the intention of this amendment is to provide for any similar contingency in future. Any other company which subscribes to the conditions laid down by the proposed section 201 (a) will get similar exemption. In effect, this company has virtually been recognized as a South African company and the hon. the Minister has indicated that the British Parliament is expected to put through a private Bill. The hon. the Minister has not indicated what will happen if the British Government fails to put through this private Bill and whether it will affect the issue at all. The second clause deals with the exemption from the payment of the usual fees by university students and research students wishing to inspect documents in the Registrar’s office. I think that encouragement should be given to them. We support the Second Reading of this Bill.

Motion put and agreed to.

Bill read a Second Time.

Mr.Speaker, I move—

As is apparent from the long title, this measure deals only with wage regulations in connection with the executive posts of local authorities. The high salaries local authorities offer senior officials in particular, or agree to pay, have in recent times given rise to serious misgivings in responsible quarters. As I shall demonstrate in a moment, these high salaries are disproportionate to the salaries paid for comparable work in the Public Service, the highest cadre in our national administration. The inevitable result is wage inflation but, even worse, there is competition for the services of key staff which, if it is allowed to continue without restraint, may seriously disrupt the maintenance of essential services. Because it is mainly the larger municipalities which pay the high salaries, and then only to a relatively small group of officials, it causes dissatisfaction in the ranks of the broad worker corps in the public sector, thus undermining loyalty and the will in employees to produce their best.

It is true, of course, that the industrial Conciliation Act provides the necessary machinery for bargaining for wages and other conditions of service, and that this machinery is also available to local authorities and their employees. In their case the Act makes one important exception, however, and that is that a dispute on which they fail to achieve agreement must be referred to compulsory arbitration. The object of this is satisfactory settlement of the dispute, because the Act denies employees of local authorities to strike. As the Act reads at present, such a dispute has to be referred to the industrial tribunal or to any other arbitrator agreed upon by the parties.

At present there are only two industrial councils in respect of local authorities, namely in respect of the municipalities of Bloemfontein and Pretoria. In the case of all other local authorities bargaining therefore takes place on an ad hoc basis, i.e. by way of direct negotiation, and if this fails, by the establishment of a conciliation board.

Mr. Speaker, let us now consider what may happen. When the employees of the Johannesburg Municipality insisted on revision of their salaries some three years ago, the city council enlisted the services of a group of wage experts from the U.S.A. to advise them on the matter. After investigation (and, we may assume, at no slight expense) the experts submitted a new salary structure which the city council was not prepared to accept. The conciliation board which was appointed to settle the ensuing dispute reached stalemate and the parties appointed a senior counsel to undertake the arbitration. The city council found itself in a tight spot. It had to defend itself against the proposals of experts appointed by itself, and then took the easiest way out, namely to contend that it could not accept the proposed salary structure because the recommended salaries for some posts were higher than the salary laid down by the Administrator for the post of town clerk, the city council’s top officer.

In this. regard I have to explain that the town clerk is excluded by section 2 of the principal Act from the ambit of this Act, and that his salary has been fixed at R10,000 a year by the Administrator of the Transvaal in terms of the local government ordinance. After the arbitrator had indicated that legally this did not prevent it from allocating higher salaries in respect of some other posts, he continued and said—

Eventually he made an award in respect of senior officials according to a scheme the parties jointly submitted to him. One is inclined to wonder why the city council went to the trouble and expense of taking the matter to arbitration.

As against the town clerk’s salary of R10,000, the award provided, inter alia, that the city medical officer, the city engineer and the city treasurer should each be paid an annual salary of R11,928 as from 1st March,. 1966; after two years, R12,504, and after another two years, the maximum of R13,080. The maximum salaries of three other officials; were increased to R11,352, and those of fiver others to R10,416, and of eight others to R9,480. Apart from the town clerk, there are at present 11 officials in the employment of the city council who receive higher—and in some cases considerably higher—salaries than the salary paid by the State to the secretary of a department and his senior professional officers. On 1st March, 1968, this number will rise to 19.

Mr. Speaker, I have given the details in full in order that hon. members may know how it was set about gaining a purely local advantage and how the salary balance in the public sector was disrupted. As may be appreciated, these events caused a great stir and intensified the demand that a limit be set to such an unhealthy state of affairs. From various quarters it was in fact also proposed that all the executive posts of local authorities, like that of the designated chief administrative officer, be excluded from the ambit of the Industrial Conciliation Act in order that their salaries might be controlled by the Provinces. The far-reaching nature of this proposal induced me to consult the South African Association of Municipal Employees, to whom I shall now refer as S.A.A.M.E., on the matter. Except for the employees of Durban and Johannesburg, who have their own trade unions, S.A.A.M.E. represents the employees of local authorities throughout the country. They are therefore the responsible, representative and authoritative trade unions. On 14th November, 1966, I had discussions with representatives of S.A.A.M.E., and I may now testify that this Association, in its characteristic responsible fashion, appreciated the obvious danger of such a wage war between local authorities themselves and the discord it must necessarily give rise to with the Provincial Administrations. As hon. members know, Provincial Administrations exercise control over the budgets of local authorities, and it goes without saying that the allocation of exorbitant salaries by local authorities will elicit reaction. The Association was not in favour of any further exclusion from the Act and insisted that its members should retain their existing bargaining rights in terms of the Act. S.A.A.M.E. agreed, however, that anomalies of the kind to which I have just referred should be curbed, and pledged its support to the proposal that all arbitrations involving local authorities should be conducted by the industrial tribunal. The Association also agreed that a local authority and its employees should be prevented from bringing about exorbitant salaries through joint action, and that the Administrator concerned should in such cases have the right to call for arbitration.

After consultation with the Provincial Administrations and the Minister of the Interior a Bill was prepared on the basis of the agreement reached with the South African Association of Municipal Employees.

Were the trade unions of Johannesburg and Durban not consulted?

Yes, they were also consulted. For general information the Bill was published in Government Gazette Extraordinary No. 1671 of 1st March, 1967, and elicited objections from certain quarters as regards the scope of the measure. But, Mr. Speaker, support for the principle of the contemplated measure was also pledged by a wide circle. This came from the side of the United Municipal Executive, some provincial municipal executives and the employees themselves, although misgivings were expressed as regards some aspects of the measure.

The trade unions which are directly concerned with the matter deliberated on the measure, and in consequence of that the South African Association of Municipal Employees approached me and proposed certain amendments. The measure in the form in which it has been submitted to the House now enjoys the support of both the National Association and the two trade unions in Durban and Johannesburg. It differs from the published draft mainly in that it is now restricted to wage disputes in respect of departmental heads.

On 10th May, 1967, I had discussions with a delegation from the United Municipal Executive. These were attended by representatives from all the Provinces, including the Cape Divisional Councils. On that occasion the Executive once again pledged its support to the principles of the Bill, and some delegates were even of the opinion that the measure did not go far enough. Others, on the other hand, counselled caution, and the representatives of one Province even asked that the measure be held in abeyance for a year in order that it may receive further consideration.

This, then, Sir, is the background against which the Bill should be seen. I think its provisions are clear, but I should nevertheless like to elucidate the clauses as follows:

Clause 1:

Because the Bill relates to departmental heads only, they must be identified as a category. That is done in this clause. As will be noticed, the definition of “departmental head” leaves the position of a designated chief administrative officer, the officer excluded from the ambit of the Act by section 2, untouched. A chief administrative officer has not been designated in respect of all local authorities, however, and it is for this reason that the definition includes a town clerk and a secretary.

Clause 2:

This clause provides for the appointment of two additional members to the industrial tribunal when the tribunal conducts an arbitration in terms of the measure. The additional members will be appointed on an ad hoc basis, i. e. only for the duration of a specific arbitration, and a member will be appointed to represent both the employer and the employees. The parties will therefore have a direct say in the arbitration—even if only one of them desires it.

Clause 3:

I deal with this clause paragraph by paragraph:

Paragraph (a):

This amendment is necessary with a view to the provision of the new subsection (4A).

Paragraph (b):

The proposed new subsection (4A) contains the essence of the Bill. All that it provides is that if an industrial council or a conciliation board is unable to settle a dispute regarding the remuneration of a departmental head, the dispute shall be referred to the industrial tribunal for arbitration. As I have said, the parties may in such a case obtain a direct say in the arbitration—therefore a quid pro quo for the right they are denied of appointing an arbitrator of their own choice. For the information of hon. members I may mention that arbitrations in which local authorities were involved since the establishment of the industrial tribunal were virtually all conducted by this body. The Johannesburg case is an absolute exception. This proves that there is confidence in the industrial tribunal and that the tribunal is also serving this purpose, for which it was established, amongst other things. In addition, arbitrations by the industrial tribunal are much cheaper than arbitrations by other concerns.

Paragraph (c):

Subsection (6) of section 46 of the Act permits the parties in a dispute to take a shortcut to arbitration if they are satisfied that a conciliation board will not produce a solution to the dispute. In this regard the amendment ties up with the principles I have just dealt with.

Paragraph (d):

The proposed new subsection (8) will prevent a local authority, whether at the instance of the employees concerned or on its own initiative, from paying exorbitant salaries to its departmental heads and thus frustrating the aims of the Bill. The Administrator concerned shall be required to establish, however, that the disputed action will have a detrimental effect on the general salary structure of local authorities in its Province if it calls for arbitration by the industrial tribunal in terms of this subsection. I want to assure hon. members. however, that thorough consideration will be given to each such request and that the parties will be offered a full opportunity to state their side of the case before I issue a directive. The powers conferred upon me as Minister by this subsection will certainly not be exercised in a vexatious manner. Hon. members will probably notice that paragraph (b) of the subsection provides the parties with an opportunity to prevent action by the administrator by calling for arbitration of their own accord

Clause 4:

This clause makes the parties concerned liable for the costs of the arbitration proceedings to which I have just referred.

Clause 5:

If an arbitration of this nature is to be conducted by the industrial tribunal it follows logically that the industrial tribunal should also conduct a further arbitration which is aimed at having the original award revised. The proposed amendment provides accordingly.

Clause 6 contains the short title.

Mr. Speaker, this measure does not aim at equalizing or pegging salaries on the public executive level. We appreciate that the employees of large municipalities are entitled to higher salaries than their colleagues who are employed by small municipalities. Nor will it prevent senior officials from receiving equitable remuneration for their services. Hon. members will agree with me, however, that a proper balance between the salaries of local authorities and the other cadres of public administration is desirable and indeed most essential. Such balance, not only in respect of salaries but also other conditions of services, may in my view be brought about by a national industrial council for local authorities, or if this is not possible, then at least by two regional industrial councils which may be established on a provincial basis. Fortunately there is already a considerable measure of support for this idea, and I may assure hon. members that my Department and I will do everything in our power to bring such industrial councils about, and I may also add that the United Municipal Executive, which came to see me, has also assured me that the establishment of such industrial councils will receive their support.

But an industrial council cannot be brought about through compulsion. It has to be brought about by these incentive methods I have outlined. Unless and until we attain this ideal, this measure is the only means of bringing about the so essential co-ordination. The crux of the matter is that an orderly dispensation will be created without prejudice to the normal bargaining processes, rather than through intervention or compulsion from above.

