When we adjourned yesterday I had mentioned that the Rehoboth community were somewhat opposed to this Bill and that their attitude towards this Government, particularly in regard to its apartheid policy, was one of great scepticism and suspicion. They are also afraid that their land will one day be alienated. The confidence of these people has to be regained. Their cooperation is necessary, and there may be individuals who will be prepared to make use of the assistance which is being offered here. But the authority of the Baster Council over the Rehoboth burghers is very strong, and we must therefore try to gain the confidence and cooperation of the Baster Council. If individuals avail themselves of the assistance which is being offered here, against the wishes of the Baster Council, it could lead to embitterment amongst them. It might perhaps be a good thing not to be in too much of a hurry with this Bill and to hold further consultations and in this way obtain co-operation. On the other hand, of course, we would like to see the Bill placed on the Statute Book and this assistance made available as soon as possible. According to the Bill the Corporation is able to grant loans and mortgage the land as security without the consent of the Baster Council or without consulting them. This is one of the major objections of the Basters. Clause 10 makes provision for a board of directors of the Corporation, who will be appointed by the Government. The clause does not provide that they will consist only of Whites. I believe that we will be able to solve this difficulty and obtain the co-operation of the Basters if we make provision for the appointment to the board of directors of, say, one person who is a citizen of the Gebiet and who has been recommended by the Baster Council. The Baster Council must possibly have the right to recommend say three persons, of whom the Minister can then appoint one. The hon. the Minister stated in his Second Reading speech that he had no intention of appointing a burgher of the Gebiet to the Board of the Corporation because he only wanted to appoint able persons of great integrity. Among the Baster community there will be persons with integrity and who will also be competent, and who will, with a little experience, become good directors. He also mentioned that too much pressure would be exercised on such a person, a member of the Baster community. If a few of the Rehoboth burghers were competent and good enough to serve on the A. H. du Plessis Committee, then there must be citizens who can serve on the board of directors of the Corporation. In terms of clause 14 the Board of Directors can appoint committees on which one or more directors shall serve, and they can co-opt other persons, persons with exceptional knowledge of the requirements of the Gebiet. But these persons may be Basters. After all, they will probably not all be Whites, and if this is so, there is no reason why a member of the Baster community should not serve on the Board of the Corporation. If the Baster Council therefore is given the assurance that they will have representation on the Corporation, the necessary co-operation will be obtained, and then there will be peace and prosperity among them.

I also have a few objections in regard to clause 22, but this will be discussed by other hon. members.

I should like to welcome the attitude adopted by the Opposition, as expressed here by the hon. member for Gardens. I think it is in the interests of all concerned in this matter, and also in the interests of the Baster community of South-West Africa in particular, that as much unanimity as possible should be expressed, on the part of this House as well, in respect of the steps which are being taken here. In his speech the hon. member for Gardens mentioned the opposition to this measure which exists among the Basters in South-West Africa. I should like to concede that that is something we would all like to avoid, but I want to state with the same candidness that I doubt, from my experience over many years of the Baster community, whether it would in any way be possible to come forward with a measure such as this and receive the unanimous support of these people.

The first obvious fact one must take into account is that the measure which is being proposed here is an entirely voluntary measure; in other words, for a person to whom it is not acceptable, it is not compulsory to make use of it. If it should appear to be unacceptable to the Baster community of Rehoboth, one would expect them not to make use of it. But the factual position is that in the Rehoboth Gebiet there exists a great need for this measure, and there are many people of the Rehoboth community who insist on this measure. My experience, when I was in charge of this committee of inquiry which was mentioned here was that one witness after the other from the community pleaded both for some or other form of assistance and that credit facilities be made available to them. But the history of the matter over the years is that the South-West African Administration tried to gain the co-operation of the council —and I should like to give the hon. member for Gardens this assurance—in introducing an aid scheme for the Rehoboth Gebiet. Over the years it has been our experience that all aid schemes which we submitted have consistently failed as a result of impossible and unacceptable counter-proposals that were made. I do not want to say anything derogatory about these people, for this is not the place to do so, but that is the factual position. I can for example inform this House that when this Committee, to which reference has been made, was appointed, it was appointed, after repeated attempts, with the co-operation of the Baster Council, and the Baster Council agreed to nominate two members on that committee. The Executive Committee would, on its part, nominate one Baster member. This opportunity was granted to the Baster Council with a view to co-operation on that committee. While that Committee was engaged in its investigations, and before anything had happened to which the Baster Council could have taken exception and which they could have felt dissatisfied about, for there was no possibility of recommendations and the committee was still hearing evidence, the Baster Council decided to withdraw from that body. At that stage already there was dissatisfaction which I, and in my opinion no other person in South-West Africa who holds any position of authority, could explain. The investigation proceeded up to the stage where the Committee had met to make recommendations and then two of the council members—the Baster Council subsequently nominated three members instead of two—decided to withdraw. I think I must take the House into my confidence because this will give the Opposition a picture of the situation and not because I want to say derogatory things about these people. The reason why those two members of the four Basters on the committee withdrew, was that they had decided at that stage that no mention should be made of loans when talking about the rendering of assistance to individuals. They adopt the attitude that mention should only be made of donations to individuals. When the majority of the Committee did not want to make that concession and did not want to agree with them, they withdrew. I explained to those people that they were quite at liberty to bring out a minority report and I offered my assistance in the drafting of their minority report—to recommend donations and to motivate it as they thought it ought to be motivated. But despite this they withdrew and I think this gives the hon. members of the Opposition an idea of the difficult situation with which we have to cope there.

Mr. Speaker, I then became convinced that whether we were able to obtain the cooperation of the Baster Council or not, but proceeding from the assumption that an attempt should be made to obtain the co-operation of this Baster Council, this aid scheme should continue because it was in the interests of all concerned, and therefore in the interests of the Rehoboth Gebiet in particular. I believe we will gain the confidence of these people in future. Let the aid scheme first be established there, and I believe, and I am not saying this without grounds, that once this aid scheme is there, these council members will begin making use of it. I am saying this because a few years ago the Administration of South-West Africa, despite the opposition of the Council, made R200,000 available to the chief or the magistrate to grant loans in the Rehoboth Gebiet. Some of the persons who made use of those loans were council members, and they were eventually accepted by the entire community. In view of the need which exists there, I want to predict that within two to three years the opposition we are experiencing to-day will be something of the past.

I do not think the suggestion made by the hon. member for Gardens, i.e. that we should not be so hasty in regard to this matter, cannot be accepted because as I have indicated, this process of attempting to introduce an aid scheme for that community has been going on for years, and we were never able to achieve any success until we came forward with this measure. The hon. member for Gardens also suggested that there should be one person on the board of directors of the corporation. I would like to say, from my experience of those people which extends over 18 years, during which time I have been closely associated with them, that I do not think it desirable at this stage that a member of the Baster community should have representations on that board of directors. These people still need a lot of guidance, and they still need to gain a lot of experience before they will be in a position to occupy the responsible position of a council member. I would not be able to-day, with the knowledge I have of these people, to indicate one member of the Baster community whom I think enjoys the esteem of his people and individuals—not that I want to cast any doubts on his integrity —who will make himself reasonably acceptable to the entire Rehoboth Community and even to the Baster Council. I think the idea of the hon. Minister for Rehoboth Affairs, i.e. that they will gradually be drawn into this committee, that they will gain experience there and that they will ultimately gain the necessary esteem among their people, is a step in the right direction.

