I move—

Mr. Speaker, as hon. members know, it is customary to request this House for an advance in order to meet essential Government expenditure during the first few months of the new financial year, while we are waiting for the usual Appropriation Bill to be passed.

As hon. members are aware, the Appropriation Act is usually one of the last measures to be adopted, and in order to prevent the Treasury from being embarrassed should there be any delay in passing the Appropriation Act, the House is being requested to authorize a sum which will meet expenditure for roughly 31/2 months, i.e. up to approximately the middle of July.

The sum requested amounts to R590 million, of which R440 million is chargeable to the Revenue Account, R122 million to the Loan Account, R12 million to the Bantu Education Account and R16 million to the South-West Africa Account.

Mr. Speaker, the House will not expect me to anticipate my Budget speech by furnishing at this juncture a full survey of the economic position. Nevertheless, I consider it my duty to furnish a brief resume of the most important economic trends in South Africa and in the world since this House last had the opportunity of discussing financial affairs, and in particular to refer to the marketing of gold.

In the first place, then, the economic position in South Africa. Full statistics in respect of public accounts, etc., are only available up to the third quarter of 1968, and it will only be possible for me to sketch in my Budget speech the picture for the whole year. However, the indications are that the economy is still in a very strong position and that inflationary pressure has been curbed effectively. Since the deceleration during the second half of 1967 the gross domestic product has shown a moderate revival, and in the third quarter of 1968 it even accelerated at a slightly faster rate than it did in the second quarter. Private consumption (particularly in respect of durable goods) and current Government expenditure have been the main factors in this revival, whereas there has been little change in gross fixed investment; in fact, private fixed investment has shown a decrease. Supplies have also decreased, and this decrease has for the most part, but not exclusively, been attributable to a decrease in agricultural supplies.

The decrease in private investment indicates that the authorities have succeeded in cooling off the over-heated inflationary climate, which has afforded our economy a welcome respite. We must, of course, take care lest this trend goes too far, and I shall come back to this point later on.

During the first three-quarters of 1968 imports and exports did not show much change, but in the fourth quarter there was apparently an increase in imports with the result that in that quarter our balance of payments on current account reflected a moderate deficit for the first time in more than a year. However, the continuous inflow of foreign capital more than wiped out this deficit so that over the year 1968 our total gold and foreign exchange reserves increased by the huge amount of approximately R500 million.

This increase in our reserves, although it was clear proof of our economic strength, was, of course, a mixed blessing since it caused the amount of money and near-money in circulation to soar to new heights. This excess liquidity in our economy creates the danger of renewed inflationary over-spending. Up to now this excess liquidity has mainly been reflected in the financial sector, i.e. in the purchase of shares and fixed property, rather than that of goods and services. Whereas the prices of shares (particularly industrial and commercial shares) and of fixed property have therefore risen considerably and new issues of shares have reached new heights, the effect of the excess liquidity on the general price level was not a considerable one. Over the year 1968 the consumer price index showed an increase of 2.7 per cent, which was for the most part attributable to an increase of 3.6 per cent in food prices. Wholesale prices only showed an increase of 2.1 per cent over that year.

The danger is, of course, that the excess liquidity in our economy may in fact affect the non-financial sector later on, i.e. as regards the purchase of goods and services, which may give rise to renewed inflationary pressure on the general price level. That is why it would be dangerous to relax our measures against inflation too rapidly at this stage.

The Reserve Bank nevertheless found it possible on 27th August to reduce its discount rate by ½ per cent to 5½ per cent. In addition the credit ceiling for monetary banks was raised to the level of March, 1965, i.e. the decrease of per cent which had been applicable before, was lifted, although most of the existing concessions to the banks in excess of the old ceiling were taken into account in the new restriction. As a further concession the banks were allowed to give credit to small business concerns up to an additional amount of 1 per cent of their new ceiling. I think that these concessions have eliminated certain points of friction in our credit restrictions without jeopardizing the economy.

At the end of December the banks were well within their credit ceiling, but over the current quarter a rise in bank credit is possible owing to seasonal factors, namely tax payments to the State.

Hon. members may quite rightly ask whether the danger of inflation cannot be diminished by draining the excess liquidity in various ways. The authorities are in fact trying to do so. The first method is to draw money away from the private sector and to sterilize it. During the first half of the current financial year the Exchequer did this on a large scale and was able to reduce its net debt to the monetary banking sector by no less than R223 million. Owing to seasonal and other factors the Exchequer finances probably did not have any, or such a strong, anti-inflationary effect during the last quarter of 1968, but as regards the current quarter it is anticipated that the Exchequer will once again make a considerable contribution towards absorbing the excess liquidity. This is partly attributable to the usual high tax payments during the first quarter of the year, but also to the new domestic Government loans which were issued last month and which have already drawn a considerable amount of money away from the private sector, as well as to the new savings campaign which I launched on 21st January to celebrate the golden jubilee of the thrift movement. Thrift remains a pre-requisite for the prosperity of our country, and I hope that this slogan of the new campaign will go down with every family, namely:

The second method of reducing liquidity is to cause it to flow out of the country by relaxing import and foreign exchange control. Import control has been relaxed considerably for quite some time, and towards the end of July. 1968, I decided also to relax foreign exchange control in a selective manner. Accordingly it was announced that applications for foreign exchange for the following purposes would be considered more sympathetically: the redemption before due date of foreign loans; approved direct investments in countries abroad, and the purchace by South Africans of shares in South African enterprises controlled by foreigners. An additional relaxation that we considered, was to lift the control over the repatriation of foreign capital investments in the Republic, but we decided against it since it was probable that such a step would only give rise to a greater inflow of capital. Besides, a foreigner can usually realize his investment in the Republic without losses, i.e. by selling it to another foreigner.

The relaxation I mentioned has only had a limited effect on our balance of payments and, consequently, on our liquidity. I would have liked to have done more towards draining away the excess liquidity in our country, but the uncertainty in regard to the marketing of our gold, to which I shall refer later on, has made it advisable to be more careful with our foreign exchange than we would otherwise have been.

What are the immediate prospects for our economy? In spite of the potential inflationary danger owing to excess liquidity, our economy has remained relatively stable and private fixed investment—the main source of future economic growth—has even shown a slightly downward trend. However, I am of the opinion that, whereas consumption is steadily increasing, whereas the level of supplies has already shown a decrease, and whereas the necessary funds for expansion are readily available, a revival of fixed investments may be expected without any special stimulation on the part of the authorities. Should this not take place shortly, we shall have to consider relaxing some of our measures against inflation. Should this in fact take place, the resultant higher level of imports will help to drain the excess liquidity and therefore counteract any inflationary effect to a certain extent. The shortage of skilled labour, which—despite everything the Government has done in respect of technical training and immigration—is still a bottle-neck in our economy, could, however, give rise to renewed inflation. My conclusion, therefore, is that our measures against inflation should still be maintained, although we must watch the position carefully so that we may make adjustments where necessary.

Before concluding this part of my speech, I should just like to sound a word of warning in regard to the current prices of shares and fixed property. I am an optimist in respect of the future growth of our economy, but the prices of shares and land presuppose in some cases a growth rate which is out of all proportion. Another alarming factor is the fact that many transactions in shares and land are being financed by means of credit. This may give rise to a dangerous situation, and those who borrow money in order to conclude such transactions, as well as those who advance the money, must be careful and act judiciously.

I should now like to say a few words about international monetary conditions over the past few months. Since the devaluation of sterling in November, 1967, the exchange markets have virtually never settled down. There was the so-called gold crisis of March, 1968 (which, as the President of the Bank of England said, never was a gold crisis but an exchange crisis), there were several serious fluctuations in the subsequent months and eventually there was the crisis of November, 1968, when France, contrary to all expectations, did not devalue but when Germany had to introduce abnormal measures so as to avoid a revaluation of the mark and when Britain had to take drastic steps so as to safeguard sterling. Speculators are at the moment the culprits who are being blamed for all these crises, and special measures are being devised in order to frustrate their efforts. However, the speculator is merely a person who is trying to anticipate the future; he will not speculate against a strong currency, although he can weaken a weak currency even further. To my mind, however, the basic causes must be sought further afield. It would be an over-simplification to select one or two factors as the causes of all the crises of 1968. However, there are in fact two basic considerations which apply. The first is that the various degrees of inflation in the various countries have seriously affected the competitive ability of those countries where inflation was worst. In the modern world such countries cannot correct their position by bringing about deflation; a “fundamental imbalance” (as it is called in the Articles of the I.M.F.) therefore results, something which can only be corrected through devaluation (unless the countries where inflation was less severe, can be persuaded to revalue their money, upwards, as Germany is considered to have done in a disguised and partial form).

However, the fact that international monetary crises have in recent times been more severe and occurred more often, is to my mind attributable to another factor, i.e. the growing relative shortage of international reserves and especially gold. In 1960 the gold and foreign exchange reserves of the non-communist world amounted to approximately 47 per cent of the total imports of these countries; by 1967 this figure had fallen to 34 per cent. If gold alone is taken into account, the change is an even more severe one, and this is important since gold inspires much more confidence than is the case with other reserve assets. The lack of international liquidity even makes it difficult for countries to withstand ordinary balance of payments fluctuations, for in most cases the safety margin in their international reserves is too small. A balance of payments deficit which, with adequate reserves, could have been borne quite easily, now causes an exchange crisis which speculators can in fact aggravate. The obvious remedy is, of course, to reinforce international reserves, and particularly gold, by increasing the gold price. The founders of the I.M.F. foresaw this situation and made special provision for such a contingency in the Articles of the Fund. It would take me too long to explain why the leading countries of the world are so reluctant to take this step, but I think that economic conditions are steadily developing in a direction which will make an eventual increase in the gold price inevitable. It has always been and still is our hope that this increase will be effected in an orderly manner and not as a result of an international financial collapse.

In the meantime international financial conditions will remain tense and further crises may be expected. It is indeed possible that, in view of new measures for counteracting speculation and perhaps supplementing international liquidity in other ways, the situation may remain relatively calm for the time being, but I do not view this as a permanent calm resting on firm foundations.

Now I come to the marketing of our gold. Hon. members will recall that leading financial countries have for several years joined forces in keeping the gold price on the London market—the most important gold market at the time—within certain limits. During the first months of 1968 the demand for gold was so high that these countries had to sell tremendous quantities of gold on the market so as to prevent the price from rising above the fixed level. In March the position became untenable, and the countries concerned decided to withdraw their support from the gold market so that the gold price might fluctuate in accordance with normal demand and supply. This was actually a return to the system that obtained in the fifties, where the official gold price (i.e. for transactions between monetary authorities) remained constant, but the price on the free market fluctuated. However, in due course it became obvious that the American Administration contemplated a more extensive change, namely the permanent isolation of the supply of gold in the possession of central banks and other monetary authorities. This so-called monetary gold would in future not be sold on the free market, but would not be supplemented by further additions of newly-mined gold either.

This attitude gave rise to a degree of uncertainty in the gold market. Regard being had to the large quantities of gold bought by speculators up to March, 1968, it was clear that the market was very sensitive and that any reports of major South African gold sales could have an adverse effect on the market. Fortunately our balance of payments was so strong that it was unnecessary for us to sell excessive quantities of gold on the free market, although we did sell a considerable quantity in June and July, 1968, without forcing the market price down. In the meantime we ascertained that the Articles of the I.M.F. granted us the right to sell gold to the Fund in return for foreign exchange. Consequently we made such an offer to the Fund in June, 1968, but owing to the opposition of the then American Administration no decision was taken in regard to this offer. The Managing Director of the Fund intimated that in his opinion and in that of his staff the Fund was legally obliged to accept our offer, and I know that this view is also being shared by many of the executive directors of the Fund, but up to the present we have been unable to take this matter any further. After it had become clear that we could not expect an early reply from the Fund, we drew our so-called super gold tranche at the Fund at the end of June. It was a credit balance of $62 million (R44 million) accumulated as a result of drawings of South African rand by other member countries.

We also sold a considerable quantity of gold to monetary authorities in the third quarter of 1968. That was the situation in September, 1968, when the annual meeting of the I.M.F. was held in Washington. In my speech at the annual meeting I pointed out, inter alia, that it was extremely important for the world to reinforce the role of gold in the international financial structure, and that the attempt at putting a stop to monetary reserves being supplemented by newly-mined gold, must weaken that structure. I emphasized that normally we would, in our own interests, sell part of our gold production on the free market, that as regards this matter we had always acted in a responsible manner, but that it would be neither fair nor in the interests of the monetary stability of the world to expect us to sell under all circumstances all our newly-mined gold on the free market. I said, however, that we were always prepared to consult with interested parties in order to seek a satisfactory solution. I may mention that the Managing Director of the Fund said the following in his address to the annual meeting—

In the course of the annual meeting certain private talks took place, and late on the penultimate day of the meeting the so-called “Group of Ten” submitted certain proposals to me. I cannot disclose these proposals to the House. However, from what I have already said, it should be clear that I would not be prepared to enter into an agreement which does not give recognition to the following principles—

1. (1) South Africa has the statutory right to purchase foreign exchange from the Fund against payment in gold.
2. (2) The possibility of a further flow of newly-mined gold to monetary reserves—irrespective of the price on the free market—must be maintained.
3. (3) South Africa cannot undertake to refuse requests from other monetary authorities to buy gold at the official price.
4. (4) The attempt at divorcing so-called monetary and newly-mined gold permanently, must be reviewed.

As the proposals submitted to me did not comply with all of these principles, I could not accept them. In my reply to the “Group of Ten”, I explained my point of view, but confirmed once again that I would always be prepared to consider any equitable proposal in accordance with the above principles.

Since then we have received no further proposals. Consequently we have continued to sell gold from time to time to monetary authorities as well as on the free market, and, as hon. members know, the price on the free market is much higher to-day than it was a few months ago. This is probably partly attributable to the fact that much of the gold which was purchased by speculators before March, 1968, and which threatened the stability of the free market at the time, has already been absorbed by this time so that it will no longer be sold readily on the market.

