Mr. Speaker, I move—

As previously announced the Government has taken the following principal resolutions in regard to Bantu taxation, viz. a Pay-As-You-Earn system will be introduced for Bantu taxation; Bantu will not be liable to payment of income-tax and provincial income-tax; pursuant upon the foregoing the Bantu taxation scales will be adjusted to make full provision for all income groups. At present Bantu are liable to payment of general and income-tax on the following basis: A general tax of R3.50 per year, paid by all males between the ages of 18 and 65 years in terms of the Bantu Taxation and Development Act, 1925. In common parlance this is called the basic general tax. In addition, a tax on incomes exceeding R360 per year which has to be paid by males and females in accordance with different scales under the aforesaid Act—usually called the additional general tax; and normal and provincial income-tax payable in terms of the Act concerned.

However, this does not mean that Bantu pay double taxes, because the taxes paid in terms of the 1925 Act on incomes exceeding R360 per year, is decreased by the amount which has to be paid in respect of normal income-tax and provincial income-tax. Bantu are of course not liable to payment of provincial personal tax.

The additional general tax is due on 1st January of any particular year in respect of taxable income which the taxpayer received in the previous year of assessment or which accrued to him during the course of that year. A year of assessment runs from 1st March of the one year to the last day of February in the ensuing year. In practice therefore, the position is that income earned in the year of assessment ending on 28th February, 1969, is only taxable in 1970. The general tax of R3.50 is payable in one instalment in respect of a calendar year.

Briefly, the general tax is collected in the following way: Every individual taxpayer must, at some time or other during the course of the year, present himself at the office of a Receiver of Bantu Tax (the Bantu Affairs Commissioner, or if there is none in that particular area, the magistrate) or other tax collection points to pay his general tax of R3.50 and, if he is liable to additional general tax, to arrange for returns of income, assessment and payment. If a taxpayer does not come forward voluntarily to meet his obligations, the Receiver can and must take steps to compel payment, such as the issuing of warrants or steps to prosecute defaulters.

In practice the amount payable in respect of income-tax is difficult to collect and obligations are, from the nature of the case, easily evaded. In considering a new system of taxation the question immediately arises whether the basic and additional general tax should be combined into one scale based on income, or whether the present system of a basic tax payable apart from income, plus an additional tax based on income, should be retained. In this connection the following considerations are mentioned: On the present basis of collection the additional general tax must be increased at least tenfold in order to yield the same income as the existing basic and additional general tax. A system of taxation based exclusively on income means that a minimum income limit must be set for the payment of taxation. However, remuneration in natura comprises a large portion of the income of labourers in certain spheres of employment. A system in terms of which remuneration in natura has to be included would not be practical in view of the possible income and problems with returns. A very large percentage of the workers in agriculture, forestry, mines and quarries, for example, are seasonal and migratory labourers, who do not work the full 12 months of the year. Any P.A.Y.E. system would therefore, apart from the problems in regard to the determination of income, imply that records of moneys collected from individuals must be kept in order to ensure that each taxpayer contributes at least the prescribed minimum annual amount. Of course, such a system could not be applied to one group or particular groups only, and since there are at present more than 3½ million taxpayers, fulfilment of their obligations in 12 instalments per year will mean that approximately 40 million entries will have to be made annually in tax records, apart from the problems which will be experienced in determining at any given time the liability to tax of any taxpayer. If any minimum limit should be set on income for the purposes of the deduction of tax, so many employers will be involved that complicated and expensive control measures will have to be established in order to insure that taxes will in fact be deducted and paid in. For example, in the case of domestic servants, thousands of employers will be involved, while the vast majority employ only one Bantu and each will have to deduct and pay in only a small amount per month. All things considered, a system of basic taxation becomes payable in one instalment by Bantu males between the ages of 18 and 65 years; and an additional tax, which is determined according to taxable income and which has to be paid by Bantu males, and by all Bantu females over and above the basic tax, and in terms of which the additional general tax is collected by way of a P.A.Y.E. system, that is, that the additional tax is deducted by employers and other bodies from wages and remuneration of taxpayers, and paid in to the State, is regarded as being the most suitable. As you are aware, employers must make deductions in terms of existing legislation from the wages of employees in respect of normal income-tax. If a P.A.Y.E. system of taxation is now to be introduced for the present Bantu taxation, alongside the existing normal income-tax system, it will create fundamental problems. In this connection the following can be mentioned: The general tax and income-tax must be paid to various bodies—the former to Receivers of Bantu Tax and the latter to Receivers of Revenue. Returns will have to be sent to various places because the various laws are administered by different Departments. Owing to the different methods of calculation employers will not in all cases be able to determine easily which of the two taxes a particular Bantu is liable to, apart from problems where a Bantu is liable to both and the general tax has to be reduced by the amount payable in respect of normal income-tax.

Since governing bodies for the Bantu themselves are now being established and formulated it is also advisable that Bantu taxation should be cast in the same mould, so that it can also in due course be transferred to the homeland authority, as is for example provided in the Transkei Constitution Act, 1963, and as provision is being made in this Bill.

It follows from this therefore that Bantu cannot be liable under different laws in terms of the new system, and for this reason they will in future be liable only to Bantu taxation. Consequently it is also possible at present to design a taxation system and scale which are unique to the Bantu, which take his circumstances and way of life into account and, most important of all, keep pace with the envisaged transfer of powers of taxation to the homeland authorities, because a tax is not only a fiscal measure, but also serves to confirm the subordination of the taxpayer to the authoritative body taxing him.

It is of course a requirement that a system of deductions should not be complicated. Otherwise administrative costs will be out of proportion and the employers who will be responsible for deductions will experience many problems, and the system which has been devised takes these aspects into account.

A further important consideration is, as has already been stated when I discussed the retention of a fixed amount, that the number of employers involved should not be too great because the controlling machinery will be too cumbersome and too expensive. This will become quite apparent if I mention two examples, namely if every person employing a domestic servant had to deduct taxes from the servant’s wages, or every farmer had to deduct taxes from his labourers’ wages, the administrative costs would be very high. In view of these considerations it was decided, as in the past, to limit taxation to incomes above R360 per year.

In view of the changes in the normal income tax scales relating to individuals and of the higher indirect taxes as announced by the Minister of Finance, Bantu taxation is also being adjusted by reducing the basic general tax from R3.50 per year to R2.50 per year and adjusting the tax on taxable income in accordance with new scales which appear in clause 6.

As I have already explained the additional general tax is payable in arrears. It is, however, a requirement for a P.A.Y.E. system that the taxation on income must be payable when the income accrues to the taxpayer, so that deductions can be made summarily on payment and not in arrears. Liability for the tax on income must therefore be brought forward now and in order to coincide with the normal tax year, the system cannot therefore come into effect before 1st March, 1970. The general tax levied in terms of the Bantu Taxation and Development Act, of 1925, has only been revised once since 1925, and that was in 1958 when the amount of the tax payable by Bantu males was increased from R2 per year to R3.50 per year and a tax was introduced on incomes exceeding R360 per year, and now, not merely an adjustment is being made but a totally new tax system is being introduced. I shall now deal with the various clauses of the Bill.

Clause 1

In general the definitions in clause 1 are primarily repetitions of provisions of the existing Act and additions in so far as they are necessary for the P.A.Y.E. system. The P.A.Y.E. system is based on those in respect of income tax and, as appear from the definitions, the same designations are used. There are, however, a few of the definitions to which I want to refer in particular, namely—

This definition is virtually a verbatim repetition of section 2 bis of the Bantu Taxation and Development Act of 1925. Taxable income shall, unless otherwise prescribed by regulation which makes it possible to make adjustments which may be necessary in practice, be determined on the basis on which the taxable income of individuals is determined in terms of the Income Tax Act of 1962, with two exceptions: Firstly, the income of a husband and wife is not grouped together. The reason for this is obvious, and can be stated as follows: There is no compulsory registration for marriages according to Bantu custom, and if the income of a husband and wife should be taxed together, it would create difficulties in regard to tax evasion. A further consideration is that owing to the administrative costs the system should be kept as simple as possible. Secondly, livestock and agricultural products which have not been realized, are not taxed. The consideration here is also one of administrative costs.

Remuneration

According to clause 18 employers will deduct Employees’ Tax from the remuneration of employees, provided of course that the remuneration falls within the scales of taxation, that is, if it amounts to more than R360 per year. I have already pointed out that compensation in natura comprises a large part of the compensation of certain groups of employees and that it is not desirable to implicate this income. That is one of the reasons why provision is being made at the end of the definition of remuneration to the effect that an amount of income of a specified nature can be excluded from the concept of remuneration. The power to exclude amounts in this way also makes it possible to make suitable provision to the effect that, for example, compensation for the defrayal of expenses incurred during the course of services can be excluded, as is also being done in terms of the Income Tax Act of 1962. However, there is also provision to the effect that amounts can be included in the concept of remuneration. This may be necessary in respect of Bantu in certain categories of work, and who are in fact independent contractors, such as crayfish divers along the West Coast, who only work for a few months in the year and during that time earn a very good income. It is desirable that the employees’ tax be deducted from their earnings. Otherwise they disappear before they can be dealt with as provisional taxpayers.

Clause 2

The Secretary of Bantu Administration and Development administers the Act and exercises certain powers in regard to officers and administrative matters, primarily on the basis of the existing Act.

Clause 3

As in the case of the existing Act, provision is made in subsection (1) for the preservation of secrecy in regard to the incomes of persons. Subsection (2) empowers the Secretary for Inland Revenue to furnish information in regard to the income of Bantu to the Secretary of Bantu Administration and Development. It will be noted that in terms of subsection (1) the preservation of secrecy does not apply to the purposes of the Income Tax Act. The two Departments will therefore be able to exchange information in regard to the liability to taxation of persons under the various laws which they administer.

Clause 4

Remuneration can be paid in terms of the existing Act to Bantu bodies for assistance rendered in regard to the collection of taxation. The amount of the remuneration is determined in consultation with the Minister of Finance. This provision is being expanded on a basis which will make it possible to make use of other bodies to collect the basic general tax, upon payment of a commission. This creates the opportunity for more points at which Bantu can pay taxes.

Clause 5

The various taxes are being levied for the benefit of the Consolidated Revenue Fund, from which payments such as those to the Bantu Education Account, are made in terms of other legislation.

Clause 6

In this clause the scale of general tax is prescribed. It will be noted that the scale for this tax on income is now the same for men as well as women. Differentiated scales were not retained because they would merely create problems with a P.A.Y.E. system.

Clause 7

Provision is being made for the payment of local tax in respect of the occupation and ownership of land in separate Bantu areas and other Bantu areas which have declared to be locations, on the same basis as in the existing Act. The amount is R1 per year per hut, with a maximum of R4 per year, and is paid by the head of the family. I see hon. members are laughing, but if a man has four wives I think he must receive a slight rebate, particularly if he has run into debt with the fifth and the sixth. In Bantu areas that are not included in this, rent as prescribed in terms of the Bantu Trust and Land Act of 1936 is paid. I shall subsequently explain how the local taxation is being applied.

Clause 8

Bantu who have not met their obligations by way of employees’ tax or provisional tax must furnish returns of their income and expenditure. If this provision is not complied with, a summary assessment of tax can be made, and in addition there are penalties for omitting to comply with the regulations.

Clause 9

Schedules can be required from employers and others in regard to Bantu in their service, the wages and other moneys paid to Bantu, Bantu living on their land and such other information as may be requested. This is a summary of the provisions in the existing Act.

Clause 10

Provision is being made for assessments, on the basis of the existing Act.

Clause 11

The time when taxes become payable is being prescribed.

Clause 12

Receivers of Bantu taxation can grant extension of time to Bantu for the payment of tax.

Clause 13

The existing provision dealing with exemption from the payment of tax is retained on the following basis: Bantu males over the age of 65 years are permanently exempted from the payment of the tax of R2.50 per year. Provision is being made for exemptions on the grounds of inability to earn money, caused by illness, old age, etc. Exemption can be granted on the grounds of attendance at a properly registered educational institution established by or in terms of law, if such Bantu have no income. Foreign Bantu who work in the Republic and who have paid taxes in their country of origin may be exempted.

Clause 14

Authorized officers can require Bantu, whom they suspect are liable to local and basic general tax, to produce receipts or certificates of exemption or certificates of extension. This is a repetition of a provision in the existing Act, and does not have any bearing on the additional general tax.

Clause 15

A new procedure is being introduced in terms of which a Bantu commissioner, an assessment officer or a receiver can summarily order the employer of a Bantu who owes taxes to deduct fixed amounts from the remuneration of such Bantu and to pay this amount as settlement of the debt. The provisions contained in subsection (3) were however also contained in the old Act (1925).

Clause 16

Provision is being made for the refund of amounts paid in excess if the claim is made within three years, but a refund does not occur in respect of employees’ tax and provisional tax if the amount was correctly estimated at the time when it was deducted, unless the Secretary is convinced that the circumstances of the case justify a refund.

Clause 17

Taxes and fines which have to be paid in terms of this legislation comprise a debt to the State and provision is being made for the summary collection according to the provisions of the Income Tax Act, which can mutatis mutandis be applied, and by way of warrants. The latter is of course a procedure which is also prescribed in the 1925 Act.

Clauses 18 to 39

In Chapter III provision is being made on the basis laid down in Schedule 4 of the Income Tax Act, 1962 for the deduction of employees’ tax from the remuneration of Bantu and the payment of amounts thus deducted by the employer, and for the payment of provisional tax by Bantu who work on their own account, and for matters connected therewith.

Clauses 40 to 42

The provision in the existing Act in terms of which levies can be imposed upon the taxpayers of tribes or communities at their own request is being retained. It is based on an old custom by means of which tribal members contribute to community services.

Clause 43

Provision is being made for offences and penalties in regard to the abuse of receipts and certificates, refusal or omission to furnish information for the purposes of the Act, etc.

Clause 44

Certain presumptions are being created. These provisions are necessary, particularly in respect of tax legislation.

Clause 45

The matters for which regulations can be promulgated are prescribed in clause 45.

Clause 46

The foregoing provisions of this Act shall not apply in the Transkei or citizens of the Transkei. In terms of Item 1 of Section B of the first schedule to the Transkei Constitution Act, 1963, the Legislative Assembly of the Transkei may make laws in regard to, inter alia, direct taxes on citizens of the Transkei, and in terms of section 52 (1) (a) and (b) of that Act amounts paid by citizens of the Transkei in terms of the Bantu Taxation and Development Act, 1925, and an act of Parliament in regard to a tax on incomes, is paid into the Transkei Revenue Fund. However, the Transkeian Government will now levy its own. taxes on Transkei citizens.

Clause 47

This clause gives effect to the resolution that Bantu individuals will not pay income tax in terms of the Income Tax Act or provincial income tax. In the 1966 tax year 2,098 Bantu were assessed for a total of R194,989. The Bantu concerned will now of course be taxed in terms of the new system.

Clause 48

This clause repeats, with adjustments, existing provisions of the Bantu Taxation and Development Act, 1925 which can be applied for the collection of rent and other moneys owed by Bantu to the State in respect of the occupation of land, and provision is also being made to apply the provisions for the collection of taxes imposed by the Transkeian Government and by Bantu authorities. The intention is that the provisions concerned will be applied to collect the taxation which the Transkeian Government is going to levy. Agreement was reached with the Transkeian Government to the effect that its taxation will be the same as that for which provision is being made in this Bill, and it will consequently not be necessary for employers to draw a distinction between the amounts to be deducted in respect of Transkeian citizens and other Bantu.

Clause 49

Existing laws in regard to Bantu taxation are being repealed. I shall refer in greater detail to certain provisions which are being amended when I deal with the schedule.

Clause 50

I referred earlier to the fact that the existing taxation on taxable income was payable in arrears, i.e. on 1st January of a particular calendar year in respect of taxable income which accrued to the taxpayer during the year of assessment, and that taxation will be payable on the new basis with effect from 1st March, 1970. The existing Act is now being repealed with effect from 1st January, 1970, and consequently any liability to payment of taxation on income which would have been payable after 1st January, 1970 lapses, while the corresponding new taxation will only be levied with effect from 1st March, 1970. In practice it therefore means that no taxation will be levied under the existing Act on incomes during the period 1st March, 1969 to 28th February, 1970.

Schedule

With the exception of proposals in regard to the Bantu Trust and Land Act, 1936, provision is made in the Schedule for the repeal of the Bantu Taxation and Development Act, 1925, and other statutory provisions which either amended or supplemented the latter Act in so far as they dealt with matters which either lapse now or have been incorporated into the Bill.

As far as the Bantu Trust and Land Act, 1936, is concerned, the position is as follows.

Sections 8 and 9

The Bantu Taxation and Development Act, 1925, contains, inter alia, the following provisions:

When the South African Bantu Trust was established in terms of the Bantu Trust and Land Act, 1936, the Development Account amalgamated with the said Trust, but it was provided that the funds which were to have accrued to the account should still be applied for the purpose provided in the 1925 Act.

For all practical purposes the Development Account is now an integral part of the South African Bantu Trust and the South African Bantu Trust Fund. In the 1967-’68 financial year only about R80,000 was collected which would have accrued to the account in the past. Mindful of the purposes for which the South African Bantu Trust Fund is being applied, and the amounts which are in fact being spent for the purposes defined in respect of the Development Account, there is no reason why the Development Account should be retained. It is therefore being proposed to amend section 8 and 9 of the Bantu Trust and Land Act, 1936, in order to provide that the moneys which now accrue to the Development Fund be paid directly into the South African Bantu Trust Fund, and that the payments which are made out of that Account will in future be made directly out of the aforesaid Trust Fund.

Section 45

The amendment of section 45 in the Act of 1936 is purely an adjustment consequential upon the envisaged new Bantu Taxation Act.

Conclusion

It is not being implied that the system for which this Bill makes provision offers the solution to all problems in regard to the collection of taxes from the Bantu. There will still be problems, and the Act will undoubtedly have to be adjusted in due course in the light of problems experienced in practice.