In this community we are dealing with deep-rooted practices, practices which I cannot fault The one is for example that they have very strong views in respect of the maintenance of an ethnic unit. They regard themselves as an ethnic unit in South-West Africa. Coupled with that there is a measure which in my opinion is a very sound measure and is one which was introduced years ago when they had leaders like Hermanus van Wyk. This measure states that Rehoboth land may not be alienated to any other person than a Rehoboth Baster. If it had not been for that measure, the Rehoboth Gebiet would not have existed any more to-day as Basterland. It would have been a thing of the past because individual Basters would, one after the other, have sold their land as the occasion presented itself. To-day the Gebiet is still there and it has remained intact in this way. There exists a suspicion that the Whites want to take that Gebiet away from them, whereas what they have there is in fact in line with the white policy of to-day, in any case the present policy of the Government. But a very strong suspicion that that Rehoboth identity and the Rehoboth territory is going to be taken away from them exists. This is an unfounded suspicion, for it was the white authorities who have for approximately three-quarters of a century been protecting the philosophy of those people. If it had not been for that white protection that Rehoboth Gebiet would no longer have existed. Nevertheless suspicion still exists there. There are other considerations in respect of this attitude which is being adopted as well, but I do not think they are at issue here. I therefore do not want to mention them here. That suspicion however, still exists among these people.

I should like to proceed and point out a few other aspects resulting from this measure. The position in regard to farming in this Gebiet is, as the hon. the Minister said in his Second Reading speech, that there is a large tract of fertile soil which, for all practical purposes, is lying fallow. This is not only to the disadvantage of the inhabitants of Rehoboth itself, it is not only the cause of the dire poverty which still exists there to-day, it is also to the disadvantage of the whole economy of South-West Africa. It is to the disadvantage of the economy of South-West Africa because Rehoboth to-day very definitely forms a very poor link in the whole economy of the region. The Gebiet has a gross production of, as the hon. Minister indicated, between R600,000 and R700,000 per year, while very conservatively calculated it should, as I have already indicated, at least produce R1.5 million per year. I want to go further and say that the Gebiet, in terms of the standards of white farming, can produce a gross income of nothing less than R3 million per year. With the necessary guidance and assistance to these people in future this can in fact be achieved. It is nothing unusual for the gross yield per hectare in South-West Africa to be R2 per hectare. According to this criterion the 1.5 million hectares of the Gebiet should produce R3 million per year. In other words, this assistance is needed. It is in the interests of the community in the first place and of South-West Africa in the second. That is why I feel so strongly that it should not be coupled to the idea that this should be done when it may one day be possible to obtain the co-operation of the Council.

In addition there are the business undertakings in the Rehoboth Gebiet. The position there is that there were white business undertakings which, upon the insistence which came from various quarters, were bought out by the Administration. Those white business undertakings, the premises and the stock, were made available to Baster burghers on tender. A considerable number of tenders were put in. They have now taken over those business undertakings. There are also quite a number of smaller business undertakings which are also in the hands of Basters. This is the general phenomenon and it was repeatedly brought to light in the evidence before The Committee in which I was concerned that these people are short of capital. They also have a need for guidance in the field of business. Owing to the system which obtains there they are unable to obtain capital. Unlike the white business man they cannot go to the banks because they do not have fixed property to offer as security, owing to those virtual servitudes on their land. In other words, they have capital problems. With this development which must result in the Rehoboth Gebiet from these steps which are being envisaged in respect of the farming industry and the larger amount of money which will come into circulation as a result, I think there are very good possibilities for those of the Rehoboth Basters who have it in them to make a wonderful success of their business undertakings in that Gebiet. The position to-day is that these people have a shortage of capital with the result that they have limited supplies. Consequently their own people, when they go to make purchases, ride past those shops. They either go to Windhoek or Kalkrand because they know that they will not get everything they need from their own dealers. They prefer to go to those places where they know they can get everything. Consequently those people need capital and guidance. I do not think there should be any delay in this respect.

I should like to focus the attention of the hon. the Minister on the fact that I expect that he will experience certain problems in this way. One of those problems which I want to mention to him relates to clause 4 (i) of this Bill. This provision concerns the security which has to be provided. I can inform the hon. Minister to-day that this will lead to agitation. The Basters will be persuaded to believe that this is how the Whites want to get hold of the land and property of the Basters. At the same time it is very clearly provided in clause 6 of the Bill that protection in this regard does exist, and that it will only be possible to alienate land to a Baster. But in spite of that I expect that clause 4 (i) will lead to an agitation. What I have just said will give the House an idea of the problem we have here. I hope it does not happen. But there is no other alternative. Money cannot be lent out without a proper form of security being given. The individual Basters who gave evidence before me and who needed assistance were only too eager to give their land as security under such conditions as are contained in this Bill in order to obtain that assistance. But I think it will be solved. It may perhaps lead to dissatisfaction but I nevertheless think it will be solved. In fact, I am certain that it will be solved.

Another matter I want to mention to the hon. Minister relates to the shares which can be purchased in Baster companies. I expect there will be a campaign in this respect as well. I would be pleased if the hon. the Minister would reply to me in this respect since it is not clear from the Bill what steps can be taken there to ensure that it will not be possible for the shareholders of these burgher companies to alienate their shares to Whites or to Coloureds for example. If safeguards have not been included in the Bill, I am of the opinion that they can be included in the regulations or in the conditions of aid. I feel that at this stage already the assurance should be given, so that the Baster community, who take this matter seriously will realize that thought has been given to this matter, i.e. that alienation which consequently can mean alienation of property cannot take place by means of the sale of shares to Whites and Coloureds for example.

A further matter I want to mention to the hon. Minister is the question of rates of interest. In the evidence I heard many questions were even then being asked in regard to what the rates of interest would be if they received assistance. I do not know whether the hon. the Minister is at this stage in a position to indicate specifically what the rates of interest would be. It may be necessary to consult the board of directors of the corporation first, when it is functioning. An assurance that these rates of interest are within reasonable limits and that they will keep abreast of the financial possibilities which will result from the assistance granted would in my opinion be assuring. I want to express the idea that in respect of businessmen in the Rehoboth Gebiet it will not be possible to apply any other rate of interest than that which is being applied in respect of the Coloured Persons’ Development Corporation. If that is not done it will lead to mutual recriminations and to greater hostility between the Coloureds and the Basters than that which unfortunately exists at the present moment in South-West Africa. In respect of the farming industry I feel that there will have to be a quite different rate of interest which will be adjusted to the conditions of farming there.

A further problem with which the hon. the Minister and his Department may have to contend in future is the system of inheritance. It is that system of inheritance which resulted in the unsatisfactory state of affairs which exists in the Rehoboth Gebiet to-day where there are approximately 350 actual farming units with more than 2,200 owners. That process is continuing. I discussed this matter individually with the Basters and they all realize that this system is leading to their downfall, but in reply they simply state that this is the patriarchal custom. This system will have to be counteracted in some way or other. In my opinion I do not think that at this stage counteracting it by means of legislation can be considered. I think that if it is linked to assistance, and together with the enhanced standard of living which will have to come with the development the community will undergo, the time may come when it may be possible to deal with this effectively.

Lastly I want to mention something else with which the hon. the Minister is possibly going to experience more problems, although I do not, however, want to suggest a solution to him to-day, i.e. those white farms which are at the moment state-owned land and which will be made available for the Rehoboth Gebiet. The committee has already made recommendations to the hon. the Minister in this regard and for this even the wisdom of Solomon may perhaps prove inadequate. If the Minister wants to avoid any dissatisfaction in regard to how that land is to be allocated, I want to inform him that I doubt whether that will be possible.

On behalf of the white community of South-West Africa for whom that Gebiet is a retarding factor, I should like to welcome this measure. I want to wish the hon. the Minister and his Department every success.