Therefore our position is still a strong one. Nevertheless, I hope that it will soon be possible to reach a satisfactory understanding with the other important countries in regard to the marketing of our gold. I say this, not because our position is weak, but because it is in the interests of the world as well as the Republic to eliminate the present uncertainty. I think that there is growing appreciation abroad both for the merits of our point of view and the responsible way in which we have acted in this delicate matter.

In conclusion I just want to refer briefly to my recent visit to Europe. A great deal of nonsense was said and written about that visit. The loans I want to discuss there, were not gold loans or loans for the purpose of coping with a critical shortage of foreign exchange. They were normal Government loans. It is true that the Exchequer does not need additional loan funds at the moment, but it is always advisable to keep one’s name on the leading capital markets of the world. That is why a Swiss loan of 60 million Swiss francs (R10 million) which expires on 1st March, was renewed by us for a period of 15 years at an interest rate of 5½ per cent and an emission rate of 98½ per cent—very favourable terms today. That is why it is also our intention to issue later on this year a loan in German marks on terms which are still to be determined in full but which will probably be less favourable to us than is the case with those of the Swiss loan.

It stands to reason that many of the bankers with whom I had talks, raised of their own accord the question of short-term loans for the purpose of bridging any temporary shortage of foreign exchange which may arise. I can inform the House that very large amounts have been offered to me on favourable terms. At the moment it is not necessary for us to avail ourselves of these offers, but it is good to know that they are available should we need them later on.

Mr. Speaker, I have tried to furnish a survey of the way I see the most main financial questions affecting South Africa, but if there are other matters in regard to which hon. members require information, I shall do my best to furnish it in my reply.

The hon. the Minister has made an interesting statement of some importance this afternoon. We appreciate the Minister’s readiness to give us an opportunity to consider his statement and to allow the debate to be adjourned to enable us to do so. I therefore move—

Agreed to.

In the Second-Reading debate on this Bill on Friday, I indicated that we had certain difficulties with the wording of clause 1 and its somewhat novel and wide implications. I therefore wish to move as an amendment—

If one omits the word “probably”, then the law will read as follows—

In other words, the effect of this amendment will be that it will be a matter of fact whether the person in fact had an intention to commit an offence when he was so disguised or whether he did not—not whether he probably had that intention. Sir, this is in accordance with the pre-Union legislation, which is repealed by this Bill, which in all four provinces included the words “with intent”—with intent in fact and not with probable intent. I feel that if this amendment is not accepted we will find ourselves having to apply a somewhat novel test, namely whether beyond all reasonable doubt, on the balance of probabilities, the person concerned had such an intention. Sir, it is difficult enough inferring intentions from facts without having to introduce an additional complicating factor. In any event, the onus is on the accused to show that he did not have the intent, and if the amendment is accepted it will be less onerous upon the person who is being arrested upon suspicion—because that is all it is—and it will be more onerous upon the policeman effecting the arrest, I am sure hon. members will agree that this is a good thing because the arrest takes place not in respect of something which the policeman sees happening, which is the normal case, but in respect of what he, the policeman, thinks is in the mind of the person in disguise. I think this is a reasonable, realistic amendment, and I put it forward in the spirit that it will avoid all the difficulties which I dealt with at the Second Reading and in the hope that the hon. the Minister, who has shown a reasonable attitude in matters such as this, will accept it.

Mr. Chairman, the hon. member was kind enough to inform me during the lunch hour of his proposed amendment. I have considered the amendment and I agree with the arguments advanced by the hon. member, and for that reason I am prepared to accept the amendment.

Amendment put and agreed to.

Clause, as amended, put and agreed to.

Remaining clauses, schedule and title of the Bill put and agreed to.

House Resumed:

Bill reported with an amendment.

Amendment in clause 1 put and agreed to and the Bill, as amended, adopted.

Bill read a Third Time.

Mr. Chairman, in this clause we are told that certain money will be transferred to the fund that is now to be established, and we are told that the assets of these funds will be transferred. I do not wish to anticipate a discussion on clause 3, but in that clause we are told that the liabilities and obligations of these funds that are being transferred will also be transferred to the new fund. I wonder if the hon. the Minister will tell us what the assets and liabilities of each of these 11 funds are.

I feel that in being asked to put this Bill through the House we should have been given that information as far as it was possible to give it by way of a White Paper. Apparently it has not been done. I wonder if the Minister will be able to give us that information after this committee stage. We wish to know which funds are now being transferred to a new fund and their liabilities taken over, and which funds are paying into the new fund. I think that is a fair request.

Mr. Chairman, I would gladly have complied with the request of the hon. member, but since these funds are at present in the hands of the provinces, we have no control over the relevant figures. However, I shall have the matter investigated and, if possible, I shall furnish the required information on a subsequent occasion. The information has to be calculated actuarially. However, I undertake to have the matter investigated, and I shall report during the Third Reading as to whether we shall be able to obtain the information or not.

Since I am on my feet now, I move the following amendment standing in my name on the Order Paper—

This is merely a typographical error which we should like to rectify now.

Amendment put and agreed to.

Clause, as amended, put and agreed to.

Clause 4:

I move the following amendment—

Amendment put and agreed to.

Clause, as amended, put and agreed to.

Remaining clauses and title of the Bill put and agreed to.

House Resumed:

Bill reported with amendment.

Mr. Speaker, I move—

In the main this Bill flows from the unanimous recommendation of the Law Revision Committee that legislation should be passed in terms of which insurance moneys and pension moneys shall not be taken into account in the assessment of the value of a dependant’s loss of support as a result of the death of such a dependant’s breadwinner which has been wrongfully caused by another.

As hon. members know it is a foregone conclusion in our law that in a case where dependants of a deceased breadwinner claim compensation in respect of their material loss which flows from their loss of support as a result of the wrongful killing of the breadwinner, they are entitled, as far as support is concerned, to be placed in the same material position as that in which they would have been had the breadwinner not been killed. They are not entitled, however, to be placed in a better material position than they would have been otherwise at the expense of the offender responsible for the death of the breadwinner. Consequently the courts off-set any profits or other benefits which may accrue to the dependant as a result of the death of the bread-winner against the value of the loss of support assessed by the court. This principle has been stated very clearly in decisions of the Appeal Court, of which Hulley v. Cox, 1923, is the leading case. In this case Chief Justice Innes said—

In Peri-Urban Areas Health Board v. Manurin, 1965, the general principle is stated as follows—

In addition to the factors referred to in the quoted extracts from the case Hulley v. Cox which are taken into account by a court in considering the amount to be awarded as material loss to a dependant, various other factors are also taken into account. In this way the assessed value of the accelerated receipt by dependants of the proceeds of insurance policies which the deceased breadwinner has taken out on his life, and which are payable to his dependants on his death, is deducted from the assessed value of the loss of support. The tendency in various countries is, however, to curtail by legislation or judicial decision the matters to be taken into account in the assessment of the amount of compensation. So for example insurance moneys, pension moneys, legacies, etc., are not taken into account in the United States. The approach seems to be that the principal in diminution of his own responsibility can make no reasonable claim to benefits which may flow from an agreement to which he was not a party and for which the deceased had made provision out of consideration for his dependants in order to provide for them. In Canada, except in Newfoundland, insurance moneys are excluded by legislation from the assessment of the amount payable as compensation. This also applies in Australia. Similarly pension moneys are not taken into account either in those countries, with the exception of a few areas. The legislation of New Zealand goes further than this and excludes any profits which, as a result of the death of the deceased, are paid into his estate or to his dependants. In England the legislature passed the Fatal Accidents (Damages) Act in 1908 in terms of which it is provided that no amount “paid or payable on the death of the deceased under any contract of assurance or insurance” shall be taken into account in the assessment of damages. Apparently this legislation was not so much inspired by considerations of fairness. Whatever the truth may be, this Act withstood the test of time and in 1959 it was replaced by the Fatal Accidents Act, which extended the scope of the earlier Act considerably.

In South Africa the general rule has also been modified to some extent by the judiciary. Justice Holmes, Judge of Appeal, in the case of Peri-Urban Areas Health Board v. Manurin, to which I referred earlier on, made the following statement, in which the other Judges concurred, with regard to the question whether a woman was obliged to mitigate the damages she suffered as far as possible by finding employment—

Also as regards the question whether insurance premiums which the breadwinner would have had to pay had he not been killed should be taken into account, the Appeal Court has lately had an opportunity of expressing an opinion. In this connection the Court said through the mouth of the same Judge—

The principle that the proceeds of insurance policies should be taken into account is still established in our law, however, and it is to be doubted whether that principle will summarily be amended by our judiciary. As recently as 1963 in the case of Legal Insurance Company Ltd. v. Botes, the principle in connection with insurance moneys was repeated by the Appeal Court as follows—

Because it has recently been felt, by Judges as well, that it is unfair that a wrongdoer should get the benefit of the consideration displayed by a breadwinner in taking out insurance for the protection of his family at his own expense, the question has arisen whether it should not be laid down in legislation that the proceeds of insurance policies shall not be taken into account in the assessment of the value of loss of support in the case where the death of a breadwinner has been caused wrongfully. Consequently the Law Revision Committee investigated this matter.

This Committee, as I have already mentioned, unanimously recommended that consideration should be given to legislation providing that the proceeds of insurance policies and pension moneys accruing to the dependants of the breadwinner on his death, shall not be taken into account in the assessment of the value of the loss of support of the dependant. Hon. members will agree with me that the introduction of such a principle, for which clause 1 of this Bill makes provision, is only fair. In McKenzie V. S.A. Taxi-Cab Company, 1910, Witwatersrand Provincial Division 232, which was referred to with approval in various other cases, the court decided in pursuance of English law that the amount which the plaintiff might claim from a defendant who had negligently caused him personal injuries was not subject to diminution for the reason that damages were completely or partially covered by insurance. One may ask oneself why in the case of the death of a breadwinner a wrongdoer should get the benefit of protection which the deceased obtained for his family at his own expense? Why should he derive benefit from an agreement in which he was not concerned at all? Why should the dependants of a breadwinner who was wise enough to make provision for his dependants recover less than the dependants of a breadwinner who had failed to make provision for his dependants? Under the existing arrangement it seems as though the deceased had been paying premiums all the time for the protection of the wrongdoer. If person, A, for example is insured for R30,000 it is difficult to understand why the wrongdoer should be benefited to the tune of that amount. A wrongdoer may argue to himself that he is insured against his own negligence to the tune of any amount of insurance, save, of course, any criminal consequences, but this also operates unfairly against wrongdoers. Surely it is nonsensical that the responsibility of a wrongdoer should be determined on the basis of whether he has hit an insured or an uninsured victim. Surely what is at issue here is the wrongfulness and consequences of the deed of the wrongdoer and not the consideration which has been displayed by the deceased. One may add here in a lighter vein that under the existing state of affairs and provided one knows that one’s enemy is well insured, one may allow oneself considerably more liberty as regards the personal safety of one’s enemy as would otherwise have been the case.

The proposal of the Law Revision Committee was sent to various interested persons and bodies as well as to Judges for their comments. I do not want to tire hon. members by furnishing a long list of the names of the interested parties who were consulted, but in broad outline I may mention that those who were consulted include the Association of Law Societies of South Africa, the General Council of the Bar of South Africa, universities, Judges, certain government departments, the Association of Pension and Provident Funds of South Africa, the Life Officers’ Association of Southern Africa and the Insurance Councils. All of these were consulted. I may tell you, Sir, that the principle of this Bill received overwhelming support. One or two bodies or persons, however, drew attention to a possible implication, and I shall deal with this later.

I shall now deal with the principle in brief. To some extent the principle contained in clause 1 of the Bill is more comprehensive than that which was recommended by the Law Revision Committee. The recommendation of that Committee concerned insurance and pension moneys, whereas, as hon. members will see, the Bill also refers to “benefits”, as defined, paid as a result of the death of a person. The reference to “benefits paid by a friendly society for the relief or maintenance of a member’s dependants” was inserted at the suggestion of the Office of Financial Institutions and the reference to “benefits paid by a trade union” was inserted at the suggestion of the General Council of the Bar of South Africa. The definitions too were adapted in consequence of certain proposals.

To return to the possible implication this Bill may have to which I referred earlier on, I have to point out that registered companies carrying on business in terms of the Motor Vehicle Insurance Act, 1942, will of necessity have to pay higher amounts in settlement of claims, which may have the result, although not necessarily, that premiums in respect of third-party insurance may be affected. But I want to say at once that this should not be seen as a deterrent. It should be borne in mind that this Bill relates only to cases where insurance moneys, etc., have to be paid as a result of the wrongful killing of a person. It should also be borne in mind that the principle of this Bill holds the advantage that the dependants of breadwinners who have been killed wrongfully, receive the benefits of a higher award. Otherwise one has to ask oneself whether it is fair to carry on according to the existing arrangement and to perpetuate for an indefinite period a principle which seems to be unfair. Such an approach hardly deserves consideration. The rest of the Bill is self-explanatory.

May I congratulate the hon. the Deputy Minister on his maiden speech as a Deputy Minister, and may I say how pleasing it is to find such a change in his tone, which it seems responsibility inevitably brings. We are indebted to the hon. the Deputy Minister for the very clear and full explanation he gave not only of the provisions of the Bill, but of its historical background and of the conditions pertaining in other countries of the world which motivated the Law Revision Committee to give its blessing to this Bill. I may say that I hope there are no hon. members who, having listened to the Deputy Minister’s speech, were confused in looking at their Bills, because the first printed Bill I received, A.B. 17, the Assessment of Damages Bill, says inside that it is “a Bill to provide for the formalities in respect of a contract for the sale of land; to repeal section 1 of the General Law Amendment Act. 1957”. Inasmuch as 1,280 copies of this Bill were printed, I hope that mine was the only one which contained this extraordinary misprint.

Now, despite the fact that everyone else seems to have approved of this Bill the most important matter is what our attitude towards it is. But let me assure the hon. the Minister immediately that we wholeheartedly support the Bill. It is a very good principle that no one should be penalized because of thrift and because he has made provision for the future. The only pity is that this principle is not extended by this Government in respect of other matters such as, for example, pensions, which in principle are no different from the principle we are adopting in this Bill.