We have listened with great interest to the hon. the Minister, because we were all interested to find out why the Government considered this measure necessary. What we thought would be the reason, has transpired to be the reason. This is to see to it that large city councils, such as Johannesburg in particular, to which the Minister referred repeatedly, and Durban, which recently concluded a contract with an engineer for an exceptionally high salary, will in future be compelled to refer to the Industrial Tribunal any increased salaries they wish to pay departmental heads. The Minister concluded his argument by saying that he wanted to retain the normal bargaining methods in this Bill; but surely that cannot be, because the methods which are employed at present are the normal bargaining methods. This Bill is an extraordinary measure to make the Government’s attitude prevail vis-a-vis the large city councils of South Africa. The object is quite clear. It is to see to it that the Industrial Tribunal shall act virtually as the agent of the State and of the provincial councils, and to see to it that the city councils will not. fix salary scales which will put the Government, the provincial councils and other local authorities in the shade. This is of course a most extraordinary act on the part of the Minister. The Industrial Conciliation Act, one of the highlights on our Statute Book, save for one or two minor blemishes, was originally intended to settle disputes between employer and employee. But now the Minister introduces a brand-new principle, an unprecedented principle, namely that the Industrial Conciliation Act, which was intended to settle disputes between employer and employee, should now settle disputes between employer and employer. Disputes between employers and employers are now to be settled at the expense of the employees. To that end that magnificent piece of legislation, the Industrial Conciliation Act, must now be prostituted. It is quite clear that it is impossible for a responsible Opposition to allow the Government to proceed with this step and to violate the entire principle of the Industrial Conciliation Act in order to settle disputes between employer and employer at the expense of the employee.

The Minister made great play of the fact that he enjoys the support of a whole series of trade unions, but of course the mistake made by the Minister, and I fear also by the trade unions concerned, is that their vision is very limited. One could appreciate that. They are concerned with the public sector of our economy. The Minister spends his whole life dealing with the Public Service and comes indirectly into contact with the other sectors, as Minister of Labour. The thinking underlying this measure is tinted by the fact that the Minister and the other concerns involved see only the public services of South Africa. They see only competition between public services and public services. They see only competition between a city council and a provincial council, but they forget that the main difficulty experienced by all public services in South Africa, city councils, the provincial councils and the Government itself, is competition with the private sector. That is the problem faced by Johannesburg, for example. When three years ago, as the Minister reminded us, Johannesburg imported experts to investigate the council’s entire wage structure, they compared the wage structure of the Johannesburg City Council with those of 19 concerns in the private sector, and the Johannesburg City Council was put to shame. It was clearly apparent that the City Council could not hope to compete in the labour market with private concerns which pay trained men infinitely higher salaries than those in the public sector. This is so particularly now that there are several large private undertakings which are able to offer employees the same and even better benefits, apart from salaries, as the public sector. We are all proud of the fact that the State, the provincial councils and the municipalities are doing so much for their employees. In the past it was a very powerful consideration with employees that they could work for the State or for a city council at a lower salary because they enjoyed so many other benefits, for example pension benefits, medical benefits, vacation benefits. But at present there is a large number of private concerns in South Africa who offer the same and better benefits, and the competition we must face up to at present is not the competition between one public body and another public body, but between the public sector in the economy and the private sector, which is heavily loaded against the public sector. As we have a severe shortage of advanced experts, it is inevitable that the public sector will be bled white of capable and experienced departmental heads, engineers, financial experts, medical experts, and so forth; and what are we going to do about it? Are we to produce negative measures to force the entire public sector to be unable to compete with the private secor? Are we to allow the public sector to be deprived of new recruits, in particular, to an ever-increasing extent, as a result of negative measures?

It is of no avail taking negative measures. This negative measure must fly in the face of the interests of all municipal employees in South Africa, all employees in the public sector, because it is an established fact that the salaries of the highest cadres in any service determine in the final instance what the salaries of the lower ranks will be. There must be a relation between the remuneration of the top men and that of the middle and lower ranks. In the Public Service and in many other concerns there is even to-day a congestion of wage structures under the pegged wages for the higher officials. We find it in the Railways and in the Public Service, and it will become an increasingly stronger argument among employers when they receive reasonable requests for increases from the less-privileged staff in their employment. They will then say: We cannot give you any more, otherwise you may eventually get just as much as the head of a department or the deputy head. This measure militates against the interests and the entire wage structure of all employees in the public sector—not only the city councils, but also the public service and the provincial service, will suffer as a result of it. This is not the answer. The answer is, firstly, that we should be willing on short term to pay more to men of standing, experts, men who are specially trained, of whom there is a tremendous shortage in South Africa. We must pay the top officials in South Africa more. They are worth that to us. We must also be able to attract them from abroad. New recruits must be attracted from abroad. We may perhaps not be able to do so in the public service, but we can and should do so in the municipal services, because we cannot go on with this shortage in South Africa. It is a shortage which hampers our development, the potentialities we could realize. But simply to cork the bottle while the water is still boiling is to ask for an explosion. It is a very shortsighted policy. I just want to say something in connection with the Johannesburg City Council, which came in for such an attack and to which the Minister referred so scornfully in his speech.

Scornfully?

Yes, he did. His entire attitude with regard to the city council was scornful. He could not understand this and he could not understand that. Through its policy of paying its employees proper salaries, the city council achieves greater efficiency than the people who criticize it so much. It also gets greater efficiency from its public service than the provincial council, and yet the Administrator of the Transvaal has so much to say about Johannesburg. But I do not want to make such a statement unless I can prove it.

Can you prove it? [Interjections.]

Here I have official figures relating to the Transvaal Provincial Council. In 1962 the capital expenditure of that province totaled R20,893,000. For 1967-’68 it has increased to R30,950,000—an increase of 48.1 per cent. The expenditure on current account increased from R125,406,404 in 1962-’63 to R215,573,304 in 1967-’68. That is estimated to be an increase of 71 per cent. Unfortunately I could not ascertain the number of non-white employees, but the number of white officials increased from 39,338, of whom 1,504 were concerned with the education of Indians and Coloureds, therefore a nett number of 37,834 to 48,320 in 1967-’68. This is an increase of 10,486 provincial officials, in other words, 27.7 per cent. Now let us see what the Johannesburg City Council achieves with its well-paid executive officers, who are responsible for efficiency. As I have frequently said in other debates: It is the executive who is responsible for the productivity of an organization and for its functioning. Let us consider what has happened in Johannesburg. In 1962-’63 its real expenditure was approximately R28,199,378. The estimated expenditure, which has not been calculated finally, is R37,629,720 for 1966-’67. in other words, an increase of 33.4 per cent. This was accompanied by an increase of 44 per cent in wages for Whites. But with this tremendous increase in expenditure, this tremendous expansion of their activities, what was the extent of the demands of the City Council of Johannesburg on the manpower of South Africa? How many additional officials did it require to perform that extra work, work which involved increased expenditure to the tune of 33.4 per cent? Whereas the provincial council had to appoint almost 11,000 new officials during the same period, the City Council of Johannesburg managed with an extra 411 white officials.

Where did you get those figures?

I got them officially from the City Council of Johannesburg.

Are they correct?

This is really childish. If the hon. member wants to get up and say that the Johannesburg City Council furnishes incorrect statistics, he may do so. But I will not be so base as to think that for one moment. Anybody would say, of course, that they could do so because they rely on non-white workers. I want to point out to them that in the same period the number of non-Whites in the employment of the Johannesburg City Council did not increase but decreased, and in fact by 350, or 1.80 per cent. That is proof, if one needs proof. If I may just bring this one thought home to the hon. the Minister, this debate will be worth the trouble, although the Bill is repugnant. This thought is that if one wants to achieve efficiency one has to start with the top cadre of the service and pay those people according to merit. The salaries of those people should be proportionate to those in the private sector. That is the problem South Africa is experiencing. If that were done, we would be able to achieve greater efficiency throughout the service. It would then be possible to pay higher and better wages throughout the services without skimming off more of the limited manpower potential in South Africa than one is entitled to. We feel that this Bill is not in the interests of South Africa, for the reasons I have submitted. We feel that this Bill is going to cause a greater congestion in the wage structure under the highest wages paid in the public sector. It is going to create disproportion between the private sector and the public sector, mainly at the expense of the public sector, which is going to enable the private sector to cause a brain drain in the public sector. I should therefore like to move the following amendment—

The hon. member for Yeoville admitted that a problem existed, the problem of a shortage of skilled manpower in the country. We know that both the State and the provincial administrations lose many of their officials because the private sector lures away officials from the Public Service. But I think it is inconceivable that we can allow the third cadre of government in this country to play this very same role, namely to draw away officials from both the State and the provinces and to draw away officials from one city to another by offering excessive salaries. None of us would like to deny any officials, whether in the Public Service or in the municipal service, the privilege of earning a reasonable wage which will enable him to make a decent living. We find now that in the case of, for example, the City Council of Johannesburg salaries are inflated artificially. The hon. member and the Minister referred to these job evaluation consultants who had been brought here from abroad. I cannot really imagine that a city council such as that of Johannesburg would bring people from abroad who have no conception of the circumstances in this country to come and tell it what salaries it should pay its chief officials.

They can be impartial.

They can be impartial, but they have no idea of the circumstances and the standard of living in this country. That is why I say that in my opinion those salaries are not based on local conditions at all. We also have to bear in mind that these salaries are paid out of the rates and taxes levied on the citizens of every city. In other words, we cannot allow the city councils to pay such salaries as will of necessity cause the rates and taxes of the local authorities to increase, because we are dealing not only with large city councils, but with the smaller ones as well, and we cannot allow the bidding among city councils to continue when we bear in mind that it may disrupt local authorities in the country. The fact that three of the four provincial councils have already tried to deal with this problem proves that such a problem did in fact exist. Ordinances have already been passed by three of the four provinces. Natal is the only province that has not passed such an ordinance, the reason being that Natal saw that the Transvaal Provincial Council had landed itself in difficulties with its attempt to find a solution to this problem. But I want to point out that these attempts which have been made by the provinces— although no steps have as yet been taken by Natal in this regard—followed upon a conference of the four Administrators at which the principle that the salaries had to be limited was accepted. In other words, all four provinces realized that something had to be done.

The reason why the hon. the Minister is introducing this legislation is this attitude, an attitude which one may call resistance, on the part of the City Council of Johannesburg, which skillfully circumvented the control exercised by the province of Transvaal over the maximum salaries which may be paid to departmental heads of the city councils. In terms of the Transvaal Ordinance the city councils of the Transvaal were classified into certain categories and maximum and minimum salaries were laid down for every category and the various city councils could act within those maximums and minimums in increasing the salaries of their officials. Then the City Council of Johannesburg came along with this skilful circumvention of importing job evaluation consultants from abroad in order to place the Transvaal Provincial Administration in a difficult situation. That is why I say that this legislation is merely an attempt to introduce control in the case of stubborn city councils— and nobody in this House would want to suggest that the city councils should not fall under the control of the provincial councils.

Then they have to be enlightened provincial authorities.

Yes, but I want to show now how enlightened they are. Seeing that R10,000 has been laid down by the Administrator of the Transvaal and the Executive Committee as the maximum salary for a chief official I can see no reason why those officials should at present receive more than officials in the various Government departments and in the provincial councils.

Because they receive too little in the Public Service.

Even so it cannot be allowed. Can we allow a city council, which falls into a much smaller and lower cadre of government, to pay salaries that are higher than those received by the officials in Government departments? The salary of R13,080 mentioned here by the Minister was not even the salary of the chief official of the Johannesburg City Council. According to that arrangement, and if the 10 per cent by which the salary of the Town Clerk may in terms of the Transvaal Ordinance be higher than the salary of the next senior official is taken into account, it would be possible for the Town Clerk of Johannesburg to receive a salary of between R14,000 and R15,000. Officials subordinate in rank to the Town Clerk could get R13,080 per annum, while departmental heads in our Public Service get only R9,000 per annum at present. That is why I say that we cannot allow this position to exist in South Africa. That such a problem does exist is proved by the fact that all four provinces have already decided to attempt to solve this problem.