Mr. Speaker, we are dealing here with a Bill which one should consider from two sides. On the one hand we must form an opinion on the motives which moved the Government to introduce this measure. We shall also have to consider the attitude of the people who have an interest in this Bill and whose closest interests will be affected by it. Both the hon. the Minister and the hon. member for Windhoek gave us a survey of conditions in Rehoboth as they found them. We all know that Rehoboth is a reasonably good part of South-West Africa. It lies in the heart of South-West Africa and is situated near Windhoek. The main road runs through it and they have the benefit of the railway line. For historical reasons it is, however, an underdeveloped area and in general the impression it creates is one of neglect. It is obvious therefore that since these are the circumstances with which we have to contend, something will have to he done in this connection. The Government is now asking for the power to establish a development corporation for them into which it will pour a half million rand and by means of which it will place development assistance at the disposal of this Gebiet. In other words, as we see the matter, the motive of the Government is undoubtedly a good one. The motive is a positive one, and for this reason we cannot oppose the Bill. In any case it cannot be said, by whoever wants to use this argument, that it is an apartheid measure, for even before South Africa accepted the Mandate over South-West Africa the Basters in the Rehoboth Gebiet were a distinctive community. They built up their own area and within the greater South-West Africa they had a distinctive form of Government and citizenship and their own patriarchal laws. Since the Union Government took control in 1915 this has been recognized by one Administration after the other. To tell the truth, and this also became clear from the speech we have just listened to, it is in fact this deep sense of independence and this tremendous feeling for tradition and for what is peculiar to them which these people have developed over so many years that has now caused them to be strongly opposed to this Bill.

This brings us to the other side of the problem which we must face up to. This Bill was preceded by a Committee of which the hon. member for Windhoek was the chairman, when he was still leader of the Executive Committee of South-West Africa. The Committee consisted of nine members, of whom three were Easters. They were members of the Baster Council, the advisory council of the Gebiet. Unfortunately we do not know what the finding of the Committee was, and I am sorry the hon. the Minister did not see his way clear to giving Parliament the benefit of the findings of the Committee as well, and I must object to that. The Minister referred to the work of the Committee in the pamphlet which he has distributed among Members of Parliament.

We have been informed in regard to the Committee but not in regard to what the finding of the Committee was. I take it that members of the Baster Council had access to the findings of the Committee, for they were members of the Committee. However, I want to say to the hon. the Minister that this is a poor way to treat Parliament, for although we are now dealing with legislation of this nature we are not being allowed to examine the findings of the Committee. I think this mode of conduct is anything but satisfactory. We on the Opposition side, therefore, have no way in which we can test this Bill against the findings of the Committee. What we do find interesting however is that we had a Committee here under the chairmanship of the Leader of the National Party of South-West Africa on which members of the Baster Council had direct representation on an equal footing with the other members. A precedent has therefore been created here which the Government should not easily depart from. The attitude of the Administration of South-West Africa was that the entire matter of Rehoboth should be approached on the basis of direct co-operation and consultation with the Baster community of Rehoboth, regardless of how difficult this may have been in some circumstances. What happened on that Committee we do not know. All we do know in regard in to what happened further was that the hon. the Minister paid a visit to South-West Africa. He then availed himself of the opportunity of speaking to the leaders of the Baster Council.

After that the hon. the Minister visited Rehoboth himself. I notice that he took the trouble to fly over the Gebiet in a helicopter to take a look at it from all angles. Subsequently the Bill was published and the Secretary for Rehoboth Affairs, Mr. Bosman, went to Rehoboth to explain the Bill to the Baster community. Judging from reports which have reached us the Bill nevertheless met with quite a stormy reception in Rehoboth. Newspaper reports inform us that the Basters indicated that they had quite a number of objections. Judging from reports in Die Suidwester, as well as in Die Suidwes-Afrikaner, they alleged, inter alia, that they had not been consulted when the readjustment between South-West Africa and the Republic took place. If that is the case, it is a pity. They complained that they had to pay taxes and that they had no representation on the legislative bodies. They made it clear that they were opposed to development but that they wanted to have a say in whatever development took place there. In addition they alleged that the development corporation was obtaining powers which would enable it to exceed the local powers of the Baster Council and to deprive them of these. As a result of this harsh words were spoken. Vehement accusations were made against the Government. They held a protest meeting and organized marches. They went so far as to send telegrams to the American Ambassador and to the British Ambassador in which they asked them to intercede. They sent a telegram to the Prime Minister in which they demanded a referendum. They sent a cablegram to U.N. I understand the Baster Council has even authorized its members to bring a case before the World Court. Mention was also made of a day of prayer, and they burnt the message sent to them by the hon. the Minister a thousand times over.

I am only mentioning this to indicate that what we are dealing with here was no superficial protest. I found it interesting that the hon. member for Windhoek also mentioned a long series of difficulties which the hon. the Minister would still have to overcome after the passing of this Bill. I think the situation which arose was an extremely unfortunate one. It is a position which may still cause us a great deal of difficulty in the outside world. Unfortunately we did not have the advantage which other Parliaments would have had of calling for witnesses to determine precisely where the problems lie and what the full extent of these peoples difficulties are. However I find it difficult to accept that it was totally impossible for the Government to come to a satisfactory arrangement of some kind or another. After all even the most unreasonable person does not summarily reject assistance being offered him, that is, if he is convinced that the assistance is in his own interests.

I am afraid that this matter can eventually cast a disgraceful reflection, not only on the Government, but on South Africa as a whole. I should like to know from the hon. the Minister whether, in these specific circumstances, it might not perhaps be better if the Government established a general development corporation which would not be specifically intended for the Rehoboth but would be available to the Basters, the Nama and all the Coloured groups in South-West Africa, including the Coloured community. If this covered everyone, and was also available to the Baster community of Rehoboth it could perhaps have given the Rehoboth Basters time to get rid of their suspicions. They would then have been able to decide themselves whether they wanted to share in the benefits which such a general development corporation could hold out for them as well.

Our attitude in regard to the Bill was clearly stated by the hon. member for Gardens. I just want to repeat that we do not oppose the principle of the Bill. However, we do want to insist on two things. The first is that a further attempt should be made to eliminate the existing misunderstanding. As we understand clause 6 it clearly guarantees that no immovable property in the Gebiet can be alienated to any other person than to a citizen of the Baster community. Even a Burgher company may not alienate property outside the Gebiet. If it is now necessary to give the Baster community the further reassurance that the Corporation will not ride rough-shod over their established customs, the Government must ascertain whether it cannot include further guarantees in the Bill which would eliminate that fear they have.

In the second place, I think that, in the circumstances which have now arisen, it is of cardinal importance that the local Government of Rehoboth should be represented on the board of directors. After all the Government itself is allowing the emphasis to fall on self-determination. This has become the basis of its policy, particularly in respect of South-West Africa. It is continually being held up to the various population groups as the point of departure of the Government’s policy. In the case of these people they have for generations now had a certain degree of self-determination in regard to local matters. It may perhaps not be on the same level as that to which we as a white community are accustomed, but as far as they are concerned, in the world in which they are living, they have for generations now had a form of self-determination. I think that, in the circumstances, it would be a grave error if this was not acknowledged in respect of the Board of Directors of the Corporation. It will avail the hon. the Minister nothing to assure them that they will one day have the right to manage the entire Corporation themselves. To them that is too far in the future, and there is no indication of when that day will come. In the historical circumstances prevailing there I think they are entitled to enjoy representation on the Board of Directors.