There is only one question which arises and that is why it is that workmen’s compensation in terms of the Act is omitted from this Bill. In other words, we here provide that if damages are assessed by a court one must not take into account what the plaintiff in the case receives from insurance policies or other benefits which are defined as being payments by a friendly society or a trade union for the relief and maintenance of dependants. But there is no mention of payments under the Workmen’s Compensation Act. Quite clearly, so far as those payments are concerned, they will be taken into account in assessing damages. One wonders why this was omitted, and the reason which suggests itself to one is that this payment info the fund created by the Workmen’s Compensation Act is a statutory payment; in other words, it is a compulsory payment whereas insurance policies and friendly societies and the other benefits defined in the Bill are voluntary payments depending on the individual. Now, that may or may not be the reason, but we would like to hear from the hon. the Deputy Minister what exactly the reasons were for excluding the provisions of the Workmen’s Compensation Act. Subject to that query, we offer no objection to the Bill.

In the first place, I have to thank the hon. member for Durban (North) for the very kind remarks he made at the beginning of his speech when he congratulated me and also said that I had spoken in a different tone this afternoon. I hope this will continue to be the case and that I shall not find it necessary to change my tone towards the hon. member in the near future.

The only point raised by the hon. member, concerned workmen’s compensation. I may just mention that this Bill does not affect that position materially. The position remains unchanged and it is also unnecessary to refer to it in this Bill. We may deal with that matter further in the Committee Stage. I do not think it is a matter which really affects the main principle of this Bill.

Motion put and agreed to.

Bill read a Second Time.

I move—

With the exception of the proposed amendment to section 14, all the other amendments are consequential in nature and require no comment at the Second Reading. As section 14 of the National Film Board Act reads at present, it is not possible for the State to make grants-in-aid to the National Film Board. The proposed amendment makes such grants possible. The Film Institute of the National Film Board meets a pressing national need because prior to its establishment as part of the National Film Board no organization existed to foster the preservation, for posterity and for research purposes, of archival cinematograph films and related matters, for example apparatus, scenarios, reference books, periodicals, etc., extremely important cultural legacies not only for the film industry but also for history, and because cinematograph films, especially the old nitrate films, deteriorate rapidly. As a result of this many valuable archival cinematograph films have already been destroyed through the years and are lost forever to our nation and to posterity. South African filmic history dates back to the beginning of the present century and has captured for posterity the complications and developments of those troubled early times. These first cinematograph films are irreplaceable evidence of the standpoints, aims and attitudes of that period in our history. Here one thinks especially of film recordings of President Kruger in Rotterdam and Paris, of Adderley Street, Cape Town, in 1898, the capture of a Boer general—most probably General Piet Cronje—propaganda against South Africa in 1899, the African Mirrors of 1913 to 1956, film recordings of Generals Botha, Hertzog and Smuts. These old films, valuable additions to our historical possessions lay neglected in attics and cellars and store rooms for years, and after they had been traced through the agency of the Institute, it was found that in many cases they were in very poor condition. There are many rolls of film at present in the possession of companies, bodies and persons which are perishing because those companies, bodies and persons are not equipped to care for them and do not have the necessary interest or funds for the purpose either.

All films printed before 1950 were printed on nitrate film which deteriorates very rapidly, and it is highly necessary that these films be restored as quickly as possible and reprinted on acetate film. Five hundred and eighty-four rolls, or about 525,600 feet, have already been reprinted on acetate film, and in the case of the important African Mirrors the work has progressed up to the late thirties. More than a thousand of the African Mirrors still have to be reprinted, not to mention the mass of documentary and feature films. It is therefore urgently necessary that the existing films be restored immediately. The material in the possession of the Film Institute must undergo the following processes. First it must be examined to ascertain the contents of the tins, which often do not correspond at all to the description which appears on the outside of the tins. In most cases the films cannot be projected and must be examined carefully foot by foot with the naked eye to ascertain both the content and the condition thereof. Subsequently they have to be catalogued and supplied with cross-references. Often there are more than half a dozen subjects on one roll of film. In the case of nitrate or acetate films of poor quality they must be reprinted on non-inflammable acetate film and the rest must be cleaned and restored. Then the films must be stored in new rust-free containers, which have to be specially purchased for the purpose. They must be placed in specially designed safes for preservation. Finally they must be printed for use in composite films of historic and educational importance.

Mr. Speaker, from the brief motivation I have given here, it is clear that there are considerable running costs in respect of the Film Institute. However, in view of the fact that the Film Board is a business undertaking which must be able to compete with other film producers as regards the production prices of films for the State and State-aided organizations, it is not fair to load its cost structure with expenditure on a service for which the State is by rights responsible. For this fundamental reason the proposed amendment is necessary so that grants may be made to the Board by the authorities to help defray the expenses of the Institute.

Sir, in discussing the contents of this Bill, which is a very simple Bill, one notices that there are three clauses. The first two clauses are consequential upon the name of the hon. the Minister’s portfolio having been changed from Education, Arts and Science to National Education. Those are the first two clauses. The third clause is one which extends to the National Film Board a power which they did not have when the board was established in 1963. The board was established as a business undertaking, and to finance the board loans would be made available; that is the main principle; and now in this third clause, in addition to loans being made available, it is possible for grants to be made. No information is given about the grants, but grants may be made to the board. Sir, I should like to say at the beginning that in trying to get information about the activities of the Film Board we are faced with real difficulties. The Act says that the annual report of the Film Board will be laid upon the Table and, presumably, would then be available to members. But there is only one copy available. That copy is filed, and therefore it is necessary for hon. members who wish to see the copy to make a special study of it, and one may not bring it into the House to quote from it. Usually when reports are made available and laid upon the Table, we receive copies. It is not necessary in the case of the Film Board for every member to get a copy, but I think at least one or two copies should be made available to Government members and to us in the Opposition. It is difficult for us to get this information and therefore we have to go to the Auditor-General’s report where we find a financial report and nothing further. We do not get the information that the hon. the Minister has been able to give to the House this afternoon. Sir, these annual reports are available only up to March, 1967, in other words, two years ago. We have not vet received the report for the period ending March, 1968, and the Auditor-General’s report, which would help to some extent, is in Part III of his report, and that we have not received. We have received Parts I and II but we have not received Part III. Therefore that information is unavailable. But from the information we have gleaned from previous reports of the Auditor-General and from replies to very good, searching questions put on the Order Paper by my colleague, the hon. member for Orange Grove, we have received some more information; so I should like to state briefly what the history of the Film Board has been financially, because we are now discussing the financial question. The merits of the work done by the board do not enter into this. We know why it was necessary to have the amendment because the film institute has to be maintained and the film institute, I think, should be maintained.

Now, Sir, let us take a look at the financial history of the board. For the first year, as far as I can ascertain, there was a loss of R79,700. Well, one has to expect that because, as the companies tell us when they have a loss in the first year or two, they have teething trouble. Well, probably this board too had teething trouble. They suffered a loss of R79,700 in the first year. The following year, up to March, 1966, the loss was R40,000 so they were getting on; they were establishing themselves and doing rather well. Then we come to the year 1967, the latest figure available to us; there was a profit of R9.800. In reply to a question put by the hon. member for Orange Grove we ascertained on Friday that for the year ending 31st March, 1968, the profit was not R9,800 but R74,000. By the way, Sir, may I say in passing that the reply to that question was prepared at short notice and we are very grateful to the hon. the Minister and his staff for assisting us as they have done. As I say, for the year ending March, 1968, the profit increased to R74,000. They are doing well. Now the hon. the Minister tells us that provision has to be made for the Film Institute. According to the records and according to the reply to this question, we find that the Film Institute last year cost R27,000; so, even making provision for the cost of R27,000 for the Film Institute, they still had a big profit. I accept what the hon. the Minister has said …

That is not all the money we need.

They have borrowed funds and if they are financed on borrowed money we can see in the annual reports how they are getting on. I do not think it is necessary to rush in and give these grants when it has not been proved that it is necessary. After all, they have these funds; they have money of their own invested, and they draw interest on that money. I think they are running their business in a good businesslike manner. The question is whether the explanation of the hon. the Minister is satisfactory, and I hope that in reply to the Second-Reading debate he will give us a little more information. We are not quite satisfied, and if we have to define more accurately why the money is required it may be necessary for us to move an amendment in the Committee Stage, but at this Second-Reading stage we are prepared to accept the Bill because there is only one financial clause. Whether we discuss this clause, clause 3, in the Second-Reading debate or in the Committee Stage, it comes to the same thing.

A number of misgivings arise in connection with this Bill, also as a result of the hon. the Minister’s speech. I wonder whether he can tell us if the appropriations made for the Film Institute in the past since its establishment in 1964, have now been found to have been ultra vires, to have been unauthorized, and whether one of the reasons for this Bill is not specifically that some or other body, or perhaps the Auditor-General, notified him that the loans made to the Film Board may not go to the Film Institute. As my hon. colleague said, we have unfortunately not yet received Part III of the Auditor-General’s Report in this connection, but it may be that the hon. the Minister has information in this regard. The aims, as explained by the hon. the Minister, meet with our approval, of course, but if one looks at the Bill itself, the aims are not as limited as the hon. the Minister would have us believe. According to the Bill grants-in-aid may be made on conditions determined by the Minister in consultation with the Minister of Finance. In other words, it can cover a much wider field than that which the hon. the Minister indicated to us this afternoon. Like the hon. member for Kensington, I hope that in one way or another, either in the Committee Stage, or elsewhere, provision will be made so that the actual purpose of this grant-in-aid may be clearly defined, that it will be for the Film Institute, and that the conditions for this grant-in-aid which the Minister is going to lay down, will be made known, either in the Government Gazette or in some other way, so that we, Parliament, may know precisely for what purpose that money is going to be employed. Under no circumstances do I want to make the accusation against the hon. the Minister or the Film Board that either of them will use the money for a purpose other than that which they suggest here, but circumstances may change and there will be other Ministers in the future. Therefore it will be a good thing if we could get some or other assurance in this connection embodied in the legislation.

Grants-in-aid are something which one more readily associates with organizations outside Government or semi-Government bodies. There is, for example, the grant-in-aid to the National Botanical Gardens at Kirstenbosch, to the Simon Van der Stel Foundation and for South African war graves. There are also comparable grants-in-aid by the hon. the Minister’s own Department, for example to the National Institute for Social Research. I think that that is the name of that institute which falls under the hon. the Minister and I am sure that he will have a grant made to it. These are, however, grants of a different nature to those given to a body which has its own revenue. The National Film Board is one of the bodies which have their own revenue. It has enough money to pay for the Film Institute, which in fact also constitutes a portion of its work.

I want to mention an analogy to you. The S.A.B.C. is also a body with a large revenue. It also has its own film archives, its own discothéque, and these are paid for out of the S.A.B.C.s’ own revenue. Is it not also possible for the National Film Board to finance its archives from its own revenue? The National Film Board is a body which spends a great deal of money. It pays R260.000 to outside bodies. We should like to have the assurance that when money is voted, or permission is granted for these grants-in-aid to be made, the funds will be used only for the purpose stipulated by the hon. the Minister, and will not go to outside bodies, for example. In answer to my question on Friday the hon. the Minister was kind enough to give me an estimate of the budget of the Film Institute for the financial year 1969-’70. If I remember correctly, the amount concerned was R64.000. He said that of that R64,000, R23,000 would be paid out in salaries and wages and R1,200 in respect of administration costs. The total expenditure in this regard is therefore about R24,000. Now we should like to know from the hon. the Minister whether he can give us an indication of what the other R40,000 will be needed for in the ensuing financial year.

Moreover, this is perhaps not the best way of maintaining the archives. I do believe that such archives are necessary, just as the work which the National Film Institute does is necessary. I wonder whether the archives themselves cannot preserve the films, as is done in other countries. I am now thinking of the Library of Congress in the United States, where films are stored and looked after properly. Is it not perhaps a task for which a grant-in-aid can be made to another Department? Is it right that the hon. the Minister should ask for such a grant to be made to the National Film Board?

I therefore hope to receive more assistance in this connection and that the hon. the Minister will answer a few of our objections and that we may possibly receive an indication in the Government Gazette of the extent of the actual work of the National Film Institute, a body which is not mentioned in the original Act of 1963. The Film Institute, for which grants-in-aid are being requested, will fall under the National Film Board.

There are able people serving on the Film Board, especially the heads of Government Departments. I am sure that where they, and especially the Film Institute, will now supply the films, they will be doing valuable work. I do not feel quite happy about the fact that all the members of the Film Board will serve in the Film Institute. I only mention in passing that the chairman of the S.A.B.C., Professor Weiss and a few other persons are serving on it. With these few words I want to conclude and to give the hon. the Minister an opportunity of replying to the few misgivings which we on this side of the House have raised.

Mr. Speaker, I regret that the two hon. members of the Opposition felt that there were objections. Before this amending Bill was referred to me, I paid a special visit to the archival division of the Film Board by invitation. I think that if the two hon. members had accompanied me on this visit, they would have gained, or when they themselves pay such a visit in future, they will gain a completely new insight into the matter. The hon. members would call it a kind of sabotage and neglect of the past as a result of the fact that there was no organization to take care of this matter. When the Film Board was established, it was never the intention that it should undertake these tasks. Under the old dispensation, before the Film Board was established, a safe was constructed because there were a few enthusiasts who saw what it was all going to lead to. The temperature must be kept at a certain minimum in order to combat the process of deterioration. They opened a few tins for me which contained only powder; one could no longer even read on the outside what the contents of the tin had been. I think we must pay tribute to-day to the National Film Board, which, since its establishment, took immediate action, despite the fact that it could not be held responsible for these matters. The Board saved what could be saved by immediately taking the necessary steps, not only as far as restoration was concerned, but also for the preservation of those items that were still to be found. I stated very clearly in my Second-Reading speech that there is not the slightest doubt that the National Film Board is a business organization. Everything which the Board has done thus far, has been done with loan capital. The hon. member for Kensington said that in 1966 there was a profit of R9,000 and in 1967 a profit of R74,000. This is an ordinary profit on revenue and expenditure. This is not a net profit because it does not include the redemption of loans, the payment of interest, buildings which had to be erected and equipment required. Up to now the Film Board has had to borrow more than R2 million and with the repayment of this the Department is first going to help them to get back on their feet. The negligible amounts which constitute the profit, include the profit on expenditure and revenue, expenditure such as on material used, salaries paid, etc. Then provision has not yet been made for all the other matters for which capital is required. To call the Film Board a business undertaking, which must make use of loan capical, is to saddle it with a function with which it is not directly concerned. If the Film Board, which must now manufacture films for the various departments, had been indifferent to the matter, if they had asked, “What difference would it make to us if all the old African Mirrors and all the old things perished?” then hon. members could have accused the Board of irresponsibility. Neither was it a case of the Auditor-General stopping them and telling them that it was not their function to do archival work. There is no question of that. I think the hon. member for Orange Grove went too far. He drew a comparison between the S.A.B.C. and the Film Board. It is important for the S.A.B.C. to preserve its own material and to do the ordinary restoration work, but it is of no importance to the Film Board to do so, except if the function is allocated to it, and the function has been allocated to it. But it would be unwise for the Film Board to plough its profits into a function which, as I clearly stated in my Second-Reading speech, is actually a function of the State. The State has an interest in the matter, it is a cultural action to preserve records of the past because they give a vivid picture of what happened.