To my mind the industrial tribunal is the body that is best able to do this bargaining between one city council and another. As a matter of fact, we have two safety valves here. The Administrator is the first person to judge. If, in his opinion, the salaries paid by a city council to its officials are too high, he may approach the Minister. The Minister acts as a further safety valve. The Minister has to be of the same opinion. So there are in fact two very important persons in the country, two very important buffers or safety valves in the country, that have to judge whether a city council pays its officials too much and whether it is causing disruption in respect of other provinces and other city councils. I think it is a very sound arrangement that we should designate a body with as much experience as the industrial tribunal to undertake this arbitration. The Minister recommended here that industrial councils be established for local authorities on a provincial or regional basis. The fact of the matter is that municipal workers are very strongly organized. They negotiate with individual city councils. Many of our city councils cannot afford to obtain the services of strong advisers to negotiate on their behalf. For that reason it is essential that an experienced body such as the industrial tribunal be appointed to undertake these negotiations. There is no question here of salaries being fixed or pegged. We simply want to prevent the whole salary structure not only of the city councils but also of the State administration from being disrupted at this time when we are combating inflation. We should not promote inflation by paying artificially increased salaries.

Those salaries were paid before inflation became very serious.

Yes, but the fact remains that the position would be aggravated if we did that. That is why I say that in my opinion the industrial tribunal is the body best suited to undertake that bargaining if we want balanced control. Therefore I should very much like to congratulate the hon. the Minister on this legislation.

Mr. Speaker, I cannot follow the reasoning of the hon. member for Pretoria (West) who argues in favour of this peculiar discrimination which is now being introduced by the hon. the Minister. The most noticeable thing about this Bill is that it mainly refers to professional men, whether doctors, accountants, engineers and such like. I do not think anyone can regard this Bill unconnected with the general development of the country. When this was a pastoral country the problem did not arise. The industrial sector hardly existed and when it did exist it had a limited market, its profits were limited and the salaries paid to its high officials were also limited. But with the development of industry of all kinds millions of rand were to be handled and very often single industries came to handle some of these millions of rand. Even excluding the gold mines and the other mines there are industries to-day, like breweries and engineering works, which can afford to pay very large salaries to achieve competence.

I want first to draw your attention to the report of the Coalbrook disaster which is well known and which contained one very important statement by the mining houses in which they said that the Government was paying a pittance to the Government Mining Engineer. They drew the attention of the Government to the fact that here was a man receiving something in the region of £3,500-4,00 (at that time) a year, with a good pension and security of tenure, and they said that this man has to talk officially to men “to whom we are paying £12,000 a year”. The security of tenure, the pension and the other perks were, so they said, “no better in the State service than they are in our service”. It is all there, it is all on record. As I said, these men whose emoluments being questioned are the higher professional men, men who, as the hon. member for Yeoville has said, in the open market can command a large salary. Not only in the open market in this country but the open market in other countries also. This is one of the brain-drain causes. If this Bill goes through, if it takes the standard professional salary of this country to be that of the public service then we will keep even fewer brains in this country. The irrigation engineers, who cannot get much employment outside, will leave. Doctors will not go into the service. The veterinary surgeons will not go into the service. The mining and civil engineers will not go into the service. The State needs water engineers for its dams.

Order! The hon. member must come back to the Bill.

I am referring to this Bill, Sir, because that is the effect this Bill will have. This Bill will lower the status of the professional people throughout the country in the public sector, and the only remedy for them will be to leave the public service. Reducing the salary of the Durban city engineer or the special Durban city engineer to the level of the civil engineers in the State service will not keep them here. They will leave the country.

Whenever a man enters a service of this nature, a Government or a State service, he remembers the saying of Napoleon that “every soldier has a marshal’s baton in his knapsack”. Every professional man entering the service of the State or any other industry must feel that he can with diligence, with attention to his work and ability, reach the top—in other words, the baton is there for him to take. But when he is tempted to come into the service as a young man he looks to see where is the ceiling, what is the top level, whether the baton is worth taking. I feel that this Bill is going to have that effect. Already we have in the medical sector of the State the control of the State over municipalities. The Minister of Health can indirectly—and does so—affect the salaries of medical officers of health, and with the medical officers of health those workers in the health sector such as sanitary inspectors, health visitors, nurses, and other people of similar occupations, all have their salaries affected by the salary of the medical officer of health. What has been the result? Several medical officers of health have taken their employers to a conciliation board and have obtained improvements, particularly in Johannesburg, Durban and other cities. Before this the municipalities in some instances increased the salaries of these officers above the recommended and accepted level set by the Minister of Health.

Business suspended at 6.30 p.m. and resumed at 8.05 p.m.

Evening Sitting

Mr. Speaker, when business was suspended I was trying to explain the effect of State control and the use of State salary scales on professional people serving State or semi-State institutions like municipalities. In terms of the Public Health Amendment Act of 1952, the Minister of Health took power to regulate the salaries of medical officers of health employed by municipalities, and he did this by giving the municipality concerned a refund of one-third of the salary paid, with his approval, to the medical officer of health on the basis of the State salaries. If the municipality paid more than the salary of which he approved, the Minister withheld the one-third refund which the municipality would otherwise have been given. The result was that municipalities would not give rises to their health personnel and this applied not only to the medical officers of health but also to the lower grades of health personnel. Some of the municipalities did give their medical personnel increased salaries; they were prepared to carry the cost of the increases themselves. The Minister then said that he was not going to give them any refund whatsoever. In other words, where municipalities gave their medical personnel increases in salary, they not only had to meet the cost of any increases to which the Minister had not given his approval but they were compelled also to forego the refund which they would otherwise have received. The result, of course, was that the staff could get no salary increases whatsoever. The medical officers of health of some of the municipalities went to conciliation boards, and so far the Government has been paying the refund which it paid before, leaving the municipalities themselves to meet the extra costs and this they were prepared to do. This had a bad effect not only on the medical officers of health, but I want to quote to you what the President of the Institute of Public Health, speaking at a congress at George in November, 1966, had to say. I quote—

Sir, all this stems from control by the hon. the Minister of Health over the salaries of medical officers of health and their junior officers in the municipal service. If you consult the universities, which have medical schools attached to them, what the position is there, you will find that the clinical professors have to be given extra salaries or some other inducement to remain in their posts. Cape Town, as you will remember, after Professor Saint retired, had some two or three professors in succession who only stayed a short time and now we find that the full time clinical professors in the University of Cape Town receive certain special awards compared with the non-clinical professors; otherwise they return to private practice. Sir, I am trying to show what happens when the State fixes the salary of a professional man.

They can still go to arbitration.

The question of arbitration does not come into it. They are quite prepared to accept conciliation boards but they do not want arbitration; it is not the same thing. I want to point out the ludicrousness of the position in which the State finds itself. The State competes with itself. Not only must it meet competition from the private sector, which I accept is difficult, but it competes with itself. Sir, if you look at the Odendaal report on South-West Africa, you will find that the commission says that the Territory cannot keep a health inspector in service. The South-West African Administration is very concerned about this because they have to cope with malaria. Why cannot they keep the services of a health inspector? Because when they appoint a health inspector in the health department of the Territory, the Railways or a municipality promptly takes him away. The Odendaal report shows that at the time when it drew up its report there were no health inspectors available to the Administration in a territory where malaria still prevails.

The position in the mental hospitals is even worse. One of the key persons in a mental hospital is a male nurse. I think everybody will appreciate that a male nurse is an important individual in a mental hospital, but the mental health service cannot keep its male nurses. Why? Sir, you must remember that a male nurse is a matriculated person. After he has been in the mental health service for a short time he realizes that both his salary and his status are much lower than those of a clerk. The result is that he becomes a clerk. Why should he not do so? As a clerk he works shorter hours and he gives orders to male nurses instead of accepting orders. He enters the administrative service in which he can climb to a high level. Lastly, I read in a road safety report quite recently that one of the provincial engineers had complained that young engineer graduates from the university who learned specialized road engineering at the cost of the province resigned after a short period of service. The provincial engineer then finds, after having given a contract to some private firm, that the engineer for the private firm is the man whom he had just trained for the job. The State cannot attempt to control the salaries paid by the smaller municipalities because they too must compete with the private sector. If they are not in a position to compete with the private sector then there will be no professional men in the service of the municipalities. What is more, quite a number of the best of our professional men will leave the country, and the best young ones who go overseas to further their studies will certainly not return to the bleak outlook which faces them here if they return.

Mr. Speaker, I think that if ever anybody deserved a compliment on the agreement which has been reached with the trade union S.A.A.M.E. and on the unanimity which has been achieved with the representatives of municipalities throughout South Africa then it is most certainly the hon. the Minister. I think that both sides of the House, as well as the country, owes the hon. the Minister a great debt of gratitude for the way in which he acted on a previous occasion when, at a critical stage, there were negotiations between the mine-workers’ trade union and the employers. On that occasion he indicated that he could take firm steps, if necessary, when dealing with differences between employers and employees, but that he always took both sides of the matter thoroughly into consideration. As ex-town councilor and as a person who has had the privilege of serving on the chief executive of the United Municipal Executive, I want to say that I did not think it would be possible for the hon. the Minister to achieve in such a short period of time this kind of agreement which has been submitted to us here this afternoon. I think he deserves our gratitude. [Interjection.] Sir, if that hon. member from Natal wants to put a question to me later on, I would gladly reply to him. I hope he will not hide behind the muttering in order that his remarks may pass unnoticed.

I should like to refer to a few minor matters which have been touched upon here by the hon. member for Yeoville, and a few other minor matters which I think deserve some attention. It is true—nobody denies it—that this legislation is not ideal legislation. I need not say this; the hon. the Minister has already said so in his introductory speech, and he also indicated that this is not the final word in regard to negotiations between employer and employees who are in the service of local authorities. The hon. member for Yeoville tried to create the impression here, in the same way as the Opposition has on numerous occasions tried to do in many other debates during the past Session, that this is such a simple matter, that the problem can be solved merely by increasing the salaries. Sir, that kind of talk is perhaps the most popular, but it is also the most irresponsible thing one can state here. I would also find it easy to suggest that as a solution and the hon. the Minister, if he wanted to act irresponsibly, would also like to say: “Just pay higher salaries.” We would be very popular in this House if it were possible for us to state in respect of our own officials in the Public Service: “Just increase the officials’ salaries and do not worry about the results”. If the hon. member for Yeoville alleges, as he did this evening, that is merely a question of competition with the private sector which has to be considered, I want to tell him that this legislation did not originate with this Government. The discussions in regard to this matter originally arose as a result of a feeling which originated amongst the local authorities themselves. As far back as 1956 the United Municipal Executive and the Provincial associations felt that some means or other had to be found to combat in some way or other competition, not between local authorities and the private sector but amongst local authorities themselves—and that is the difference. It is not, as the hon. member said, the case that we are now introducing legislation here because we are afraid that people will be drawn from the Public Service and from the Provincial Service by local authorities. It was the local authorities themselves who requested that a stop be put to that kind of competition whereby one local authority, by offering higher salaries, lured the same officials for the same work without extra qualifications, away from another local authority. It was never the idea that a stop would be put to promotion according to merit, but the local authorities did have the idea … [Interjection.] I do not know whether the hon. member for Pietermaritzburg (District) had the privilege, as I did, of serving on local authorities and on the chief executives, but, for his information I may just say that representations were made to the chief executive of the United Municipal Executive from Natal as well, to the effect that unfavourable competition should be eliminated.