There are at present more than 3½ million Bantu who are liable to the basic general tax and a large percentage of them will also be liable to tax on income. The number will steadily increase as wages increase. Unfortunately it is not possible to determine the precise number, because information in regard to the incomes of individuals is not readily available. In making provision for the system, however, the fact that a large section of the taxpayers are unable, and that it cannot be expected of them to complete returns and to keep a record of income and expenditure, must, however, be taken into account. Also, I have already mentioned the cost factor. It would, to say the least, be nonsensical to introduce a system the administrative costs of which would be so high that it would swallow up the proceeds of taxation.

As opposed to that, these aspects in themselves present no reason why a tax should not be levied, and a tax on income is of course the basic form of taxation, by means of which the pressure of direct taxation can be distributed evenly according to the means of the taxpayers. There was a time when our tax collections were not what they should have been. However, that was owing to various factors, but the fact remains that collection has increased from R7.6 million in 1963-’64 to R11.3 million in 1967-’68, and the amount for 1968-’69 will, it is estimated, also be approximately R11.3 million. It is estimated that approximately R1 million of the collections in each of the past two years was in respect of the part relating to income. The expectation is that the scales and system which is now being proposed, will also produce approximately R11 million, notwithstanding the decrease in the basic general tax, because many taxpayers who previously evaded their obligations will not be able to do so now under the P.A.Y.E. system.

Now, as far as the obligation of employers in terms of this system is concerned: An interdepartmental committee which instituted an investigation into tax matters, inter alia, interviewed representatives of the South African Agricultural Union, the Afrikaanse Handels-instituut. the South African Federated Chamber of Industries, the Institute of Administrators of Non-White Affairs, and the Chamber of Mines, and it appeared that, generally sneaking, there was no objection on the part of the members of the organizations who would be affected the most to a simple P.A.Y.E. system. Consequently the system was designed in such a way that it could fit in easily with the existing system of the Department of Inland Revenue, in that use was being made, inter alia, of the same designations, which would make it unnecessary for employers to change their registers; in that the taxation is being determined in terms of R30 units, which makes calculations in respect of groups of individuals possible and easier; and in that provision is being made for tables which employers will have to apply in the determination of amounts owed, instead of their having to calculate the amounts themselves.

Then, too, I want to avail myself of this opportunity of expressing my gratitude towards the bodies concerned and their members, as well as other employers who will have to comply with requirements in terms of the Act. There will probably be problems, but with mutual co-operation it will always be possible to find solutions.

Mr. Speaker, we have listened to an interesting address by the hon. the Deputy Minister in introducing this Bill. It has been a lengthy address, and it has been necessary for the Deputy Minister to address the House at length to explain exactly what is involved in this taxation Bill. I want to say straight away that although the Minister has given us this full explanation, we do take it amiss that no White Paper was issued with this Bill. The mere fact that the Deputy Minister had to take so long to explain the Bill to us is proof of the fact that a White Paper was necessary, not only for Members of Parliament but also for the public at large, for the employers who are involved under the P.A.Y.E. system and also for the Bantu themselves. I want to say at once that we on this side of the House have had the services of a member of the staff of the Department who came to address us and to advise us on certain queries we had, but I must say that a White Paper on the lines of the address given here by the hon. the Deputy Minister would have been much more useful to us and would have given us a better insight into the provisions of the Bill. Sir, we have stressed before the necessity of getting White Papers on Bills of this nature and I want to stress again now that the Government should give us White Papers instead of facing us with a measure like this and a lengthy address such as we have just had here. Sir, everybody knows that all laws affecting the Bantu are complicated, and the taxation of the Bantu is likewise complicated. The Bantu does not only pay the taxes which the white people, the Indians and the Coloureds pay; he pays other taxes as well. We know that the Bantu is relieved of the obligation to pay the personal tax in the provinces, but otherwise he pays all the taxes which the other groups pay and in addition he has to pay other taxes as well. He has his own general tax which, as the Deputy Minister has said, was introduced in 1925 and is generally known as the poll tax or the “kopbelasting”. Every male Bantu person pays that tax, but in addition he has tribal levies to pay and in terms of this Bill, according to what the hon. the Deputy Minister has said, he will still be called upon to pay tribal levies. The Bantu pays all the trading and other licences that other citizens have to pay; he pays our income tax, and in 1958 this Parliament saw fit to make him pay an additional tax on his income, a tax which is not paid by the other groups. At that time, in 1958, we on this side of the House opposed the introduction of that tax on the ground mainly that it was a tax on the income of the lower-income groups, the people who were least able to afford to pay a tax. We felt then that there should have been an inquiry first, that a commission should be appointed to go into the full effect that this taxation would have on the Africans. We know that there have been researches made into the income of the Bantu in the rural areas and in the urban areas. We have had different statements as to what the average income of the African is in the Reserves and outside the Reserves. We have had different statements, too, as to what it costs him to live, what the normal Bantu has to pay by way of living expenses, and we felt in 1958 that this tax should not be introduced unless a complete survey was made of his living expenses and all the taxes he had to pay in different ways before a separate tax was placed on him. We feel even more so now in this case. We know and the hon. the Minister has said that the African pays direct as well as indirect taxation. A commission was appointed by the hon. the Minister of Finance to go into this question of taxation. In the Budget speech this year we heard the result of that report. The report of the Franzsen Commission was discussed. That commission dealt with direct and indirect taxation, but it did not deal with the taxation of groups separately. We know that this was only the first report and we know, too, that representations were made by the commission about the taxation of Bantu, but we have not yet had the benefit of the Franzsen Commission’s deliberations on that aspect. All I can say is that we would have thought that the Government would have waited until the Franzsen Commission had reported fully on the taxation of all the groups before it came to the House with a measure of this nature.

Now there is no new principle in having a different tax for the Bantu contained in this Bill, because as I said before there is a different tax for the African. He pays an income tax now which other groups do not pay, by virtue of the 1958 Act.

His income tax is now being abolished.

I know. I say the principle of differentiation was accepted in 1958 when an income tax, which was called a general tax then, was placed on the African, but at that time he was also liable for the income tax which all the other groups pay, but the income tax he paid was deducted from the amount of his general tax. So I say the principle of differentiation is not new, because we had it in 1958, and the principle of collecting tax by the P.A.Y.E. system is not new either because it applies to the African now under our Income Tax Act. He pays the same income tax as everybody else pays and it can also be collected by means of P.A.Y.E. So the system of collection which is now envisaged in this Bill is not new either, but what is new is that you will now have one group of people put on a completely new basis of taxation from the other groups. He will no longer pay the income tax paid by the other groups; he will have his own income tax in terms of this Schedule to the Bill. Now I am not going into the question as to whether he is better off or worse off under this new system. If you try to compare the Schedule with the taxation paid by the other groups, in some cases you can argue that the African is better off, but in other cases again it is easy to prove that he is worse off. I do not intend to go into an argument on that basis at all. But one thing that must strike the African is that whereas they are taxed on income on a sliding scale with no allowances or rebates the other groups all have allowances for deductions from their taxable income. Admittedly, the basis on which he pays as laid down in the Schedule is lower than that of other groups, but all the other groups are entitled to deductions and rebates for their families. The married man, for instance, may claim rebates for his children. All the other groups are allowed to deduct from their taxable income the amount they pay by way of pension contributions, and this amount may be quite considerable in the higher-income groups. There are deductions for insurance premiums paid and for medical expenses incurred. For the African, however, there are no deductions of this nature. We have not heard from the hon. the Deputy Minister on what basis this schedule has been prepared. Officials were very helpful and assisted us in this matter. But how does this Schedule compare with the taxes paid by other groups? There has been no attempt to explain this matter. There has been no attempt to equate the tax payable under this Schedule with the tax paid by the other groups. We know there is a reduction in the general tax which the African will pay, not under the new Schedule of taxes, but because of the reduction of R1 in the poll tax which every African has to pay. But otherwise he does not seem to have had the consideration shown in the reduction of the general tax on income that has been shown to other groups in regard to income tax reductions as announced by the hon. the Minister of Finance with his taxation proposals.

The hon. the Deputy Minister has pointed that in terms of the Transkei Constitution Act, the Transkei Government has the power to tax its own people. In fact, it is the only body that can tax its own people. The hon. the Deputy Minister has now told us that the Transkei Government has agreed that they will tax their people on the same basis as the hon. the Deputy Minister is now proposing to tax the rest of the Bantu population. We will also collect the taxes for the Transkei Government and we will collect the taxes for all the other Bantu authorities. I understand, and the hon. the Deputy Minister can correct me if I am wrong, that our arrangement with the Transkei Government is that we pay over to them a certain proportion of all the taxes we collect. I do not know if that is still the position. The hon. the Deputy Minister nods. It is therefore still the position. I think we pay over 15 per cent of the taxes we collect to the Transkeian Government.

Poll tax only.

Does it only mean 15 per cent of the poll tax, or does it mean all taxes?

15 per cent of all taxes.

Yes, that is what I thought. The hon. the Deputy Minister has said that the Transkei Government is going to pass an Act on the same lines as the one he has introduced. If this Bill is passed, we accept the principle that every year a schedule of taxation will be laid down for the African people and that these taxes will be collected from all Bantu in the country. What would happen if the Transkei Government does not pass the Act, which the hon. the Deputy Minister expects them to pass? They have undertaken to pass a similar Bill, but supposing they do not? Supposing there is opposition in the Transkei Government to this form of taxation and that the Opposition members are able to gain the support of some of the Government members in opposition to this tax, which after all is a tax on incomes lower than is applicable to other groups? The Bantu pay income-tax on a lower income than other groups. The hon. the Deputy Minister must bear in mind that with our last Budget the sales tax was introduced. Everybody pays this indirect taxation and every African has to pay it also irrespective of whether he lives in the Transkei or in Zululand or in Cape Town or in Johannesburg. I want to mention this particularly, because during our discussion in the Budget debate on the sales tax, the hon. the Minister of Finance interrupted my colleague, the hon. member for North Rand, and he said that they will not pay the tax on most of the items they buy. That is quite wrong. If one looks through the list of articles on which the sales tax has to be paid one finds that the Bantu has to pay this sales tax on practically every article he buys except his foodstuffs. He will be affected by this tax and will be more affected than the other groups, because the hon. the Deputy Minister will admit that the Bantu are the group which on the whole earn a lower income. Although they receive no relief in respect of direct taxation and income-tax, they have to bear all the burdens of indirect taxation with the other groups. That is going to hit at them and they are going to bear in mind that their cost of living has gone up with the indirect taxation they have to pay, but that they do not receive the relief which the groups are getting by way of allowances on income-tax. This Government is going to find itself very much embarrassed by territorial authorities such as that of the Transkei and the Ciskei, which may not all agree on the rate of taxation. If this tax is to be collected on the pay-as-you-earn system by the employer, we are going to find that the employer will have to find out to which ethnic group his employees belong, and he may have to deduct a different amount for taxation for each ethnic group.

I point out these problems which may arise because I want to say that this measure should not have been introduced in the way in which it has been done. Far more consideration should have been given to it. After all, the Franszen Commission went into this question of taxation in general, and the Government should have waited until it has received the Franszen Commission’s report, if they are going to make a report, in regard to Bantu taxation. If they are not going to give a report on Bantu taxation and the effects of the various taxes on the Bantu, then I want to say that the Government should appoint a special commission to go into this question of Bantu taxation in general, not only the question of income-tax, but the question of all the other taxes that the Bantu have to pay. The Commission should also go into the question of what taxes the Bantu are able to pay. We feel that this matter deserves more consideration. Therefore, although we accept the principle of the collection of taxes under the pay-as-you-earn system, and although the principle of differentiation in taxation has been accepted in the past, which we opposed at the time, we feel that if there is good reason for taxing the Bantu on a separate scale, the Government should bring proof to this House as to what scale it should be and how it should compare with the taxation paid by the other groups. We have had nothing like that placed before us and the hon. the Deputy Minister has not even told us why it is necessary to tax the Bantu on a different basis from the other groups.

We can foresee the trouble that eventually as the Coloured Council and the Indian Council develop there may be calls by them for powers to tax themselves and eventually we shall have each of the different groups taxed separately by this House. No groups are going to be satisfied if they feel that they are paying a tax which other groups do not pay. They will not be satisfied if some groups are getting more benefit from the taxation than the other groups. If they are not taxed on the same basis, it would bring about hostility between the groups in South Africa unless a good reason is shown and proof is given as to why they should be taxed on a different basis and they are shown what benefit they will receive from that form of taxation. The Minister says that they have consulted with the Chambers of Industries and other bodies who have said that they would welcome a simpler form of taxation. The Minister says that this is a simpler form of taxation. I say that it would have been a simpler form of taxation if all the Native taxes were combined in one tax and the employer knew exactly what he has to deduct from his employee's pay. To satisfy all the taxes as regards the employee. That, of course, is not the case as the hon. the Minister himself has admitted. The general tax will not be paid monthly; it has to be paid in one lump sum; the tribal levies will be paid separately from this taxation which will be deducted by the employer. So the employer is not going to find himself any better off under the new legislation than he has found himself under the present legislation.

The hon. the Minister has mentioned payment in kind. I take it that the farm labourer will not be taxed on his rations or any other benefits he has received in kind. I take it that that will also apply to domestic servants. Nothing given in kind will be taken in for taxation. It does not seem quite right that anything given in kind will not be taxed, whereas the Native who cannot get anything in kind, will have to pay the full tax. I am not for one moment saying that the Natives should be taxed for the food and the housing they get on the farms, but naturally there is going to be a grudge against their colleague who receives clothing, food and free accommodation while other Natives only receive their salary and have to pay for accommodation, transport, etc., and are much worse off than their colleagues who pay no tax at all.

I could go on and on discussing the inequities in the measure and the hon. the Deputy Minister, I think, will agree, that this is not the solution and that we can expect to land in trouble. He does not pretend that this is the solution and therefore I say before the House accepts a Bill of this nature, and the principles involved, we should have much further inquiry into this matter. The Minister should come to us with facts, which will substantiate his case. We, therefore, want to suggest that this matter should be referred to a Select Committee. All we can do is to suggest that it should be referred to a Select Committee where members of both sides of the House can hear evidence by the Bantu themselves, the employers, the tax consultants and by the Revenue Department. Let us hear the whole story and go into the matter fully. We cannot go into the matter fully in this House; we cannot take evidence and on the meagre information given by the hon. the Minister, we are not justified to accept a Bill of this nature and the scales of taxation contained in the Schedule. Therefore I move as an amendment—

Mr. Speaker, after a long argument the hon. member eventually came forward with an amendment. Throughout his entire argument no one could determine whether he was in favour of or opposed to the principle of Bantu taxation. Now, it was clear throughout his argument, and it became even clearer from his amendment, that he had not done his homework properly, because there have already been several commissions of inquiry about the whole question of Bantu taxation. I am referring specifically to the Lemmer committee of 1963, which, inter alia, had the following terms of reference. I quote—

1. (1) improved methods, systems and means of collecting Native taxes;
2. (2) whether the P.A.Y.E. system should be applied to the collection of Native taxes;
3. (3) any other views in regard to the stepping up and the effective application of the Act in connection with the collection of tax; and
4. (4) whether any amendment of law is essential.

This Lemmer committee did valuable work and collected valuable statistics, from which I shall quote in due course. Subsequently another commission was appointed which once again issued a report. If we now look at the legislation as it was passed, and if we have listened to the Second-Reading speech of the hon. the Deputy Minister, it is very clear that the principles of Bantu taxation are not being altered by the legislation before us, but that a new levying technique is being instituted, the P.A.Y.E. system. Certain concessions are being made. But, as I see it, the Bill is not intended for the collection of more income-tax or less income-tax from the Bantu. The Deputy Minister also said this in his Second-Reading speech. He said, inter alia, that R7.6 million was collected in the year 1963-’64, in 1967-’68 R11.3 million and in 1968-’69 R11.3 million as well. Despite the rebate of R1 per year for the 3.5 million male taxpayers in respect of the basic tax of R3.50 per year, it is foreseen that under the new system about R11 million per year will also be collected. This is because of the fact that more will be collected per taxpayer. There are certain adjustments. I shall come to them in due course and point them out. But there are many Bantu taxpayers who do not pay under the existing legislation because they cannot be incorporated under this system. This is what we also found when the P.A.Y.E. system was established for the Whites, i.e. that there were taxpayers who did not in fact honour their obligations.

The United Party does, in fact, have to answer the following two basic questions in that connection. Is the United Party in favour of education and tuition for the Bantu? If so, why do they bemoan and deplore this legislation and why are they begging for a White Paper and a Select Committee? This legislation before the House is nothing more than a simplification and a consolidation of already existing measures. If there were any additional amounts collected under this system of tax collection, who would the people be who would benefit by that? Surely hon. members know that this tax goes directly to the Consolidated Revenue Fund, from which it is paid over to the Bantu Education Account. There has, after all, been a great shortage for years. This is, in fact, what we must believe if we look at the statistics. I shall quote from the Lemmer report. In the year 1926-’27 the total Bantu taxation collected was about R2.2 million, and the expenditure on Bantu education R0.9 million. But Bantu taxation increased to R2.8 million in the year 1937-’38 and the expenditure on Bantu education to R1.8 million. In the year 1947-’48 the Bantu taxation was a mere R3.1 million as against expenditure on Bantu education of R9.2 million. In 1958-’59 the Bantu taxation was R5.4 million and the expenditure on Bantu education R18.5 million. In the year 1963-’64 Bantu taxation was estimated at R7.8 million, while the expenditure on Bantu education was R26 million. There is therefore a deficiency. If more were to be collected under this legislation than is estimated, i.e. R11 million, who would benefit by this? The Bantu, and no one else, especially in the sphere of Bantu education. I cannot understand the hon. member for Transkei’s argument in that connection at all, because the Bantu are being benefited, specifically by way of Bantu education. The Government is not being benefited. The Whites in this country are not being benefited either.