I can give hon. members opposite the assurance that as regards the allocation of these funds, which will be accounted for in the Budget each year, they will be employed for no other purpose. An explanation will be given. So much will be allocated for salaries, so much for other expenses, and the rest for material. There will only be a certain permanent staff engaged on the work on a full-time basis, and not persons from the Film Board working on a part-time basis. A separate staff will be engaged on the archival work, and we shall have to indicate separately in the Estimates what money is required for the Film Board for the restoration and preservation of old films.

Will the services of outside organizations be employed for the restoration of films or will it be done by the Institute itself?

If it is done by outside organizations, outside organizations will have to pay for it.

But you say that they will have no revenue next year?

Who, the archives?

According to the reply you furnished, they will have no revenue.

There will be no revenue. We have so much of our own work which must be attended to. I merely mentioned in my Second Reading speech that we do not know what is still lying around outside, and if it is of sufficient value to be preserved for the nation this will be done, but it will have to be decided whether it is in the interests of the nation. We cannot simply give people cinematograph films which have been repaired and restored.

No, Mr. Speaker, I think there is a little misunderstanding. I regret that the annual report could not be tabled now. I want to break a lance here to-day for what the Film Board has done and especially for what they did with the able general manager, Mr. Jan Botha, in charge of affairs. I must say that these people have really done pioneer work, they have made a breakthrough, and I think we must give the Film Board full credit. I know hon. members opposite agree with me. They will only get this additional supervisory duty, but the funds may not be taken from their funds. It is my sincere hope that on second thoughts the Opposition will not find it necessary to oppose this measure any further.

Motion put and agreed to.

Bill read a Second Time.

Mr. Speaker, I move—

The proposed amendment to this Act is of a technical nature, but it is essential for the efficient bookkeeping of the South African War Graves Board. In terms of the present wording of the War Graves Act, it is the duty of the Controller and Auditor-General to audit the accounts of the Board, but there are no instructions as to the manner in which the Board should keep its records. Clause 1 of this measure now eliminates this shortcoming by providing that the Secretary for Cultural Affairs may prescribe the manner in which the records should be kept. As regards clause 2, I want to point out that prior to the establishment of the South African War Graves Board by legislation, this body was established as an administrative measure and was known as the South African War Graves Board (Suid-Afrikaanse Oorlogsgrafteraad). Cher the years this latter South African War Graves Board, which was established in 1956, acquired certain movable assets which had to be transferred to the Board established by legislation. The provisions of clause 2 of the amending Bill are necessary in order to legalize the transfer of these assets.

I rise merely to say, Mr. Speaker, that we on this side appreciate the reason for these amendments which are proposed to the principal Act and we on this side of the House support this measure.

Motion put and agreed to.

Bill read a Second Time.

Mr. Speaker, I move—

The object of the proposals contained in this amending Bill is, in the first place, to round off what has been happening in the course of a few years with regard to the re-organization of the South African Defence Force.

On 17th October, 1966, the public servant who occupied the post of Secretary for Defence vacated that post and the Commandant General of the South African Defence Force was appointed to that post whilst retaining his duties as Commandant General. He was therefore both Commandant General of the South African Defence Force and Secretary for Defence. By Proclamation No. 124 of 1967 the designation of the head of the Department of Defence was changed from Secretary for Defence to Commandant General of the South African Defence Force. The proposed amendment legalizes the appointment and regulates his duties, functions, conditions of service and privileges as he is a member of the forces and not a public servant in the narrow sense of the word. Clause 7 provides for this.

Subsection (2) is necessary in view of the fact that non-members of the South African Defence Force are also employed in the Department of Defence. This group includes public servants and temporary employees who have been appointed in terms of the Public Service Act and fall under the public service regulations for the purposes of discipline. Members of the Defence Force are, of course, subject to the Military Discipline Code. Therefore, in order to enable them to apply the public service regulations to their civilian subordinates, they are deemed to have been appointed in terms of the Public Service Act. The Cabinet decided to put this matter beyond any doubt after proper legal advice had been obtained in regard thereto. Civilians are employed mainly in the inspectorate and in the accounting section, and women for the most part are employed as clerical assistants.

The second principle of this amending Bill is to make provision for various matters in respect of which the Minister may delegate some of the powers which are legally his, which will allow of matters of a purely routine nature and ones in respect of which the Minister has laid down his policy being executed on behalf of the Minister. This will bring about a general acceleration of activities and work, will relieve the Minister of unnecessary burdens and will entrust commanders with greater responsibilities. This is very important. The clause which deals with the delegation of powers, is clause 2, which relates to the appointment of honorary members of commandos. Clause 3 deals with refresher courses in respect of certain officers of the Reserve. Clause 4 deals with the employment of members of the Permanent Force Reserve in other portions of the South African Defence Force for service in terms of Chapter X. Clause 5 deals with something of a purely administrative nature. Clauses 8, 9 and 10 also deal with the delegation of powers.

In addition the amending Bill makes provision in clause 6 for the proper exclusion of 16-year-olds from the selection lists drawn up during the year in which they register. In view of the fact that training only commences during the year in which the person who is liable to undergo compulsory military service turns 18, and in view of the fact that the selection list is drawn up during the year which proceeds training, the persons whose names appear on the selection list must be in their seventeenth year or older, This merely is an attempt to exclude 16-year-olds effectively.

In addition a few things are being rectified, for example by paragraphs (b) and (c) of clause 6, as well as clause 11, which makes a grammatical improvement. This covers virtually all the provisions of this amending Bill. *

Mr. Speaker, the principle with regard to the post of Commandant General and Secretary for Defence is one which we on this side of the House have already accepted. It has our full support.

The other principle which the hon. the Minister is presenting in this Bill, i.e. that with regard to the delegation of powers, is another which we do not oppose. We realize full well that no matter how the Minister delegates his powers, he still is responsible to this House in the end for what is happening in his Department, wherever it may be happening. This being so, we have no objection to this principle.

As far as clause 5 is concerned, I should like to ask the Minister, however, to explain to us why he deems it necessary to delegate the powers to the registering officer. A new post is now also being created for such a registering officer. Or is this merely an old post which is now being defined? As regards clause 8, which deals with the retirement of members of the Force and the opportunity they have to stay on in the Force, I feel that this is a matter to which the Minister should give his personal attention in any event. I should not like to see him delegating these powers to somebody else.

With these few words I want to indicate that we support this Bill. If further discussion is necessary, we shall do so during the Committee Stage.

Mr. Speaker, as regards the hon. member’s question with reference to the registering officer, I just want to say that there is a registering officer. At times it does happen, however, that he is on leave or on sick leave, or something of that nature. What is being done here, is only being done to eliminate the tedious procedure which has to be followed when in such cases the Minister appoints a person to act in his stead. This is the reply to his question.

As regards the question of the delegation of powers in respect of officers whose terms of service have expired and whose terms of service may be extended, the position will be that the policy will first be laid down in consultation with the Minister, i.e. on what grounds such persons will be retained in service. In the second place, reports will be made to me from time to time on all delegations which have been made to different officers. The practice to-day is, where I have already delegated powers relating to certain matters, that reports are made to me to explain what actions have been taken under those delegated powers. But you will realize, Sir, that, with a growing Defence Force which is assuming the proportions our Defence Force is assuming at present, and in view of the fact that in addition to the activities of the Defence Force there now are other activities in connection with the production of armaments and the Armaments Development Corporation, it has virtually become a matter of impossibility for the Minister to give his attention to a whole series of routine matters, when he can quite easily lay down his policy and receive reports on those matters from time to time. This is the whole object we are seeking to achieve with this amendment.

Motion put and agreed to.

Bill read a Second Time.

Mr. Speaker, I move—

This short measure became necessary because of the action Parliament took to introduce a system of national service for the Citizen Force and Commandos instead of the old system of applying the ballot. The definition of “citizen” will also now, if this is agreed to, include the South African citizens within the meaning of the South African Citizen Act of 1949; and include a non-citizen, to whom the provisions of section 63 of the Defence Act have been made applicable by the proclamation provided for. Hon. members will recollect that when the Bill was before a Select Committee, we made provision that national service also be applied to immigrants under certain conditions.

Furthermore, the term “service” is reformulated to suit the provisions of the Defence Act, as amended. In clauses 2 and 3 the words “undergoing compulsory military training” are substituted by the words “rendering service” in accordance with the system of national service already in practice. Provision is also made in clause 4 to bring the position into line with the principle of national service. In other words, the basic idea contained in this measure is that the protection of the principal Act will now apply to all those called up under the provisions in respect of national service of the Defence Act.

Mr. Speaker, we on this side of the House have no objection to this Bill. I just want to draw the attention of the hon. the Minister to clause 1, in which mention is made of a “non-citizen”, in other words, a person who has not declared that he does not intend becoming a South African citizen. I was under the impression that the following procedure was followed as regards the training of the non-citizens, namely that those who are not citizens, are asked whether they will become citizens later. If their reply is in the negative, they are not trained. Does the reverse apply now? If the person remains quiet, is he still going to be trained?

No.

This would seem to me to be the case here. In any case, I shall give the hon. the Minister the opportunity to reply to that. However, we have no objection to the Bill. It is merely a case of this paragraph not being quite clear to me.

Mr. Speaker, I think the principle that was accepted, was that we would issue a proclamation in terms of which this whole matter would be regulated. The crux of the matter was that people in certain age groups who had not become citizens yet, would be given the opportunity to say whether it was their intention to become citizens. If they declare that intention, they are registered and called up at the prescribed age to render compulsory service. However, this does not apply to those who do not intend becoming citizens. The principle as accepted by the Select Committee is not altered by this measure.

In other words, if somebody does not want to become a citizen, he will not receive training?

In that case he will not receive his training.

Motion put and agreed to.

Bill read a Second Time.

Mr. Chairman, there must be a misunderstanding, because we on this side of the House understood that this matter was not going to come under discussion. I would like to ask the hon. the Minister whether he will not report progress and ask leave to sit again.

Mr. Chairman, I move—

Agreed to.

House Resumed:

Progress reported.

Mr. Speaker, I move—

Since the Liquor Act first appeared in 1928 it has been amended on no fewer than 26 occasions. To assert that the position as far as liquor legislation is concerned is a fluid one because it deals with a liquid commodity is probably not too far-fetched. The provisions of the Bill of which I am moving the Second Reading, deal with liquor in general, but cover miscellaneous matters. It would be easier to deliberate on each separate provision in the Committee Stage, and consequently, for the purposes of the Second Reading, I will not go into details on the principles contained in each separate clause. I therefore intend confining myself in the main to what I regard as the most important principles of this Bill.

Hon. members may recall that in February, 1967, my Department published a Liquor Amendment Bill for general information and commentary. Many of the provisions which appeared in that draft Bill have been included in the Bill before you. Where practicable, and where it was found essential, the provisions of the 1967 draft have been supplemented and adapted. However, I want to mention that it was not possible in all the cases to comply with all suggestions and requests since there are too many conflicting interests and divergent opinions when it comes to liquor distribution. In the first place the Bill contains a number of provisions which are aimed at facilitating and rectifying administrative operations, administrative problems which crop up, and at clarifying certain provisions. In this connection I am referring, inter alia, to clause 4, 5, 6, 7, 8, 11, 12 and 13. The provision in regard to prohibited brews such as Skokiaan and Barberton, and distillates of these, has in the past given rise to certain problems when prosecutions were instituted. That provision, i.e. section 122 of the Act, has now been rewritten as laid down in clause 41, and I hope that the problems will in this way be eliminated.

According to information illegal trafficking in liquor is assuming disquieting proportions. This is not only confined to shebeens but is also taking place in ordinary cafes. In order to combat this evil effectively provision is being made in clause 53 (c) for minimum penalties. I have no doubt that this measure will be supported by all hon. members. The Wine, Other Fermented Beverages and Spirits Act, 1957, was recently amended to make provision for the control of the manufacture of other fermented beverages, including the so-called orange wine. Up to now the sale of a beverage made from fruit other than grapes was controlled by the provisions of sections 6 (3) and 90 of the Liquor Act. As a result of the amendment of the Wine, Other Fermented Beverages and Spirits Act, 1957 it was resolved to overhaul the provisions regulating the sale of other fermented beverages as well. You will find the provision, which is in fact self-explanatory, in clause 3 of the Bill. You will note in regard to clause 3 that it is being envisaged that a wine farmer who wants to sell wine on his farm or a wine co-operative that wants to manufacture wine at a central cellar should be treated on the same basis as the manufacturer of other fermented beverages. This means that such a wine farmer or co-operative, in the same way as the manufacturer of other fermented beverages shall operate in terms of ministerial authorization, granted upon the recommendation of the National Liquor Board. If a manufacturer of wine should want to sell his wine elsewhere, i.e. at the so-called wine farmers’ depots, a wine farmer’s licence must be applied for in the way already prescribed.