I want to go further. If the hon. member, or the Opposition, doubt this I am prepared, if time allows, to read out the presidential address of the president of the United Municipal Executive to prove that year after year reference is made to this unfavourable competition which exists between local authorities, municipalities such as Johannesburg, Durban and others. In addition I want to say that I do not intend this to be in any way derogatory; I merely intend it to be a statement of fact. Smaller local authorities in particular have complained because the larger local authorities, specifically Johannesburg and Durban, enticed officials away from the smaller local authorities, and brought the entire system of local management to the verge of collapse because they were unable to compete. [Interjection.]

The hon. member for Kensington has asked what is wrong with that. I would like to tell him what is wrong with that. If a person is promoted according to merit, if he is given a more responsible post, and the man in that post consequently earns a larger salary, then there would be nothing wrong with that. But does the hon. member for Kensington consider the following to be right? In comparison with the salary structure of the public servants and the provincial officials, a local authority, during the period 1956 to 1967—and now the hon. member for Yeoville will notice that I am considering a local authority other than Johannesburg—increased the salary of its town clerk, quite automatically, by way of regarding, from R3,300 to R6,000 a year. But then it was added that this R6,000 would have to be increased soon. A city treasurer who received a salary of R2,040 per year was receiving a salary of R5,236 11 years later. That is not in proportion to the increase in the cost of living. Is that right?

So what?

I shall proceed, and then the hon. member for Durban (Point) can explain to the country what he means by saying “so what?” A truck driver was paid R880. Without any additional responsibilities, and with the same increase in the cost of living, which was generally applicable throughout the country, his salary, apart from the other privileges of leave and pension, was increased to R2,112. Does the Opposition think that conducive to a sound national economy? Do they think it is sound policy for the Government to allow these things to happen? If they think that and if it is not merely a case of their currying favour with Johannesburg or some other smaller municipality, I want to ask the hon. member for Durban(Point) whether he is also prepared to increase the salaries of our public servants, secretaries of departments, and others, by 120 per cent? Is the hon. member prepared to do that?

We say that they must receive a cost-of-living allowance.

Now we are hearing a new story about a cost-of-living allowance, since this other argument of theirs is no longer valid. If anybody has appreciation for the work of the third level of government, i.e. local government, then I do not think I need take second place to such a person. I have that appreciation because I had the privilege of working together with people on the local government level. But I want to say, and I am saying this without any reflection on the members of local authorities throughout our country who are doing outstanding work, that these people, because of the nature of the work which they are doing, and because they are not remunerated on a full-time basis for their work as councilors, do not have the time to go into all these details of wage laws and conciliation legislation, with all its implications. They do not have the time for that and often, particularly at the smaller places, they do not have the necessary knowledge. I maintain that as far as Witbank is concerned, the town where I come from, I can testify to the fact that that town council always acted with the greatest circumspection and responsibility in order to see that justice was done as far as their officials were concerned. Moreover, I can say that if anybody has reason to be appreciative of the work of the officials of municipalities then I am that person. But when that appreciation has to be expressed in terms of rands and cents, which we cannot account for to the other sectors of our public life, then I think it is extremely irresponsible not to put a stop to the way in which salary increases are being granted by local authorities.

I want to conclude by saying that what the hon. the Minister held out the prospect of was the most gratifying news to me, namely the prospect of there being encouragement for provincial associations, or for the United Municipal Executive or local authorities in a group, if they wanted to co-operate, to establish industrial councils. I think, and here I agree with the hon. member for Yeoville, that nothing is more desirable than this, i.e. that this fine piece of legislation of ours should be applied in the best possible way.

But I want to ask the hon. member for Yeoville the following. In any bargaining process, as provided for in our industrial legislation, the two parties, i.e. employer and employee, have always been recognized. None of that bargaining between them is being removed by this legislation. All that is being done is that another additional method is being suggested, and only for one reason. Has the hon. member for Yeoville ever asked himself who the people are who can act as mediators on behalf of the employer in the case of municipalities? I know what his reply will be. It is the local municipality. In all fairness, do you think that such a local authority has at its disposal particulars of salaries and leave benefits, etc., elsewhere so as to be able to draw a proper comparison and arrive at a fair and honest agreement with their employees? If he says that then I just want to tell him that it is incorrect. Municipality after municipality focused attention on the fact that those particulars were not always available to them when bargaining took place. It is impossible for part-time people on that level of government to have gone into these matters properly. Now the Minister is suggesting that when it appears that, comparatively speaking, the national economy can suffer as a result of the granting of salary increases, and smaller municipalities can be prejudiced by unfair competition, there should be this safety valve, i.e. the fact that the Administrator will be able to act as adviser to people in this regard. But this does not mean that the Minister or the Administrator is implying by that that these chief officials’ salaries should now be pegged. That is not so. The bargaining will still go to the court, which we, on both sides of the House, have always said we are proud of, and which will have the final say even on decisions made by a Minister. Can you tell me what is wrong with that? I want to ask that the Opposition to regard this legislation as an interim stage in finding such a fair solution that we will also be able to give employees the acknowledgment in respect of local authorities which they deserve, but also exercise that control over local authorities, because they are not an isolated section of government. They are the third level of government and have to work with us and often under our supervision.

Listening to the hon. member for Witbank, I think it is obvious that the hon. member has very little knowledge of industrial conciliation, as it affects local authorities, with whom we are dealing to-night. Let us get down to what this Bill really does. This Bill does two things only. The one is, that the arbitration court in terms of the old law, is done away with, and that we must now refer such disputes to the Tribunal. That is the first leg of this Bill. The second leg of the Bill is to enable the Administrators of the Provinces to interfere in the salary scales, which municipalities decide to pay to heads of departments in certain specified categories, and to have those referred to the Tribunal. Let me just say here that I have spent many years of my life in municipal service, in the Cape Provincial Municipal Association and in the United Municipal Executive, and I represented this country at the International Labour Organization, where this type of debate and discussion took place at the highest possible level. I just mention this to show that my bona fides in saying what I have to say, are well founded. What the Minister is trying to do will not succeed. You may peg the salaries or wages of the men in the upper brackets by this expedient of referring the matter to the Tribunal, but what will really happen is that you will have a welling up from the bottom of the lower salary and wage scales in all municipalities to such an extent that they will be crowding upon those of the men in the top jobs. It is my contention that the Public Service, which is controlled by the Public Service Commission, should face up to the facts of the day and pay officials, especially the head officials in the various departments of the Central Government, a far higher salary than they do, because their scales of pay are out of line with modern practice to such an extent that municipalities, which can pay these wages and salaries, are able to compete and to draw these people off. Surely the Minister and the Government must realize that if people are attracted out of the provincial service and the Government service into local government, there must be something wrong. So I say to the Minister, that the introduction of this Tribunal to intrude upon, and interfere with, industrial conciliation disputes, is quite wrong.

The hon. member who has sat down has said that the old policy and the old basis in this country—which are good—are that there should be conciliation between employers and employees. If this Bill was going to do only that and just that, nobody could complain. But this Tribunal is going to arbitrate between employer and employer. If one municipality decides to advertise for a job and a man employed in another municipality wishes to apply, this Tribunal can stop him. What is that man going to do? It is quite elementary. He will look for a job in private industry. If the Government is genuine and sincere in what it wants to do, it must regulate the wages and salaries of private industry, because then we will begin to get at the problem—if we can call it that. If one compares the wages and salaries of persons, and professional men in particular in this country—and these are the men referred to here—with those paid in other countries of the world, our pay does not shape up too well. These are incontrovertible facts. I quote as an example the case mentioned by the hon. member for Durban (Central). This is no new problem. For many a long day municipalities have had difficulty in getting medical officers of health. They have had difficulty in getting health inspectors, health visitors, and people of that type. The Minister, as the hon. member said, set a ceiling upon the salaries, which might be paid to these people, and that ceiling is based on what the department is prepared to pay by way of subsidy. When the municipalities paid higher than that, and took it out of the general rate, the reaction from the Government was simply to restrict municipalities and to threaten to withhold the subsidy altogether. When we talk about engineers and people of that particular, shall I say, professional calling, we find that they are hard to come by. In this country there are any number of opportunities and vacancies which occur for men with those abilities, skills and qualifications. Moreover. the pay is good. So I cannot see how it is going to rectify matters by bringing these people down to a level in terms of the Public Service Commission scales of pay. These are the things with which we are faced.

Referring now to the Administrators. I know from experience that Administrators for a long time would have liked to interfere in local government and municipalities. The hon. member for Witbank said that in the small local authorities councilors have neither the experience nor the time. Now that is an admission. If a man decides to serve on a local authority, no matter how small or large it may be, surely he must make it his business to be familiar with these things.

The South African Association of Municipal Employees has over a number of years pressed for better wages and salaries for its members. Certain people, the people in the top brackets, have been excluded. I want to say without fear of contradiction that a municipality the size of Johannesburg, or of Durban, or even of Cape Town, is a sizeable undertaking, and these men in the top jobs are entitled to good pay if we want the jobs done properly.

Look at the Deputy Ministers we have for what we pay them.

Order! Is the hon. member reflecting on a Deputy Minister?

No, I was just pointing them out as typical of the people this country produces.

Order! I think the hon. member must withdraw that remark.

I withdraw that, Sir.

It has also been said that this legislation is undesirable legislation and that nobody is lending support to this measure, except unwillingly. In dealing with individuals in the country it must be remembered that they are entitled to sell their labour in the best market. There can be no possible qualification to that right. Every man is entitled to sell his labour in the best market. The Government service, as we all know, is being faced every day with more and more people leaving to take jobs elsewhere. The country as such is developing economically in every field. People in municipal service do not have the opportunity to make the technical studies that they should to keep abreast of their professions. So they must do one of two things: They must either leave and take a job in trade and industry, or they must press for more money. And that is where we are this evening.

The Minister has asked us to approve a Bill restricting the right of individuals to sell their labour in the best market to the best possible advantage. [Interjections.] There is no other argument but that. [Interjections.] It makes no difference how much we may argue or how much hon. members may attempt to talk me down. The fact remains that it is the right of every individual to sell his labour in the best market. If it should so happen that he falls into dispute with his employer he can do one of two things: He can look for another job or he can go to his trade union and have a dispute declared and get some relief by way of arbitration.

As I say, I have had long experience in municipalities with this type of arbitration. Any municipality of any consequence has a scale of pay and the scales of pay rise by annual notches, usually in terms of five years. They can be in terms of seven years and they can be in terms of three years. I am talking about modern, up-to-date municipalities who give their officials and employees an opportunity of realizing that if they stay in a particular job they will automatically get an increase in pay for a given period until they reach the grade barrier.

When we come to town clerks, city engineers, town treasurers, medical officers of health and other persons, who in the terms of the Bill are regarded as what one might call key personnel, we must remember that these people are highly qualified persons. These people have spent years, either in training or by way of practical experience, in getting the knowledge that they have. Who are we, sitting here as individuals, to decide by law that because Mr. X decided to follow his calling or his bent in local government he shall have a ceiling set upon him with no relief whatsoever in terms of this measure. Moreover any applications that he might make for a salary increase, irrespective of whether his employer is prepared to grant it or not, are subject to the interference, and the intrusion of an Administrator who does not pay his own people enough money! That is the whole essence of the matter: The Government does not pay its own employees enough money.

I go further. For the first time in many years in public life I now hear from hon. members that municipalities are the third section of government. They will be glad to hear that, because they have felt for as many years that they have been the Cinderella. Municipalities have not had much recognition from the Provinces, and even less from the Government. They are regarded as a sort of necessary evil. [Interjections.]

Order!