The hon. member touched upon a whole series of matters. It is simply not possible for me to reply to them in the time at my disposal. But in order to reply to what I consider to be the most important, I want to bring the following to the attention of the House.

Bantu who earn less than R360 per year now pay R2.50 in general tax as against the previous R3.50. He therefore gains R1 a year. But what about the Bantu with an income of R870 per year? He will pay R9.82 in future, 68 cents per year less than he has paid in the past A Bantu with an income of R1,230 will now pay R17.02, 52 cents per year more than he paid in the past. A Bantu with an income of R1,740 will now pay R27.22, R2.72 more than in the past. A Bantu with an income of R4,020 will now pay R173.62, while in the past, if he was married and without children, he would have paid R262.50, which entails a saving of R95.88. I am mentioning these figures to illustrate that, since the hon. the Deputy Minister said that there would be no noticeable difference in the amount, there will merely be a rounding off process in the actual payment of taxes when the proposed rates take effect, but there will not be a substantial difference in the amounts which will be paid by the Bantu. In other words, there will not be an additional levy in excess of that to which he is already liable under the legislation of 1925 and subsequent legislation. The hon. member’s plea for a Select Committee of a White Paper can therefore merely serve as an indication to me that he did not do his homework properly and that he merely moved the amendment for a White Paper in order to be able to say something.

He quoted from the Franszen Commission report. If he were to refer to page 39 he would see that the last sentence of paragraph 175 reads—

And the above-mentioned items are those not affected under the sales duty. Therefore his entire argument that the Bantu would, by indirect taxation, be affected to such an extent that the Government would be compelled to make tax concessions, falls flat. The hon. member said that the United Party opposed the increase of the general tax in 1958. Under those circumstances one would assume that they would be very grateful for this legislation because the general tax is being decreased here from R3.50 to R2.50.

What about the income-tax which he has to pay?

As far as incometax is concerned, I have just proved to the hon member that there is no increase on the 1925 tax. He may make that small calculation himself, if he can. He will find that there is no essential difference between the old rates and the new rates. Sir, the hon. member said: “The collection system is not new.” It is definitely new as far as the Bantu is concerned. The Bantu has never been compelled to make monthly payments under the P.A.Y.E. system. The principle of Bantu taxation is not new; it was accepted a long time ago. The principle of specific rates is not new either; it was accepted a long time ago. This legislation results in no essential difference in rates. The hon. member said that the levying technique, the P.A.Y.E. system, is not new. Why he is therefore asking for this Bill to be referred to a Select Committee I find altogether inexplicable. He said that what was, in fact, new, was, as he described it, “the introduction of a system whereby one part of the population pays on a different basis from the other”. But, Sir, this is not new either. In terms of the 1925 Act the Bantu were already paying on a different basis to the Whites. Then he asked: Why can the Whites be favoured by certain deductions while the Bantu taxpayer is not favoured. But surely the hon. member received his reply about this. The answer is that there are several concessions granted to the Bantu which are not granted to the Whites. There is the concession that compensation in natura, compensation by way of housing and food and even livestock, is not taxed until it is converted into capital. This is a concession which the white taxpayer does not receive. There is the additional concession that husband and wife are taxed separately under this measure; their incomes are not added together. This is an important concession; this is a benefit which the Whites do not enjoy. There are certain concessions which are not granted to the Bantu, but this is more than offset by the compensation granted to the Bantu in this Bill.

Then the hon. member pleaded for a setoff of the tax which is payable by various groups of the population. I take it that he means that the tax which is payable by the Bantu in terms of the new rates should be set-off against the tax which would be payable by the Whites. Let me immediately concede that there are various reasons why such a setoff would not be fair and justified. At this stage it is not possible in practice either because the Whites, inter alia, pay provincial tax, as the hon. member should know, and the provincial tax for the four provinces has not been announced yet, with the exception of that for the Transvaal, and, I think, the Cape. But I have certain statistics before me which I want to quote for the hon. member’s information so that he will not feel so sad about the lack of a White Paper. An unmarried white person with an income of R870 pays R19 and the married white person pays R2. This includes the Transvaal provincial tax at the new rates which were announced last week. On the other hand, in future, the Bantu will pay R9.82 An unmarried white person with an income of R1,230 will pay R56 and the married white person R11, as against the Bantu’s R17.02. An unmarried white person with an income of R1,740 would pay R133 and the married white person R53, as against the Bantu’s R27.22. The unmarried white person on an income of R4,020 would pay R409 and the married person R281, as against the Bantu’s R173.62.

Now the hon. member must listen. This set off which, according to the hon. member, justifies the reference of the Bill to a Select Committee, indicates that the Bantu’s rate compares very favourably with that at which the Whites will be paying in the future, i.e. after the hon. the Minister of Finance has announced the new rates. This ought to console the hon. member. The hon. member also asked what would happen if the terrible problem of the Transkei Government not accepting this taxation Act were to crop up. The hon. the Deputy Minister has surely given us a reply already. He pointed out that taxation is not merely a fiscal measure, but also a measure which denotes the subservience of a person to the people, to the nation and to the State to which he belongs. In the light of that, particularly in the light of the second leg of that argument, I can see no reason why the Transkei Government would not pass similar tax legislation. Does the hon. member want to claim that the Transkei Government does not want to affirm that subservience, that loyalty, of the Transkei citizens to the Transkei with, inter alia, legislation which makes those Transkei citizens liable to pay tax to the Transkei Government? The hon. member is now sitting there without saying a word. I say that that argument has already been dealt with sufficiently by the hon. the Deputy Minister.

Sir, the hon. member for Transkei made a strange plea at the end of his speech. He came along here with what I would almost call a stupid request that all taxes which the Bantu pay should be united in one tax. Let us at least be realistic. What does the Bantu pay under the taxation Bill which is now before us? In the first place he pays the basic general tax of R2.50; this applies to males between the ages of 18 and 65 years. In the second place, he pays, if applicable, a local tax of R1 with a maximum of R4 if he has four huts. Furthermore, he pays the tax according to the rates before us and, if so determined by the tribal authority, he pays a tribal tax. Let us review those four different taxes individually. It is immediately clear that one tax could never make provision for the needs which must be met by each type of tax which must be levied. Let us suppose that a tribal authority decides to purchase three tractors. Does the hon. member then want to suggest that an Act should be passed by this Parliament which assesses the entire Bantu population of the Republic at 5 or 10 per cent per male member in order to buy those three tractors or, say, five lorries? Is that what he is suggesting?

No.

No, he is not suggesting that, but he is pleading here for all taxes to be combined into one tax. The hon. the Deputy Minister explained that there are 3.5 million male Bantu between the ages of 18 and 65 years who are liable to taxation and who now have to pay R2.50 per year. The hon. member has said that this must be combined in one tax.

I did not say so.

That is what the hon. member was asking for; he said, “All taxes to be combined in one tax”. That request by the hon. member would entail at least 42 million entries having to be made. If the hon. member were to think of the cost of that, it goes without saying that it could never be considered, as the hon. the Minister has indicated.

I want to repeat that the legislation before us contains no new principles. The principle of the tax liability of the Bantu was decided many years ago. It now implies the P.A.Y.E. system for the Bantu. It simplifies the existing legislation and creates the channels through which Bantu, who were liable to taxation in the past in terms of the 1925 Act and did not pay the tax, will now also have to contribute their share in terms of this Act, not for the Whites or for this Government, but exclusively for the benefit of the Bantu Education Account. If hon. members of that side agree that it is, in fact, necessary for Bantu education to get money, what objection can there be? Do the hon. members want to say that Bantu education must not get money? Now they sit there without saying anything.

Don’t talk nonsense.

If this then implies that this Act will provide that those Bantu who are liable to taxation and who have in the past evaded their responsibilities, will now have to meet these obligations and that the funds so obtained would strengthen the Bantu Education Account, what is the hon. members’ objection? There can be no objection, because the whole matter of Bantu taxation has to my knowledge already been investigated by at least two commissions. The legislation before us is quite clear and the speech of the hon. the Deputy Minister has shed even more light upon the matter. I now merely ask for what earthly reason the hon. member stood up here to ask for a Select Committee by way of an amendment I think that these are merely delaying tactics on the part of that side of the House and I want to tell the hon. the Minister that, while we realize that such a new collection technique may give rise to problems, this legislation is a courageous attempt to call upon all Bantu taxpayers to meet their responsibilities. On behalf of this side of the House I want to thank the Minister and his Department for introducing this law.

I am afraid the hon. member who has just sat down did not understand what my colleague, the hon. member for Transkei, was saying and that has led him into missing the point altogether in so far as my hon. friend’s speech is concerned. The result is that he is criticizing what was never said.

The hon. member for Transkei moved that this Bill should be sent to a Select Committee now before the Second Reading. In the light of the advantage that Parliament has gained through adopting that procedure in the past, I want to ask the Deputy Minister in charge of this Bill to give very serious thought indeed to this request which has been made. Let us go back for a moment to some of the history of Bantu taxation and have a look at it, bearing in mind that events like the Bambata Rebellion of 1906 stemmed directly from the imposition of a poll tax on the Bantu of Natal. This is a matter which from time immemorial has caused difficulty. The initial tax first levied on Natives in South Africa historically was merely a replication of a tax which was really the paying of tribute to the chief. That was the historical basis of taxation in South Africa. The first taxes were based on the historical concept among the Bantu people of paying tribute to the chief. The Deputy Minister, who knows Bantu history, will probably agree with me that that was the basis upon which those taxes were founded. When once the white authority became the supreme chief, it was entitled to tribute. From that it went on, for various reasons. Taxation was increased from time to time, so that to-day we have a mixture of an old historical concept and a modern concept of the need to pay taxes for the purpose of carrying on the government and to pay for the various services rendered by the Government of the country. But I want to suggest that this was an appropriate occasion to have gone into the whole question of Bantu taxation. I say that for the reason that together with other sections of the people, the Bantu are gradually getting a much higher level of money wages paid to them. They are getting much higher wages or salaries in money payments, at a level which 20 or 25 years ago would probably have been unthinkable. The whole shift in the basic economy of South Africa is working towards an increase in salaries and wages for the Bantu along with other folk on the lower economic strata. There is a general lifting of salaries and wages. That is bringing the Bantu, who in the past were on a very low level in so far as actual wages were concerned, gradually higher up the salary ladder to a point where they become now, as it were, equated with members of other groups. We have seen even in recent weeks cases where professional people who are Bantu will be drawing in the region of R3,000 or R4,000 a year. When I was a boy that was unthinkable. My old grandfather and people of his generation would have wanted to put a wet towel around their heads and rest in the shade for a few hours because they would have thought they were suffering from sunstroke if we had talked like that in those days, but to-day we just take it for granted. At this time then in our economic history, as well as in our political history, it is perhaps a fitting time for the whole matter to have been reviewed. Here I want to support the hon. member for Transkei when he says that we surely to-day are not going to waste any time debating whether under the new Schedule more or less tax is going to be paid by the Bantu. That is really not the issue before us. It may be an issue which may become important, but it is not the issue before us, I submit, in the debate on this measure.

What we are concerned with here is not what the hon. member who has just sat down said, when he said that these are old taxes and this is merely a new method of dealing with them. This is not a new method of dealing with them. This was a golden opportunity to investigate the whole matter ab initio, to hear what the people concerned had to say, and there are many people vitally interested, and then to come with a measure which would have had a degree of permanence. I want to emphasize that point. The Bantu people as a whole, the 13 million or 14 million of them, are conservative people; they are like me; they are “verkramp”. They are conservative. We do not like too many sudden changes, particularly in taxation. None of us likes changes in taxation, especially if, looking at it from our own point of view, we consider that it will hit us and that we will have to pay more. That is a fatal basis for any taxation—I will have to pay more. That is fatal. No kind of taxation proposal can appeal to the taxpayer if he has to pay more. But I repeat that the Bantu people are conservative and they do not like change. That is why I suggest that before this change was made piecemeal, there should have been a thorough investigation so that what is adopted now, subject to any change in the rate, could have been the system of taxation for a long time to come. Not only so far as the Bantu people are concerned—I will come to that in a moment—but in so far as they, as a race, are concerned with taxation it would be a longterm method of taxation, the rate itself being probably subject to change. I am leaving out the historical reason why we have different taxes paid by the Bantu and why personal tax is paid by the white people but not by the Bantu and that sort of thing, because I do not think it is really germane to the subject. The principle, then, that I would like to see would be basically that an income tax in South Africa, subject to whatever the rate may be and subject to whatever rung on the taxation ladder the tax may start at, it should be one tax applicable to everyone throughout South Africa. The Deputy Minister shakes his head. I am putting forward a proposal here which could be thrashed out before a Select Committee. The fact that the Deputy Minister shakes his head while I feel just as strongly that I am right, while he believes strongly that I am wrong, is a good reason why the matter should go to a Select Committee, because both of us ought to know what we are talking about, and I do know what I am talking about.

But a third party may be wrong.

I hope the hon. the Minister will not interject in this matter. He does not understand this legislation; therefore he has left it to his deputy. But that is quite right; that is how it should be, but let the person who knows nothing about it not make any interjections. [Interjections.] I am addressing my remarks to the Deputy Minister of Bantu Development at the moment. That hon. Minister is no longer Minister of Information because he does not know anything. Therefore he is now in charge of another department altogether. So, let him also keep quiet.

You are not witty.

Heaven forbid, Mr. Speaker. I was never more serious and earnest in my life. The hon. the Minister of Social Welfare knows nothing about Bantu taxation, nor about the Bantu. He knows nothing about it at all. He did not even write a thesis about it as the other hon. Deputy Minister did, however wrong that thesis may be. But let us come back to the point. Where do we go to when we depart from the principle? Because we now have an opportunity of dealing with the principle, a long term principle, for Bantu taxation. As my hon. friend has said, we are running the risk that the different ethnic groups, as and when they reach the stage where the Transkei is to-day, are bound to demand their right of taxation. Similarly with the Coloured people who inevitably, as surely as the sun rises, are going to ask for the right of taxation. I think they are being given R20 million to-day to handle as expenditure. Sir, I was a provincial councillor and had to do with provincial administrations long before I came to Parliament. Those hon. members of this House who were provincial councillors, the hon. member for Klip River is one of them, will know that through the years there has always been the tendency to come down harder and harder on the provinces’ rights of taxation; there has always been a resistance on the part of the provinces at losing their spheres of influence and their rights to taxation, i.e. the avenues through which they can tax. Here there is continually the crunch between the provincial administrations and the Government, on the question of taxation, the sources of taxation. History has warned us that that is the position and it ought to warn us that that will be the position and that the Coloured group, the Indian group and the other eight Bantu ethnic groups will each press for the right to levy their own taxation. The Government’s ideology is bringing them up against a stone wall, and this they have to surmount, not us. As a matter of fact, the Government may rest assured that every time they slip and skin their noses on that stone we of the United Party shall tell them, “We told you so; see what a mess you are now making of things”. From the political point of view we are going to take the fullest advantage of it. On that point I want to be quite clear.

The measure we are discussing now is going to fail and it is going to fail for two very good reasons, and when my hon. friend suggested that it be referred to a Select Committee, he was suggesting something in the interests of South Africa and in the interest of a good fiscal measure to apply to all races at all times. Surely, that is not party politics; it is only a broad South African outlook and as such should be lauded by the Deputy Minister of Bantu Development. But let me give the two reasons why this legislation is going to fail.

Firstly, the Bantu are not identifiable to-day. I am not talking about the man in permanent employment in towns; about the man who has got a fixed job with a boss who knows him and for whom he works year after year. It is not these I am talking about; I am talking about those who come in from the Bantu areas, work for a time and then move on. In some cases they work for a week, even for only one day and then move on. And are these there in their hundreds or thousands or are they there in tens of thousands? They cannot be identified. That is why the general tax to-day is so far in arrears. Every one of us who works with the Bantu and comes from Bantu areas, knows of the Bantu who comes along with a smile on his face and admits that he hasn’t paid his tax for five years, or eight years, or as the case may be, and is quite happy about it. This happens because they cannot be identified. In the so-called Bantu areas there is no method of identification of the Bantu. That is the first point, i.e. you cannot identify them for the purposes of this tax. This tax will be collected from the employer who employs more or less permanently the same Bantu month after month. He has them in regular employment and you can collect the tax from him. As far as this is concerned, there is going to be no great difficulty. The Government is not collecting this tax; they are putting the onus on the employer to collect it. But as soon as you come to the shifting mass of the Bantu people then tax collecting will fail.