Furthermore I want to refer to clause 19 which envisages certain important changes in the system of classification. When provision was made for classification in 1963 it was stipulated that a classified establishment should apply for re-classification every three years. Subsequent to that a system has been introduced administratively whereby each classified hotel is inspected at least twice annually in order to determine whether the prescribed requirements are still being complied with. As a result of this, we regard it as unnecessary that three-yearly applications for re-classification should be made, and that requirement is consequently being repealed now. I am convinced that this provision will be welcomed by the hotel industry in particular. Hon. members are aware that upon classification the privilege of allowing women into certain restricted areas can be granted. Some of you will probably have visited these so-called ladies’ bars already, and will agree with me that it is a very big improvement on the old system of men’s bars.

However, a problem has cropped up in this regard in that some hotel owners have constructed their dining rooms or restaurants or lounges in such a way that the ladies’ bar forms part of these. As soon as liquor is poured over the counter in a room, that room becomes a bar for the purposes of the Liquor Act, and consequently such a dining room or restaurant must be closed on closed days and persons under the age of 18 may in any case not be allowed in. This matter is now being rectified in clause 19. I want to make it very clear right now that what is being envisaged with this is not to allow general drinking in bars on closed days, and even less to allow children into bars. This concession will only be granted by me upon the recommendation of the National Liquor Board, and then it will be subjected to conditions and restrictions.

Prior to 1928 it was legal to employ women as bar attendants. With the commencement of the 1928 Act however, a prohibition was placed on this. In 1963 it was provided that a housekeeper could also be employed as a bar attendant. However, this provision is being circumvented by some licence-holders who are allowing charming your women to work behind the bar counter under the pretext that they are housekeepers. According to my information many of these women have little or no knowledge of housekeeping. That provision is therefore being deleted now. However, to alleviate the problems experienced by hoteliers in recruiting suitable male bar attendants, and also because it is felt that a woman behind the counter would be better suited to the atmosphere of a ladies’ bar, provision is being made in clause 19 for the employment of females in ladies’ bars. It is a privilege which it will only be possible to grant to classified hotels, and it will be subject to such conditions and restrictions as I, after consultation with the National Liquor Board, shall impose. In this connection I may state that such a woman will be subject to a process of selection by the local magistrate and the designated police officer in so far as character—not her vital statistics—are concerned. I also want to mention that although the relevant clause stipulates the minimum age for such employment to be 18 years, I intend to make it considerably higher by imposing conditions. I want to emphasize that if this concession leads to undesirable conditions, I will not hesitate to withdraw the privilege immediately in specific cases.

When an off-consumption privilege is granted to a hotel by virtue of classification, the licence-holder must pay an amount equivalent to half of the renewal fees for his hotel licence for it. It happens quite often that such off-consumption privileges cannot at first be taken up during the month of January, but only much later on in the year. At present no provision is made in the Act for a pro rata reduction in the fees payable for such off-consumption. In order to accommodate hotels further, provision is now being made for this as well in clause 19.

A day on which a Parliamentary or provincial election takes place is a closed day for the purposes of the Liquor Act. This provision must also be read in conjunction with section 181 of the Electoral Laws Act. It is also generally accepted that a day on which an election of members of the Coloured Persons’ Representative Council takes place is a closed day. In clause 21 this matter is being dealt with as follows.

In the first place, liquor for on-consumption may be sold to Whites in the normal way on a polling day for members of the Coloured Persons’ Representative Council provided the distribution point is situated in a white group area. Conversely, liquor for on-consumption may be sold to non-Whites (excluding Bantu) in the normal way on a Parliamentary or provincial polling day, provided the distribution point is situated in a non-white group area. In the event of authorizations in terms of sections 100bis and 100sex you will find similar provisions in clauses 32 and 33.

The reason for these changes is simply that non-Whites have nothing to do with Parliamentary and provincial elections, and that the opposite applies in the event of an election of members of the Coloured Persons’ Representative Council.

I want to emphasize that this concession, which I am certain will be supported by all on-consumption licence-holders and particularly hoteliers, is restricted to the provision of liquor for on-consumption. As is at present the case liquor for off-consumption may not be supplied.

As has already been said, the polling days which I mentioned are closed days subject to what has just been explained now. In clause 21 it is also being provided that on such a polling day liquor for on-consumption may be sold in the normal way from 9 p.m. to 11 p.m. In my opinion there is no good reason why on-consumption drinking localities should remain closed after the polls have closed.

Since I have now dealt with closed days and polling days, I also want to refer to paragraph (b) of clause 55. At present the day on which an election of members of an urban local government, excluding a by-election, takes place is a closed day. It is being envisaged in said clause to make this closed day an ordinary open day. We are doing this because we are convinced that the reasons for this restriction no longer exist. It is extremely unlikely that a voter at a local government election will allow himself to be influenced by a few tots of liquor, or that a candidate will make a few voters drunk in order to obtain a few votes.

Clause 23 deals with wholesale liquor licences, and is one of the provisions which appeared in the 1967 draft bill. The provision elicited quite a good deal of divergent commentary. I want to emphasize that what this clause is envisaging is not to deprive any person of his existing privileges. A wholesaler who traded with the public previously, will still be able to continue doing so, provided he complies with the prescribed requirements.

Clause 29 is a new provision. As hon. members are aware, the Minister can impose conditions and restrictions when he grants a new liquor licence. These conditions and restrictions, which of course differ for every type of licence, are known as standard conditions. When a local licensing board renews a licence granted by the Minister the board may impose additional conditions, but may not amend or delete the Ministerial conditions without consent. In the case of licences which were granted before 1965, every local administration imposed its own standard conditions, which differed from one licensing area to another. Those of you who have anything to do with liquor licensing will know about the tediously long list of roneod conditions which is attached each year to the licence itself. What is being envisaged in the clause is to make it possible for the Minister to announce by way of notification in the Gazette standard conditions and restrictions in respect of the various classes of licences. These conditions and restrictions will then be applicable to all licences of the particular class to which it relates. Provision is also being made for the suspension of any particular condition or restriction. A licensing board will not be able to suspend, amend or delete such a condition or restriction without ministerial approval, nor impose a condition or restriction which is in conflict with those imposed by the Minister. This measure will result in uniformity in so far as the general conditions and restrictions are concerned, will eliminate a vast quantity of work for magistrates and their staff, and every licence holder of a particular type of licence will know that he is being treated on exactly the same basis as his counterpart. I want to give the licensed liquor trade the assurance that the general conditions and restrictions which are being envisaged will first be published in draft form in the Gazette for general information and that they will be afforded the opportunity of commenting on and, where necessary, making representations in that regard.

The amendment to sections 100bis and 100sex (clauses 32 and 33) are to a large degree self-explanatory. In both cases the tabling of particulars of authorizations which have been renewed is being done away with. As a result of the increasing number of authorizations which are being granted (in the case of section 100bis there have been 430, and in the case of section 100sex 75) the documents dealing with renewals which have to be tabled each year are becoming more and more bulky. The necessary particulars are in any case set out once in the document which furnishes details in regard to the new authorizations which have been granted. I doubt whether the particulars which are furnished in regard to renewals serve any purpose and justify the enormous quantity of work involved in the compiling of those particulars. In any case my Department can furnish the particulars to any person wishing to have them. In the case of section 100bis provision is also being made for the granting of authorities to the Bantu Development Corporation and the Investment Corporation, whereas in the case of section 100sex the Coloured Development Corporation will also be able to hold authorities or have an interest in them as a shareholder. It will enable the relevant bodies to fulfil their aims more efficiently. Clause 33 also contains a relatively long new provision to deal with the position where a shareholder in a business authorized by section 100sex leaves the country permanently. It has come to my attention that in one case two shareholders left the country permanently, because, according to report, they were dissatisfied with certain aspects of Government policy. I am convinced that the considerable benefit which section 100 sex bestows upon Coloureds and Indians was intended for inhabitants of the Republic and not for people who are permanent residents outside our country. This provision will enable us to deal with such a position.

There are certain licensed clubs and restaurants of excellent quality which have so-called dummy bars. In these bars liquor may not be poured over the counter and this is done around the corner out of sight of the guest. Apart from the fact that something like this can lead to all kinds of irregularities, I am satisfied, in view of the success which we are having with ladies bars in hotels, that we can also allow ladies into club and restaurant bars. In the case of restaurants the same position applies in regard to the bar portion which in practice forms part of the eating locale and which therefore makes it a prohibited area for women and children under the age of 18. It will only be possible to grant this concession upon the request and after recommendation by the National Liquor Board, and will be made subject to restrictions and conditions. In this case as well it is not the intention that children should in future be allowed into bars and supplied with liquor. The relevant provision is clause 36.

The labelling of liquor containers with the name and address of the license-holder was previously controlled by the provisions of the Wine, Other Fermented Beverages and Spirits Act, and in some cases by the conditions imposed by local boards as well. In clause 40 provision is now being made for this. It is unfortunately the case that as a result of the smuggling trade this provision is necessary.

I also want to refer hon. members to clauses 15, 55 (h), 57, 58 and 59. These deal with the Mount Currie district. The provisions of the Liquor Act of the Republic are not at present applicable to that district, and the sale of liquor there is being controlled by the Transkeian Liquor Proclamation of 1949. According to the description of the Transkei in the Transkei Constitution Act, 1963, the Mount Currie district does not, however, form part of that territory. The present state of affairs, i.e. that applications for liquor licenses in that district are dealt with by the Secretary for Justice of the Transkeian Government, and that matters in regard to liquor should be controlled by provision which differs from the Liquor Act is an undesirable state of affairs. The matter was investigated in loco and I gave consideration to the objections of the local liquor license-holders. After careful consideration I decided that, notwithstanding the objections, which at this stage already I want to state are in my opinion rather unimportant, the Mount Currie district should be incorporated in the Liquor Act of 1928. One of the objections raised in regard to incorporation is the question of classification. Just as was done in the case of all other hotels in the Republic, the hoteliers of which there are six in the district, are offered a period of five years in which to have their establishments classified.

There are other provisions in the Bill which are possibly of less importance and which I should like to explain in more detail in Committee, if I am requested to do so.

Sir, we are all agreed that this Bill, like almost any other amendment to the Liquor Act, is a matter to be dealt with in the Committee Stage. I rise merely to indicate not what my personal views are, but to indicate that the United Party traditionally has a free vote on any amendment to the Liquor Act. We feel that it is a matter of individual conscience as to how members feel on liquor in relation to matters such as applications for licences and the various other matters which appear in this Bill for the first time, such as the provision for the presence of women in classified licensed premises. We feel that that is a matter to which each individual member should apply his own mind.

Sir, there are various principles in this Bill, as the hon. the Minister has said, but no main principle, and there are other principles which, while they relate to liquor, have an effect upon other aspects such as elections. The hon. the Minister’s argument that it is quite in order to allow liquor to be served in on-consumption premises during a municipal election but not during a parliamentary or provincial election, is one with which I would say at first blush many people may disagree. In fact, I might go so far as to say that in my own mind it might be in those circumstances, in a local election, that the possibility of anyone being tempted to vote for someone on the basis that he might get a drink if he did, is more real than it would be in a parliamentary or provincial election, for the reason that in a parliamentary or provincial election, one votes for a cause, for a party, for certain principles. One goes there to vote for the candidate who represents that party whereas in a municipal election—and I must say that the figures indicate that the percentage poll in municipal elections is extraordinarily low in comparison with parliamentary or provincial elections—someone might be induced to vote for the reason I have mentioned. However, that is a matter that we will have a look at in the Committee Stage.

This is a very long Bill and it is no doubt the first of many that the hon. the Minister is going to have to introduce because of the unfortunate manner in which the 1963 Act was in fact handled. There we had basic amendments to the Liquor Act and, if I recall correctly, there were over 150 clauses, and they were not debated in committee. I think we got as far as clause 7 of that Bill when the guillotine came down, and as a result of the fact that there was no debate in this House the hon. the Minister now finds himself faced with all these difficulties. I am glad the hon. the Minister agrees and I hope he will never allow that to happen again with a liquor Bill. Sir, we are very pleased that the hon. the Minister’s attitude in this regard has been that he has given advance publication by publishing in the Gazette a draft bill which contained many of the provisions of this particular Bill.

There are many other aspects of it which do not fall within the principles of this Bill because the Bill, as I said, has no main principle, to which we will certainly give our attention in the Committee Stage. The provisions which the hon. the Minister has mentioned such as closed days and minimum penalties, are matters to which we may have to give consideration, not as individual members but as the collective unit that we are as the official Opposition. For all those reasons, Sir, we offer no objection to the Bill at this stage, and we look forward to debating these matters—some in our private capacities, and others in our capacity as the official Opposition.

Motion put and agreed to.

Bill read a Second Time.

I move—

Mr. Speaker, as in the case of formalities in respect of contracts of purchase and sale of land, there was no uniformity in connection with the formalities in regard to leases of land in the various provinces prior to the adoption of section 2 of the General Law Amendment Act, 1956. In the Transvaal, the Free State and Natal the matter was governed by pre-Union statutory provisions, while in the Cape Province there were no statutory provisions in this connection.

In carrying out one of its aims, i.e. to inquire into and make recommendations in connection with uniformity in the legislation applicable in the various provinces of the Republic, the Law Revision Committee considered the various provisions in force in connection with leases and recommended uniform legislation. Section 2 of the General Law Amendment Act, 1956, was a result of a recommendation by this committee. That provision, just like the provision in connection with the formalities in respect of contracts of purchase and sale, did not escape the scrutiny of the judicature and legal critics. There were judicial decisions and criticism in legal periodicals, but I do not think it is necessary to burden this House with the details. It is desirable that the alleged obscurities should be cleared up.

One of the grounds of criticism of the existing provision is that principles in connection with various legal concepts are combined in it in such a way that they have no relation to each other. The main provision deals with the formalities in respect of the conclusion of leases, while the proviso is allgedly related to the operation of the rule “Lease goes before sale” and of a cession of a lease, which have no connection with each other and with the main provisions.

It also appears that the expression “third parties” is a concept of uncertain meaning. It is not clear whether it is the intention that a successor under gratuitous title, i.e. a successor who has not given value for the land, such as in the case of a donation or inheritance, should also be protected where a long-term lease, i.e. a lease for a term of at least 10 years, is not registered against the title deed of the leased land, or whether it is the intention that the provision should only apply in respect of a creditor or successor under onerous title, for example a successor by way of purchase.