I conclude my remarks by simply saying this. I cannot possibly accept any proposition which intends to restrict and exclude any man, or woman for that matter, in these high echelons of public service from getting the pay which the employer is prepared to pay. I cannot accept any interference whatsoever from anybody else, other than a properly constituted arbitration court, on which both sides have equal representation with a neutral chairman.

Mr. Speaker, the hon. member for Karoo has just said that the hon. member for Witbank apparently has very little knowledge of industrial legislation. I want to tell him that the hon. member for Witbank knows a great deal about local authorities. With all due respect for the hon. member for Karoo’s knowledge of local authorities, I want to tell him that judging from what he said it sounded to me as if quite a number of years had elapsed since he last served on a local authority. The hon. member for Witbank served for many years on his own municipality and he was also a member of the United Municipal Executive of the Transvaal Municipal Executive. He probably knows a great deal more than that hon. member will ever know. But then the hon. member for Karoo comes along here to-night and makes the fantastic statement alleging that the Administrator should not have the right to interfere in the salary scale of local authorities. I shall return to that later. All that I can say at the moment is that it was a fantastic statement. He argued here about the right a person had to sell his services on the best market. This legislation has nothing to do with that. The legislation before the House does not restrict anybody from selling his services. He launched an attack here on the salary scales of the Government and drew comparisons between the salary scales of the private sector and that of the State and the semi-State sector. That has absolutely nothing to do with this entire matter. The entire theme of that hon. member and the hon. member for Yeoville dealt with the clash between the salary scales of the private sector and that of the Public Service. But this legislation has nothing to do with that. All that the hon. member for Yeoville did here was to make a plea for the salary scale of the Johannesburg Town Clerk. He used these things and said that this legislation would bring about confusion in the wage structures of the State.

I was pleading for the private motor car drivers to whom the hon. member for Witbank referred.

You were pleading for salaries. But that is not the objective of this legislation. The objective of this legislation was clearly set out by the hon. member for Witbank. It is not aimed at Johannesburg as such. It was quite by accident that the Johannesburg Town Clerk has been involved in this matter. This legislation is aimed specifically at restoring order to the equilibrium of salary scales of local authorities, in other words, establishing a proper, regular structure. I shall tell you what happened. What originally gave rise to this legislation was the type of thing which was happening, and to which the hon. member for Witbank referred, i.e. the fact that competition was taking place between various local authorities. The one local authority was luring away the officials of another local authority. In turn local authorities were luring away the officials of the Provincial Administration and the Public Service. The turn-over between the private sector and the local authority sector is by no means as high as one thinks it to be. It is much lower. The official in the local authority remains in the local authority. He does not easily go to the private sector. The reasons are that he enjoys certain security, as well as certain prospects which he does not enjoy in the private sector. We have had many of them who have gone only to return again. But I want to explain to you what did in fact happen in the Transvaal after there was this competition which was mentioned. In this way a regarding scheme was introduced in a certain town—let us call it town A—and the salary scale of the town clerk was increased from approximately R4,900 to more than R6,000. After this took place it was subsequently felt that a plan should be devised in order to control this type of thing. One would immediately find that that municipality which had increased its salary scale to such an extent would be drawing officials from other municipalities. I am in a position to inform you that this little town had a population of 5,000 and that its town clerk was being paid on the same salary scale as a town with a population of approximately 10,000 to 12,000. It was then decided to refer the matter to a Departmental Commission and the Local Authority Advisory Council of the Transvaal. They investigated the matter. I now want to inform the hon. member for Yeoville that officials from Johannesburg served on that commission. They were some of their cleverest officials. That commission consisted of officials from local authorities who then considered this matter and tried to establish how the matter could be arranged. It was then argued that a town clerk should have certain qualifications and that he should receive a certain minimum salary. That salary was then determined to a certain degree. Then an attempt was made to grade the towns in the Transvaal. A formula was ultimately devised on the basis of the size of the towns. But now one comes to the top scale which has to be paid to the town clerk, whether he is the town clerk of Johannesburg, Durban or Cape Town. It makes no difference. You will agree with me that somewhere along the line the Public Service has to be taken into account. I am now asking the hon. member for Yeoville whether a local authority is an industry, or whether it is a third level of government. It is a third level of government. It is a semi-Government Department. Other Government Departments must be taken into account. Somewhere in the top categories one must make a notch so as to draw a comparison with all one’s other heads of departments. That was precisely where the difficulty lay. That is what the scale was based on and what the maximum salary of a town clerk ought to be. That, then, is how Johannesburg came to be implicated in this matter. This legislation was not specifically drawn up for that reason. That was the whole idea behind the matter. An ordinance was then passed and the ordinance provided that before a town council could pay a town clerk a certain salary it first had to obtain consent for that salary because, as the hon. member for Pretoria (West) said, the towns have been graded and a minimum and a maximum notch has been laid down for every town. What did in fact happen was that some municipalities baulked against that. But all towns were graded on a reasonable basis, which brought about an improvement in the entire matter. I can tell you that it was the Transvaal that began with this matter; and you have heard that there were two other provinces, i.e. the Free State and the Cape, who did not agree to this matter. They also have a provision in their ordinances which contains a stipulation to the effect that the town council must receive permission from the Administrator to pay salaries in excess of the stipulated salaries. Natal was the exception. As far as Natal is concerned I can tell you that the Natal members on the United Party Municipal Executive support this legislation. But what is this legislation actually providing for? The legislation is making provision for the following. Now one can find a city council which realizes that it cannot increase the salary of its town clerk until it is more than that determined by the Administrator, but which then increases the salaries of its other heads so that they are more than that of the town clerk, because it is free to do so. All that is being provided in this legislation is the following. There are two parties, i.e. the employers who are the councilors and the employees who are the officials. They concur. They want this for their own towns. But it is not in the interests of the general salary structure in the country. This legislation provides that the Administrator has the right to request the Minister to refer those salary scales which have been determined by irresponsible municipalities for negotiation if the Minister deems fit. I suppose that that is important. Then the matter can be rectified in the interests of the general salary structure of the country. What the hon. member for Yeoville said, i.e. that it will cause confusion, is not correct. This legislation is going to be to the advantage of the salary structure as a whole. The hon. member for Yeoville mentioned percentages and figures in order to compare the Johannesburg City Council and the Provincial Administration.

I mentioned the actual figures as well.

Yes, the hon. member mentioned the figures and wanted by so doing to prove efficiency. The hon. member wanted to indicate how efficient the Johannesburg City Council is. But surely hon. members cannot do that. The Provincial Administration and the City Council of Johannesburg function on two absolutely separate bases. Then one has political functions and the other has political, as well as productive functions. It renders services. If the basic services which are being rendered are not the same, how can one use figures to compare them? Surely those figures then have no significance.

Mr. Speaker, I welcome this legislation and I believe that all local auhorities in the country also welcome it. I regard this legislation as a damper which is being placed on irresponsible local authorities to prevent them from acting as they have done in the past, since they will now not have such a free hand to do as they please.

The hon. member for Pietersburg, who has just addressed the House, made it quite clear that he is in favour of regimenting salaries. The hon. member for Witbank went so far as to bring lorry drivers into the argument. He illustrated the case of the lorry driver in one municipality getting R880, while another one was getting R2,000. This Bill really has to do only with heads of departments. The Minister in his opening remarks illustrated the case of Johannesburg. I suggest that the premises of the Minister are established on wrong foundations. It is not competition between State Departments, provincial administration departments and cities; it is, rather, competition between the cities and private enterprise. I have had the privilege of serving as sole arbitrator on 14 or 15 municipal disputes, being elected by both employer and employee. In not one single case has the argument ever been used in evidence brought to me that certain salaries were being paid in State Departments. Always, when a demand was made for higher pay, the aggrieved parties quoted the rates of pay being paid in private enterprise. My experience in all the arbitrations I had, they compared either one municipality with another or, in many cases …

I just want to know, who applied for the arbitration?

I presume the hon. member knows the Industrial Conciliation Act. Under this Act the employees, after indicating that they have a grievance they, in due time, following the procedure of the Act, can elect an arbitrator. The employers also elect an arbitrator.

[Inaudible.]

I am answering your question, if you would do me the courtesy of listening. The employees elect an arbitrator and the employers also. This is the difference; they appoint an umpire. In 15 of the cases I was the sole arbitrator. As employers and employees elected me.

Who was the umpire?

No, I was the arbitrator …

And also the umpire?

And also the umpire. Not one single decision on any case was taken on appeal. In all the cases that were brought to my notice, invariably the parties concerned compared the rates of pay either with those of other municipalities or with those of private enterprise. It is competition with private enterprise with which the employees are mostly concerned. This Bill is an attempt to try and regiment the municipalities. As I have said, the Minister is on wrong premises. He fears that the competition is such that it will affect State Departments.

The hon. member for Witbank during the course of his remarks suggested that employees were being attracted from other municipalities to Natal. Let me illustrate the position in the city of Durban. The city treasurer was trained in the city department and was a member of the treasury staff. His predecessor was on the Durban city treasury staff. The one before him was on that treasury staff. The town clerks are in the same position. Most of the heads of the departments of the city of Durban were men trained in the city of Durban. It is true that Durban has trained the town clerks of Port Elizabeth and the city of Johannesburg. Dr. Holmes, who became city treasurer of Johannesburg, had been trained in the city of Durban. The present town treasurer for the town of Pinetown was trained in Durban and then went to Bloemfontein. Our Nationalist friends made it so difficult for him in Bloemfontein that he eventually came down to Pinetown at a lower rate of salary, to get a bit of peace. To suggest that it is the competition with State Departments and not with private enterprise, is to beg the question.

The hon. member for Pietersburg suggested that persons would leave the municipal service and go to private enterprise and then go back again. That is what he said in the course of his remarks. What happens invariably is that during the boom times, the professional class leave either the civil service or the municipal service. If one were to go to most of the cities to-day, one will find that quite a number of professional civil engineers are men who formerly served in our various State departments or municipal departments. They have left to practice as professional men. As time goes on and we experience a bit of depression and credit squeeze and things become difficult, some of those men will weather the storm; others will not. Those who do not weather the storm, those who cannot succeed on their own, those who cannot stand on their own feet, are the men who will go back to the municipal service and the State service, because they were not the best fitted to stand on their own feet. That has happened throughout the history of this country. [Interjection.] I did not say all. If the hon. member has had any experience of life, he will know that the best men in the legal profession can go out and stand on their own. Some of those who cannot make the grade, become members of Parliament. Private enterprise sorts out the sheep from the goats. Those who can stand on their own feet, will succeed. There are some people, of course, who can make a success in both spheres, both in public life and in their profession. But they are very rare. I would like to ask the Minister whether this is not a first step towards fixing earnings. We have heard of price control and profit control. Is this a first step towards income control? Because, if they are going to regiment salaries for municipal services and for the civil service, will the end be a second class civil service or a second class municipal servie? Will we not experience a brain drain, people leaving this country and going overseas? In this competitive world it is the natural desire of every man to get to the top.

Order! The hon. member for Bloemfontein District must not converse aloud.

It would be best to leave the terms and the conditions between employers and employees to the employers and the employees. Let them settle their own differences and let the State only interfere when they fail to reconcile their differences. So long as the employers and the employees can settle their differences the employees can sell their labour in the best market and the employers are prepared to pay the price. Is not that the best safeguard that we have for the future? Surely you can leave it to the ratepayers of the various cities to regiment their councilors through the ballot box to see that town councilors do not pay their employees too much. In all cities…

Durban.