Secondly, it is going to fail because there is not the staff to administer it, and to administer this particular measure is going to call for far more staff than what we have at the present moment, if only to keep the records up to date and for no other reason, the records in the tribal areas and the records in the white areas. When the Deputy Minister was speaking just now, he said he knew this was not a solution and that there would have to be amendments to this Bill. And how right he was. However, it is unnecessary. He is saying the very thing that frightens me. He is saying to the Bantu that there will be chopping and changing as far as their taxation system is concerned; that it will have to be amended. Thereby we are doing the one thing we ought not to do with the Bantu. Instead, we should lay down the position clearly, distinctly and let it remain there. We should not go back again and chop and change so that the Bantu is continually in a ferment wondering what is going to be the next change in regard to his taxation. However, this is what the Deputy Minister has forecast. That he himself has said. And this is one of the cardinal weaknesses in this measure—it has none of the elements of substance, of permanency. Here, then, lies the big difficulty. In dealing with the changes that may be made, let us look at the Transkei for a moment. Let us look at the Transkei Constitution Act, No. 48 of 1963, particularly at section 37 dealing with the legislative powers of the Legislative Assembly of the Transkei. It has the power “(a) to make laws not inconsistent with this Act in relation to all matters appearing in part B of the first schedule of this Act”. Let us now have a look at part B. Section 1 of part B says “direct taxation on citizens of the Transkei, whether resident within or outside the Transkei …” So, the Legislative Assembly of the Transkei can make these laws. In 37 (1) (b) it says that “to provide in any such law for the amendment or repeal of any law, including any Act of Parliament …” But let us go further and come to subsection (3). Leaving out the exclusion, it says, “no law made after the commencement of this Act … which relates to any matter referred to in subsection (1) shall apply in the Transkei …” But there is an exclusion which I have left out and this I should now like to read. What law, then, shall apply in the Transkei, the law that has been excluded? It is the law made by the Legislative Assembly “as is referred to in subparagraph (ii) or (iii) of paragraph (a) of subsection (1) of section 52 …” Let us have a look at section 52 (1) (a) (ii) which reads as follows—

Subparagraph (iii) of paragraph (a) reads as follows—

So, what is the net result? The net result is that in regard to these taxes applicable to a resident in the Transkei, the Transkeian Assembly cannot amend this tax. However, in respect to the taxes applicable to a citizen outside the Transkei, the Transkei Legislative Assembly can amend it. That is the position. Here we have little chickens coming home to roost. Here sits the Assembly of the Transkei and in terms of our laws it can make a law which is in respect of its own citizens outside the Transkei, but in the white areas it can repeal a tax, amend it or exempt its citizens from it. But in respect of their own citizens in their own homeland, they can do nothing about the matter. We fix the tax for its own citizens in its own homeland. There is nothing it can do about it. It must accept the dictates of our Parliament in regard to its own citizens in their homeland. But in regard to their own citizens who are in the white homeland, they can amend, change or do with it whatever they like. There is nothing we can do about it in Parliament. That is the point.

This is a logical policy!

We can pass an Act to-day dealing as we will with those Transkei citizens outside the Transkei, in white areas, and it is not applicable. It can be repealed at once by the Transkei Legislative Assembly. This is how it works. That is why the hon. member for Transkei said that these various governments of the future may make changes in the application of the laws; in the rate of tax; in the rungs of the taxation ladder and there is nothing that the Deputy Minister can do about it.

Now let us have a look at the position of the employer who will have to collect the tax. In that case he does not only have to watch and see what the law is made by the Transkei in respect of its citizens outside the Transkei; what the law is made by this Parliament in respect of the citizens of the Transkei outside the Transkei, but also what the position is in regard to a citizen of the Transkei normally domiciled in the Transkei who comes out of the Transkei and wants to work. What kind of a position are we placing the employer in? This is only one homeland with that kind of government. We have eight of these ethnic groups. If they are not to be given kindred powers, then there is cause for trouble immediately. We are now, because of the passed legislation, getting ourselves into a real fiscal mess. Reference has been made in respect of the purchase tax and taxes of that kind. Here again the question arises as to how far legislative functions and legislative powers run in regard to these matters. We will now continually be caught between the upper and the nether millstones in respect of taxation measures passed by the Transkei and hereafter by the other non-white governments as they come into being and their own parliament as we are sitting here in Parliament assembled. I say that this is all wrong and needless. Let the Deputy Minister send this to a Select Committee. Let us get together and see whether we can work out, firstly, a measure which will be fair to all, taking into account their economic status, their capacity to pay, any fringe benefits they may have. Let us see whether we cannot make it applicable and make it in such form that it will have a degree of permanence so that when the Bantu are told that this is the new system of taxation and the new scale of taxes and that it is likely to remain, they will know that they will now have to settle down, because there are the taxes. The Government must also carry out a proper method so that the taxpayer can be identified if he is a Bantu. This is not possible at the moment. Many years ago I sat on a committee. We laid down as one of the first principles for statehood, for which we were trying to find out an answer to, it should be possible for a government to be able to identify citizens without difficulty and for the citizens to be able to claim the protection of the Government without difficulty. At the present time that does not apply as far as the Bantu are concerned, particularly where one gets the Transkei coming into the picture and other people of that kind may hereafter have citizenship attaching them to other Bantu states. These are the main principles, the simple things which we should like to have done. It can be done round the table of a Select Committee. There the appropriate folk can all come to give evidence. They can be examined and we can hammer out something really worthwhile putting on the Statute Book.

Mr. Speaker, I listened with interest to the address made by the hon. member for South Coast about the problems the hon. the Opposition is seeing in the implementation of this legislation. It seems to me as if I have to agree with the hon. member for Wonderboom. I simply cannot do otherwise. The Opposition has not made a proper study of this matter. Now they want to bluff themselves that no one else has gone into this matter, and that the hon. the Minister has come here without understanding the implications of this legislation. They pretend that the Minister simply wants to force legislation onto people without understanding what it is about. Now they would like to acquaint themselves with the matter. The only way to be able to do this, is to get a Select Committee appointed on the subject. It seems to me that this is what it is about. In any event, I cannot dwell long on the arguments. The hon. member for South Coast said that this legislation would be a failure for two reasons. In the first instance, the Bantu could not be identified and, in the second instance, there would not be enough staff, because this legislation is too cumbrous. The hon. the Deputy Minister explained here that efforts have been made to make it as concise as possible. I really think it is. The whole question of tax collection is problematic, especially when one is dealing with the Bantu.

The hon. member for South Coast told us that he knew the Bantu and also the conditions in which they resisted the original taxes, etc. In my opinion he wants to make the matter more cumbrous than it in fact is. In any event, I think we have reached the stage in this country where the Bantu have become used to and acquainted with certain basic systems of democracy as practised by us. We must not try to make these Bantu imitators of the Whites, not even as regards our taxation system. The hon. member suggested that we should have one system of taxation. I do not want to dwell on this in detail. There may be a certain measure of similarity among the Bantu, the Coloureds, the Indians and us, so that we can place them on the same footing as regards taxation. However, with the best will in the world I cannot see how the hon. member can say that he knows the Bantu, the Bantu’s circumstances and history, and then still wants to suggest that we should simply have only one system of taxation, and that the Bantu should be placed on the same footing as the Whites. There are so many cases where the Bantu should be treated differently. We are dealing here with people who differ from us to a large extent. The point of view of this side of the House is that we should accept those differences. Everything we do is based on the individual identities of the races concerned. As regards taxation, it is important in my opinion that we should take the specific needs of the Bantu into account. Here we have a case where 3½ million out of a total population of 12½ million are liable to taxation. I agree with the hon. member for South Coast that their income has increased during the past number of years. But simply to say that we must make their system of taxation the same as ours without taking into account all the complications, is to my mind something which cannot be considered at all. In the first place I want to revert to the question of Bantu education. It was laid down as a principle by this side of the House that a certain amount, i.e. R13 million, would be voted for that annually. The rest of the amount was to be collected by way of taxation to be paid by the Bantu. If we look at the Bantu Education Account, we see that there is an annual shortage. In my opinion, therefore, this Bill is very welcome at this stage because it will afford us the opportunity of collecting possibly larger amounts. I think it is only right that we should take into account that the Bantu must make his contribution, and that we should stand by this principle, also as regards his education. If we take into account the entire question of the development of the country, it should be realized very clearly that in the first instance we have to deal with less developed people. They have to be taught and guided from the beginning to make a contribution in their own traditions and circumstances. In other words, to a large extent they are a limiting factor. We cannot move too rapidly because the material with which we are working is of limited capacity. On the other hand we cannot say that the Bantu should pay the same as the Whites, and so abandon this principle. We must take into account the Whites willingness to contribute to the development of the Bantu, and this is important. In a certain South African trade publication it is said, for example, that 34.5 per cent of their total labour force is derived from the Bantu population. If we go into this whole question of Bantu revenue, we must accept that the wages, benefits and consequently the income of the Bantu who are rendering these services in the commercial field have, as has been mentioned by hon. members, increased. In my opinion it is a sound basis that is set out here, i.e. that those who earn more than R360 per annum, must contribute progressively more … The only way in which a hold can be obtained over these people is by bringing the employer into the matter. That is basically what is envisaged with this system. The employer has to be brought into the matter and he has to fill in the forms. In cases where Bantu work for short periods, such as when it is a monthly wage which exceeds a certain fixed amount, and he has bound himself to work for a certain period, deductions, calculated on the total excess at the end of the year, have to be made in any case. The result is that that Bantu will now make his contribution. I know that the task of finding the 3½ million Bantu who will now have to pay taxes, will be a very difficult one. The only way out is, therefore, the basis I have mentioned here.

I cannot see how we can expect a select committee to conjure up methods out of the air to combat this basic problem we have been struggling with all these years. I feel that we, as the hon. the Minister said, will come up against problems. As we develop we can give attention to these matters and then we can see where we can improve the system. The problem in this case, will be to get all the employers to fill in their forms and to see to it that these particulars are made available to the Department concerned. I think it is very important that direct Bantu taxation should definitely be given attention in the way it is getting attention here. In a rural constituency such as mine we have the difficulty with the Opposition that they do the rounds and say, “Look what the State is doing for the Kaffirs! Look what is being done in the Bantu areas; and what contributions are being made by these people?” This is the one story which they spread on the platteland. If we seek a sound approach for the collecting of taxes, they feel that the matter should first be referred to a Select Committee, and in the process the whole undertaking is delayed. I want to give a reason here why I welcome the fact that Bantu who earn more than R360 per annum will now be subject to this scale of taxation, and that the employer is going to be brought into the matter and will have to accept responsibility for the worker. Because the position in this country is that we have developed so rapidly and that the wages of the Bantu have increased so rapidly during the past number of years, the Bantu have in fact been unable to keep pace with the development of the country. Instead of increasing their standard of living the Bantu decided in many cases that they were earning so much that they should work less. This is one of the problems we have to cope with in the Lowveld, where we have to do with intensive farming. The Bantu go to the Witwatersrand complex to go and work in the industries in particular. Now the farmers have the difficulty that many of them go and work in the industries for six months, and then sit at home for the next six months. I think it is the duty of the State to make those people realize that they must contribute their share to the development of their own areas and to the education of their children. The image that is created by the Opposition in my area, i.e. that the Whites are simply pumping in the money and developing the Bantu, and that they are in fact better off than the Whites, must be stamped out. In my opinion the hon. the Minister should try to have this legislation implemented as effectively as possible, although we will undoubtedly have problems.

In view of what has been said here I cannot see why there should be any delay and why there should be another Select Committee discussion. To my mind we could have come forward with legislation such as this a few years earlier. Then we would have been in the position that we could have determined from our experience where the bottlenecks are, and we could already have been eliminating them now. I can assure hon. members that the legislation before us now, will be welcomed in my community. Actually I would very much have liked to see that we had a compulsory payment system for the entire 3½ million, and that the employers could have been brought in there as well. From the speech made by the hon. the Minister I understand, however, that that is not possible, and that it would not justify the administrative work on account of the large numbers. Consequently it will not be possible to apply it. But provision is at least being made now for Bantu persons who earn more than R360 per annum to make their contribution to the development of the Bantu, not only in the homelands, but especially for their education throughout the country.

Mr. Speaker, one of the points which seems to be worrying the hon. member for Nelspruit is the fact that the Official Opposition often uses the argument that too much money is being spent on the Blacks, particularly during election periods. If this is so, I cannot help having the thought that the hon. member is thinking of a good answer to this accusation. The answer that he is going to trot out is going to be the Bill which is before the House to-day. He is going to say, “There you are; it is not true; we are going to levy much greater taxes on the Bantu people and therefore we can ignore the accusation that we are spending too much of the white taxpayer’s money on the black man”. The other argument he used was in part the same as the argument used by the hon. member for Wonderboom. He has said that the main beneficiary of the increased amount of tax collected by virtue of this new taxation measure is going to be the Bantu Education Account. Thereby they are both reaffirming what to me is the essentially unsound principle that the Africans should pay for their own educational services. Of course, if one carries this to the most ridiculous extreme, it would mean that in every case the poorer members of the community must be expected to finance their own services in all regards.

That is not true.

But this is exactly the argument that is used, namely why should it be expected of the Africans to finance their own education when it is not expected, for instance, that the poorer members of the white section should not receive all the benefits that the richer members of the white community get, namely free and compulsory education. One can carry this argument to an absolute ludicrous extent such as to say that certain constituencies contribute more to the Consolidated Revenue Fund than other constituencies. I dare say my own is a high contributor towards the Consolidated Revenue Fund, but who on earth could use the argument that therefore certain members of the community should be entitled to greater benefits? This is nonsense. No modern state recognizes the principle that the poorer section of the community should be expected to finance its own essential services. It is largely because this Bill carries still further that principle which has been adopted in this House in many regards, that I am entirely against this Bill.

I will of course vote against it in principle at the Second Reading. I do not believe, in any case, that one should consider the Africans who are integrated economically in our country and two-thirds of whom earn their livelihood in the white areas of South Africa, as a separate entity for the purposes of taxation. The hon. the Deputy Minister himself says that in most communities taxation is levied according to a person’s ability to pay. Of course that is the one and only principle that should concern this House when it is considering taxation measures. It should be an equitable form of taxation based on the principle that nobody should pay who is unable to pay. To my mind this Bill goes completely against that principle and it goes against that principle in one particular respect, namely that it starts the taxable income as far as Africans are concerned at a much lower level than the taxable income starts for white, Coloured and Indian taxpayers. I am leaving aside the question of the poll tax which Africans pay and which white people do not pay. It is true that Africans do not, and white people do pay provincial tax, but again on an income level. But instead every male African, as the hon. the Deputy Minister has pointed out, from the age of 16 to 65, irrespective of income, pays a poll tax which has this year been reduced by R1. This is considered by the hon. member for Wonderboom first of all to be an example of the Government’s magnanimous gestures towards the African people.

I want to point out to the hon. member that that R1 saving is completely swallowed up many times over by the sales tax which was imposed on everybody and to which Africans, of course, are also liable. During the Budget debate I showed that on one item alone, namely an essential commodity such as cleaning and washing materials, 2½ times the amount of the saving of the poll tax is going to be paid by Africans. This is the additional cost as a result of the sales tax. This estimate was not worked out by any liberalistic organization, but it was one which was worked out by the University of South Africa, which undertook a large number of cost-of-living surveys a few years ago for the different racial groups. I think these figures were based on surveys made in 1965 and 1966. On one budget item alone, 2½ times the R1 saving in poll tax is going to have to be paid by Africans, with the result that the African is not going to be better off as a result of this saving.

I will come to some of the specific provisions of this Bill in a moment, but I think this is quite a good opportunity for exploding some of the fallacies which are rife in South Africa about Africans generally and their taxes in particular. One of them of course is that the African pays less tax than the white person. One hears this over and over again and it is always a justification for the obvious discrepancies in services supplied to African people. No less a person than the editor of Dagbreek two or three weeks ago stated that the African pays less tax. That is, of course, because he earns a much lower income. It is not because he is allowed to pay a lower tax, but because he earns a lower income. Africans earn a lower income because of the many restrictions which are placed on them by various laws which prevent them from earning more money, and earning a taxable income. There are restrictions on their mobility so that they cannot sell their labour on the market that pays the highest price.

There are also restrictions as far as the jobs they are allowed to take up and also the skills they are allowed to acquire. All these restrictions are hindrances placed on the African’s ability to earn a taxable income. I will have absolutely no objection whatever to the African paying precisely the same amount in tax that any other taxpayer has to pay, but of course at the same taxable income level and not at a taxable income level which is lower than the level applicable to any other group in this country. There is another matter that has been pointed out by the hon. member for Transkei, namely that the African contributes a great deal towards indirect taxes in this country by way of the articles he buys on which a tax is levied. I am not only talking about the sales tax, but in the past as well Africans also had to pay for articles which carried an excise duty. The amount paid in indirect taxes has been estimated by the African Institute at about R28 million per annum. The poll tax also yields about R11 million per annum. The amount paid by Africans in ordinary income tax, according to the last available figures, was something like R1.3 million. All in all it is therefore not true to say that the African does not pay any tax at all. He does, and he pays a considerable amount of tax according to his very low earning capacity.

If one looks at the table given on page 291 of the Minutes of Proceedings namely the table applicable to ordinary taxable income as far as Whites, Coloureds and Indians are concerned, one sees that where the taxable income does not exceed R1,000 the tax is 5 per cent of each R1 of taxable income. Since every married white, Coloured and Indian person is allowed an immediate rebate of R50 it means that no person in that group actually pays tax. Five per cent on a R1,000 is R50 and it therefore means that no tax is paid on R1,000. If one looks at the tax tables on page 10 of this Bill one sees that where the taxable income exceeds R360 but does not exceed R480, the tax begins at R1.20 and it goes up quite steeply …

That is ten cents per month.

I am talking about the annual rate now. Where the taxable income exceeds R600 but does not exceed R720, the tax is R4.32. None of these figures sound very high until one remembers …

It is low.

I do not agree with the hon. the Deputy Minister; it is only low when one has a high income, and it is high when one is already living below the poverty datum line where every single penny of income counts and where every single penny of expenditure is an extra hardship. This is what hon. members do not realize. The poverty datum line was estimated a few years ago at R56 per month for a family of five living in an urban township. On a previous occasion I pointed out that the average earnings in the manufacturing and construction occupations for unskilled workers who are of course all Africans, are an average of only R46.11 per month.

The poverty datum line is R56. The average wage in the manufacturing and the construction industries is roundabout R46.11 per month. A survey which was done not so long ago in Soweto revealed that 33 per cent of families earned less than R56 per month, that 30 per cent of families earned less than R50 per month; that 30 per cent earned between R50 and R75 per month and 20 per cent between R75 and R100 per month, only 20 per cent over R100 per month. I might say that if one takes R56, which is the poverty datum line, and multiplies it by 12, one gets R672 per annum. One then sees that a large number of the people who are now going to pay up to R4.32 per annum in tax under the new schedule, are people below the poverty datum line, and that is why this tax, although it appears to be low in absolute figures, is very high comparatively.