I notice that clause 10 which deals with the Board of Directors, leaves it to the State President to determine how many persons shall serve on it and who those persons shall be. The hon. the Minister was quite right in pointing out that this Bill did not contain a provision which excluded the Baster community from serving on the board of directors. However, what we would like to see is a specific provision in the Bill making provision for these people to be included, which would for example give the Baster community the right to appoint three persons, of which the State President could then select one to serve on the board of directors. We will in the Committee Stage move an amendment to this effect.

Our motives for this, apart from those which I have already mentioned, are that in one of the protest meetings they called, the Council did in fact state that they were opposed to the scheme because the Government did not recognize the already achieved status of the Baster community. That is how they feel about the matter. We must accept that if they do not receive any representation on the board, even after such representation was recognized in principle, when the committee of inquiry was appointed they will feel even more strongly that they had received a slap in the face as far as the status which they have already achieved in that part of the world is concerned. I think that this is a cardinal objection of those people, and it is an objection which can be overcome. It would be a poor argument on the part of the Government if they were to say that this corporation will only work with Government money, for the way the Basters feel about this is that they are also taxpayers, and that the Government money is partially their money as well. There cannot be any objection on the grounds of colour to representation on the board of directors.

The chairman of the Baster council, the chief who enjoys representation with them in a managerial capacity, is a white person. Thus this principle is already in operation there. As I have said, a precedent has also been created in that full representation was also given on the Du Plessis Commission to members of the Baster Council. In fact, as I understand the pamphlet issued by the hon. the Minister it seems to me that the prospect of something like that taking place is being envisaged. On page 14 of the pamphlet the matter of consultation with the Council is considered. It states here “… the Government will therefore continue to consult with the Council in regard to the various development projects which have to be undertaken in the field of social welfare., health and education. This will in due course be announced”. As I interpret this, the Baster Council will be consulted in regard to all development projects, before such projects are announced. The only interpretation I attach to this is that they will have a representative on the highest level. On page 10 of this pamphlet we find another paragraph which states: “Baster Council will be consulted”. The Baster Council will of course be consulted throughout in regard to the drafting and implementation of the aid schemes. Now I assume that when the board of directors drafts and implements aid schemes the Baster Council can be consulted by giving it representation in the initial stages. I am afraid that the Government will place itself in an indefensible position if it does not act according to the spirit of what seem to be promises as they are contained in this pamphlet.

The position is therefore that we on this side of the House do not oppose this Bill. However we do lay down a proviso, which is that we would like to see further attempts being made at reaching an agreement and that with every step the Baster community will at least be afforded the opportunity of sharing in this. I have listened carefully to the speech made by the hon. member for Windhoek. He stated that he saw difficulties in and objection to at this stage giving the Baster Council representation on the board of directors. After that the hon. member mentioned a long series of expected difficulties. May I say that I appreciate the hon. member’s candidness; in fact, it is his duty towards the Minister, not so? He even envisaged further agitation and hostility. In the light of this it appears to me to be essential that the Minister should weigh up these two problems in order to determine which one is the greatest. While there will not of course be too many Basters competent enough, there are, after all, Basters available who have the sound business experience needed. For that reason the Government will have to decide whether it prefers to give representation to the Baster council as opposed to agitation and difficulties and hostility which it may arouse if it does not do so. Those are the two problems the Government will have to weigh up. As we see the matter what will present the least problem to the Government will be to keep its slate clean and see to it that the Baster community is at least afforded the opportunity of sharing each step which is taken to assist them.

Mr. Speaker, this matter involves not only economic questions but also, to a large extent, sociological and social questions. The Baster group of South-West Africa is a group which does in fact need the help of this Parliament. If we want to analyse their problems fundamentally, I think it is necessary to adopt an historic approach to their problems. Yesterday the hon. the Minister mentioned in passing how the Basters happened to be where they are at present. However, I want to go into this in greater detail and in so doing illustrate the problems which have developed there.

Probably few members know that the Rehoboth Basters are actually Coloureds who, towards the end of the eighteenth century established themselves along the Orange River. At that time they numbered approximately 5,000 souls. Hermanus van Wyk, the man who acted as their leader, was born in the Fraserburg district and after that lived in the region of Amandelboom. Later, in 1868, he moved to Berseba in South-West Africa, where he lived for four months. In September, 1870, he decided to travel further north with the purpose of looking for a place to live for himself and his little group of Basters. In this way he arrived at Okahandja where it so happened that a peace conference between Jan Jonker, the chief of the so-called Afrikaner tribe, and Maharero, chief of the Herero tribe and Abraham Swartbooi, chief of one of the Nama tribes was in progress. On this occasion Hermanus van Wyk consulted the missionary Dr. Hugo Hahn to find out whether there was any land available for them. Dr. Hahn then referred him to Abraham Swartbooi. He then went to speak to Swartbooi who told him that he would lease Rehoboth to him. Rehoboth was at the time known by the name of Annis, and belonged to quite a different Nama tribe, under the chieftainship of Oasib. The latter had given Swartbooi the right to live there, while it actually belonged to the Red Nation of the Nama. Actually Swartbooi, with whom Hermanus van Wyk then negotiated only leased that territory. In any case he gave him a horse for it. Dr. Hahn suggested to him that he should also discuss this matter with Maharero and obtain his approval as well. This he did. To Maherero he also gave a horse. After that he handed over a further 12 horses to Swartbooi. On that occasion it was never decided where the boundaries of the Gebiet would be. Swartbooi told Hermanus van Wyk to draw up a document which he would subsequently sign. But when the negotiations reached that point, Swartbooi refused to sign. In this way the problem arose. In 1873 their water supply gave in. Hermanus van Wyk gave serious thought to buying the Gebiet, but Swartbooi did not want to have anything to do with that because the Gebiet did not in fact belong to him. In 1875 when the Dorsland Trekkers arrived on the scene they entered into negotiations with Oasib, the chief of the Red Nation and the true owner of the land. When Hermanus van Wyk heard of that he went to Swartbooi and said that he wanted to buy the land before it fell into other hands. A deed of sale was then drawn up. The original was destroyed in a fire in the Cape Archives. However, copies of this still exist. The Deed of Sale was dated 23rd December, 1875. Inter alia, the missionary J. Boehm also signed as witness. The purchase price was 100 horses at £25 a head and five wagons at £50 each. According to a sworn statement made by Karolus Swart, who was then sub-chief, on 8th June, 1925, before a commission appointed by this Parliament the five wagons, which formed part of the purchase price, were never delivered; the horses were.

It is also interesting to note that the Swartboois thereupon removed to Fransfontein and Zesfontein to the north of South-West Africa. The Rehoboth Basters, under the leadership of Hermanus van Wyk, drew up a constitution for themselves, long before they purchased the land. In fact the first constitution was drawn up on 31st January 1872. This first constitution made provision for a “supreme Governor” (opperste bestuurder). Whom they also called “chief” (kaptein). This was followed by a constitution which was drawn up in July 1874. The actual date was never written down in the constitution—the original still exists today—but according to the constitution Hermanus van Wyk was designated chief with effect from 1st January. 1874, and he was assisted by a chief’s council of four members. Sir, when the Germans appeared on the scene a “Treaty of Protection and Friendship” was negotiated on 15th September, 1885, with the Rehoboth Basters, and consequent upon that the treaty on Defence of 26th July, 1895. According to this treaty the Rehoboth Basters obtained a certain measure of self-government, but only to a very limited extent. In fact, there was German sovereignty both in the interior and abroad, and the German flag was in fact raised over Rehoboth. In 1905 Hermanus van Wyk unfortunately died and the Basters then addressed a petition to the Germans dated 30th January, 1906, in which they requested that the chieftainship be abolished. In this way it came about that Cornelis van Wyk, a son of the famous Hermanus van Wyk, became a Gemeindevorsteher, a sort of foreman. He was appointed annually to that post.