Then it also appears, in terms of the existing provision, that an unregistered long-term lease is invalid from the beginning, while in terms of earlier law such a lease was binding for the first 10 years in respect of a successor under onerous title or a creditor, where the lessee was in possession of the thing leased. This is alleged to be an anomaly if it is taken into account that a short-term lease, i.e. a lease of less than 10 years, which does not have to be registered, is enforceable on third parties where the lessee is in possession of the thing leased. A lessee on short-term therefore enjoys greater protection than a lessee on long-term where the lease has not been registered. Furthermore it is contended that the provisions in connection with cession are not necessary, as the Registration of Deeds Act, 1937, regulates the matter adequately. A further question that arises is whether the proviso in the existing Act is at all necessary and whether the common law will not in any event be revived if the proviso is not re-enacted.

All these vexed questions have once again been considered by the Law Revision Committee—which, as hon. members know, consists of prominent jurists—in the light of judicial decisions, the common law and statute law as it applied in the provinces prior to the passing of section 2. That Committee has now recommended that a provision such as is contained in clause 1 of the Bill be substituted for section 2. That provision regulates the formalities in connection with leases in a way which the Committee considers to be the most feasible in the light of judicial decisions and the common law. This should eliminate the problems I mentioned earlier.

The date of commencement of the Bill, as provided in clause 4, corresponds with that of the Formalities in respect of Contracts of Sale of Land Bill and should afford interested parties sufficient time to become acquainted with the provisions of the Bill.

Having said this, Mr. Speaker, I think that no more need be said on the general principle of the Bill.

I want to thank the hon. the Minister for the detailed information he has given the House as to why this Bill has become necessary. We know that it really embodies what has been common law in the Cape, at any rate, and we quite agree that it is necessary that there should be uniformity so that people in the Republic, no matter where they do their business, will know what the position is, instead of having different laws applying in the different provinces. We therefore will support this Bill.

Motion put and agreed to.

Bill read a Second Time.

I move—

On a point of order, Sir, we were given to understand that we would deal with Order of the Day No. XVI. I should like to appeal to the hon. the Minister to move that Order of the Day No. XVII also stand over because we are not in a position to deal with it now.

Order! These are matters which should be arranged between the Whips. I have no knowledge of these arrangements.

Motion put and agreed to.

I move—

The amendments to the principal Act proposed in this Bill contain two principles. Clauses 1 and 3 are intended to abolish, with retrospective effect, the requirement that the conditions of service of the officials and employees of the Scientific Research Council be prescribed by regulation, and clause 2 is meant to authorize the Council, with retrospective effect, to receive money voted by the Provincial Councils in aid of the Council for research work. I may just say that both these provisions are only meant to rectify matters and to make them more streamlined; they contain nothing new, as I shall indicate.

Under section 10 (1) (a) of the Scientific Research Council Bill, 1962, no official or employee of the C.S.I.R. may be employed under conditions (including remuneration) other than those prescribed by regulation. Experience has shown, however, that in practice it is impossible always to keep to the letter of this provision. So many bodies have to be consulted about altered conditions of service and remuneration of officials, and it takes such a long time to obtain a final decision from all the bodies concerned, that it has often in the past been necessary to apply revised salary scales with retrospective effect. The payment of such salaries is not in accordance with the letter of the law, and therefore it is considered necessary to amend the original section with retrospective effect from the date of commencement of the 1962 Act (1st April, 1962).

The corresponding sections in the Acts by which other statutory bodies were established, do not make it compulsory to prescribe conditions of service by regulation, and there is no reason why the C.S.I.R. should be treated differently from these bodies. In other words, the C.S.I.R. is now being treated in the same way as other statutory bodies.

Provincial councils have for many years been voting money for research work in regard to matters in which they and local authorities have a direct interest. Contributions of this kind mainly went to projects launched by the C.S.I.R. in connection with air and water pollution, the re-use of water, efficient building methods, road construction and road safety. All these matters are of real interest to the provincial administrations and local authorities. Since 1964 a total amount of R263,600 has been donated to the C.S.I.R. for projects of this kind by the four provinces, but the law advisers have now expressed the opinion that these contributions do not fall within the powers of the provincial councils.

The Administrators decided during their latest conference to accept the principle that provincial councils should have the right and should be encouraged to make contributions, as in the past, towards research work on matters which are of direct interest to local authorities and themselves. They accordingly requested that the relevent legislation be suitably amended to grant the provincial councils this right and to legalize such donations as have been made in the past. Clause 2 is intended to accede to this request in so far as it is possible to do so in terms of the legislation under my control. The question whether the Financial Relations Consolidation and Amendment Act, 1945 (Act No. 38 of 1945), should also be amended accordingly, is being considered by the Department of the Interior. I think it is clear that we are here, with the consent of all the parties concerned, rectifying a matter which is of fundamental importance to the C.S.I.R.

Mr. Speaker, we on this side of the House will assist the passage of this Bill. We are particularly pleased that the anomalies which existed in the past, especially in respect of the affairs of the C.S.I.R., will now be removed. Furthermore, certain matters which were purely provincial matters were in the past not really dealt with by the provinces but by the Central Government. That anomaly is now also being removed. For these reasons we intend to support this Bill. At the Committee Stage we might criticize one of the clauses of the Bill. We shall, however, study the hon. the Minister’s explanation of that clause again before the Committee Stage of the Bill. We will then decide whether any criticism of the clause is necessary.

Motion put and agreed to.

Bill read a Second Time.

Mr. Speaker, I move—

Mr. Speaker, in this Bill amendments are being proposed to the two Acts which contain for the most part the provisions in terms of which the admission of persons to and departure of persons from the Republic is controlled, i.e. the Admission of Persons to the Union Regulations Act, 1913 (Act No. 22 of 1913) and the Departure from the Union Regulations Act, 1955 (Act No. 34 of 1955).

I should like to mention to this hon. House, by way of information, that during 1968 the following number of persons legally entered or departed from the Republic, from or to areas other than the three former High Commission Territories:

Entry: Whites 617,690

Non-Whites 34,693

Departure: Whites 596,699

Non-Whites 23,597

In respect of Lesotho, Botswana and Swaziland statistics for 1967 only are available, and then only in respect of Bantu. These are as follows:

Entry: South African Bantu returning 113,033

Foreign Bantu 273,725

Departure: South African Bantu 121,073

Foreign Bantu 290,024

These statistics are being quoted in the first place to try and give an idea of the extent of the traffic to and from the Republic and secondly because it will become quite apparent from these statistics how essential the provisions of the above-mentioned Acts are and how necessary it is for efficient control that the provisions of these two Acts should continually be taken under consideration with the purpose of determining whether prevailing problems can still be dealt with by means of the existing powers and whether additional powers are not possibly essential in order to protect the peaceful inhabitants of the Republic against threats from within as well as from outside by persons who have no other interest than their own and who in addition are not even citizens of this country yet. Ours is a hospitable country which has a great deal to offer for those who want to and who can share our lot with us, but no sensible person can expect us to allow our hospitality to be abused in order to destroy what we esteem very highly. That is why I feel myself at liberty to approach this House with the proposals contained in this Bill. This is an extremely important Bill, and for that reason I deem it my duty to give as comprehensive a summary and explanation as possible of the aims of the proposed legislation and the reasons why these amendments are regarded as being essential and justified in my Second Reading speech already. The best way in which this can be done is to deal with those clauses of the Bill in question which are of importance and to the purpose one by one, and I am now proceeding to do so.

Clause 1:

In terms of the present provisions of the Admissions of Persons to the Union Regulation Act 1913, as amended by the Border Control Act, 1967, which came into operation on 1st February, 1969, every individual arriving at a port giving access to the Republic with the purpose of entering the country must appear before a passport control officer, and must satisfy that officer that he is not a prohibited person in terms of the provisions of this Act. Before the commencement of the Border Control Act, 1967, legal admission to the country was not restricted to the entrances and all a person entering the country had to do was report as soon as was practicable for him to a passport control officer for examination in terms of the Act. At such an examination by a passport control officer, it is in the first place ascertained whether the person in question complies with the requirements of section 24 of Act 22 of 1913, which provide for the most part that any person except a South African citizen by birth or origin, shall be a prohibited person in the Republic if he is not in possession at his arrival at a port of a passport or other document of identity which is recognized by the Minister, including a visa, unless he has been exempted from the requirement to be in possession of a visa. (Before the commencement of the Border Control Act, 1967, these provisions were not applicable to children under the age of 16 years.)

If said person complies with the requirements of section 24, it is subsequently determined whether he is affected by the provisions of section 4 of Act 22 of 1913, in which section it is provided that any person entering or having entered the Republic is a prohibited person in the Republic unless he is not subject, in terms of the provisions of section 5 of the same Act, to the provisions of section 4, if he is (to mention only a few of the most important impediments): (a) any person or class of persons deemed by the Minister on economic grounds or on account of standard or habits of life to be unsuited to the requirements of the Republic; (b) any person who is unable, by reason of deficient education, to read and write any European language to the satisfaction of a passport control officer; (c) any person who is likely to become a public charge by reason of infirmity of mind or body or insufficient funds; (d) any person who has been convicted in any country of certain serious offences mentioned in paragraph 4 (1) (f); (e) any person suffering from certain infectious diseases or (f) any person who was legally removed from the Republic, unless he has obtained permission to return.

Among the persons who are exempted from the provisions of section 4 are, inter alia—(a) persons who enjoy diplomatic immunity in the Republic, other representatives of foreign states and members of their households; (b) persons, with isolated exceptions, who were born in areas which at present comprise the Republic, and (c) any person domiciled in the Republic. (What is understood under the concept domicile will subsequently become apparent from the explanation of certain other amendments.)

If said person complies with all the requirements of Act 22 of 1913 which may be applicable to him for admission to the country, and he is not a South African citizen and is not a person to whom permanent residence has been granted in terms of section 4 of the Aliens Act 1937 (Act No. 1 of 1937) or who has been exempted from the provisions of this Act, a passport control officer can, upon request, issue a temporary aliens permit to him in terms of section 5 (1) of the Aliens Act, 1937 (Act No. 1 of 1937), as amended, in order to enter the Republic temporarily or sojourn therein if they are already there for the purposes, period and subject to the conditions as are set forth in that permit.

Any person who remains in the Republic after the expiration of the period mentioned in the aliens temporary permit or who contravenes any one of the conditions shall be guilty of an offence and can be dealt with under the provisions of Act 22 of 1913 as a prohibited person in the Republic.

In terms of the statutory provisions which have so far been dealt with briefly, any person can consequently be a prohibited person in the Republic, firstly if he is not in possession of a passport and visa on entry, or secondly if he is subject to the restrictions mentioned in section 4 of Act 22 of 1913, or thirdly if he is not in possession, during his sojourn in the country, of a valid aliens temporary permit.

Section 2 (5) of Act 22 of 1913 provides that when admission to the Republic is refused by any passport control officer or police officer, or when any person is detained, restricted or arrested as a prohibited person, that officer shall give notice of that fact and the grounds of such refusal, detention, restriction or arrest, to that person in writing (as well as to the captain of the ship or aircraft if he arrived by those means). Every such prohibited person has the right of appeal, which except in exceptional cases must be exercised within three days, to a board constituted for the purpose of such appeals in the area.

In terms of section 24 (4) of Act 22 of 1913 any person who is a prohibited person in the Republic because he entered the Republic without a passport and visa (if this requirement is applicable in his case) is guilty of an offence and is liable upon conviction to imprisonment for a period of six months, and whether he is convicted or not, a passport control officer may arrest or have him arrested without a warrant if he is not already in custody and can remove him or have him removed from the Republic in terms of a warrant issued under this Act. While awaiting such removal such a prohibited person can be detained in a prescribed place of detention.

Apparently any person who objects to the fact that he has been declared a prohibited person in the Republic because he was not, as explained, in possession of a valid passport (and visa) or an aliens temporary permit, also has the right of appeal to an appeal board, and must consequently be granted three days in which to exercise that right.

If these persons, who are sojourning illegally in the country as appears quite clearly from the fact that they are not in possession of the documents in question, are not detained, they generally disappear like the proverbial needle in the haystack and to detain them, will, owing to the numbers, create practical problems at the places of detention. They are aware of the practical problems which make detention, particularly at border posts, impossible and that is why they make use of the three days’ grace to appeal in order to enter the country and then disappear, or after having been traced in the country, make use of the same subterfuge in order to disappear again. This behaviour on the part of such persons, once the loophole becomes general knowledge, will defeat all attempts to keep persons who have no right to admission or to sojourn in the Republic out of the country. In the light of the circumstances I have explained, I therefore feel myself at liberty to recommend in clause 1 that this loophole be eliminated.

I do not think that if reference is made to the provisions of section 24 (4) of Act 22 of 1913 in particular, there will be any doubt that it was not the intention that a person should have a right of appeal under these circumstances if he can prove his right to admission or sojourn by submitting only the documents in question.

In clause 1 it is being proposed further that the amount which can be accepted as a deposit from a prohibited person as indeminification against costs for the State when that person appeals against his prohibition, should be increased from a maximum of R200 to a maximum of R1,000. This amount was laid down many years ago—I think it was in 1927—and since then the costs in question have increased tremendously.

In this way for example ships refuse point blank to transport prohibited persons since their presence spoils the journey for other passengers and on the other hand airline companies almost as a rule demand that such a person be accompanied by an escort in order to protect the other passengers from any unpleasantness. If the entire amount which is taken as a deposit is not used for expenses, the balance is paid back.

I come now to clause 2, and at the same time I want to deal here with clause 6 (a) because it has a bearing on clause 2 (a). As was pointed out earlier, section 5 of Act 22 of 1913 provides which persons or class of persons cannot be declared to be prohibited persons in the Republic in terms of the restrictions contained in section 4 of the same Act. Section 5 (1) (e) protects, subject to certain qualifications, persons who were born in any part of the Republic before the commencement of this Act, i.e. 5th August, 1913, and subject to certain conditions and with the exclusion of certain categories, persons (chiefly Asiatics) who were born after 1st August, 1913, in any place of parents who were domiciled in the Republic at the birth of the person in question. This right is known in common parlance as the so-called birthright. Apart from this certain categories of persons domiciled in the Republic are protected from the restrictions of section 4 by the provisions of section 5 (1) (f).