Hon. members may remember that some 15 or maybe 17 years ago there was a bus strike in Johannesburg, where Africans for ten solid weeks walked into town every day from Alexandra Township, a distance of about nine miles, and back again because an additional fare of one penny per journey was about to be levied by the bus companies. They considered that one penny to be an enormous imposition on them. Every additional African who is brought in under this new tax schedule is going to feel exactly the same way about this sort of thing. Sir, I want to agree with what the hon. member for South Coast said earlier on. He said that taxation was always one of the burning issues with the African people. I want to remind the hon. the Minister that the dock workers’ strike, which was recently concluded in Durban, had as its basis the fact that the pay envelopes handed to Africans contained less than they had expected because of the reductions for tax about which they had not been informed. Their wages had gone up but the tax was deducted and the net amount which the African received in his pay packet was less than he had expected. The result was that there was an instantaneous strike.

Agitators.

No, it was not due to agitators. Hon. members opposite must stop bluffing themselves about this; it was a spontaneous reaction to the fact that these people found that their pay packets were smaller. I want to ask the hon. the Minister whether he has taken the psychological aspect of this Bill into consideration. It is all very well to sit here in the hallowed, insulated atmosphere of Parliament, as we do, and pass laws without thinking the matter right through to their implementation. I want to ask the hon. the Minister whether he has thought of what is to happen right throughout the country next year (because this only comes into operation in 1970) when Africans are going to be presented with pay envelopes containing less than they had expected. How is he going to make this information available and try to explain the position so as to lessen the blow? He should start giving his attention to this very important matter now. He must not think that it is just a matter of passing a law and then expecting everybody to accept it. They are not going to because as it is they have great financial difficulty in attempting to meet the rising cost of living with wages which in any event are far too low to maintain the average family at any decent level of subsistence. I want to ask the hon. the Minister too to give special attention to the exemptions which he is allowed to grant under clause 13 of this Bill.

Under the regulations.

I think clause 45 empowers him to make regulations but they have to be in conformity with the provisions of clause 13, as I read the Bill. There are certain cases where apparently immediate relief may be given—not necessarily shall, but may be given. That is firstly if a person is indigent. I should certainly hope so because how on earth can an indigent person be expected to pay any tax? Relief may also be given to a person who is prevented by reason of age, chronic disease or other cause not within his control from paying the tax. That gives the hon. the Minister very wide scope and I am going to ask him here and now to interpret that as widely as possible. I want to bring to his attention two specific types of people I have in mind. The first is the position of widows with children. Under this Bill all Africans, males and females, are going to be liable to pay this general income tax. The hon. the Minister has told us that husbands and wives are not going to be jointly assessed; that the wives’ income will not count in this respect, but I want to put it to the hon. the Minister that he should give a special concession to widows who do not have their husband’s income to help meet household expenses and who have dependent children to rear, because under this Bill no allowance at all is made for dependants. Every white taxpayer immediately gets a dependants’ allowance, if there are children or other dependants. Nothing like that is allowed for in this Bill, and I ask the hon. the Minister to give special thought now under the regulations which he is going to frame, in terms of clause 45, to widows with dependent children.

Then there is also the question of unmarried women with children. Sir, the townships to-day are full of unmarried women with children. This is a very important issue. It is a natural result of the migratory system. It is no good closing our eyes to it. The fact that there are thousands of men in the towns without their wives has led to a great increase in the illegitimacy rate in the townships. It is part of the system; nobody condones it; nobody wishes to encourage this but we must take cognizance of its existence, and it exists to a very great degree, as any sociologist who has worked in the African townships will tell the hon. the Minister. The number of unmarried mothers with illegitimate children in the townships to-day has reached frightening proportions, and I ask the hon. the Minister to give special consideration to children’s allowances for these women, irrespective of whether they are married or not.

Then there is the question of implementation of this measure. I have mentioned before that it is much easier to pass a law than it is to implement it. How the hon. the Minister proposes to implement this measure is beyond me. He is going to need another army of policemen because under clause 14 anybody who cannot produce his tax certificate to show that he has paid his tax is liable to immediate arrest. I think my reading of this provision is correct. It provides not that the certificate may be required, but that it is required. Any policeman can stop any African at any time of the day or night and demand his tax receipt. I know that he can also do it under the present law; he can look into the reference book—I will not call it a pass book, because I was told by the Chief of Police the other day that there is no such thing as a pass. The registration book has to contain a tax stamp; otherwise the African can be arrested immediately for non-payment of his tax. But, Sir, this makes it even more complicated because here it is not the Department that has to put the stamp in the book; it is the employer who has to give the employee his tax receipt. The duty is laid on the employer to give the employee the tax certificate. You tell me, Sir, how any employee whose employer has neglected his duty in this regard is going to force the employer to do this? It is going to be very difficult. I know that in numerous cases people have been arrested because employers have not signed them off when they have dismissed them; they have had a row with the servant; they have kicked him out on the turn and they have refused to comply with the law. Just because they know that it is doubly difficult for a man to be re-employed unless he is properly signed Off, they do not bother to do it. Sir,. there are Careless employers. I i know that under this Bill the law will come down on the employer as well, but I am taking the actual case of the African male in the street who is stopped by a policeman and made to produce his tax certificate. Sir, what on earth is going to happen? We are going to get more arrests under this system; we are going to get more crowding of the prisons. I foresee the most tremendous difficulties in administering this law. I might point out to the hon. the Minister that according to the last report of the Department of Police for 1966-’67 there were over a quarter of a million arrests for non-payment of tax. What is the point of going on like this and trying to implement an absolutely impossible law under tremendous administrative difficulties? Apart from the police side of it, I think the hon. member for South Coast also mentioned the shortage of staff and the tremendous amount of book work involved in this system and, of course, the fact that the migratory labour policy is going to make it even more difficult to keep track of employees who are moving backwards and forwards between the reserves and the industrial areas. All in all, Sir, I think this is a thoroughly bad Bill. It is a Bill which introduces still further differentiation between African taxpayers and the taxpayers of other races.

This is a Bantu Taxation Bill.

That is my point; we do not want a Bantu Taxation Bill.

It is not an African Taxation Bill.

I disagree with the hon. member. I am entitled to use my own terminology. [Interjections.] I admit that the original Act did too, but this principle is now carried all the way through. There is quite a difference in the administration of this system now. The administration is made more difficult by this Bill. I think we ought to have a Bill applicable to everybody, an income tax Bill which recognizes all the principles accepted by all modern states. That is that one pays tax according to one’s ability to pay and not according to the colour of one’s skin, and that one gets allowances according to a system of equity which the State considers should be applicable to its citizens, irrespective of their colour. I think the administration would then be easier because the tax would start at the level of income enjoyed by the skilled and semi-skilled workers in this country. There would then not be this difficulty of tracking down the employee, of rendering returns or anything of that nature, because such people tend to be permanent workers. They tend to have acquired skills, and in order to acquire skills you have to be in a job on a stabilized basis. I say therefore that the rate of tax as applied to our White, Coloured and Indian citizens, is the rate of tax that we should apply to our African citizens. For all these reasons I shall, of course, oppose the Second Reading of this Bill.

The hon. member for Houghton is against this Bill in principle. We accept that, because that fits in with her ideology. Our views and hers differ like day from night. However, we are at least able to say in her favour that she is always consequential and honest in her views. Basically she is opposed to this Bill as it differentiates between the various population groups as far as levying taxes is concerned. Of course, she wants every one—White, Brown, and Black —to be treated alike; she wants a single Taxation Act. She does not want to recognize the system of ethnic grouping. She is advocating the western liberal view as regards the existence of this country, but that is the very point on which we differ basically. We see the development of South Africa in a different light; we recognize the various ethnic groups because each has its particular needs, and that is why we have this Bill before us to-day. It is very clear to us that the standard of living and the needs of the Bantu differ completely from those of the Whites, and for that reason the tax levied on the Bantu differs from that levied on the Whites. Sir, I have said the hon. member represents the liberal Western view. Our view is definitely that of Africa. We hold a view which can be made applicable to Africa and which can work here, not one imported from overseas which cannot work here. That is the reason for the introduction of this Bill. Sir, what did the Official Opposition do in this case? The Opposition, through the mouth of the hon. member for Transkei, asked for a Select Committee to investigate this matter further. They do not want to say either “yes” or “no”. They want this matter to be investigated further and in addition they asked why there was no White Paper. But why should there be a White Paper? What does this Bill contain which the previous legislation did not contain? The only other thing that has been included here is the system of P.A.Y.E., a different way of administration, but nothing else. What is there to be investigated? But politically they are very clever. They do not want to take up a standpoint. They do not want to say the Bantu should pay tax.

They want to be neither fish nor flesh.

Yes, they do not want to be one or the other so that they may engage in double talk at the next election. That is what they want to do. This legislation does not contain any new principle. They want to bring the Franzsen Commission into this matter and they say the Franzsen Commission should bring out a report first. What did the Franzsen Commission do? The Commission did not say anything as regards the principle of legislation; it investigated new methods of taxation. I cannot say whether the Franzsen Commission will make any contribution. But if this Bill is passed and accepted in this form and if it appears in practice that changes have to be introduced, changes will in fact be introduced. [Interjections.] This Bill merely introduces a brand new scale of taxation which makes it different to the white scale of taxation as it used to be. You will notice from the speech of the hon. the Deputy Minister that there were more than 2,000 Bantu who were entrepreneurs under the previous system of income tax, and therefore it is essential for tax to be levied, except as regards the basic amount, on income as well, because the Bantu is developing, and as he develops and his economy becomes more sophisticated, this legislation will be adjusted to that.

The hon. member for Transkei went further and complained about the indirect taxation which would be levied on the Bantu. But it is very clear that the indirect taxation is a tax which is going to be levied inside the Republic of South Africa on products produced inside the Republic, and the Bantu who are here in the Republic will have to pay that tax. But if it happens that the Transkei develops and produces products within its own territory, those products will not, after all, be taxable here. I do not believe this is an argument which should be advanced with regard to this legislation, because that is an entirely new principle of taxation, which will also be applicable to the Whites. But to me this legislation very clearly is a further step in the direction of the emancipation and the development of the Bantu. A nation’s system of taxation usually is representative of the stage to which it has developed. The reason for the introduction of the P.A.Y.E. system here, is that it is very clear that the vast majority of Bantu still are employees at the moment because of the industrialization of the country, and this system has to be introduced now in order to throw the net much wider. I want to tell the hon. the Minister that I think that after this legislation has been put into operation and the net has been thrown wider and all employers have introduced the P.A.Y.E. system, we may perhaps find that the estimate of R11 million, which is the amount anticipated to be collected, will be exceeded substantially, because I believe many Bantu have escaped paying tax before. This Bill makes all the other legislation much more streamlined and easier to implement. Surely there is no point in passing an Act which is so difficult to administer that it is incapable of implementation. As we know, the Bantu is a difficult customer at this stage as far as taxation is concerned, but in time and with patience and application he will be educated. He must be educated in this direction so as to make him realize that he has to pay tax and that the white man alone cannot for ever remain the one liable to tax. He will have to learn to help himself in future. It is the duty of the Whites to impress this on them and to explain to them that if they ever want to exist as a nation and want to have any right of existence as a nation and if they want independence eventually, then they have to learn to pay taxes so as to contribute to the welfare of their peoples.

This side of the House has never opposed the taxation of the Bantu people because we think it is fundamental that people should be taxed on their ability to pay. The rate of taxation should be commensurate with their ability to pay and that is why we are asking for a Select Committee to get more information than was given to us by the Minister in his speech. The previous speaker took exception to the fact that we asked for a White Paper. Surely it is an ordinary courtesy in this House that with a Bill of this nature there should be a White Paper, an explanatory memorandum. We appreciate the Minister’s courtesy in letting us have a copy of his speech at the same time that he spoke this afternoon. That is a courtesy which could very well be followed by other Ministers in important matters. During the course of his speech the Minister referred to the fact that he had been in touch with the Chamber of Industries and other organizations in connection with this tax, but what he did not tell us was whether they approved of this Bill, and whether they were satisfied with the mechanics of this Bill. He did not tell us that; he just said that he had been in touch with them. I doubt very much whether they approve of the method of collecting this tax. The Minister and other previous speakers referred to the report of the Franzsen Commission. I have that report before me and it says in paragraphs 141 and 142—

I am sure the Minister has read that report. The Franzsen Commission is all in favour of streamlining the position. In fact, it goes so far in its final recommendation as to say—

The Minister of Finance has not accepted that principle, but the Commission referred to the difficulties.

Now, we have a further difficulty with this Bill. We already know that the Minister of Finance only has two-thirds of the officials on his establishment. Roughly, half of the establishment are permanent staff, and about 20 per cent are temporary staff, and the other 20 per cent consists of unfilled posts. Under this Bill we are establishing an additional register. Already under the Income Tax Act we have established a register of employers and now we have to establish another register for the registration of employers under the Bantu tax. So there are two registers to be established, two offices to which communications must be addressed, resulting in a duplication of work and of services. We have gone a long way since the days of pen and ink and making records, and I am quite sure that the Minister, if he has to do this job, has a computer in his department in order to provide the records of some 3.5 million cases, 3.5 million taxpayers. All these cases will require programming, so you have a different programming system for the Bantu taxation as against that for white taxation. There is a different programming technique for Bantu taxation as compared with white taxation, and that in itself involves additional work. In a country which to-day is desperately short of computer programmers, we have to have further programmers taken on to do this special work in order to get the records lined up with the employers. Unless there is a link between the employer and the employee tied up with the register, the Minister will not get the control he envisages, because he is throwing the responsibility for the collection of this tax on to the employers, and the employers have to be on his register and in turn the employees will be tied to that register. His difficulties will continue to the extern to which the employer has temporary employees. Once there are temporary employees there will be further troubles. So, there is the difficulty of identifying the employers with the employees and the additional technical work that is required in order to get 3.5 million people on the tax register. So that there will be duplication of staff. The staff which has been doing this work in the Inland Revenue Department will not be available to the Department of Bantu Administration, and both departments will be competing for the same type of employees. And then this tax system does not cover all the taxation. It covers the taxation of the employees under the graded taxation, out the general tax will not be deducted.

You did not do your homework. What about the provisional taxpayers?

There is no provision made. The ordinary basic tax will still have to be collected from two sources. We have this statement from the Chamber of Industries—

Now the employer will not be concerned with the deduction of the one tax; he will only be concerned with the graded tax, and this will be a further burden on the employer. I am certain that the Chamber of Industries have not supported this Bill because of the difficulties they find as far as the mechanics are concerned, and this is one of the reasons why the Bill should go to a Select Committee.

Did they tell you so this morning?

If they told the Minister something different he should have brought that information to this House this afternoon. This is a matter of public interest. If the Minister has other information, he should give it to us this afternoon. We have not seen the Chamber of Industries this afternoon, but we had information from them last week. Is the Minister suggesting that the Chamber of Industries is entirely satisfied with this Bill as it is now? There are additional difficulties and it is for these reasons, that it should go to a Select Committee. The Bill as it now stands indicates that there is always the question of discrimination. I support the hon. member for South Coast that there should be a common basis of taxation above a certain level, because you will always find friction where there is a different rate of taxation for different groups, the more so when the rate of taxation of the one is increased and perhaps not of the other. The Bill as it now stands is incomplete. Only the departmental aspect has been considered whilst the interest of the general public has not been considered. For that reason the Bill should be sent to a Select Committee before its Second Reading.

The hon. member for Pietersburg replied rather effectively to the request made by the hon. member for Transkei for a White Paper in regard to this legislation. A similar request was addressed to me before, and subsequent to that I went through the Bill once again. But, really, Sir, I did not see my way clear to drafting a White Paper which would be more clear than this piece of legislation is. We are dealing here with legislation which was for the most part adopted as far back as 1925. It was in fact amended in 1958, but basically it is still the legislation of 1925, drafted in Dutch, and I am sure that not one of the hon. members opposite could understand it better than I could, and I could not understand it. The English text, on the other hand, was clear to all of us. In addition to that we had the Income Tax Act of 1962. This legislation was drafted on the basis of these two Acts, and to my mind it is as clear as any White Paper in the world could be. For that reason I did not see my way clear to drafting a White Paper.

I want to deal first with the hon. member for Transkei. He held forth on the various taxes the Bantu had to pay—income tax, and so forth. But I want to tell the hon. member that no change has been effected. For instance, the hut tax, which has existed over all these years, is still being levied, and the same applies to the tribal levy. All of this is still being recognized by this legislation. The only change that has in fact been effected, is that relief has been granted in respect of the scales of the lower income groups in particular. The hon. member also admitted that there had been differentiation over the years. No new principle is therefore being introduced here. The new principle which is in fact being introduced here, is that of a P.A.Y.E. system, and the relief which is being effected particularly in respect of the lower income groups. The hon. member objected to cases where the Bantu were remunerated in kind, and said that this should not be taken into account. But I thought the hon. member would welcome that. I am also saying this for the benefit of the hon. member for Houghton. It is true that there are Bantu who are given an acre of land, for instance, to plough; similarly, there are Bantu who have grazing rights. On the one hand the hon. member complains about there being differentiation, and, on the other hand, he does not want to admit that the privileges which the Bantu do enjoy, privileges which are not taxable, are to their own advantage. He wants us to bring them into calculation as well. In my Second Reading speech I said that we did not want to introduce a system which would eventually be more expensive to administer than the benefit we would derive from it. The hon. member for Transkei, who knows the Bantu and who knows that under this system they are often remunerated in kind, will appreciate that at this stage of the development of the Bantu it would be an impossible task to bring the remuneration received in kind into calculation as well.

Then the hon. member also asked a question about the Bantu in the Transkei. The hon. member for South Coast elaborated a great deal on that. He objected and wanted to know how we were going to identify all these people. He noticed all the problems, for instance, that the Transkei would possibly not want to levy this very same tax.

Not only the Transkei Bantu, all the Bantu.