Sir, I should just like to refer in the first instance to the question of territory. Because there is no description whatsoever of the specific land and what it comprised, the Germans for the sake of goodwill, demarcated 1,795,000 hectares, of which almost one-quarter, i.e. 451,700 hectares was sold to Whites within a few years. In other words, there were only 1.343,267 hectares left. In 1923 the South-West Administration again purchased additional territory from Whites, i.e. eight farms with a total surface area of 38,616 hectares, and added it to the Baster Gebiet. Under the Odendaal plan a further 12 farms, with a surface area of 73,789 hectares would be purchased, of which at this stage only approximately 62,000 hectares have been bought out, which would then be added to the Rehoboth Gebiet. In other words, the present Rehoboth Gebiet, as it exists to-day, is in any case larger than it was when the Germans originally demarcated it. Sir, it is also interesting to note that the Rehoboth Basters never looked after their land properly. Not only were they quite ready to sell the land and run the danger of becoming completely alienated, but the Bantu of South-West Africa also leased their land. In 1923 for example the Bantu kept a total of 41,515 head of cattle in the Rehoboth Baster Gebiet as against a mere 45,389 belonging to the Basters. In other words, the Bantu had virtually half of the Rehoboth Baster Gebiet.

When the South African Government appeared on the scene, it was General McKenzie of the Union troops who saved the Basters from total annihilation. The Germans were on the point of defeating them in battle and virtually annihilating them, but McKenzie appeared on the scene with the Union troops and saved them. On the 5th February, 1919, the Basters then sent a deputation consisting of Cornelis van Wyk, A. Mouton, N. Olivier, Dirk van Wyk and F. W. Maasdorp to this Parliament. They conducted interviews here not only with the Governor-General but also with the Prime Minister and they requested, firstly, that the Rehoboth Baster Gebiet should not be returned to the Germans and secondly, that they should be placed under British Imperial protection and should become a protectorate as Basutoland, Bechuanaland and Swaziland were at the time.

In this way it came about that Rehoboth developed into what it is to-day. Under the South African Government a white person was appointed as chief, i.e. the magistrate at Rehoboth. If one considers the history of the Rehoboth Basters one finds that time and again, year after year, some squabble or dispute arose. That has been their history from the beginning up to the present. In 1918 civil war threatened between the group of Cornelis van Wyk on the one hand and that of Samuel Beukes on the other. The lack of the leader of the calibre of Hermanus van Wyk emphasizes to-day still the need in Rehoboth of people who can come to the fore and take the leadership of Rehoboth upon them. In Rehoboth you have this situation to-day. On the one hand you have some of the very richest Basters; there are Basters whose assets are far in excess of R100,000, but on the other hand you also have the very poorest Basters. There is no contact between them; there is suspicion and enmity between these two groups and of course they are unable to make any progress. Every now and again one hears of telegrams they send to the U.N. This happened again recently, as the hon. member for Bezuidenhout has already mentioned. But it is interesting to note that the existence of the Rehoboth Baster Gebiet coincides precisely with the present Government’s policy of separate development. The Basters want to retain Rehoboth as a sovereign unit for the Basters alone. Even the leaders of Rehoboth, who are so fond these days of corresponding with the U.N., are the last people who would like to be thrown into the cauldron under a system of one man one vote in South-West Africa, because they realize that they with their 14,000 will be in the minority by far and that they will have no representation whatsoever in any system of government which is established on the basis of one man one vote.

Sir, this Bill means a new beginning for the Rehoboth Baster Gebiet. I want to go so far to-day as to make an appeal to the Basters of Rehoboth. One finds them everywhere; one finds young Basters at the University of the Western Cape and elsewhere, but they are doing what Dr. Kenneth Abrahams did; in other words, they are leaving the Baster Gebiet and establishing themselves elsewhere. They are therefore lost to the Rehoboth Baster Gebiet. I want to make an appeal to the younger generation of Rehoboth, once they have received university or other training elsewhere, to return to Rehoboth and render their services to their own community which needs their services so desperately to-day. In conclusion I want to say that this legislation lays a foundation for co-operation between the various groups in Rehoboth, a basis, a new beginning, which the different parties can associate with one thing and that is the land of Rehoboth and the prosperity of Rehoboth. I have no doubt whatsoever that once they begin to realize that this Government, with this measure, envisages nothing but their welfare, the Government will soon gain their cooperation.

Mr. Speaker, I have found this a most interesting debate. In putting this Bill on the Statute Book, I think we are in some respects breaking new ground. The hon. member for Middelland has appealed in his speech for a new approach to the Rehoboth Gebiet. I support that wholeheartedly. We do need a new approach, and I think in this Bill we have been too content to depend on the old approach. We need a different approach. I was very interested in the hon. member’s story of the history of the Rehoboth Gebiet. I suppose the hon. member is familiar with the diary of the missionary Tindall, who was the grandfather of our famous Justice Tindall in the Cape. He gives something of the early history of that area, and there we find very much the same story as that mentioned here by the hon. member. Sir, I was very pleased to hear the hon. member say that Natal saved the situation again when they sent troops to South-West Africa under General McKenzie. They practically saved these people from extermination. The suggestion of the hon. member that the young men should go back to the country of their origin will not find favour. That sort of suggestion never does find favour. The young men who have left Ireland will not go back to Ireland. The young men who have left their own country and have adapted themselves to the way of life of other countries, will not be persuaded to go back unless, of course, special opportunities can be created for them. If there are so many young men who are well educated and are prepared to serve their people, why cannot they serve them in the manner that has been suggested by the hon. member for Gardens, that is to say, by allowing them to participate in the directorate of this corporation?

When we come to this Bill itself, which we are most concerned about, we find that it follows the old pattern, the pattern of all our development corporations. The original pattern, of course, was the pattern of the Industrial Development Corporation which was established almost 40 years ago in a Bill introduced by Mr. Hofmeyr, namely the Industrial Development Corporation Bill. Sir, there are certain weaknesses in that pattern, weaknesses that we have noticed particularly when we have seen this prototype developed in other development corporations. We have the Coloured Development Corporation, we have the Bantu Development Corporation and the Xhosa Development Corporation, and in all of these we find the same weakness, i.e. the weakness of lack of parliamentary control. When this Bill has been passed, as I have no doubt it will be, because we are anxious to see a Bill of this kind on the Statute Book, then Parliament will have lost all control of the administration of this Bill. That is true of the Industrial Development Corporation, which today has a capital of over R200 million, which shows a profit after taxation of over R5 million and which does not declare dividends for the taxpayers of South Africa. They do not have to do so; the directors are in command. I feel that the weakness of these development corporations is that they do not come before Parliament and tell us how they spent the money we have voted. After all, when Parliament votes money, it wants to know how that money is spent. Therefore I shall suggest an amendment with regard to the auditing of the books when we come to the Committee Stage of this Bill. I think the relevant clause is clause 22. Sir, we have suggested from time to time that a proper method of control would be to establish a third select committee, similar to the Select Committee on Public Accounts and the Select Committee on Railways and Harbours, for these public corporations. They could then report annually and without going into details we would know what progress is being made and, especially in the case of this Bill, how it has been adapted to the problems of the Rehoboth Gebiet.