The hon. member interjecting says “Durban”. The hon. member ought to know that the standard of Durban’s municipal servants, the heads of departments, compare favourably with anything else in South Africa. I wish that the hon. member would learn, as a new member, that he can ask questions but cannot make running interjections. He must contain himself because he has little or no experience of what takes place in the city of Durban. The citizens of Durban shall, if they were dissatisfied with the rates paid to senior civil servants, change their town councilors. They have changed their town councilors in the past and would change them again. Any local authority, if it is going to be democratically elected, the citizens of that municipality will see to it that they have the best town council. When the town council pays wages and salaries which they regard as excessive, they will take care of it in the ordinary democratic way. If the Government has got to settle the difficulties through a Public Service Commission which does not face UP to the reality in the modern world, it will not be shielded by this kind of legislation and it is up to the Minister to look for other ways if he wants to get over his difficulty. I suggest that the best way to solve the difficulty which the Minister finds himself in, namely the question of high salaries for municipal servants, is to leave it to the municipalities, to leave it to the citizens of those towns to elect councilors who will fix the rates of salaries having regard to the conditions of service in the city or town concerned. Because private enterprise will compete for these services, various municipalities will compete for these services, and the State will compete for these services and unless it is the policy of the Government to fix salaries, to fix a ceiling on earnings, to fix a ceiling on profits, to fix a ceiling on prices, and regiment earnings, profits and salaries all along the line, then there is no argument for the Minister bringing forward this Bill which has as its main object the regimentation of salaries as a first step towards the regimentation of incomes throughout the country.

Mr. Speaker, I want to associate myself with what the previous hon. members have said and say that we are grateful for the opportunity of being able to deal with this legislation here this evening. Those of us who are acquainted with the matters relating to local authorities and other levels of government, will agree that the state of affairs as far as the salaries which local authorities are paying are concerned, is not a healthy one. I simply cannot agree with the hon. member for Pinetown who has just advocated here that competition between the private sector and the local authorities and other forms of government should simply be allowed to take place from time to time as far as the salaries of officials are concerned. As far as local authorities are concerned, I want to point out that the sooner local authorities in South Africa realize that they are the third level of government and that they cannot simply carry on as they please as far as salary structures are concerned, the better it will be and the sooner will we have a satisfactory and a healthy state of affairs in South Africa. We have experience of this kind of matter.

I am thinking in particular of the Transvaal. how local authorities there—the hon. member for Witbank also mentioned this here —are not only buying out another’s officials off. but how local authorities are buying out officials on higher levels of government. We know what is happening in the Transvaal Province. One finds repeatedly that when one has c good official it is not long before that official is brought out by another local authority with the offer of an attractive salary. Where is this matter going to end in South Africa if we allow it to carry on in an uncontrolled way and if one simply allows the salary structure of the one to move up to that of the other if the private sector, the local authorities and the Government sector have to compete with one another in this way as far as salaries are concerned? One cannot compare a local authority with a private business and with the private sector. I would be the first to admit that I think that as far as this legislation is concerned, it is quite probably not the last time we will have to consider this measure and I hope and trust that this favourable arrangement which the Minister has concluded with S.A.A.M.E.—in fact, they themselves say that this legislation will work well—will be accepted in this way. But I can see that something is quite probably being included in this legislation which people will still be able to make use of to find loopholes in order to try to evade the provisions of the legislation. I only hope that we will be able to obtain the co-operation of the trade unions on which officials of local authorities are serving, and that it will not be necessary to tamper with this again.

I want to reply to a few points made here by the hon. member for Yeoville. We have become accustomed to the fact that what the hon. member for Yeoville actually does over and over again in this House is to act as champion for the City Council of Johannesburg. From time to time the City Council of Johannesburg is held up here as an example of the ideal government in the country. This City Council is held up here in all kinds of ways as an example of the ideal United Party government. We have been told here that the salary structure of the City Council of Johannesburg was investigated by overseas experts and that these overseas experts stated that the City Council of Johanneburg compares very unfavourably with that of the public sector. Johannesburg is immediately placed on the same footing as that of the private sector. Johannesburg must now be placed on the same footing as that of the mining industry, as that of normal industry, etc. In other words, Johannesburg must now, as far as its salary structures are concerned, be placed in the same salary categories. Where is this all going to end? I have had the opportunity of serving on the Johannesburg City Council for many years, and I have had experience of the kind of overseas experts whom those people brought over to investigate the salaries. Every time I hear of overseas experts coming to Johannesburg to give advice, then I take a dislike to the whole matter.

Why?

Those people who come from overseas to give us advice do not have the faintest idea of what is going on in South Africa. What usually happens is that our own officials have to submit all the necessary particulars and details to those people and the end result of the whole matter is that often our own officials have to draw up those reports and make recommendations. I have no confidence in those so called overseas experts. Sir. I do not want to set a city council debate in motion here tonight. but there was a debate in the city council of Johannesburg on this same expert advice which the Johannesburg City Council obtained in regard to the wage structure of the municipality, and the National Party group of the city council of Johannesburg pointed out the weaknesses in the recommendations of those so-called experts. Those people sat there and they took no cognizance whatsoever of the lower salary structure in the Johannesburg municipal service. They only concerned themselves with the higher salary structure. As far as Johannesburg is concerned, I can say that Johannesburg has on many occasions in the past been guilty of this matter which we are also concerned about, i.e. luring away municipal officials from the Government sector by offering them higher salaries. Sir, we simply cannot tolerate that in this country. The hon. member for Yeoville referred here to the capital works which had been undertaken by Johannesburg, comparing them to those undertaken by the Transvaal Province. He drew all kinds of comparisons and furnished us with the percentage increase in the staff of Johannesburg. as against the percentage increase in the staff of the Province. He arrived at the conclusion that the record of the Province compared very unfavourably with that of Johannesburg. He said that there had been a greater increase in staff in the Provincial service, as well as a greater increase, expressed in percentages, in the salaries of the staff in the employ of the Provincial Administration, and that the record of the Province as far as capital works were concerned nevertheless compared unfavourably with that of Johannesburg. But, Sir, the hon. member’s figures were incorrect. I happen to have experience of this kind of thing. The hon. member said that the capital works of the Province increased from R20 million to R30 million and that it was accompanied by a tremendous increase in the staff. He compared the record of the Province in this regard with that of Johannesburg, where the capital works had increased from R28 million to R37 million, with an increase of 34 per cent in wages and an increase of 27 per cent in the number of officials. I think those are the figures which the hon. member furnished here.

You are completely confused.

Surely those are the figures which the hon. member mentioned.

No, I said that the number of non-Whites in the case of Johannesburg had decreased and that there had been a small increase in the number of White officials.

If that is so then I am still quite correct when I say that the capital works of Johannesburg cannot be compared with the capital works of the Province, for very sound reasons. The hon. member knows as well as I do what the position is as far as government work is concerned: Strict supervision is maintained and there is all kinds of work which has to be done beforehand. When the City Council of Johannesburg, however, gives out a project on contract, such as its through-road project, then the same amount of supervision is not maintained, nor is the same amount of preparatory work done which does in fact have to be done when the Government or a Province allows a project to be undertaken by contractors. Stricter financial control is exercised. The same measure of control is never exercised by a city council. The hon. member has no experience of this kind of thing, and then he comes along here and speaks in a cynical way of the record of the Province as compared to that of Johannesburg. The figures mentioned by the hon. member for Yeoville in regard to capital works undertaken by the Transvaal Province had a bearing on capital works financed from loans and subsidies from the central Government only; he lost sight of the works which are financed from the Revenue Account.

I mentioned that as well.

No, the hon. member did not mention them as far as the Transvaal was concerned.

Were you sleeping?

The hon. member did in fact mention those figures in respect of the City Council of Johannesburg. The hon. member therefore compared things which cannot be compared. If the hon. member for Yeoville were to glance at the long title of this Bill then he would see that our aim here is simply to obtain a wage structure which is more or less consistent for the three levels of government. I want to lend my strong support to the idea expressed here by the hon. the Minister, namely that we must give serious consideration to establishing regional industrial councils which can introduce, on the level of local authorities, a uniform salary structure throughout the country. Sir, I also want to support the remarks made by the hon. member for Witbank in this regard. The hon. member for Witbank knows a great deal about this kind of thing. He served on the United Municipal Executive, and he knows what he is talking about. The lack of a uniform salary structure has a crippling effect on the smaller local authorities. One finds that a small local authority trains a man and that as soon as his training is complete, he is lured away by a stronger and larger local authority. I want to express the hope that this legislation will eliminate this anomaly. I also want to express my gratitude to S.A.A.M.E. for the wholehearted support which they have given this Bill and I am grateful that the employers’ organizations of the city councils of Durban and Johannesburg also agree with the amendment which is being introduced here.

The hon. member for Benoni who has just sat down spent a good deal of his time criticizing the Johannesburg Municipality. He criticized the City Council which runs by far the largest municipality in South Africa and which runs it most efficiently—a United Party-controlled City Council. Sir, one wonders why this hon. member should have found it necessary to spend so much of his time criticizing the Johannesburg Municipality. Of course, the answer is quite easy to find. The hon. member is trying to distract the attention of the people of the Transvaal from the appallingly bad administration of the Transvaal Provincial Council and its executive committee which is a Nationalist-controlled body.

Order! I think hon. members are going beyond the scope of this Bill in their arguments.

Mr. Speaker, perhaps you will just permit me to round off this aspect of my speech.

Order! I think it has been rounded off quite sufficiently.

Well, Sir, if that is your ruling I must accept it. I have not quite finished with the hon. member for Benoni. The hon. member for Benoni criticized the Johannesburg Municipality for being responsible for the sort of poaching of top personnel, which the hon. the Minister and members on the Government side claim to be the justification for this Bill. Of course, as was to be expected from the hon. member for Benoni he did not mention one single example of this sort of poaching of top personnel—not one. If there had been poaching of top personnel by the Johannesburg Municipality by offering higher salaries, the hon. member as a former member of the Executive Committee of the Transvaal Provincial Council would be the first to be able to quote examples, so we are justified in coming to the conclusion that there are no such cases. I am reminded also that the hon. the Minister gave no examples of poaching although he claimed that the whole object of this Bill was to put a stop to the poaching of top personnel. Sir, I make the categorical assertion that this Bill shows the Nationalist Government in its true colours. It is further proof that the Government is not concerned with the lot of the ordinary citizen of this country. What is it trying to do by this legislation? The Government is trying to fight inflation, which has been created largely by its own acts and commissions, and it is trying to fight it at the expense and to the detriment of the municipal employees of South Africa and also at the expense of the State employees of South Africa. Sir. let me explain why I make this statement. What is the Government doing in terms of this legislation? It is ensuring that a ceiling can be placed on the salaries of the top officials. I emphasize this because the hon. the Minister says that it is not the object of the Bill to place a ceiling on salaries. But, of course, he is not being entirely frank with the House because if no ceiling is being placed on the salaries of top personnel, then the whole object of this Bill is defeated. The whole object of the Bill is to curb rises in the salaries of departmental heads. Sir, if you restrict the increases in the salaries of top personnel you automatically keep down the salaries of all the other grades, and the Government is doing this at a time when the cost of living is going up almost every day. The net result is that on the one hand the Government is about to freeze certain top salaries, which will have the result of freezing all the salaries lower down, and on the other hand the Government is not doing anything to check the rise in the cost of living. The net result must be that the salaries of municipal employees will constantly decrease in value.

This legislation reveals another aspect of the Government’s philosophy and that is its mania to take upon itself powers to control almost every aspect of life in South Africa.

Order! The hon. member must come back to the Bill.

With your permission, Sir …

Order! That is a different matter altogether; the hon. member must come back to the Bill.