Let us confine ourselves to the Transkei first. This does apply to the others as well. In my Second Reading speech I said that before this legislation we had already come to an agreement with the Transkei. But if we had adopted the premise the hon. member for South Coast wanted to adopt, and had assumed that they did not want to levy taxes, we should bear in mind, surely, that this is for their revenue fund; then we say: “Fine, if you do not want to, we shall not collect your taxes either. In that case you will simply have to manage without them; you will simply have to do without them.” But in that case it will also be to our advantage. If the Bantu come here, we shall tax them here. We are now discussing all the possibilities. You know, Sir, if the skies should fall on us, we would all be wearing blue caps. But I cannot spot all these difficulties which the hon. member has brought to the fore. We entered into this agreement, and I cannot see why we shall not enter into further agreements in future. Basutos from Lesotho and Bantu from Malawi, Botswana and other places come here, and they have different systems of taxation. Why should all of them be identified now? This legislation already provides that, in cases where such a person has paid taxes over there, such taxes may once again be taken into account when he has to pay tax here. No, Sir, I do not see all the difficulties which hon. members are seeing.

The hon. member for Transkei referred to all the problems which could crop up. Every one of those members spoke about the problems. They said that I had allegedly said at the very outset that I would have to introduce amendments once again. I admit that there are problems in this regard, but one has to start somewhere. If there should be problems today in regard to collecting this tax under a P.A.Y.E. system, should we then say: “Good gracious, no, it will simply be too difficult. Problems will crop up. We would rather do nothing.” What I did say, was that it was not being suggested that the system for which this Bill makes provision would afford the solution to all the problems experienced in regard to the collection of tax from the Bantu. I am just as aware as hon. members are that problems will in fact crop up; but we have to start somewhere, and we must start this year. Then we shall overcome these problems as we meet them.

The hon. member for Transkei also said that we should appoint a Select Committee to inquire into this whole problem; this Select Committee is to say whether or not there are reasons why the Bantu should be taxed separately. Sir, this is after all a principle which was adopted back in 1925 and which we have implemented all these years. We carried on with it for certain reasons. Those hon. members did not convince me that there should not be differentiation. In fact, my first conclusion from the speech made by the hon. member for Transkei was that he agrees that there should in fact be differentiation. He wants us to go back once again and to decide whether we want differentiation here in South Africa or whether we shall pursue the policy of the hon. member for Houghton, who wants one tax only, i.e. the tax as determined by the Minister of Finance, which applies to Whites, Coloureds and Indians. The United Party must now tell me whether they also share that view with the hon. member for Houghton. I do not think they do, because they have never intimated that they are not agreeable to differentiation being applied in respect of the Bantu, with all the other privileges they are granted, and to their being taxed, apart from income. It was an old principle of ours to collect, apart from a Bantu’s income, R3.50 from every male Bantu between the ages of 18 and 65 years. It was a principle that Bantu earning R360 per year and more, men and women, had to be taxed on a rising scale, a scale which we have actually reduced now in respect of the lower income groups. No, Sir, I really do not know what justification there is for the request that a Select Committee should now go into the matter and tell us whether we should follow the system of taxation proposed by the hon. member for Houghton, or whether we should continue with the system of differentiation, which has been in operation over all these years.

Then the hon. member wanted to know why the Franzsen Commission had not investigated this matter. I want to refer him to the message to the State President on page iv of the report of the Franzsen Commission—

Yes, but that is not to say that they agreed to it.

No, I did not suggest that they had agreed to it. The hon. member must not put words into my mouth. I say that the Franzsen Commission was in fact aware of that and that they were informed as to our intentions. If the hon. member wants to tell me that they did not agree to it, I want to tell him that they did not reject it either.

They did not mention it at all.

They did mention that we were working at a system for bringing about simplification, and that is what we are aiming at in this Bill.

Yes, but whether it is this Bill, is in fact the whole point.

I did not make interjections while the hon. member was speaking. The Committee Stage still lies ahead. If the hon. member wants to ask questions later on, I shall reply to them with pleasure. The hon. member must now afford me the opportunity of rounding off my arguments. Should there be matters which the hon. member raised and to which I did not reply, I should like to do so, for I have nothing to hide. I should like to come up with a good Bill.

Incidentally, the hon. member for Wonderboom came out with interesting comparisons, which already give the Opposition an indication of how the scales are going to work. I just want to add that one should read those comparisons of his in this light, i.e. that when it comes to the higher scales, there are additional taxes as well, such as provincial tax and income tax, which have to be added to these scales. In other words, the scales we are comparing are those which the Bantu have in the first instance been paying under the additional tax, as against those which they are now paying in additional tax. Then it is true that in the higher scales they are paying more than they did before. But then it should be borne in mind that previously they used to pay an additional income and provincial tax as well, which in respect of all the provinces, with slight variations, came to more or less 33 per cent of the income tax. And if one were to compare that with the tax paid on R1,740, it should not be forgotten that over and above that amount, a small amount in income tax was payable if that person did not have a number of children in respect of whom he received a rebate.

We are indebted to the hon. member for South Coast for the historical background he furnished in regard to the way these taxes originated. I do not think it was the hon. member who asked me whether I knew what the psychological effect of this would be. It may have been the hon. member, but I think hon. members also referred to that. What the psychological effect is going to be, is something which I have duly taken into account, especially if I obtain the co-operation of every organization. There is one thing which causes the Bantu to feel aggrieved, and this came very clearly to the fore this afternoon. I do not want to pretend to be an expert, but I think I can justly claim that I know the Bantu as well as the next man does. There is one thing a Bantu dislikes, and that is unjust or unfair treatment. That Bantu whom one may have caught for failure to pay his tax, would say to one: What about that other person who has not paid any tax for ten years? Then he is dissatisfied. The psychological effect this is going to have is that one Bantu will say that he has paid his tax and that the other person will not evade his either. In fact, in this respect the Bantu do not differ much from us. When we had a Select Committee on a P.A.Y.E. system for income tax, one of the things which gave the greatest measure of satisfaction was the fact that there would be fewer cases of tax evasion in future. That is actually what provision is being made for in this Bill. It also has a further effect. The hon. member for South Coast must help me. I know he can. The hon. member for Transkei must help me. I know he can. I shall help, too. Tell the Bantu that the basic tax of R3.50 which he used to pay, is being reduced to R2.50. Tell them that those people who went free and evaded the payment of tax, will no longer succeed in doing so. Those who did not pay their additional tax, will no longer succeed in doing so either, because their employers are now going to deduct it from their remuneration. Therefore I have duly taken into account the psychological aspect of this matter. I feel absolutely sure that, if these people are not going to be given the wrong impression, i.e. that their pay sheets are now being reduced because they have to pay a new tax, I cannot see how we shall promote dissatisfaction. It is as important for the Bantu as it is for the Whites to have a P.A.Y.E. system. Surely, we are not demanding more money from them. I am still charging the same amount, but I am doing so in monthly instalments, just as it is in the case of the Whites. We are now bringing it into line with that of the Whites. No matter what a person’s income may have been, he would in any case, once he has been discovered by the Receiver of Revenue, have been liable to paying in any outstanding amounts. And sometimes, as hon. members often say, this goes hand in hand with hardships and trying circumstances, because he has to raise that amount all at once. Now we have a P.A.Y.E. system and he virtually does not even notice it. However, this would not be the case if we were to tell people, as the hon. member for Houghton did, that there was a strike in Durban “because the pay checks were smaller, as the tax was deducted”. If we are going to adopt that sort of attitude, we are not going to do well. Many of these Bantu are at present being informed by teachers, ministers of religion and by Radio Bantu. These bodies and persons will inform them that this is not a new tax which has been thrust down their throats. They will be informed that this measure is also bringing them relief, and that the amounts previously paid by a number of Bantu who were subject to income and provincial tax, will now be paid into the Consolidated Revenue Fund, out of which this money will eventually be spent on Bantu Education.

You better make propaganda.

Yes, I shall make propaganda, because propaganda is being made against this Government. Propaganda is being made, as the hon. member once again did here this afternoon, by saying that these poor people, who are the poorest amongst us and are earning the least, are being taxed. The fact of the matter is that the tax paid by those people is being reduced. If that propaganda is being made, my Department and I shall also employ other methods of making propaganda in order that these people may be correctly informed.

I think I have already replied to the question of Bantu who are dissatisfied about taxpayers who are in arrears and the fact that there is a bigger possibility now of getting hold of such persons.

I spoke here about all the obstacles, all the difficulties, that were being seen in the way. We are supposed to have a staff shortage, and so forth. Hon. members may safely leave that matter to us. We have heard that before. I do not really know whether, as far as income tax is concerned, taxpayers remain undiscovered for the reason that we do not have sufficient staff. We shall make use of other organizations, as is being provided in the legislation. This will even be done on a commission basis. We shall also make it easier for the Bantu by creating more tax collection points. When the Bantu fail to pay tax, it is not always a case of their trying to evade tax. Sometimes it is very difficult for them. Those Bantu may quite possibly be working from Monday morning to Friday evening. The offices where they can pay their tax, are closed on Saturdays. We want to overcome those difficulties and we are going to create more tax collection points. We can do so, even on a commission basis, by getting, in consultation with the Minister of Finance, other organizations to collect this tax. The basis will always be that people will not pay too much or too little.

Now I come to the hon. member for Houghton. The hon. member for Pietersburg said that it is unlikely that we would ever agree, in spite of the fact that both the hon. member and I have been members of this House for as long as 16 years. Now the hon. member wants to know why the basis on which the Bantu have to pay for their education, is different from all the others. Surely, this is a half truth. Surely, this is not the whole picture. Surely, this is not the only money which is being paid into the Bantu Education Account. In fact, the hon. member knows that apart from these taxes other amounts are being paid into the Education Account.

R13 million.

Now the hon. member mentions the amount of R13 million again. What about higher education? The Bantu Education Account is being looked after. This Government will do its duty in that regard. However, it is in respect of the Bantu only—and this the hon. member does not want to say—that all taxes are paid into the Education Account. Is she unable to see something good in that as well? Now I should like to ask her this: What about all the other privileges the Bantu are enjoying? She is always very critical. She does not see any good in what we do. She always sees things which are wrong. She should at least tell me about the Bantu …

There are enough people thanking you all the time.

Sir, I do not seek gratitude, not even from the hon. member for Houghton. All she has to do is to give me a chance to reply to her arguments. I want to tell her that the Bantu have already thanked me, and that is more than she has done.

[Inaudible.]

The hon. member referred to Bantu who were earning R30 per month and from whom I was now going to collect 10 cents per month. Previously they paid more than R1.20 per year. How many of them pay hospital fees? How many of them pay for their operations? In this manner I can mention to her one benefit after the other. All of these are privileges which we are granting these people. These people are being treated well.

White people also do not pay for these things.

The hon. member does not impress me with that argument.

They are treated on the same basis as the Whites.

Mr. Speaker, I do not know whether it is your intention to afford the hon. member another opportunity of making a speech, or whether she will be afforded her next opportunity at the Committee Stage. You know, Sir, she and I will sing together rather well, but I do not think that it is possible for us to talk at the same time. That has never worked out well, because I have some difficulty in hearing and I do not hear everything she says. It seems to me as though she does not really want to hear what I am saying. She should allow one of us to speak at a time. I do not want to pause at the fact that the Bantu start paying on lower scales. It is a fact that as from his 18th year a Bantu person—if such person is a male, is not sickly and can work—pays R2.50 until he is 65 years of age. This is an exception, Sir. This position has been in existence since 1925. This afternoon the hon. member availed herself of this opportunity in order to raise this matter. She did not do so because a change had been effected; in fact, this afternoon she had the opportunity “to thank the Minister”, and she let that opportunity slip. She availed herself of that opportunity to state her views on something which has over the years been accepted as such. This afternoon she availed herself of this opportunity to ask, “What about the 250,000 Bantu who have been arrested for failing to pay their taxes?” In my Second Reading speech I mentioned the difficulties we had experienced in regard to the collection of these taxes. This is not as a result of the fact that there were so many taxpayers, but because there was a vast number of people who were evading tax. I told her that over the past three years we had increased the number of Bantu from whom we collected taxes, and that we had increased the amount from R7 million to approximately R11 million. My Department’s ideal is to make every taxpayer pay his tax. That is just. That is honest. That is honourable. It is a pity that we had to arrest a quarter of a million before they paid their taxes, but do you know what we have achieved, Sir? After all, I also work with my own Bantu. Nowadays, shortly after New Year’s day, this is the first thing they ask me: “Sir …,” but my Bantu still call me “master”. They say to me: “Master, please pay our taxes now. We do not want to have any trouble”. We have educated the Bantu, and we are training them in the realization that they are taxpayers, too, just as I and every other person are. It is not my intention to break down what has already been built up.

The hon. member for Pinetown also saw imaginary difficulties lurking ahead. He referred to a new register which employers would now have to keep in respect of their Bantu employees, etc. We experienced those difficulties when we introduced a P.A.Y.E. system for ourselves. The hon. member and I both served on the Select Committee which went into this matter at the time. I might have seen even more problems than he did. At that time the hon. member was very zealous. He believed at the time that everything could be surmounted. Sir, at present employers are finding it much easier to handle this P.A.Y.E. system than they did before. I do not know why there would be so much extra work for them in the form of new registers, etc. It may happen that they will only have to add new columns in their registers. By means of block systems, etc., we made the scales as easy as possible in order that the whole system may be as easy as possible for the employers. But the employers can still come to us. We do not sit in closed offices and we do not have blocked ears. If the employers approach us with acceptable proposals, and not with proposals which would only benefit themselves and their groups, we shall listen to them. By way of regulations which we can issue, we can put many things right. This can be done as soon as we have gained experience of this legislation. There will still be time to put such things right. However, since difficulties may crop up, we shall not sit still and do nothing.

The hon. member asked me a question. He asked me whether I was sure that the Chamber of Mines accepted this Bill, as it reads at present. I can tell him, as I said in my Second Reading speech, that when we appointed the departmental committee, we were in touch with all these bodies, such as the Chamber of Industries, the Chamber of Mines, Sakekamers and others. They told us that they would be agreeable to a simplified P.A.Y.E. system. Now the hon. member says they are pointing out that there are still two systems of taxation, i.e. the basic tax of R2.50 and then the P.A.Y.E. system. Sir, in my Second Reading speech I said that if we had to collect all these taxes by means of one scale, that scale would be so high that these people would be affected to a much greater extent, especially if our object were still to collect R11 million. The hon. member must tell me on some occasion or other whether he is in favour of there being one scale only. However, if he does so, he should propose an alternative system in terms of which it will be possible to guarantee me at least R11 million per year. That is the amount we want to collect from the Bantu. I want to follow up the hon. member’s question further, and I want to be perfectly frank with him. This Bill has laid upon the Table for a considerable time, but one of my officials told me on Friday that the Chamber of Industries wanted certain information. In this case I said what I also said when the Opposition wanted information, namely “Give them that information”. At 1 o’clock on Friday it was brought to my notice that the Chamber of Industries had raised certain objections. I considered these objections, and I am definitely of the opinion that they can be surmounted. But what I find striking, is that the hon. member has a memorandum which was handed over to him. The hon. member must tell me whether I am wrong. Such a memorandum was not handed over to me or to any other member on this side of the House. As far as I know, there is no such memorandum. If there is one, I should be pleased if the hon. member would let me know of it. I do not have that memorandum. I think that if there were such a serious objection, there was sufficient time for forwarding such a memorandum to me. If that had been done, I would have investigated the matter. Sir, I do not see my way clear to this legislation being delayed any further. To my mind there is nothing to justify its being referred to a Select Committee.

I want to extend my sincere thanks to hon. members on this side of the House, who have obviously made a thorough study of this legislation, for having facilitated my task by replying effectively to most of the proposals.

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

Upon which the House divided:

Ayes—101: Bodenstein, P.; Botha, H. J.; Botha, L. J.; Botha, M. C.; Botha, P. W.; Botha, S. P.; Brandt, J. W.; Carr, D. M.; Coetsee, H. J.; Coetzee, B.; Cruywagen, W. A.; De Jager, P. R.; Delport, W. H.; De Wet, C.; Diederichs, N.; Du Plessis, A. H.; Engelbrecht, J. J.; Erasmus, A. S. D.; Erasmus, J. J. P.; Frank, S.; Froneman, G. F. van L.; Greyling, J. C.; Grobler, M. S. F.; Grobler, W. S. J.; Havemann, W. W. B.; Henning, J. M.; Herman, F.; Heystek, J.; Janson, T. N. H.; Jurgens, J. C.; Keyter, H. C. A.; Koornhof, P. G. J.; Kotzé, S. F.; Kruger, J. T.; Langley, T.; Le Grange, L.; Le Roux, F. J.; Le Roux, J. P. C.; Lewis, H. M.; Loots, J. J.; Malan, J. J.; Malan, W. C.; Marais, J. A.; Marais, P. S.; Marais, W. T.; Maree, G. de K.; Martins, H. E.; Meyer, P. H.; Morrison, G. de V.; Mulder, C. P.; Muller, H.; Otto, J. C.; Pansegrouw, J. S.; Pelser, P. C.; Pienaar, B.; Potgieter, S. P.; Rall, J. J.; Raubenheimer, A. J.; Raubenheimer, A. L.; Reinecke, C. J.; Reyneke, J. P. A.; Rossouw, W. J. C.; Roux, P. C.; Sadie, N. C. van R.; Schlebusch, A. L.; Schlebusch, J. A.; Schoeman, H.; Schoeman. J. C. B.; Smit, H. H.; Smith, J. D.; Swiegers, J. G.; Torlage, P. H.; Treurnicht, N. F.; Uys, D. C. H.; Van Breda, A.; Van den Berg, M. J.; Van den Heever, D. J. G.; Van der Merwe, C. V.; Van der Merwe, H. D. K.; Van der Merwe, S. W.; Van der Merwe, W. L.; Van Rensburg, M. C. G. J.; Van Staden, J. W.; Van Vuuren, P. Z. J.; Van Zyl, J. J. B.; Venter, M. J. de la R.; Viljoen, M.; Visse, J. H.; Visser, A. J.; Volker, V. A.; Vorster, B. J.; Vorster, L. P. J.; Vosloo, A. H.; Vosloo, W. L.; Waring, F. W.; Wentzel, J. J.; Wentzel, J. J. G.