Sir, we have this proposal of the hon. the Minister before us on how he will control the Rehoboth Gebiet. Having listened to the hon. member for Windhoek, who has not minimized the problems, I realize that a great problem faces the hon. the Minister, how he is to obtain the goodwill of the Rehoboth people. It reminds me of the story of the Trojan horse, Sir. These people think that this Bill, or any intervention by a white Government of South Africa, is a Trojan horse coming into their area, and they think they might lose the right to own their own land. You know, Mr. Speaker, what was said about the Trojan horse—

What they say to the hon. the Minister is that he brings presents and yet they fear him. It has even been translated rather differently. Beware of the Greeks when they bring presents. In the Minister’s case I think the Rehoboth people say, having listened to the hon. member for Windhoek, they must be especially aware when the Minister brings presents. That is the feeling they have and our problem is how we shall overcome it, because we are all agreed that there should be a Bill of this kind. We are anxious to help these people. How do we overcome this problem? Well, I think we must get to this idea: How can we get co-operation? And if we are to get cooperation, we must get co-operation in this case on the basis of equality. I know the problem of the hon. members opposite. They have this magic word “integration”; we may not have integration. We have suggested that when you have a board of directors, there should be representation on it of the Baster people, of the Rehoboth people. They should be represented on the board of directors. I would say to the hon. the Minister that he should give that careful consideration. And when I say that there should be representation, I do not think it should be a director nominated as directors are for our development corporations in South Africa. They should be nominated by their own group there. However, I do not know how many. We should go to them and say: We wish to co-operate with you; will you nominate one or two of your people to serve on this board of directors with us? There is nothing strange in this. Here is the annual report of the Coloured Development Corporation, and they say what the hon. the Minister says in dealing with all of these: with the Bantu Corporation, the Coloured Corporation and now with this one. The report says—

They say they are going to do it eventually. Then they deal with the Spes Bona Savings and Finance Bank Limited and say—

Oom Flippie, you are just wasting time. Why did you not listen to the hon. member for Windhoek?

So the hon. the Minister has done that already. I know the hon. member for Piketberg thinks it is a subsidiary, but if it is good enough for a subsidiary company, it is good enough for the Corporation. So the principle is being accepted. The Minister will remember that when his Bill was before Parliament to create a university for the Coloured people …

Order! The hon. member is going too far now. He is covering too wide a field altogether.

It is the principle of shared responsibility between the Rehoboth people and the Government. How the Minister is going to meet that I do not know. The hon. member for Windhoek has explained that it will be a difficult problem. How will he gain their trust and confidence? Perhaps he has some other plan which he will tell us about later.

Now I come to the Bill itself and to certain points in it. Let us take these clauses. One clause corresponds to clause 3 (a) and clause 3 (b) of the I.D.C.; here it is 4 (a) and 4 (b). Clause 4 (a) makes provision, with the approval of the State President, to establish and carry on any mining, industrial, business and financial undertakings. So this corporation will have the right to operate itself, in addition to financing others, and then of course 4 (b) makes provision for assisting other undertakings of burgher companies to establish themselves. That is a similar provision.

We now come to the directors. We mentioned directors and we said it would be desirable to appoint directors because provision is made in clause 10 for appointing a member of the Rehoboth Community. It says so very clearly. I thought the Minister had it in mind. It says that the State President shall elect all directors appointed by him for their ability and experience in business or administration, or their knowledge of the needs of the Rehoboth Community. Now, who is more aware of the needs of the Rehoboth Community than the Rehoboth people themselves, than their own Basterraad? That gives the Minister an opportunity to say that he must have one or more of them to sit on the board. I do not think there is any objection to their sitting with the white directors. Is there such an objection?

They will be sitting together on the Committees in terms of clause 14.

So, there is no political objection to their sitting together on the Corporation?

That’s a different aspect.

In regard to clause 15, the Minister had better read it over again because the draughtsmen have left out a word in the English text, but we will come to that in the Committee Stage. Then clause 17 deals with the share capital. Subsection (3) says that only the State may become a shareholder in the corporation. I know the Minister said in his Second Reading speech that that was one of the objections of the Rehoboth people. They felt that it should not only be the State but that they themselves should have the right to be shareholders. I do not think they have a very strong claim there. I do not think it will benefit them very much, because there will not be any large profits in the beginning. But where I think the Minister could get their cooperation would be in providing loans and savings for them at a high rate of interest, so as to get them interested first of all in savings. They could lend money to the corporation and obtain a high rate of interest and that might make them interested. I think it could be approached in that way, not to give them shares in the beginning, unless you give them preference shares, guaranteed preference shares, guaranteed by the Government. I think that might be a way of getting their co-operation, because the Minister does require their co-operation and he is anxious to have it. Then there is reference to the board declaring a dividend. Well, we need not think about that because there will not be many dividends. Then I wish to tell the Minister that I will move an amendment to clause 22. I think the accounts of the corporation should be audited by the Auditor-General and it should be possible for our Public Accounts Committee to investigate how the funds are being expended. Then towards the end regulations are made to control the affairs of the corporation. I think perhaps too much is left to regulation. We are anxious to assist the Minister, if he can think of a better way of getting the co-operation of these people because I think he must get their co-operation. Without their co-operation, this plan will not be a success. I know it is often possible, as was done with the Coloured Development Corporation, to say: We offer you money. Then individual people will say they are anxious to have it. But in this case of the Rehoboth Community they are not acting so much as individuals; they act as a community. They are an established community. I think it is essential to get their goodwill and their cooperation. Having listened to the speech of the hon. member for Windhoek, who had the privilege of serving on this committee, I realize it is going to be extremely difficult to get their co-operation. He said we would get it in a period of two or three years. Well, we must all assist. I ask the Minister to take them with him and not to say: This is what I am giving you; this is the policy that you must have. They have very strong community feelings opposing this Bill.

J was glad to learn from the hon. member for Gardens yesterday that the Opposition was supporting this legislation. This is a good start, because, Sir, you can understand that if the Official Opposition in this House were to have opposed the Principle of the legislation, they would have reinforced these Rehoboth people in their opinions, and then one would have had much greater difficulty in obtaining their co-operation than ought now to be the case. I listened to the objections of the three hon. members of the Opposition. The last speaker, the hon. member for Kensington, said that he would probably move an amendment in the Committee Stage, and therefore one probably need not go ir.to that now. But there are a few objections which all three of the hon. members raised. One is in connection with better co-operation, but I want to reassure them now. Just as the South-West Africa administration has, in the past, gone out of its way to bring about co-operation with the people in Rehoboth, I believe this Government is also anxious to bring about the same fine spirit of co-operation, in order to help these people for their own benefit, which we all know is so very necessary. Thus I think that the Opposition should accept the fact that the Government intends this legislation in a spirit of goodwill, in a fine spirit of co-operation. I do not think that they need to be afraid of that objection.

The other objection that each speaker mentioned is that there should be at least one of these people on the Board of Directors, but I think the hon. member for Windhoek replied to that very explicitly. The hon. the Minister will probably add to that reply. I do not consider it necessary to elaborate on it. As far as I am concerned it is impossible at present. This legislation would then be useless. One would take up all the time of this hon. House in order to get it onto the Statute Book, without any possibility of implementing it, because one would not have the co-operation of those people. That is why those objections are also unfounded.

Examining the Rehoboth Gebiet, and the piece of legislation now before the House, there are a few basic facts which one must take note of. One must examine the quality of the land in that Gebiet and one must see whether the land is fit for agricultural purposes: because one immediately asks oneself why there was such tremendously rapid development in the rest of South-West Africa, while the Rehoboth Gebiet, which has some of the best agricultural land for mixed farming, large and small stock, lagged behind? One asks oneself, where does the fault lie? One could look to various bodies for the fault, but in the first place I do not think the fault lies with the Administration or with the Government. As the hon. member for Windhoek has said, the Administration there has made various attempts to help these people. But it was always through their own fault that those who granted the assistance failed to achieve the measure of success intended.