Domicile for the purposes of this Act means in brief the place where any persons has his present permanent home or place of residence, or to which he is returning as his present permanent abode and not for a mere special or temporary purpose.

In addition it is a requirement that such domicile cannot be obtained in the Republic or in a province unless that person has lawfully resided therein for a continuous period of three years, otherwise than under terms of conditional or temporary residence or detention in a prison or gaol, reformatory or mental hospital.

Once this domicile has been acquired it can in general only be lost if the person concerned departs from the Republic and does not return within three years after the date of such departure, or had not returned within three years after 5th July, 1927, the date on which the Immigration and Indian Relief (Further Provision) Act, 1927, came into operation.

Apparently this provision in respect of the loss of domicile only after an absence of three years has this result that a person who in terms of the provisions of the repealed provisions of section 1 (b) of the Union Nationality and Flags Act, 1927, ceased to be a Union citizen through the loss of his common law domicile and consequently is not a South African citizen in terms of the South African Citizenship Act. 1949, is still protected from the provisions of section 4.

Common law domicile is of course lost as soon as a person departs physically from the country with the intention of not returning. In addition to this section 15 of the South African Citizenship Act, 1949 contains provisions in terms of which South African citizens automatically cease to be such citizens. One of the principal provisions is that such a citizen ceases to be a South African citizen if he acquires, while outside the Republic and provided he is not a minor, the nationality or citizenship of a country other than the Republic by some voluntary and formal action or other, apart from a marriage.

Consequently it is clear that there are persons who were South African citizens or even Union citizens who are not South African citizens because they gave up citizenship of this country of their own free will, but who are nevertheless exempted in terms of the provisions of section 5 (1) (e) and (f) of Act 22 of 1913 from the provisions of section 4 of that Act.

With the proposed amendments contained in clauses 2 (a) and 6 (a) it is recommended that such persons should also be made subject to those provisions when they make application for admission, and that the value of citizenship of the Republic is by so doing being enhanced and becomes of greater value for citizens.

A further matter of great importance which is made the subject of discussion in this Bill is the deportation of certain persons under clause 3 from the Republic in terms of the provisions of section 22 (3) of Act 22 of 1913. This section was added in 1956, and its intention was made very clear by the then Minister, i.e. to remove persons who are not South African citizens and who cannot be removed in terms of any other provision from the Republic if the Minister deems it in the public interest to order such removal. The principle is accepted that the Minister’s decision shall be final, but since 1956 it has become apparent that the wording of this provision is at fault in certain respects, and the result of that has been that such persons cannot be removed forthwith. The present interpretation of the provision is that such a person has the right to lodge an objection, after a removal order has been served on him, to the Minister, and has the right to make representations in writing. There were no real objections to this, although the original purpose of this power has to a certain extent been defeated.

There is now a tendency, as an apparently logical extension of this interpretation, which grants a right to be heard, to interpret it as granting a right to have the reasons for the removal furnished by the Minister; otherwise it is not possible to exercise the right to be heard. In order to ensure that the original intention of this Parliament is not made null and void, it is being recommended in clause 3 that it should be prescribed clearly that the decision of the Minister is in no way subject to appeal to the courts, and that no person is entitled to reasons for such decision.

I now want to deal with clause 5 and want to explain that in terms of the definition (section 30) of a passport control officer, a passport control officer is any person, apart from a board of appeal, to whom the Minister has entrusted powers or duties in connection with the implementation of Act 22 of 1913. The result of this definition was that the Minister had to appoint every person as a passport control officer, a process which hampered the tracing of prohibited persons in the Republic and their detention. It often happens that a police officer comes across a prohibited person, but because he has not been appointed as a passport control officer, he does not have the authority to ask the person for the necessary documents to prove that he is not a prohibited person. The result is that the prohibited person simply disappears.

Consequently it is now being proposed in clause 5 that the Minister be vested with the authority to appoint any officer or group of officers in the public service as a passport control officer or officers, and to entrust to such persons such duties as he may deem necessary in connection with the implementation of the Act.

In addition to this it is being suggested that any police officer or person, authorized thereto in writing by the Minister, who suspects on reasonable grounds that a person is not a South African citizen, may require that person to produce to him proof that he is entitled to be in the Republic, and if satisfactory proof cannot be submitted, to take that person into custody and bring him before a passport control officer who can then determine what that person’s rights are. This power is necessary so that police officers and even officers of local administrations can be used to contain the tremendous stream of persons who have no right to sojourn in the Republic and who are illegally resident here.

In regard to clause 7 it should be mentioned that in terms of the present provisions of the Departure from the Union Regulation Act, 1955 (Act 34 of 1955), no person may depart from the Republic except through a port and may not do so without valid travel documents.

On the basis of these provisions, passport control officers have in the past always prevented persons from acting in conflict with these provisions, but after an intensive investigation into more effective means of controlling entry and departure from the country, the conclusion was reached that every person departing from the country should before such departure display his travel documents to a passport control officer and shall only be allowed to leave the country if those documents are valid.

Since the best way of undertaking the examination of the person in question can only be determined by way of experience, taking into consideration the convenience of visitors, the problems which differ from one airport to another and from one harbour to another, it is being proposed that the State President should be vested with the authority to prescribe by regulation the necessary steps, which can then be adjusted according to circumstances.

I want to state that, arising out of the explanations which have been furnished, I believe that it will be clear that we are dealing in this Bill with a task of tremendous proportions, and of the utmost importance to our country which with all its attractions offers a refuge and a safe home to honourable persons, but which, at the same time also offers an attractive hunting ground for that kind of person whom we can definitely get along without and against whom the inhabitants expect and have the right to expect that the State should protect them. I hope and trust that this Bill will enjoy the full support of both sides of this House.

Mr. Speaker, the remarks of the hon. the Minister make it quite clear that measures of this sort are of a rather complicated nature and I wonder whether a lot of time on the part of the hon. Minister and members of this House could not have been saved had there been an explanatory memorandum with certain cross references as far as this legislation is concerned. There is a further problem that arises from this Bill and that is the determination of the principle involved which we are to discuss during the Second Reading. It seems to me from the remarks by the hon. the Minister that the principle involved is the extension of powers, in one way or another, so as to tighten up the control of entry into and departure of persons from the Republic. If that is the principle, then obviously a great measure of our discussion will take place during the Committee Stage. The extent to which such an extension of powers, and the extent to which laws must be amended to give that extension of powers, is a matter which we will have to debate in more detail in the Committee Stage. I want to give the assurance that we on this side of the House will obviously support measures which are justified as being necessary to ensure effective control of the borders of the Republic of South Africa. The figures given by the hon. the Minister indicate the enormity of the task which faces our officials who have to keep guard on the borders and watch movements into and out of the Republic. Obviously also this side of the House will support measures which are necessary to ensure that there are removed from the Republic those persons who are not citizens of South Africa and about whom the hon. the Minister says “ons kan sonder hulle beslis klaarkom”. Obviously we will support measures to remove undesirable persons from the Republic, but at the same time there are aspects of this Bill about which one wonders whether they are ensuring that no citizen of the Republic, and no former citizens of the Republic—and a former citizen can become a former citizen for various reasons which I will elaborate upon—are unjustly treated by reason of the legislation that we pass. I therefore wish, at this stage, to deal with certain aspects of the Bill and I hope that the hon. the Minister will elaborate on them when he replies to the Second Reading Debate.

Firstly I want to turn to clause 1 (a) of the Bill. The hon. the Minister took a considerable amount of time in explaining to the House the implications of section 24 which virtually deals with aliens entering the country without proper documents. He also took a great deal of time explaining the implications of the provisions of Act 1 of 1937 which, in effect, deals with an alien exceeding the time that he is permitted to remain in the country. But there was a strong silence on the part of the hon. the Minister as regards the umbrella phrase which is included in this particular clause, namely “a prohibited person in terms of any other law”. That is a very wide provision. We know there are powers to declare a person a prohibited immigrant under emergency regulations, which are now being enacted. We know that there are times when, under the Citizenship Act, a person becomes a prohibited immigrant. But when one is here in this clause excluding the right of appeal I do think that the hon. the Minister should be more explicit as to which prohibited immigrants he in fact means to bring under this umbrella provision and under this clause. Perhaps he could indicate to us what the other laws are to which there is this generalized reference when he replies to this debate.

The other point in this clause 1 to which I want to refer is the question of the deposit being fixed in the case of an appeal. If clause 1 (a) of the Bill is approved by the House the appeal in clause 1 (b) of the Bill will then be of a person who is not a prohibited immigrant, in other words, a person who has a legitimate right to have a decision reviewed as to whether he can and cannot remain in the Republic. The amount of deposit which is requested is a maximum sum, but it seems to me that it is a very onerous and considerable sum of money, namely R1,000. At the same time I must concede that what that has to cover, namely the cost of detention, the cost of removal to the place of hearing, the cost of removal back and then the cost of removal from the Republic does not make the sum excessive. One appreciates also that the amount suggested is the maximum figure that can be demanded by a passport control officer. I wonder whether we are not doing an injustice to would-be appellants by puting the appeal completely out of their reach, especially as the persons who are appealing will not be prohibited immigrants if the first portion of this clause is approved.

I would now like to deal with the Minister’s remarks regarding clause 2 (c). As I understand the position under clause 2 (c), a person who was previously a citizen of the Republic or a Union national and has lost that nationality will be treated for all purposes of the Aliens Regulation Act, 1913, as an alien. If I am correct I think it is necessary that we should examine under what circumstances citizenship can be lost. I would assume, from an international law aspect, that we in this country would in any event have to receive back, despite this proposed clause, a former South African citizen who has not acquired some other nationality and who is deported back to South Africa. I am also concerned with whether this clause does not affect those persons who leave South Africa on exit permits for purposes of permanent residence elsewhere, because they have no option and because of administrative procedures. I want to raise a matter here which is of considerable concern to sections of the population. One has seen complaints about this. There are sections of South African citizens, qualified under the Citizenship Act, who are not issued with passports to enable them to leave South Africa as South African citizens. The only way they can leave to go overseas to take up employment is to apply for exit permits and to state that they are leaving permanently. They are then given an exit permit and under section 5 (1) of Act 34 of 1955 they then lose their South African citizenship and for purposes of our laws are then regarded as aliens. If I am correct, I think that is a matter that the Minister might consider further and I think we may have suggestions to make during the Committee Stage to alleviate this position when this position is the result of Government action or administrative action. Coloured persons are for instance issued with exit permits and not passports. Sometimes they desire to come back to the country of their birth. They then become aliens for the purposes of this provision although they initially only wished to leave temporarily and to retain their South African citizenship. I think we will have further discussion with the Minister on that clause in the Committee Stage.

Then there is clause 3. The Minister has given us his reasons why it is felt that he as the Minister should be relieved of the obligation of disclosing certain factors to a court on an appeal against the exercise of his discretion. I also appreciate that this does not apply to a person who is a South African citizen, but only to an alien. We are not entirely happy that this should be enacted. There are various reasons why we believe that it is a provision which is abhorrent, that a man is determined to be undesirable in the opinion of the Minister and has no means of any review of the Minister’s decision. I know that the Minister himself will use a legal or an unbiased mind when dealing with these problems, but one must also look at what might happen in the future and one must also have regard to the possibility of the Minister being misinformed. He may be misinformed as to the factors upon which he subsequently decides that it is in the public interest that a person should be removed. I know that the courts have asked for this information to be placed before them in appeals which have come before them. I think the Minister should give us some more acceptable reasons than he has done so far as to why he should be given these powers and why he should be excused from the obligation of justifying the opinion he formed.

The other aspect of this clause, as I understand it—and again I would be indebted to the Minister if he would elaborate on it—is that the right of proceeding to the courts on review on the normal grounds of mala fides, etc., are not excluded in any way by this amendment. The intention is that the amendment applies only to the question of disclosing the grounds upon which the Minister formed the opinion that the person should be removed in the public interest. In other words, all other aspects of review and rights of review are not in any way affected by this particular provision.

In regard to clause 4, the Minister has correctly drawn attention to the problem of identifying by name in the Government Gazette the number of persons who must operate or function as passport officers to a lesser or greater degree, as they may be authorized from time to time. One realizes the practical difficulties on the long borders of South Africa. As I listened to the hon. the Minister, I wondered why it was that when he appreciates problems of this sort his party should be contemplating the creation of eight more international boundaries. I merely mention it because the Minister already has so many difficulties in dealing with the boundaries for which he is now responsible. But one appreciates the necessity for giving authority to a class of persons or a class of officers so as to deal effectively with the problem.

There is one point in clause 5 to which I wish to refer. Again it is a question of what is intended by the Minister. One can understand that on some of the borders of the Republic, if one allows somebody to get across without immediate apprehension, there is little likelihood of finding him in the desert or in the bush which divides him from the police post where he might enter the Republic. I understand, therefore, that there should be the power of arrest, but it seems that there should be an obligation on the person affecting the arrest to bring the person before a passport officer, and that there should not merely be a discretion. I draw attention to line 30 of clause 5, which says that when a person is so arrested he may be brought before a passport officer. I shall move in the Committee Stage that this should be made obligatory and that he shall be brought before a passport officer so that his position can be investigated and decided upon with the least possible delay.

The final observation I wish to make now is in regard to clause 7. Here I understand that the difficulty at present is that although there is a check-up, for instance, of persons leaving some airports and seaports of the Republic, there is no record kept by the Department of departures and it is necessary that some procedure should be introduced in order that there can be a continuous record of the identity of persons leaving. It is a Utopian ideal that that should be done, but on the figures the Minister has given us in regard to these movements I wonder whether he can assure the House that this will not be some decision, some ideal which we hope for but which is unobtainable, and whether he feels it is possible in fact to implement what is contemplated here, that there should be a complete check-up of every person coming and going, and that the information about persons leaving should be passed to the aliens officer. It would probably necessitate a considerable increase in the number of public servants if such a record was kept.

In conclusion, I want to say that we on this side of the House, as I said before, will not oppose the Second Reading of the Bill, but the question of how far these powers should be given to the Minister will be a matter for debate under the various clauses in the. Committee Stage.