I bow to your ruling, Sir. What the Government is doing in terms of this Bill is to take powers to restrict not only salaries where there is a dispute between employer and employee, as suggested by the hon. member for Witbank, but it is taking power to step in even where there is no dispute between employer and employee. This I wish to emphasize because it has not been made clear by Government speakers in the debate up to now that this is indeed the effect of this Bill. I refer to clause 3 (d), which says—

That is case No. 1, and now comes case No. 2—

The Administrator is then empowered to step in. It is perfectly clear that the Administrator and thereafter the Minister may step in, even where a local authority has increased salaries of departmental heads and there is no dispute as the result of that. Powers to control of this type inevitably lead, because they disturb the normal economic situation, to the necessity to take yet further powers of control and this, I predict, is what is going to happen; and in fact certain members on the Government side have almost predicted this. They have said that this Bill is not ideal. The hon. members for Witbank and Pietersburg said that the Bill is not ideal, nor is it likely to be the last word in regard to this matter. In regard to this aspect I wish to refer the House to what the general secretary of TUCSA has said in this connection, and I need not remind the House that TUCSA represents a substantial body of people.

The Bantu also.

The Bantu are also people. The word ‘'Bantu” means people.

This is what the general secretary said. Referring to the Bill, he said—

I would point out that this effect of the Bill is entirely contrary to the main principle of the Industrial Conciliation Act as it exists to-day, which is to allow freedom of negotiation between employer and employee. This is the whole basis of the settlement of disputes and it is the reason why it can be provided that strikes shall be limited only to certain set situations. If you have complete freedom between the employer and the employee to negotiate to their best advantage, you can then justifiably provide restrictions in regard to strike action. But this major principle of the Industrial Conciliation Act is being disturbed by this Bill.

We have heard much from hon. members opposite about the reasons for this Bill. We have been told that it is to prevent poaching of top personnel between the local authorities. I mentioned a moment ago that we have not been given any examples of such poaching, and I would point out that experience has shown that the loss of top personnel which takes place does not take place to any great extent between one municipality and another. The loss takes place from the municipality to the private sector. This has been stressed by members on our side of the House continuously in this debate and we have yet to hear an answer from the Government because this is fundamental to the Bill. If we are right in our contention, this measure must fail to achieve the object which the Government is aiming to achieve, namely to keep the top personnel in the municipal service. We claim that this measure, far from improving the position, will make it worse, because those people who feel dissatisfied with the ceiling placed on them can go nowhere else but to the private sector.

But I find this argument of hon. members a most extraordinary one. The salaries of departmental heads are not fixed by the departmental heads themselves; they are fixed by the local authorities, and local authorities do not step up the salaries of their top personnel just for the fun of it. They do so because they cannot get the right type of people unless they pay them those salaries. They step salaries up because they are unable to find the right type of people at the salaries which were being paid before. How can the Government suggest that this measure is going to meet such a situation? If the salaries were fixed by the departmental heads themselves and they were paying themselves far too much, one could understand the logic of the Government case, but that is not the position at all. I might also make the further point that the hon. member for Pretoria (West) said, to justify this measure—and this I think is one of the most shocking aspects of the Government case to justify this legislation —that we cannot allow officials of local authorities to get more than officials in State Departments. What is his solution to this? Is it to step up the salaries of State officials? Oh no, his solution is to curb the salaries of the others and in so doing to curb the salaries of State officials as well. I repeat that this measure is yet another example of the indifference of this Government towards the ordinary salaried citizen of this country. The attitude of the Government is particularly difficult to understand where in several of the State Departments there is inefficiency and the Department is not being properly run.

Order! The hon. member is going too far now.

I accept your ruling, Sir, but perhaps you will allow me to point out that several heads of the Departments of State have recently in their latest reports drawn attention to the fact that the salaries being paid to their top people are not sufficient and are not attracting the best people to those positions. I would mention only one example. The Secretary for Justice in his report devoted a good deal of his report to dealing with this very subject and he made this precise point. Surely it is good business to pay your top people well and in that way to encourage the very best people to get to the top, because if you have the best man in the top position you have efficiency in that organization, and if you have efficiency in the organization you have no extra costs; you do not have wastage which you get if you have inefficiency at the top.

Before concluding, I want to refer to the Natal Municipal Association, to which two hon. members opposite have already referred. I would very much like to know how these hon. members could have made the statement that the Natal Municipal Association supports this measure. Unfortunately the hon. members who made this statement do not appear to be in the House now, but perhaps at a later stage of the debate they might tell us, because I have here a memorandum prepared by this Association, dated 11th April, 1967, which is lengthy and goes into five foolscap pages. I can therefore not read the whole thing to the House, but it makes it very clear that this Association, far from being in favour of this legislation, is against it. Perhaps I could refer to some aspects of it. At page 2, under the heading “Criticisms of the Bill’, they say—

Then I would like to refer merely to one other passage here—

I support this view and I should like the hon. the Minister when he replies to justify his contention which he made when he introduced this measure and referred to certain specific figures of salaries being paid which he claimed to be exorbitant. I should like him to justify that, particularly in the light of the responsibilities and duties of the persons concerned and in the light of the budget which these people have to handle. I suggest that that cannot be done because undoubtedly under present conditions it is reasonable to pay such salaries in order to get the right type of people.

In conclusion, I wish to summarize and to say that we consider that this legislation will give rise to disputes, not between employer and employee but between employer and employer, to the prejudice and detriment of the employees. We believe that the real problem which is faced by local authorities and by Government Departments is the problem of competition with the private sector. We believe that this problem can be solved only by an increase in salaries and not a freezing of top salaries, because it is only by increasing the salaries of top personnel that the right people will be attracted to these positions.

We point out that there is, in practically every sphere already, a shortage of top personnel and. consequently, that we cannot afford, particularly in the State and municipal services, to do anything which will jeopardize further the drain of our top personnel. We say this is entirely a negative measure which will have the result of preventing local authorities competing with the private sector. Therefore we urge the Government to withdraw this Bill and to look for a solution of the problem from another direction, the right direction—namely the payment of a proper and adequate salary to our top people.

If one considers the attitude adopted by the United Party to this legislation, it is sometimes not quite clear whether the United Party is the head of the dog and the Johannesburg City Council the tail, and who is wagging whom. What the United Party is now doing is to bear out consistently the attitude of the Johannesburg City Council, an attitude which it announced even on 14th March. On 14th March there was a congress at Pretoriuskop, on which occasion the hon. the Minister discussed this matter with S.A.A.M.E. According to the Rand Daily Mail, the Johannesburg City Council made the following statement immediately afterwards, under the headline “Johannesburg to fight Minister’s move”—

That was said by Mr. Friedman, M.P.C., and leader of the United Party in the Johannesburg City Council. So this argument started even at that stage. Judging by the actions of the United Party here, one would think that the right of collective bargaining which exists under the Industrial Conciliation Act is being abolished by this measure.

In his argument the hon. member for Musgrave said: “The Government is not concerned with the lot of the ordinary citizen.” What he meant by that was that in future public service, provincial and municipal employees would not get their rightful salaries. I want to tell the hon. member that this Government is a government with a sense of responsibility, and it therefore is prepared, in cases where local authorities pay exorbitant and excessive salaries, to shoulder the responsibility of stopping it in the interests of the taxpayer of the country. Where does the city council get its revenue? Its source of revenue is the rate-payers. Now they want to waste this revenue with a generous hand. How could the United Party say that in stopping this we are not acting in the interests of the “ordinary man”? Another ridiculous argument advanced by the hon. member for Musgrave was that we wanted to freeze salaries. Members on the staff of any local authority have the right of collective bargaining—even the heads of departments. This Bill provides that if any dispute arises on a level higher than the deputies, it may be referred to an industrial tribunal, or in his discretion the Administrator may refer it to the Minister, who in turn may refer it to an industrial tribunal. But officials, from deputies downwards, still have the same machinery for collective bargaining that they had under the Industrial Conciliation Act. If a dispute arose on salaries which should normally be higher, what industrial tribunal would be so foolish as to decide not to adjust those salaries? The hon. member for Musgrave advanced the argument that this Bill sought to reduce wages and salaries. But in my view the opposite obtains, because the fact that all staff members, up to and including deputies, have the machinery of collective bargaining available to them, offers the assurance to heads of departments that they will not be underpaid. The hon. member also said that this Bill was not ideal. I think he pretended that the hon. member for Witbank and the hon. member for Pietersburg and the hon. member for Benoni had said that this was not the ideal measure. But that is not what these hon. members said. What they did say, was that it would be ideal if all local authorities could organize themselves into a national organization of employers in order that together with a united employees’ organization they might create an industrial council or a regional industrial council. That is what hon. members said—not that this legislation was not the ideal solution.

What hon. members on the opposite side are now advocating is nothing but the aggravation of inflation. That is what they are doing —they are committing treason to their own country.

On a point of order, Mr. Speaker, is the hon. member permitted to say that this side of the House is “committing treason to their own country”?

Order! The hon. member must withdraw those words.

I withdraw them, Mr. Speaker. There was a reference here to the “wonderful” City Council of Johannesburg and the fantastic salaries paid by it, and how extremely capable the officials are supposed to be and that the City Council could get capable officials only by paying fantastic salaries. But what happened in the Parks Board, which paid those fantastic salaries to the officials? Did the fantastic salaries put a stop to those things? No, Mr. Speaker, a higher salary is no guarantee that one will get an efficient official.

I now want to refer to the hon. member for Karoo. The hon. member for Karoo said that under the existing system relating to local authorities and subsidies by the State, it was not possible to recruit health officers. The hon. member suggested that he knew a great deal about the Industrial Conciliation Act. He also suggested that he was familiar with local authority matters. It is quite clear to me that in spite of his lengthy experience he knows preciously little about local authority affairs. For does he not know that local authorities are grouped into health groups and that they are subsidized accordingly? Local authorities have certain rights, and in terms of the existing Act they may avail themselves of those rights. As an example I want to mention the case where health officers cannot be obtained at the fixed scales. In such a case those officials and their local authority could go to a conciliation board, that is, if they failed to reach agreement. Surely they could get an arbitrator. Surely conciliation could take place. And if that conciliation is accepted, the State contributes its equitable subsidy to that local authority in respect of the increased salary scale. Hon. members should not come up with that argument. It is quite clear that there is no intention in this Bill to peg salaries. But if city councils offer fantastic salaries in order to poach officials from other city councils, this legislation creates a channel or course which may be followed in future to stop such practices. The idea is not to regiment salaries, as the Opposition pretended. We want to thank the hon. the Minister for introducing this Bill. And I want to plead that if there are loopholes in this Bill the hon. the Minister should not wait any later than next year to close those loopholes.