If I must now mention a few reasons why the development lagged behind, confining myself to agriculture, there is, firstly, the absence of a planned system of farming. Hon. members will perhaps ask me why these people were not helped in their planning. I immediately want to reply that the Soil Conservation Act of South Africa was made applicable to the Rehoboth Gebiet. That Act was opposed to the same extent that this present legislation is being opposed. For a number of years they completely avoided the Soil Conservation Act and all the benefits it held for them: for example, subsidies. At a later stage the farmers with a little more initiative began to make use of the benefits of the Soil Conservation Act, of subsidies, etc. Therefore we also believe that, in due course, as my hon. friend said, they will also begin to make use of the benefits of this legislation. Secondly, there is the lack of understanding. Apart from a small percentage, they still have no realization of the benefits of conservation farming methods. There is a total lack of understanding among these people, because they are always prejudiced when it comes to any measures aimed at helping them. Therefore one must not blame the Government; a portion of the blame, or all of it, is theirs. We know them, and the hon. member for Bezuidenhout ought to know them as well, but we do not expect the other hon. members to know their disposition. As a result of the system of testation, which the hon. member for Windhoek mentioned, they also lacked capital. This is quite understandable, because they did not develop). There was a lack of credit facilities. In addition, their farming was of a poor quality. The animals were of a poor quality because, apart from a few wealthy persons, who constitute a small percentage, they are always competing with the initiative of the white man. When they have to go and buy bulls and rams, they have to compete with white initiative and this is very difficult for them to do. Therefore I am glad, and I am sure hon. members will pardon me for mentioning it, that the farm Tsumis which was purchased will now be used, as the hon. the Minister said, for a breeding station and as a demonstration farm. Then the Rehoboth farmer will be able to go and buy his rams and bulls without competition from the white farmer. This alone would be of great assistance for the improvement of production.

I hope they are good bulls.

Yes, they themselves hope so. There is another point I should like to mention in connection with something that happened in the past and is still happening at present. It probably does not meet with the approval of the Government, nor with that of the South-West Africa Administration. In the past, with the approval of the Baster Council, several landless white farmers were farming within the Baster area. Hon. members know that someone who leases land usually does not have the same respect for the soil on which he is farming as the owner of that soil has. Not only did this cause trampling and erosion of the land, it also dampened the initiative of the Baster farmer because he did not display the necessary initiative and because he had an additional income on which he could live. This is wrong. Up to the late fifties, this was the case. Then, on the recommendation of the Baster Council, the South-West Africa Administration decided that these white farmers should leve the Rehoboth Gebiet. The Administration took the necessary steps to remove those people from the Gebiet and to settle them elsewhere. Then another system of leasing took place, not so much by farmers, but indeed, by speculators. Because the law did not prohibit it, the people negotiated with private farmers without the permission of the Baster Council. For example, they leased land on condition that the animals would be owned in rotation. In that way they misused not only the Gebiet, but also the people’s property. These speculators try to obtain the Baster’s animals cheaply, and more particularly those of the small farmers. Then they prepare the animals, for market or for sale, on the Baster’s own veld. In so doing they make their profit. As hon. members know, Whites must have a permit in order to enter the Gebiet. The speculators actually appointed the Basters to purchase the animals. This causes dissatisfaction. I should like to ask the hon. the Minister to take the necessary steps, as soon as possible, to have that system abolished. The other white bona fide farmers are also dissatisfied with this state of affairs. They say that they were removed from the Gebiet and now the Gebiet is being left in the hands of speculators. We should like to see the Gebiet either opened up to white farmers or else closed altogether. This is what I should like to bring to the hon. the Minister’s attention.

With our knowledge of these people, we realize that they are strange people. The hon. member for Windhoek also said so. They are, in fact, unique, but I have no doubts about their acceptance of this Act. It will, it is true, take at little time, but in due course they will accept this Act in the fine spirit in which the Government intended it. They will accept this help which they need so desperately, and they will make more and more use of it. As my hon. friend said, there will be problems. Indeed, one has problems with all laws that are made. The present Department of Coloured Affairs has gained a great deal of experience over the years in connection with the Coloureds, their problems and the condition in which they find themselves. The problems of this Rehoboth Gebiet are also nearly the same as the problems experienced in other Coloured areas. I have no doubt that, with the Department of Coloured Affairs and the Minister, the Rehoboth Gebiet is in good hands., I believe that their intentions are sincere and that they want to help these people. The rest they will have to contribute themselves. They will also have to offer their spirit of goodwill and their co-operation. If they do not want to make use of it, that is that. But then they only have themselves to blame. I think that we have already made progress with the establishment of a Rehoboth affairs division under the direct control of the Minister and the Department of Coloured Affairs. We are progressing much more rapidly than in the past. We are glad that the Opposition supports the principle. We want to call upon them to accept this legislation as it is, in the spirit of goodwill with which it is offered by the Government, in order to help those people in the Rehoboth Gebiet.

Mr. Speaker, I wish to say to the hon. member for Mariental that we certainly hope that his confidence that the Basters will accept this legislation and will benefit from this co-operation will be well founded. I think it is abundantly clear, to the extent that we on this side of the House can make it possible, that this corporation should be offered to the Basters not as an offer of assistance from the Government or from a section of Parliament, but as an offer from the whole of Parliament, from both sides of the House. This would perhaps make it more acceptable to them. I trust that that will be conveyed as being the feeling of Parliament as a whole. I want to say to the hon. member for Mariental that our support for the principle of this Bill is none the less determined when we say that we have differences in regard to method followed on minor points in so far as the terms of the Bill are concerned. To ask us to accept the entire Bill as it is before us, is asking for too much. From the history of the Baster people which we have had from the hon. member for Middelland, and from those of us who know something about them, we must accept that there is a suspicion or a fear as to the retention of their property ingrained in the Baster people. They were, after all, as we have heard this afternoon, forced from one area of the Union, as it was then, to seek a new home in South-West Africa and eventually were able to settle in what is now the Gebiet, which is now their particular area. One must understand that because of that background and history there is a fear that any attempt to mortgage their properties or to hypothecate their properties in any way by persons other than Basters, carries with it the risk of loss of ownership. I agree with the hon. member for Mariental that that suspicion will eventually disappear, because although, as the hon. member has pointed out, there has been phenomenal agricultural development in South-West Africa and this potentially valuable area, the Rehoboth Gebiet, has not participated to the extent that it should in that agricultural development. One calls to mind that whereas in 1920 the agriculture produced R1.7 million, representing 13 per cent of the gross domestic product of South-West Africa, the amount produced in 1965 from agriculture was R36 million, representing 16.8 per cent of the gross domestic product of South-West Africa. But in that growth and increase of the agricultural development of South-West Africa the Basters certainly did not share proportionally.

I want to add to one or two matters which was raised by the hon. member for Mariental other problems which face these people as regards their methods of farming. The hon. member touched on one aspect, namely the improvement of stock on their agricultural lands, but I believe there is another matter which is linked with the soil conservation practices of which they have so far failed to avail themselves, namely the necessity of fencing and the subdivision of their farms into camps to provide for the adequate rotation of grazing on those farms. This is becoming a most important matter in cattle and sheep farming in South-West Africa, not only in the Rehoboth area but also in other areas, because of the increasing cost of land. I know that the problem of this corporation will be to find the field staff to sell the ideas of soil conservation, camping and planned farming to these people in this particular area.