The hon. member for Green Point indicated that they were not opposing the Second Reading of the Bill on any principles, and therefore it will probably be better to discuss the various clauses in more detail in the Committee Stage. But the hon. member raised a few points to which I want to reply briefly now.

In the first place the hon. member expressed the view that an explanatory memorandum would have been desirable in the case of this Bill. Yes, that may be so. The Bill is not a very long one, but I am inclined to agree with him that the reference to all the various sections in old Acts which from the nature of the case have existed since the beginning of the history of the Republic, makes this a complicated piece of legislation, but I also have some doubt as to whether a memorandum would have made the matter much less complicated.

It might have helped one trace them. *

Yes, but as you have seen, I found it necessary to deal with this short Bill in great detail in my Second Reading speech, because I wanted to cover the entire field in order to indicate where these matters originated. I have some doubt as to whether an explanatory memorandum might not perhaps have caused more confusion. It is difficult to decide when one should have such a memorandum and when one should not. I felt that because the Bill is so short it was not necessary to have one.

The first point raised by the hon. member was the words “any other law” in clause 1. The reply to this is simply “to make assurance doubly sure”. These words have been inserted to be of assistance not only in the case of section 6 of Act No. 34 of 1955, but also in the case of any other provision which may be necessary in future, and in the case of the legislation and regulations of other Departments. Here we had in mind more specifically the legislation of the Department of Bantu Administration, bearing in mind that “other law” also refers to regulations. Therefore it was deemed desirable to tackle the matter on a broad basis and to use a comprehensive phrase, and as a result we have the reference to “any other law”.

The hon. member also referred to the increase of the deposit to R1,000 in clause 1. It used to be £100, or R200, and now we have increased it to R1,000. I realize that people may find it difficult to find the necessary amount to deposit, but the hon. member will also agree with me that if R200 were deemed necessary at that time, then an amount of R1,000 is certainly not out of proportion in terms of the present value of money. I also want to direct his attention to the fact that it is within the discretion of the officer. I think the hon. member himself said the officer was not obliged to demand R1,000 as a deposit, but that a smaller amount could be demanded, according to circumstances.

The hon. member also referred to someone who leaves the country on an exit permit and loses his citizenship as a result. That is so. Our view is that if someone leaves on an exit permit and with the intention of leaving South Africa permanently, he must be deemed to lose his citizenship by doing so. But I want to point out to the hon. member that according to the Hague Convention we are obliged to take such a person back if he is not accepted in the country of his destination. Therefore, if he is regarded as a stateless person there, we are obliged to receive him back in South Africa.

The other point raised by the hon. member relates to clause 3, which provides that the Minister will not be required to furnish reasons when he removes a foreigner from the country and does so in the public interest. The hon. member said I had to furnish better reasons. If I had been in a position to furnish the reasons, which in most cases I cannot do because it is not in the public interest and I should furnish them—because I cannot furnish them in most cases, it is also difficult for me today to give the hon. member better reasons. But I should like to give him this assurance. In the first place my approach is that those people have no claim to residence in South Africa. Foreigners have no right or claim to residence here. Their residence here is subject to the willingness and the decisions of the Government. The hon. member will of course agree with me on that point. In cases where they forfeit their privilege to obtain residence in South Africa, we must have the right to put them out of the country. But now it happens so often, in most cases in fact—just recently it happened again in one particular case—that the Minister is obliged to issue an order that such a person be removed from the Republic and that the circumstances are simply such that the reasons cannot be furnished. If I could have explained the circumstances privately to the hon. member, he would have understood better why it is so. But the fact of the matter is simply that we are to-day living in a different world from the one we used to live in. The circumstances that prevail to-day in a world that has become small are different from the ones that prevailed previously, and as a result of international interest, the one in the affairs of the other, as a result of subversive activities taking place, and particularly as a result of the fact that one does not want to reveal the source of the information, it is necessary …

Is that not the crux of the matter?

Yes, that is in fact the crux of the matter. In most cases one does not want to reveal the source of one’s information, and as a result the Minister would not be able to carry out his duty properly if he were to be subject to a provision that he must give reasons as to why he takes such a step in the public interest. Consequently I feel, especially in view of the practical proof we have had in recent times, that the Minister should not be placed under that obligation when he has to take such a step.

The hon. member also referred to clause 5 and the word “may”. He feels it should be mandatory. I do not really want to enlarge on this; we can discuss it during the Committee Stage, but cases of illness or other cases may occur where it is simply not desirable that it should be made mandatory. I am prepared, however, to consider the matter and then to discuss it with a greater degree of motivation during the Committee Stage.

Mr. Speaker, I think these are more or less the matters that were raised here. I presume we shall be able profitably to discuss the matter further during the Committee Stage.

Motion put and agreed to.

Bill read a Second Time.

I move—

Mr. Speaker, this Bill was drafted after consultation with the insurance industry, and the comments and suggestions of the insurance industry were taken into consideration throughout. It contains a number of diverse provisions and it is not possible to indicate their content in terms of any special feature. One could, however, say that the general object of the Bill is to bring the Insurance Act, 1943, more into line with changed circumstances and to adopt it in the light of experience gained in its practical application.

I should like to refer briefly to the most important matters involved and I shall more or less follow the order of the Bill. I do not intend referring to proposed amendments which are only meant to improve existing provisions in the Act and in which no important principles are involved. If it proves necessary, I shall explain these less important provisions during the Committee Stage.

In terms of the proposed amendment to the definition of “funeral policy”, the maximum value in money of an obligation which may be incurred under such a policy is increased from R200 to R300. Representations were received from the insurers to increase the limit to R400. It was taken into account, however, that benefit societies registered under the Friendly Societies Act, seldom in practice offer funeral benefits exceeding R300. If the Insurance Act were now to raise the limit to above R300, it might lead to an artificial increase in funeral expenses. I may just point out to hon. members that concern has been expressed in this House in the past in regard to high funeral costs.

A concession is made in regard to the calculation of the net liabilities of a registered insurer. An insurer will, subject to the approval of the Registrar, in the calculation of his net liabilities be permitted, in addition to other deductions permitted by law, to deduct a liability to a creditor who has waived his right of discharge in concurrence with other creditors. This concession is proposed to cover the case in which an insurer has established a full subsidiary for the purpose of undertaking specialized forms of medical insurance and underwriting medical schemes. Members of such schemes insist on the underwriting company limiting its share capital so that the surplus assets which the company is obliged to possess over and above its net obligations, cannot be provided by the parent company in the form of share capital

The proposed amendments will make it possible to draw the surplus from loan funds provided by the parent company. By waiving its rights the parent company virtually places itself in the position of a shareholder and the loan funds may be regarded as share capital for the purpose of the calculation of obligations

It must be emphasized that an insurer will only be able to make use of this concession with the approval of the Registrar, which will ensure that it will remain strictly limited to the cases which we now have in mind.

In addition a concession is proposed which will make it possible to obtain registration in respect of long-term insurance business without paying the required deposit to the Treasury. This is intended for the type of case where it becomes necessary to register a new insurer for the sole purpose of taking over long-term business from an existing insurer, having it fully re-insured by a registered insurer and letting it terminate, a situation which sometimes occurs in practice. The requirement that the obligations should be fully re-insured by a registered insurer will provide an adequate safeguard to the policy-owners concerned. A further amendment which is logically related to the concession which has just been referred to, is the provision which is being made to the effect that a deposit already paid by the new insurer, may be repaid to him if the circumstances agree with those just described.

In the case where an insurer has ceased to undertake insurance business or has failed to commence with it within a reasonable period after registration, the Registrar is now being authorized to take the initiative and to with draw the registration. It has been proved in practice that it is undesirable that inactive insurers should continue in existence as such to no purpose, but in terms of the present wording of the Act, withdrawal at the initiative of the Registrar is practically excluded. When the insurer opposes the withdrawal, the Registrar has to afford him an opportunity of stating his case.

At present an insurer is permitted to transfer assets which he possesses in excess of the minimum requirements laid down by the Act in regard to either long-term or short-term or compulsory third party insurance business freely among these sectors, on condition only that he notify the Registrar of such transfers. It is now propoed that the approval of the Registrar is made a pre-requisite for any internal transfer of assets, including surplus assets. This amendment is deemed desirable because it is not possible in practice to draw a defenite distinction between surplus assets and other assets.

Certain forms of amalgamation and transfer of business in which a domestic insurer is concerned are at present subject to confirmation by either the court or the Registrar. There are others which do not require confirmation at present, but which may be to the disadvantage of policy-holders and creditors. It is now proposed that these should also be made subject to confirmation.

In addition to this it is proposed, inter alia with a view to affording better protection to policy-owners and creditors, to extend the existing requirements to the effect that the Registrar be notified of certain forms of acquisition of interests in the insurance industry.

The Act already provides that the court may issue directions to the liquidator of the business of a registered insurer, but a difference of opinion arose in the courts about the validty of such a direction when it is in conflict with certain provisions of the Companies Act in particular. The express purpose of the liquidation provisions in the Act is to make provision for a particular and elastic liquidation procedure in the case of insurers on the basis of the particular problems that are experienced and in regard to which the liquidation provisions of the Companies Act are difficult to apply in practice. It is therefore deemed desirable to amend the Act in such a way that directions issued by the court to a liquidator of an insurer will be valid notwithstanding the provisions of any Act other than the Insurance Act.

A further problem that occurred in regard to the liquidation of insurers, in the form of conflicting court opinions on the question as to when the insurance cover provided under a policy by an insurer who has been placed in liquidation, terminates, has given rise to a further addition to the liquidation provisions of the Act. The proposed addition will have the effect that after the date of final liquidation, no further obligations can arise for the insurer in liquidation.

A minor of at least 18 years of age already has the contractual capacity, in terms of the Act, to take out a life policy on his own life and to pay the premiums for it. This capacity will be expanded so that he may undertake to maintain the policy for a certain period of time from his own earnings. This is considered to be a logical expansion of the capacity which a minor already has.

Mr. Speaker, the maximum amount to which certain life policies and the yields thereof are protected against the creditors of a person or his estate, is being increased from the present R3,000 to R10,000, but at the same time provision is being made for benefits which are already protected under the Friendly Societies Act to be taken into account in the application of the new maximum. The maximum amount to which certain life policies and the yield thereof is at present protected in favour of married women as against their creditors, is likewise being increased. The maximum to which life policies are in certain circumstances excluded from the estate of a man in favour of his wife, is also being increased from R3,000 to R10,000. The proposed increases are deemed desirable in view of the change in the purchasing power of money and the important part played by life policies in social security.

A new provision in the Act lays down that an incorrect representation made to an insurer may only affect the contractual position between the insurer and the policy-owner where such incorrect representation has probably had a material effect on the calculation of the risk.

It is intended by means of this provision to put an end to the allegation that insurers sometimes evade their liabilities on the ground of incorrect representations—for example, that a man is 21 instead of 22—which in fact have nothing to do with the determination of the insurance risk.

The power of the Registrar to classify insurance business of a certain kind as insurance business of another kind at the request of an insurer, is being extended so that in the case of a difference of opinion the Registrar may decide what kind of insurance business it is. At present there is no limit as regards the age of returns and statements which the public are entitled to inspect and make copies of. Some of these documents are only of temporary interest to the public. To eliminate the useless storage of such documents those that are older than about 10 years are now being excluded from this right.

Finally it is proposed that the directions for the calculation of obligations under policies that are still current, be amended in so far as they relate to long-term policies. The amendments provide for the use of mortality tables of more recent date than those prescribed at present, as well as for an increase in the rates of interest applicable, to bring them more into line with existing interest yields. These amendments will make it possible to calculate long-term insurance obligations on a sounder basis than the present one. The application of the replacement mortality tables and of the higher rates of interest will lead to a long obligation figure under unterminated long-term policies. Advantages which may result from this are more favourable premium rates for future policy-holders, better bonus rates for existing policy-holders, and higher dividend rates for shareholders.

Mr. Speaker, I have now come to the end of a short exposition of the most important matters that are dealt with in this Bill. I want to say in advance that I shall move a few minor amendments of a textual nature in the Committee Stage which will not bring about any substantial alterations. These amendments will be handed to the other side of the House beforehand and will appear on the Order Paper before the Committee Stage is reached.

Mr. Speaker, as the Minister said, this is a Bill which has the support of the insurance world. The insurance organization felt that the time was overdue for a tightening up of the Insurance Act. There have been one or two unfortunate incidents in recent years, which showed the necessity for tightening up the insurance legislation. On the whole, I think it is agreed on all sides of the House that South African insurance companies, in general, have a good record. In his address, the hon. the Minister referred to the funeral policies and indicated the amendments to the Act affecting the funeral policies. That is an admission on the part of the Deputy Minister that not only has the cost of living gone up but the cost of dying has also gone up and there is no doubt that this was the reason for the amendments in the Bill. I think that the tightening up of funeral policies is overdue and I think it is necessary that this form of insurance which, in many cases, plays on the emotions of people, should be tightened up so that there is adequate security for the policy-holders. Many of these policy-holders do not read the conditions of their insurance policies and find out, or rather the relatives find out, too late that the policies do not give them the cover which they anticipated.

The rest of the Bill covers the general question of the assessment or the calculation of liabilities. There too the Bill introduces a more conservative element and quite rightly so, because having regard to the fact that the value of money is eroding, it is only right that in the calculations of liability proper calculations should be made so that the liability of all life policies should be calculated on a conservative basis to ensure that the policyholder under the conditions of his contract will have the necessary funds available in the company. This is part of the conservative approach which one expects from an insurance company and this legislation puts it into effect.

I hope that the Minister will have adequate staff in his department to make sure that the administrative side of this Bill can be adequately supervised. So often one finds—I do not say necessarily in this particular department—that legislation is put on the Statute Book and when it comes to be implemented one finds that the necessary technical staff is not available to ensure that adequate control is maintained. This is a measure to improve the Insurance Act; to improve the security as far as the public is concerned; to ensure that the insurance industry as a whole, takes adequate steps to ensure that the contracts will be fulfilled. For those reasons we support the Second Reading of the Bill.

Motion put and agreed to.

Bill read a Second Time.