Tellers: G. P. C. Bezuidenhout, G. P. van den Berg, P. S. van der Merwe and H. J. van Wyk.

Noes—34: Basson, J. A. L.; Basson, J. D. du P.; Bronkhorst, H. J.; Connan, J. M.; Emdin, S.; Fisher, E. L.; Graaff, De V.; Hourquebie, R. G. L.; Jacobs, G. F.; Kingwill, W. G.; Lindsay, J. E.; Malan, E. G.; Mitchell, D. E.; Mitchell, M. L.; Moolman, J. H.; Moore, P. A.; Murray, L. G.; Oldfield, G. N.; Radford, A.; Raw, W. V.; Smith, W. J. B.; Streicher, D. M.; Sutton, W. M.; Suzman, H.; Taylor, C. D.; Thompson, J. O. N.; Timoney, H. M.; Wainwright, C. J. S.; Waterson, S. F.; Wiley, J. W. E.; Winchester, L. E. D.; Wood, L. F.

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

Question affirmed and amendment dropped.

Motion accordingly agreed to and Bill read a Second Time.

Mr. Chairman, clause 1 deals with the definitions. Therefore it is an important clause as it provides for those persons who will benefit by the proposed legislation. Clause 1 (iii) reads as follows:

It then goes on to explain that such an allowance excludes any allowance paid in respect of subsistence and transport expenses or entertainment expenses. I have raised this matter at the Second Reading. However, I am afraid I am still not clear as to what type of allowance the particular paragraph provides for. It mentions purely the question of an allowance regularly paid annually in respect of special services tendered to the statutory body. We would like to know what actual allowances are envisaged in terms of this clause to make such a provision, as these allowances will substantially affect the benefits that are payable in terms of a further clause. Have these allowances been taken into account for the calculation of the benefits payable? In respect of this clause the definition of “member” means any person serving on a statutory body in a full-time paid capacity, or a person serving as a Commissioner-General in terms of the Promotion of Bantu Self-Government Act, 1959. It then makes a further provision, namely a person who in the opinion of the Minister is rendering full-time paid service to the Government in a similar capacity. I want to refer to this additional provision whereby the hon. the Minister extends the position as far as the Commissioner-Generals are concerned also to include persons who in the opinion of the Minister are rendering fulltime paid service to the Government in a similar capacity. Perhaps the hon. the Minister will be good enough to inform the Committee as to the basis upon which such service is envisaged in terms of this provision.

There are also two other items on which we on this side of the House feel that further clarity is necessary. In paragraph (x) it is stated that “service” also means service by people who rendered similar service in relation to a statutory body immediately prior to the commencement of this Act and that it will also be taken into consideration. Here it appears that it will have a retrospective effect in regard to the persons who are already serving in a full-time capacity in such statutory bodies. I would therefore like to ask the hon. the Minister whether he can give an indication as to when he expects this Act to come into effect. I ask this because it is evident that provision is made that previous service prior to the commencement of this Act will be taken into account. It is therefore important to know when this Act will commence as this will also have a considerable effect on the pension scheme if such previous service is also going to be taken into account as pensionable service. In paragraph (xi) (b) the hon. the Minister also defines a statutory body for the purposes of this Act. During his Second Reading speech the hon. the Minister mentioned some of the bodies concerned, who are classified as statutory bodies. This is, however, a further extension which states that at such a body’s request it will be designated by the Minister in consultation with the Minister of Finance as a statutory body for the purposes of this Act. Here too, we would like some further information as to what types of bodies the hon. the Minister envisages would also be entitled to join this pension scheme which is provided for by the Bill now before us.

Mr. Chairman, in the first place, the hon. member asked a question in connection with allowances. The definition contained in this clause does not include an allowance in connection with the question of subsistence and travelling expenses or entertainment expenses, and so forth. In other words, this is not an allowance which has been introduced for those specific purposes. There are, however, cases where people do receive certain allowances. Where a member of a statutory board is instructed to carry out a particular task, to which he devotes more time, and where he has to give special attention to a particular matter, such a member is compensated by means of an allowance because in this respect he has to give more attention to a particular matter than other members of the board.

Is this an annual allowance?

Yes, it is an annual allowance.

“Final salary” is very clearly defined as the amount of the annual salary payable to a member on the date of his retirement or death together with the amount of any allowance regularly paid to him annually in respect of special services rendered by him. The allowance has to be paid regularly to him annually; that is the crux of the matter. In other words, it does not include a temporary allowance or an allowance which is paid suddenly and arbitrarily, it has to be a permanent annual allowance which is paid to the member in the form of a salary.

Arising out of clause 1 (iv) (b), the hon. member referred to the position of persons serving as Commissioners-General or who, in the opinion of the Minister, are rendering full-time paid service to the Government in a similar capacity. As I said from the outset, this Bill covers the cases of persons who are not covered by existing pension schemes. This Bill does not affect people who are members of existing pension schemes because under such existing pension schemes one is able to calculate their pension in advance, because there is a certain measure of order and regularity in the service of those members—they are appointed on a certain date and they retire on a certain date. This Bill affects people who cannot be covered by the normal pension schemes. A situation which we are unable to foresee at this stage might arise in future and if this happens we do not want to come back to Parliament to effect a further amendment; that is why it is laid down in this Bill that a member may also be a person who, in the opinion of the Minister, renders full-time paid service to the Government in a similar capacity. In other words, if a member of a board which is not included under this definition renders full-time paid service to the Government in a “similar capacity”, such member may be included under this definition without any further amendment having to be effected to this measure.

The hon. member also referred to the definition of “service”. The definition gives effect to the intention that the scheme will only apply to members who are in service on the date of commencement of this Act or to members who are appointed after the commencement of this Act. Continuous service immediately prior to the said date will count as service, but it is not the intention to count as service any periods of service prior to that date in respect of which a person would in any case have been excluded under the existing scheme which was introduced on 1st January, 1963. Persons who have retired under the existing scheme, would have received the benefits under that scheme. Since people may also receive annuities now and such annuities have to be discontinued when they become members again, because they cannot be allowed to draw a pension while earning a pension for the same purpose, it is necessary in those cases for their periods of service— although they are not continuous periods of service—to be consolidated when they subsequently retire. However, this is being done only for this purpose, and for no other. In other words, if a person has served as a member of a board for a certain period and then retires and receives an annuity because he has completed nine years’ service, and is again appointed to a statutory board after a period of two or three months or even a year, the annuity lapses for the duration of the period he is serving on the board again. He cannot receive the annuity and serve on the board at the same time. The annuity lapses in the meantime but when he retires again, his previous service plus his new service are added together for the purpose of calculating the annuity he has to receive after that. This is why this specific provision is being made.

The hon. member also asked which other bodies we proposed to include under “statutory bodies”. According to the definition contained in paragraph (xi) (b) it will include any body which has, at its request, been designated by the Minister, in consultation with the Minister of Finance, as a statutory body for the purposes of this Act. In this case the same principle applies as the one I referred to a moment ago. In other words, we are providing here for future contingencies which cannot be foreseen at the moment, namely that a body might be established which might apply to the Minister to be treated as a statutory board. It is impossible for us to foresee what developments might take place in future. However, I want to give the hon. member the explicit assurance that the Minister, in consultation with the Minister of Finance, will deal with the matter and that hon. members will always have the opportunity of calling the Minister concerned to account if they do not agree with the classification of the board. To my mind this provision is essential in order to prevent us from having to come back to Parliament unnecessarily to effect a further amendment to the Act in order to meet new circumstances which might arise.

Clause put and agreed to.

Clause 2:

Mr. Chairman, I refer to subclause (2) of clause 2, in which it is provided that a pension payable in terms of this Act shall be paid from the Consolidated Revenue Fund. The hon. the Minister knows that I welcome that. But I am rather anxious to know how the Vote will be provided for. For example, will there be a sinking fund under the Revenue Fund? If not, will it be paid out of the Consolidated Revenue Fund every year? If that is the case, which seems preferable, will a man who has served, on a statutory body of the Native Affairs Department for example, receive his pension under the Bantu Affairs Vote; will the man who has served on a statutory body of the Finance Department receive his pension under the Finance Vote or will the hon. the Minister, as Minister of Pensions, have all this provided for under his own Vote? I am curious to know how this will be budgeted for.

This clause, which provides for the establishment of the scheme, appears to make the provision that the benefits will be paid from the Consolidated Revenue Fund. Where the statutory body is a provincial statutory body, the money will then be recovered from provincial revenue in terms of paragraph (a) of subclause (3), and from the Territory Revenue Fund as far as South-West Africa is concerned. Paragraph (b) then provides that in the case of any person who was a member of a statutory body referred to in paragraph (b) of the definition clause, the pension payable shall be recoverable from such statutory body. The point that I would like to raise with the hon. the Minister is, what happens where a statutory body which has been classified as such by the hon. the Minister in terms of the definition of a statutory body is dissolved as a result of a change of administration? The Minister would then have to recover any pensions paid out of the Consolidated Revenue Fund from that statutory body. Is the Minister satisfied that this clause gives him sufficient power to recover such moneys from that statutory body which has been classified as such by the Minister as a special privilege? If he cannot recover the money, will the Consolidated Revenue Fund then continue to pay an annuity that might have been earned by a person, in spite of the fact that in terms of the clause before us the Minister is required to recover such moneys from the statutory body concerned which is then no longer in existence?

I should like first to reply to the first question put by the hon. member for Kensington. Subclause (2) provides that all pensions shall be paid from the Consolidated Revenue Fund. If the hon. member looks at the definition of “Consolidated Revenue Fund” he will see the following—

Parliament will therefore appropriate funds every year in a case which will be earmarked for this particular purpose. The pensions will therefore be paid from the Consolidated Revenue Fund. I hope this is clear to the hon. member.

The hon. member for Umbilo also asked how these funds would be recovered in case problems should arise. Subclause (3) empowers the Minister to lay down the conditions according to which and the manner in which pensions shall be paid, and also, inter alia, the manner in which payments will be recovered from the Provincial Revenue Fund or from bodies which find their own funds. The possibility even exists that it might be required of the latter bodies to make advances so that the money may be recovered from such advances in case any problems should arise, but I am convinced in my own heart and I am satisfied that we have adequate powers here to be able to ensure that the matter will be dealt with in a proper manner.

Clause put and agreed to.

House Resumed:

Bill reported without amendment.

I move—

Under section 10bis (1) Iscor has unlimited borrowing powers upon provision of its own securities. If, however, the Corporation raises loans without State guarantees, the Ministers of Economic Affairs and Finance may for this purpose furnish State guarantees to a total amount of R50,000,000 without prior parliamentary approval having to be obtained. So far Iscor has raised State-guaranteed loans to a total amount of R34,600,000. This therefore leaves a balance of only R15,400,000 which can be obtained with State guarantees without prior parliamentary approval. In passing it may be mentioned that, apart from bank overdrafts, Iscor has made little use of its borrowing powers without State guarantees so far. The reasons for this are obvious—loans under State guarantee can be obtained on more advantageous terms.

It is generally known that Iscor has undertaken considerable expansions during the past number of years, and is at present on the eve of further major expansion. It is the intention to increase its present production capacity of 3,521,000 ingot tons per annum to approximately 6,600,000 ingot tons per annum in 1975-’76, and approximately 8,700,000 ingot tons per annum in 1979-’80. In addition the creation of facilities for iron ore exports of between 10 million and 15 million tons per annum is being envisaged.

All these expansions, including the necessary additional housing and mine development, will require a capital investment of approximately R1,500 million from the present until 1980. The creation of facilities for ore exports alone, which I mentioned a moment ago, will require a capital investment of approximately R120 million over the year 1970 up to and including 1973. This amount is included in the total expenditure of R1,500 million.

In the past Iscor financed its expansions to a considerable extent out of profits. Although it would have liked to continue on this basis with its further expansions, it would inevitably have resulted in increased steel prices, and requests made by the Corporation in this connection up to now have as far as possible been opposed by me. The idea is that Iscor should rather make use of cheaper financing methods, in other words, borrowed capital. The result is that after a series of discussions with Iscor it has begun to follow this method recently, and intends to do so as far as possible in the future.

From the point of view of sound financing policy, however, Iscor would not like to see its borrowed capital at any stage amounting to appreciably more than 40 per cent of its net assets. In this connection it may be mentioned that Iscor’s net assets as at 30th June, 1968, amounted to R381,773,000 and were financed as follows:

Against this background it is now the intention to amend the Iscor Act as follows in order to finance Iscor’s expansion programme—

1. (a) to authorize the Board of Directors of Iscor to increase its authorized B share capital from time to time, with the approval of the State President, to a maximum of R250 million. Clause 1 of the measure before the House is in connection with this; and
2. (b) to remove the restriction of R50 million on the powers of guarantee of the Ministers of Economic Affairs and Finance, provided, however, that the Minister of Economic Affairs will in future have to table a report in Parliament in respect of each State guarantee furnished by him for an Iscor loan, From the point of view of parliamentary control this provision will make better provision than is the case at present, while at the same time ensuring that Iscor will not, as at present, be restricted during parliamentary recesses to raising State-guaranteed loans not exceeding R50 million. Clause 2 of the Bill makes provision for this.

The intention is then, if this Bill is approved by Parliament, that Iscor will finance its expansion programme by the following means—

1. (a) The taking up of B shares by the State at a rate of 10 million per annum (R20 million) over a period of seven years, as from 1969. This gives a total of R140 million.
2. (b) The raising of loans to an amount of approximately R400 million, from 1969 to 1976. These loans will be covered by State guarantees, and it is hoped that, as from 1976, only replacement loans will be necessary.
3. (c) The procurement of the remaining amount of R960 million out of profits and write-offs in respect of depreciation.

From the foregoing explanation hon. members will notice that the Bill makes provision for authorized B share capital of R250 million, while Iscor, according to present estimates, will only require R140 million of this amount from the present until 1976. However, this does not mean—and I want to make this point clear—that, after Iscor has issued B shares to a further amount of R140 million to the State, there will remain B shares to an additional amount of R110 million to be issued. The R51,360,728 which has been provided so far by way of the taking up of B shares, plus the amount of R32,400,000 which has been paid by way of premium on these shares and which the Government intends to have converted into B shares, must be taken into account here. This then gives a total of approximately R227,761,000 which will have been taken up by 1976, leaving a balance of R22,239,000 which it will be possible to obtain by way of B shares after 1980. There are other reasons as well why the amount is being put higher than the actual requirements, as estimated at present. In the first place it is not certain how much Iscor, even with State guarantees, will be able to borrow, and accordingly there has to be a measure of flexibility. In addition it is not advisable to come forward with amendments to the Act every now and then in order to increase Iscor’s authorized capital. Furthermore it should be borne in mind that the larger the authorized capital for which the State can subscribe, the more it reinforces Iscor’s position as a prospective borrower on the foreign money market. In the third place there is the share premium account of R32,400,000, which, as I have indicated, the Government wants to convert into B shares. I believe hon. members will agree with me that there is little justification for the State having to take up its shares with Iscor at a premium. This would decrease the State’s earnings by way of dividends, as prescribed in the Act, and accordingly it is the intention, as soon as the proposed amendment to the Act has been approved by Parliament and has been promulgated, to arrange for this accumulated share premium also to be converted into B shares.

We support this Bill because it is quite clear that Iscor with its present development, quite apart from the very great developments which we know are in prospect, at the moment is under-capitalized. The hon. the Deputy Minister has quoted figures which I doubt whether most hon. members have been able to follow in detail unless they have studied the balance sheet and the annual report very closely, but it boils down to this that we propose here to increase the authorized capital of Iscor some fivefold. It seems a large increase, but when you consider the figures mentioned by the Deputy Minister, such as the 10-year programme involving an expenditure of some R1,500 million, and you realize when looking at the balance sheet that at the moment Iscor has capital commitments in regard to expanding existing plants amounting to something like R94 million, then the figure asked for in this Bill to increase the authorized capital to R122 million as far as the B shares are concerned, is not so excessive. The existing B shareholders will have the option to take the shares up, and of course the only shareholder as far as the B shares are concerned is the State President, and he will remain the only shareholder. The share premium account, to which the hon. the Deputy Minister referred, stands at some R32 million, and at the last issue I think the R2 shares were issued at a premium of some R13. I do not know whether the intention is that future B share issues should also be issued at a premium. The value, according to the report, was based on the fixed assets of the Corporation and of course if that is so the Corporation will be able to raise a good deal more than the actual par value of the shares which we are now asked to authorize the issue of. This, of course, is a very large increase in the share capital and it is a very large programme the hon. the Minister referred to for the next 10 years. It highlights once again the lack of parliamentary control over Iscor. This is not the time to discuss that, Sir, but in view of the very large expansion and the very great importance of the industry I think it is pertinent to ask the Minister, or to ask hon. members generally, how many of them have the slightest idea of what Iscor looks like; how many of them have visited the Iscor plants or have any conception of the vastness and the importance of this undertaking. The Defence Department has been very good, while they are spending a great deal of money, in arranging for hon. members to visit various places where expansion is taking place. Sasol has done the same thing at times, and of course the Chamber of Mines organizes periodic visits for members to see the mining industry and the Railways do the same thing. I do think that more should be done to encourage members to know more about the activities of the various undertakings which are growing so enormous and which are financed by the State, like Sasol, Iscor, Phalaborwa, and so on. I would ask the hon. the Minister, who I see has now graced us with his presence for a few minutes, whether he cannot take into serious consideration the possibility of organizing more frequent tours for members to some of these undertakings. It would mean that Parliament as a whole would know more about what they are talking about when it comes to examining the reports laid on the Table and it will lead to a much better understanding of these undertakings. I do not know whether the Parliamentary Association could be drawn into organizing visits of this sort. Visits abroad are extremely important, but it is also important to know what is going on in one’s own country. I would like to take this opportunity of putting the idea to the hon. the Minister that something more organized should be done to acquaint hon. members with what is going on, so that they will have a better understanding of what is going on in these huge State undertakings.