Mr.Speaker, I should like to convey my gratitude to members of this side of the House who have pledged their support to this measure. I also appreciate the study they have made in this connection, because it is clear that they are familiar with the subject. Unfortunately I cannot say the same for the Opposition. In this debate the Opposition has once again given us a demonstration of their total lack of responsibility to South Africa. They resorted once again to popular cries. They persist in claiming the best of both worlds. When it suits them, the Government has to be attacked because it cannot curb or contain inflation. But when the Government introduces a co-ordinating measure such as this one, we are accused of bringing up an unreasonable measure. It is sad that we should be saddled with such an ambivalent attitude. Not that I Could actually complain about it, because I suppose the Opposition is responsible for its own follies. But what makes me unhappy is the fact that the hon. member for Yeoville, who was the main speaker on that side, considered it necessary to cast reflections on the trade unions for their attitude to this measure. The hon. member referred to that as though they lacked adequate vision. They were alleged to have limited vision because they granted their support to this measure. I wonder whether the hon. member knows what that encompasses. I wonder whether the hon. member is fully aware of what S.A.A.M.E. is. S.A.AM.E. is one of the most responsible trade unions in this country. I say this with the utmost emphasis and conviction. In S.A.A.M.E. we have the best trade union people one could hope to have in a trade union. They are people who act responsibly, people who know their duty also to South Africa. And what struck me about this trade union was the following. To them these things will perhaps not be the most popular imaginable. But they also appreciate the position of South Africa and of the Government, which is waging a titanic battle against inflation. Consequently they are also prepared to contribute their share towards waging this battle. And for that reason I deplore the fact that a reflection should be cast on these people to the effect that they show lack of vision. I wonder whether the hon. member knows that their general secretary is an outstanding and highly qualified person. He is a person who in his day was also a member of the industrial tribunal. He resigned from the industrial tribunal to take up the position of general secretary in S.A.A.M.E., which he had occupied previously. He is a person who is thoroughly familiar with the Industrial Conciliation Act. He is fully conversant with industrial legislation and also with the interpretation, etc., of a measure such as this. He is a person who, together with his executive, professed support for this measure. He does not see this measure as a means of prejudicing the workers. It is indeed deplorable that the hon. member for Yeoville deemed it necessary to cast a reflection on a trade union of this standing, in the way he did. The hon. member for Durban (Central) said that if we were to take the Public Service as our premise, we would actually lower the standard and go downhill. To me that is an equally unfriendly and unnecessary reflection on a very important section of our country, namely our Public Service.

Only on the Government, which fully deserves it.

It is an unfriendly and unnecessary reflection on our Public Service officialdom. Our officials in the Public Service, who work for these salaries, do so also for love of South Africa. They do so because they regard it as their contribution to this country. It does not tally in the slightest with one of the arguments advanced by the hon. member for Musgrave, namely that the turnover of concerns should be taken into consideration in fixing salaries. If we were to adopt this ridiculous premise, could you possibly imagine what the General Manager of the South African Railways would receive as a salary? While you were speaking the hon. the Minister of Transport drew my attention to the fact that the turnover of the Railways amounted to roughly R900 million a year. The General Manager of the South African Railways receives a salary of R11,550. Surely that is a quite ridiculous statement. The Public Service officialdom and these people have something of which the United Party has apparently never heard, namely loyalty to South Africa. And they also endeavour to see to it that this wild horse of inflation in this country is curbed. For unless everybody in this country contributed his share towards curbing this inflation horse, those very people would suffer. The purchasing power of those very people’s money would decrease to such an extent that in course of time they would buy much less with those very increased salaries which are spiralled upwards in this way. I therefore want to say that the pleas which we heard from the United Party are actually designed to bring about wastage.

If the United Party’s pleas in this debate were responded to, inflation would not only be aggravated, but the result would also be a wastage of efficiency. There would be a constant shuttling of people who are bought off in the spiral battle that would result. That would necessarily affect productivity in this country. The hon. member for Karoo made the gloomy prediction that this measure would not succeed. He said that the bottom layer, under these executive posts, would make this measure impracticable. I want to concede to the hon. member for Karoo that we do have a problem in that regard. The people who are not mentioned in this measure may present us with a problem; that is, if city councils want to be so injudicious in increasing the wages of the people concerned, with their cooperation. that it will affect the cadre defined in this Bill. But I have the utmost confidence that our city councils and S.A.A.M.E., whom I credit with this sense of responsibility, will see to it that this labour pattern is maintained. I have the utmost confidence that this will be d-me. I am confident that this industrial council system to which I referred will come into being in a year or two or more, and will then eliminate that problem to a large extent. I therefore trust that there will be no need for us to come back to this House with further measures in this connection. But I will not hesitate to say there that no matter how unpopular it may be, if this labour pattern were disrupted, we would be compelled to come back. We cannot allow this inflation to continue, thereby undermining the economic strength of our country.

Why do you not restrict the private sector?

The wages in the private sector are determined by the existing machinery for negotiation. The hon. member for Pinetown produced another piece of sophistry. He said that the ratepayers could deal with a city council which pays excessive salaries. Can you imagine what will happen if the ratepayers dealt with such a city council and ousted the whole city council? Must they then reduce the salaries of those people? By that time those people would already have concluded service contracts and wage contracts, and are those to be reduced? That is the type of argument we are saddled with in this House. The hon. member asked whether this was the first step towards pegging wages. No, it is by no means a step towards pegging wages; it is not the first step and it is by no means a step in that direction. The policy and attitude of the Government with regard to wages is well known, and that is not done or contemplated by this measure, and you need therefore have no fears.

Is it not possible to reduce salaries in municipalities when this Bill is accepted?

The industrial tribunal conducting arbitration in this regard could review the matter, and if it is necessary to make adjustments, that could be done, but not in the way represented by you, namely that the ratepayer will be able to deal with the city council during an election, and that the city council could then adjust the wages afterwards, presumably to the extent to which they have suffered defeat! Can one imagine what this would mean? With regard to the pegging of wages, I want to point out that the Government has no intention of pegging wages, and the more this sophistry is expounded, the less force it will have, because the workers in this country can see very well that this is not the intention of the Government. But that does not make us shirk our responsibility as regards establishing co-ordinating machinery, which this is. We are not abrogating the bargaining right of the workers; on the contrary, the bargaining right is safeguarded by this very measure. The very fact that we did not exclude those workers from the Industrial Conciliation Act confirms their right to bargain for wages. That is not in the least affected by this measure. They may still neogitate, whether on the industrial council or on the conciliation board. It will become a matter for review by the industrial tribunal only if it disrupted the pattern of the entire country. The hon. member for Musgrave had another story to tell, namely that the Government was not concerned with the interests of the workers. It is almost impossible to deal with such senseless slogans. The workers in this country know that through these years of National Party Government their standard of living has risen to the present level, which is comparable with the best in the civilized part of the world. The hon. member referred to Tuesa. I wonder whether the hon. member is aware of the fact that this co-ordinating body does not represent a single one of the departmental heads of this nature. They do not represent one of the departmental heads to whom this measure relates. What is important is that the organizations which do represent them, such as S.A.A.M.E. and these trade unions to which I referred, support the principle of this measure. Surely that is important. If you want to bring up Tuesa, I shall be compelled to tell you that the South African Confederation of Labour, which is another large federation, has adopted the attitude that they acquiesce in the attitude adopted by S.A.A.M.E. I did not even mention this in my introductory speech, because they do not represent these people directly. S.A.A.M.E. are the people who represent them, and their attitude is of importance to us. Now, the hon. member for Musgrave also referred to the Natal Municipal Association’s memorandum which was submitted by them, and read certain sections from it. That is true, That is a memorandum which they prepared, and they prepared it with reference to the first published Bill, but what is equally true is that those very representatives of the Natal Municipal Association were members of the United Municipal Executive which came to see me on the date I mentioned. At the moment the mayoress of Durban is the president of the U.M.E. I discussed this matter with them and asked them pertinently whether they supported the principle contained in it, and the entire delegation which was sitting there that day under the chairmanship of the mayoress of Durban said that they supported the principle.

But …

Yes, they had reservations. I stated in my introductory speech that Natal was one of the provinces which entertained misgivings. There is nothing to hide. But the other provinces said that we should continue with this and there were some of the other provinces which even said that this measure did not go far enough.

Is it pot correct that the Natal Municipal Association continues to abide by the passages that I have read out?

I do not know whether they abide by that. What I may tell you is that when they visited me, after they had asked to interview me, we discussed both the principle and the details of the matter. It is true that they had misgivings about the details. They wondered whether it would be effective. They used the same arguments as those advanced by the hon. member for Karoo. They asked, what about the lower layers? Would that not make this measure ineffectual? They did raise those misgivings. But on the principle of this measure, that these unbridled wage increases should be curbed, they agreed with us. The delegation which came to see me in Marks Buildings on the day mentioned by me, agreed with that principle—and that is of importance.

I conclude by saying that this measure will bring us co-ordination. It will bring us coordination as regards the salary structure in our public sector. It will also have the advantage that it will provide for orderly development in our country.

Question put: That all the words after

“That” stand part of the motion.

Upon which the House divided:

Tellers: P. S. van der Merwe and B. J. van der Walt.

Tellers: A. Hopewell and T. G. Hughes.

Question affirmed and amendment dropped.

Motion accordingly agreed to and Bill read a Second Time.

Mr. Speaker, I move—

This measure is being introduced by common consent of both sides of this House. In general outline this Bill seeks, firstly, to enable members who qualified for the maximum pension as an ordinary member on 1st June, 1965, the date on which the Parliamentary Service and Administrators’ Pensions Act, 1965, came into operation, to be paid the maximum pension payable at the present time if they were to retire or retired before having contributed for a further two years and six months as from 1st June, 1965. That was the intention when the improved scheme was introduced in 1965 but it was apparently overlooked in drafting the Act. Secondly, it is the intention to delete the provisions in terms of which a member may, upon his retirement, elect to receive an amount equal to his contributions in lieu of any pension payable to him in respect of pensionable service. No member has ever made use of this right. These provisions give rise to a great deal of additional and unnecessary correspondence because that has to be brought to the notice of members on their retirement, something which, from the nature of the case, must of necessity cause considerable delay in the payment of pensions. Furthermore, it is not desirable that a member be allowed to receive the cash and subsequently leave a widow without any right to a pension. Therefore these provisions are being deleted by clauses 4 and 9.

Thirdly, it is the intention to do away with the provision that the break between provincial and Parliamentary service is not to exceed a period of one year and to give members who have been affected by that provision a further choice of becoming participating members. A member, whose break between provincial and Parliamentary service exceeds one year and who is not entitled to a pension from the province concerned, may still become a Parliamentary member without his being able to take his provincial service into account, but if he is entitled to a provincial pension, however small, he is entirely excluded from the parliamentary scheme. The unfavourable effect of this provision is being rectified by clause 7.

Finally, it is the intention to re-enact in clause 17 the major part of a provision which was contained in the Pension Laws Amendment Act, 1964, and which was repealed in 1965. The said provision provided for a few members who had retired as members of the Legislative Assembly prior to the date of commencement of the Pensions Ordinance of the territory of South-West Africa, but to whom, as former members, a pension had nevertheless been granted in terms of that Ordinance, to become participating members. In 1965 it was not envisaged that there would still be such persons who would come to Parliament and the provision was repealed. Now the provision is being re-enacted.

For the rest we have availed ourselves of this opportunity to express the intention of the Act more clearly in some respects and to rectify certain anomalies.

As I have said, this is a measure which is being introduced subsequent to consultations between parties on both sides of this House, as is usually done, and I hope that it will find general support.

Mr. Speaker, the hon. the Minister has explained the meaning and the purpose of this Bill and has stated, quite correctly, that it is introduced with the blessings of all sides of the House, I think with the blessings of all hon. members of the House. It sets out to correct certain mistakes and anomalies that occurred in the Parliamentary Pension Act. Certain errors have occurred in the cross-references and those are corrected by the Bill before us. This Bill also sets out to clarify certain of the definitions, particularly as regards the meaning of “pensionable service”, so that it can be beyond any doubt. In addition, it carries out what was the original intention with regard to the pension rights of a member, because I think the most important clause of this Bill is the one that enables a member to elect to become a participating member, although he has been out of the provincial council for more than one year and comes to the House at a later stage. It appears to have been an injustice that he was debarred from bringing into account his pensionable service in the provincial council. I think it is only right that that should be done. This Bill achieves that and it also corrects an anomaly in regard to those who are heading towards the full pension of the 20 years, to be counted as 22½ years. It has reference to three members who were affected in this way, and I think it is only right that the House should do justice to them. Therefore this Bill receives the full support of this side of the House.

Motion put and agreed to.

Bill read a Second Time.