Mr. Speaker, I want to assure the hon. member for Constantia that the Opposition’s support of this measure is appreciated. In connection with the future issue of B shares, I can inform the hon. member that they will not be issued at a premium. On the contrary, it is the intention to convert the premium which Iscor obtained from the issue of previous B shares into ordinary B shares at par. I think that answers his point.

Then I also want to assure the hon. member that we will keep his suggestion in mind about members of Parliament perhaps being invited to pay visits to Iscor and other of these State-owned corporations. I think it is a good suggestion. It was done, I think, some six years ago. Members of Parliament were invited to pay a visit to the Iscor works, and some availed themselves of this opportunity. In any case, I think it is a good suggestion and it will be conveyed to the hon. the Minister. Perhaps we could start off by inviting some of the leading spokesmen and people who are especially interested, on both sides of the House.

Motion put and agreed to.

Bill read a Second Time.

Mr. Speaker, I move—

Fortunately this is a very short measure, it is not controversial, and hon. members have already had an opportunity to read the explanatory memorandum in connection with it. I intend dealing with clauses 1, 3 and 4 first. The change proposed in clause 1 follows on the design and development of a vehicle which travels on an air cushion between the vehicle and the surface of the land or the sea. It is the air-cushion vehicle of which the already familiar hovercraft is an example. The International Civil Aviation Organization amended it definition of “aircraft” to exclude such an air-cushion vehicle, and our legislation will now follow the example of that organization. For the sake of interest I may just tell the House that in America I saw developments in this connection in the field of Railways. They are considering a train which would run on an air cushion and which they hope will be able to achieve a speed of 500 miles per hour.

As far as clause 3 is concerned, provisions already exist which authorize the Minister to regulate the lighting or marking of any obstruction exceeding a prescribed height and situated within a prescribed distance from an aerodrome. The proposed provision will make it possible to issue regulations for the regulation of the lighting or marking, for the purpose of ensuring the safe operation of aircraft, of any obstruction exceeding a prescribed height, irrespective of the distance between the obstruction and an aerodrome. The necessity for such authority is obvious. What comes to mind here is, for example, a power line stretching right across a valley with its suspension towers at the tops of both sides of the valley.

The provisions of clause 4 are necessary to bring about uniformity in the Afrikaans versions of the Principal Act and the Aviation Regulations, 1963. By using the word “lugvaartuig” throughout as the more comprehensive concept, that is to say, as the equivalent of the word “aircraft”, it becomes possible to use the word “vliegtuig” in the Afrikaans versions as the equivalent of the word “aeroplane”. Sometimes there are different regulations and requirements in respect of aircraft (which, for example, includes a helicopter) and aeroplanes.

As far as clause 2 is concerned, tenders were invited in 1968 for the right to sell liquor in bottles to outgoing international passengers in the transit area at Jan Smuts Airport, that is to say, the right to run a so-called duty-free bottle store. After tenders had been received and before they were considered, it was found that the Minister did not have the power to grant such a right, and the tenders were then cancelled. The proposed amendments will now enable the Minister to grant this right. The provisions as printed in the Bill are virtually self-explanatory. I may just say that when this measure has been passed by Parliament and has been promulgated, the opportunity will again be given to interested parties to tender for the right to conduct the business concerned in the transit area at the Jan Smuts Airport.

Clause 5, which envisages an amendment to the Liquor Act, 1928, is a consequential amendment to ensure that the provisions of section 5 (3) (b) of Act No. 30 of 1928 do not become applicable to the liquor trade which is to be conducted in the transit area. I think, Mr. Speaker, that hon. members will agree that this measure contains no controversial provisions.

Mr. Speaker, we support this legislation and we take pleasure in the fact that the long expected duty-free shop at Jan Smuts Airport can now become a reality. This is a matter which has often been discussed and which we have always supported. We are glad that we have now reached the stage where we can look forward to the coming into operation of that shop. It appears from the introductory speech by the hon. the Minister that it has been decided to place this shop in the hands of private initiative and not to control it departmentally.

That is why we are calling for tenders.

I just want to ask the hon. the Deputy Minister whether the first tender was advertised, or whether private notice was given to tenderers, or in what way it was made known.

Tenders were advertised publicly.

I am asking this question because there were the usual stories going round in connection with the names of firms which were supposed to have received this privilege. As long as these tenders are public and everyone gets the same opportunity to tender, there can be no objection, unless the Department itself wants to run such a shop. It would create the opportunity of making a profit and possibly reducing the losses suffered by the Catering Department. I also want to ask whether arrangements have been made for that new legislation in connection with sales duty to make provision for goods sold there to be exempted from sales duty. At such a shop not only liquor will be sold. There are other South African products which ought to be sold there, for example dried fruit and other typical South African products which are exported, and on which sales duty will have to be levied. I hope that these products will be exempted from that duty.

Another point which I should like to mention, while we are amending the Aviation Act, is the question of the present restaurants at the various airports and the restrictions placed on them by the liquor provisions. The present restaurants which are under private control in terms of section 6bis (1) (b) have very limited rights. We have previously, during the discussion of the Vote and on various occasions, suggested that the restaurants at the airports should be allowed to serve the travelling public with drinks on closed days. It is very easy to determine who is a passenger. Each passenger must have an air ticket. I see no reason why such a restaurant, which is open in any case, and which must be there in any case for serving other refreshments, cannot also sell liquor to such travellers and the persons who are with them on a closed day such as a public holiday or a Sunday. As soon as one boards the aeroplane one can buy a drink. But it is unfortunately the position that aeroplanes are often delayed. Travellers sometimes have to wait as long as five hours. It has often happened to me that I had to wait up to five hours at an airport on a Sunday. When this happens one has to wait until mealtime to get even a cooldrink. I hope that the Minister will say that, because we are modernizing and are now in the Twentieth Century and have duty-free shops at the airports, we shall also be able to enjoy such a Twentieth Century commodity at the airports.

Albert will object.

I shall be sorry if objection is raised against it, but I think that the vast majority of our people, and especially those who use the Airways, will agree with me.

The last point I want to mention is in connection with the serving of such drinks. I am mentioning this specifically, because it relates to the clause we are now discussing. I think the time has come that the people who undertake such services at the airports should be allowed the same right as any restaurant or hotel in a city to decide whom they want to employ. There is no doubt that there are many complaints about the service at these restaurants. These complaints come from all who use them. I have taken the trouble to talk to three such restaurant managers. I asked them why the service was deteriorating. Their simple reply was that it was impossible to find suitable white staff. I really think the time has come that, when we provide such a service, we should not restrict the person who is going to undertake that service, with all sorts of rules and conditions as to whom he may employ, etc. As I have said, the owner of each hotel and each restaurant in South Africa has the right to decide who is going to work for him. There is no person who does not go to a hotel or a restaurant because he does not like being served by a non-White. There is no person who objects to his luggage being carried by a non-White at the airport. It is part of the service which such a passenger receives. I think the time has now arrived also to consider this attitude in connection with the catering service at the airports, and to withdraw the restrictions. With these few words I want to support this Bill on behalf of the Opposition. I hope that it will lead to an improvement, not only in this one case, but in respect of all the cases I have mentioned.

Mr. Speaker, it is becoming clear to us that air travel is more and more becoming the channel for traffic between South Africa and the rest of the world. In saying that, you also realize that our international airports are more and more becoming the gateways through which the traffic from one country to another flows. I want to express my thanks to the Deputy Minister for this legislation, which makes it possible for typical South African products, such as the products of the vine, our cigarettes, etc., which can also serve as a means of publicity for South Africa, to be sold duty-free in the transit area at our international airports. But in this connection there is an interesting point which comes to the fore, namely the legislation in connection with our wine industry, which provides that the Co-operative Wine Growers Association, better known as the K.W.V., can only sell its products abroad, and not in South Africa. I do not want to quarrel with that specific legislation. However, I just want to point out that since we are in this legislation dealing with a transit area, when people have gone through the customs they virtually find themselves in an international area outside the South African controlled area. It occurred to me that it may be desirable to give attention to the possibility of products of the K.W.V., which are virtually the hallmark of what is best in the South African wine industry, also being made available duty free and under all circumstances to travellers in this transit area, so that they can then go overseas with a special symbol of what is good in South Africa. I think many people can testify to the quality of the products of the K.W.V.

Order! We cannot take the discussion of this matter too far.

I shall not yield to the temptation of taking this matter too far. I just want to point that it is rather anomalous that the K.W.V. may not sell its products on the domestic market. Here, however, we have to do with an area which is in fact an international one. I want to plead with the Deputy Minister for attention to be given to offering the products of the K.W.V. in this transit area.

Mr. Speaker, I should like to thank the Opposition for their support. I do not want to reply to the hon. member for Durban (Point) in detail, because he was only working a fast point. He spoke about the local and existing restaurants, which are not covered by this Act at all.

But they are controlled by this.

The service in and the staff of the present restaurants are not affected by this legislation. These are matters which are subject to separate legislation and regulations. I have, however, taken note of what he said.

Do they not function in terms of this clause?

No, this clause is only to grant us authority to open a shop in the transit area where we can sell products free of customs duty. It has nothing to do with the present shops and restaurants. In any case, I have taken note of what he said. The hon. member also put a question in connection with the sales duty and asked whether provision was being made for these products to be exempt from sales duty as well. This is a matter which we shall have to discuss with the Treasury and the Minister of Finance. I want to accept straight away that he made a point, because if one sells products free of customs duty in this case, it actually amounts to this, that one does not want to levy further duty on the man leaving for overseas.

I made some further inquiries in connection with the question raised by the hon. member for Stellenbosch. It appears to me as if there is a provision in the Act relating to the K.W.V. that it shall not sell its products under its name in South Africa for consumption in South Africa. If, however, the Act reads that it may sell its products within such an area for consumption outside South Africa, it may possibly be considered. But in the first instance, if the Act does not stipulate that, the K.W.V. itself will have to amend its Act. The K.W.V. Act also makes special provision in regard to Rhodesia.

I am sorry, but I told the hon. member that the point made by him was out of order.

Yes, but it is ar interesting point, so I just had to mention it, so that we may know that it has been noted. In conclusion I want to thank hon. members for the support which they are giving me in regard to this legislation.

Motion put and agreed to.

Bill read a Second Time.

Mr. Chairman, the hon. member for Durban (Point) raised here the question of the Weenen emergency camp. Now I want to say at once that the Weenen emergency camp is a temporary measure. At present consultations are being conducted between the Department and the local farmers’ association with regard to the establishment of a Bantu township somewhere in the district of Weenen. Until such time as this matter has been settled, they will be accommodated in that camp under much better circumstances than those under which they lived before.

They used to be squatters on the common and at present they are concentrated in an emergency camp, which will be of a purely temporary nature.

Your “temporary” is an eternity.

No, definitely not.

The hon. member for Bethal delivered a plea for something to be done about the presence of increasing numbers of Blacks in the rural areas; for this state of affairs to be combated. I want to say at once that one of the major and important steps which has been taken in this regard, is the abolition of the labour tenant system, which contributed greatly towards the presence of larger numbers of Blacks in the rural areas. I must say, however, that the co-operation given by the farmers’ associations and the agricultural unions does not as yet come up to our expectations. The present position is that the Transvaal abolished the labour tenant system in 25 districts on 31st December, 1968. This system has been abolished in the whole of the Free State; in Natal it has been abolished in three districts, and in the Cape Province in two districts. Let us warn at once that problems will arise during the period of transition to full employment. The Bantu are not in favour of changing over to full employment. To many of them this is an old tradition. The farmer himself has become used to this system and therefore I want to warn that problems will be experienced. At the same time, however, I want to give the assurance that the hon. the Minister and his Department will do everything in their power to make this matter come off smoothly. In cases where we have started this process and in cases where farmers’ associations have changed over, the Department has gone out of its way to do everything in its power to assist those farmers. I believe that the problems which have arisen in this regard can be overcome.

The hon. member for Waterberg pointed out that the Bantu on the farms have a seven-day working week, as against the five-day working week of the industries. Therefore the industries are much more attractive to the Bantu. To this I want to add that the industries pay much higher wages than most farmers do. We as farmers will simply have to realize that the days when the farmers and the mining authorities used to be biggest employers of Bantu in the Republic of South Africa, are over once and for all. South Africa’s development into an industrialized country has been rapid and dramatic. As a result of this, the Bantu will now be attracted by the industries. I therefore want to urge our farmers to plan their farming operations in such a way as to make do with the minimum amount of Bantu labour to maximum advantage. I want to say here and now that the farmer may always rest assured that he will have the co-operation of the Department as regards the process of bringing this matter into line, so as to allow of the Bantu adapting himself in this process of changing over. However, I do have this consolation to offer the farmers. The Bantu homelands cannot carry much more livestock than they do at present. Therefore the farmers who are planning to retain their best Bantu, will be in a position to extend privileges to those Bantu living on his farm in the form of grazing rights and land. In this way the farmer will be the only one who will still be able to offer the Bantu a place to which he can trek with his livestock. It will be in the interests of the farmer to offer in this way to the Bantu, who is very attached to his livestock and wants to retain them, a place to which he may go. This will happen if the farmer makes the necessary arrangements in this connection and provides the other facilities so as to attract the Bantu.

The hon. member for Umhlatuzana referred here to the large-scale squatting within the Durban complex. Now I want to say at once that large concentrations of Bantu squatters are most definitely to be found all over this belt surrounding the Durban complex. In recent years they have been moving from the hinterland, the homeland, to Durban because of employment opportunities in that complex. One reason for this, inter alia, is the tremendous industrial development of this complex. This development has been attracting these people because of the employment opportunities this offered them and at the same time Natal has been experiencing an unprecedented drought in recent years. This has caused an increase in the numbers of Bantu looking for new places of employment. The largest numbers of squatters concentrated at places where industrial development has taken place, places such as Amanzimtoti, Pinetown, New Germany, Hammarsdale and Cato Ridge. Everyone of these districts border on the Bantu homelands with the result that the largest numbers of squatters moved precisely to those points of employment and consequently squatted in their own homelands. This was a dramatic migration with which no one could cope, in other words, the influx was greater than the number of houses that could be provided. Here I want to give the assurance that the Department has taken steps, and has done so immediately, to deal with this problem. A township such as Ntuzuma, consisting of approximately 10,000 premises, has been planned by the Department. This township is planned to be situated on the farms Dalmeny and Richmond, which are adjacent to Kwa Mashu. When it is developed, it will offer housing to many of the squatters who concentrated at the borders. A further two or three thousand premises will be found on the Trust farm Phoenix, where it will be possible to make provision for some of these squatters. The township Mpumalanga has already been planned and will eventually be able to house 12,000 families. Expectations are to have 4,000 houses ready as soon as the end of the financial year. More than a thousand houses are already occupied at Hammarsdale and houses are being completed at a very rapid rate. All the squatters along the railway line at Hammarsdale have been removed. If sufficient funds are available each year, it is expected that the squatter problem at Hammarsdale will be solved in the foreseeable future. There are other places where the Bantu are to be housed, which are being developed in that complex. The farm Rietvallei is being acquired by the Trust in order to establish a township there. It will be used, more particularly, for the settlement of the Bantu in the Cato Ridge complex. We are expecting further development in Clermont this year. Therefore it is perfectly clear that these schemes are being undertaken by the hon. the Minister and his Department with a view to combating the belt of squatters around Durban. The farm Dassenhoek in the Pinetown district has also been planned. In addition, the Bantu Affairs Commission are at present giving attention to the possibility of acquiring land in the Kloof-New Germany-Pinetown complex and between the Isipingo and Umbogintwini Rivers. All these extensions are under consideration.

Therefore it is very clear that we are doing our utmost to cope with this dramatic influx, this population explosion which is being experienced. [Time expired.]

Mr. Chairman, in the very limited time at my disposal, I do not want to comment on what the hon. member for Klip River, who has just resumed his seat, has said, but I cannot help thinking that he is taking a trial run here this afternoon to try to gain something for himself. [Interjections.] The hon. the Deputy Minister must now keep quiet. He gave us a lecture a short while ago about interjections and my time is very limited. To-day happens to be the 26th of May and I was expecting someone to remind us that to-day is the 26th of May and that 21 years ago the Nationalist Party took over the government of this country. Imagine that after 21 years of Nationalist Government we find ourselves in a very much worse position than we were 21 years ago. I do not want to delay this House or use my time by reminding hon. members of the manifestos which they used 21 years ago and of the wonderful promises they made during the 1948 election. What has happened to all those manifestos and promises? Absolutely nothing has happened. In fact, the opposite has been taking place. We have heard so much about migratory labour during the last few years, and the moving of Bantu labour from one part of South Africa to another, but as far as we are concerned they are all still in South Africa, regardless of where they were moved from or where they may have gone to. We have heard so much about Bantu being moved from West of “the line” to East of “the line” and I only wish I had more time to discuss this problem further. What is worrying me is that I represent a part of South Africa which is at the receiving end of this labour force. While the Government is busy moving or repatriating Bantu from certain areas, no employment is being provided for these people. The Government brings the Bantu labour back regardless of whether they have employment in the Eastern Cape, on the borders of the Bantu reserves, and in the so-called Bantu homelands. At night in towns and villages of the Eastern Cape one will find crowds of Bantu roaming around, burglaring, not looking for motor cars and radios, but looking for food and money because they have no employment to earn money to buy food. The tragedy is that this problem is coming back on the householders who own valuable properties and are not only paying high municipal rates on their properties, but also high Divisional Council rates, which no other province is paying. It is only in the Cape Province that these Divisional Council rates are payable. House-owners now find that their “house-holders’ premiums” have been raised as well. This is done because of the activity of burglars in the area. Let me quote what one of the insurance companies has written to the householders who have to pay premiums on policies—

Business interrupted in accordance with Standing Order No. 23.

House Resumed:

Progress reported.