On a recent visit to that area there were two matters which struck me and which I would like to raise with the hon. the Minister. These matters may have been covered in the hon. the Minister’s contemplation of the establishment of burgher companies or burgher undertakings. First of all there is the question of housing in the Rehoboth township itself. I think the hon. the Minister would have felt the same as I did, namely that the housing that is available to the Baster people in Rehoboth is in sharp contrast to the new educational and other public buildings that have been erected. I wondered whether it is within the contemplation of the hon. the Minister that there should virtually be slum clearance in that township carried out by this corporation or by some body formed with the assistance of this corporation or whether that will be a matter which would be attended to by his colleague, the hon. the Minister of Community Development. The difficulty one sees for this last possibility is that the Group Areas Act does not apply in South-West, that the Population Act has no application there and it would seem that the urban or semi-urban rehousing will be the responsibility of this corporation.

Linked with that is the question of the commercial undertakings. It is true that in the past these commercial undertakings were in the hands of white persons, before they were purchased and taken over by the Basters. They are, however, primitive in the extreme. I believe that they are primitive not only because of a lack of training of the proprietors but also because of the lack of capital which is required for commercial undertakings. In clause 4 the Bill does provide for the establishment and the carrying on of “mining, industrial, business and financial undertakings” by the Corporation. I should like to know whether it is the hon. the Minister’s intention to endeavour to establish commercial undertakings which will be financed by the corporation as the Government has attempted to do in the case of the Coloured Development Corporation. I want to say, that having looked at the development of the area, I cannot go as far as the hon. member for Middelland and look at this Gebiet with its present population of 14.000 as being a totally viable and ultimately sovereign group in South-West Africa. I do not believe that that view could ever be held with any sense of reality as far as the Baster people are concerned. I do believe, as the hon. member for Windhoek said, that the development of the potential of the Baster Gebiet especially as far as agricultural product is concerned can be of tremendous value to the economy of South-West Africa as a whole. That brings me to the hon. member for Middelland who expressed regret at the fact that those Basters who had had advanced education, had left to seek other pastures to develop themselves and earn money. I am afraid that that will happen but one does hope that as a start has been made with the furthering of education there, there will be a number of these people who will remain in the Rehoboth area to assist with the development of the area.

I also want to record one other matter which I think is relevant and of which I think we should remind ourselves, namely that the establishment of this corporation to render financial assistance in South-West Africa is really not new. It is interesting to go back through the records. South-West Africa came under the mandatory control of South Africa and by 1937 the then Union of South Africa had contributed approximately R7 million to South-West Africa, a sum which was considerable in those days. In the years after the Second World War South Africa also discharged its obligations to the territory, which the late General Smuts referred to as “the sacred trust of civilization” which was vested in South Africa with its mandatory powers. By 1937 the Union of South Africa had contributed approximately R7 million to the development of South-West Africa, a sum which as I have said was considerable in those days. That was the loan debt which was increasing annually. In 1937 it became necessary to suspend the payment of interest and the repayment of any redemption of that sum of money to South Africa. It was in fact only in 1945 that the economy of South-West Africa had so rehabilitated itself that South-West Africa again commenced to make repayments to the Union Government. After that, the development was so rapid that a development fund was created in South-West Africa. This fund was built up to several million rand. I mention these facts merely because the principle involved in the establishment of this development corporation and the provision of funds for the advancement of South-West Africa and of its people is not a new principle. It is something which has been adopted by this Parliament over a long period of time.

As we are all concerned, I want to conclude by referring again to the way in which this corporation is presented to the people of Rehoboth. It must be put to them in such a way that they will accent it with its full benefit to themselves and to South-West Africa as a whole. I have already dealt with the question of technical advisers for the agricultural industry.

We know what our difficulties are in South Africa in getting sufficient extension officers for our various agricultural projects. One wonders what the hon. the Minister’s feelings are about the availability of such extension officers in this particular area. Then there is the second point, namely whether it is contemplated that in conjunction with the educational facilities that are there, there will be facilities for agricultural schooling or training in so far as the Baster youth are concerned, so as to equip them to utilize such additional facilities and benefits. Thirdly there is the question of the establishment of what one might call a pilot scheme within that area. Here I am in some difficulty in following what is in the hon. the Minister’s mind. There must be a start somewhere with some farm or group of farms to demonstrate to the Baster people the advantages of proper fencing, proper grazing, rotation of grazing, and so on. Is it the hon. the Minister’s intention that this corporation should itself undertake that activity, or is it to be undertaken by and entrusted to the Baster Council itself, if their support can be obtained. I am sure their support will be obtained in carrying out these particular operations.

One realizes that this is a pilot scheme in so far as South-West Africa is concerned. It is concentrated on a certain group of people, on a group of people who represent 2 per cent of the population of South-West Africa. When one realizes that that 2 per cent and the areas which they do occupy can make a very valuable contribution to the further development of South-West Africa, one trusts that the hon. the Minister and his Department will have success in gaining co-operation from the people of that territory. The hon. the Minister in his announcement, which has been published and has been made available to the Rehoboth people, I think indicated a course which will secure that co-operation. On page 14 of this statement the hon. the Minister said—

I trust that, with that, will come the identification of the Basters with the work of the corporation and its ultimate success.

Mr. Speaker, this is the kind of measure which needs all the goodwill and all the good hone we can offer. That is why I am most appreciative of the outstanding level on which these discussions were conducted in this House. I want to express my appreciation to everybody who participated in this discussion for the responsible manner in which hon. members approached this difficult and delicate matter. I want to extend a special word of thanks to the United Party since, from the nature of the constitution of our Parliament, they could perhaps have been expected to oppose everything that comes along. I want to express my appreciation to them for the support they gave this measure. I also want to express my appreciation for the responsible manner in which that side of the House dealt with this matter. I want to give them, as well as members on this side, the assurance that a discussion such as the one that was conducted here to-day will definitely help me as the Minister in charge to deal with this difficult matter. It is no secret that this is a difficult matter to deal with. The history of a century bears witness to that, but I do not wish to elaborate any further on that to-day. These people are a national group that has special characteristics to which one should have regard. A discussion such as the one that was conducted here to-day, and the support given to this measure, will definitely be helpful to me in the implementation of this difficult task.

Mr. Speaker, the hon. member for Gardens, who was the first speaker on the Opposition side, referred to the suspicion which existed in the minds of the Basters. This is a suspicion which, unfortunately, lies at the root of our whole problem of dealing with this matter. It is this suspicion which has over a long period made it virtually impossible for the Administration of South-West Africa to show any progress. It is this very same suspicion which has in the past handicapped our own South African Government in this regard. It is a suspicion which I cannot explain to hon. members. I have often been asked, since I became a Minister and since I paid a visit to that area, to what this suspicion is to be attributed. Speakers on this side tried to shed light on this matter. In my introductory speech I myself also tried to shed light on the actual background to this suspicion which exists in regard to the Whites and the white administration. One finds it so difficult to understand this that at times it actually perplexes one to a certain extent. I could, for instance, just mention to hon. members what no less a person than Councillor Olivier said to me. He is the person who is at the head of the agitation against this development plan. On the day I attended the Baster Council meeting he told me that I had to appreciate that he, Councillor Olivier, was born in mistrust and grew up in mistrust. What that is attributable to, I shall not pursue any further, but this is the state of affairs with which I have to contend. This is the mental approach we must try to overcome in order to cause the development to take place. It is understandable that to us who have to deal with this matter the question of the board of directors, about which several hon. members opposite spoke, is not as easy as may have been suggested. It was suggested that we ask the Baster Council to nominate three members, of whom we could appoint one to the board of directors. This proposal was made with good intentions by members opposite in the hope that it would expedite co-operation. But, Sir, we have already heard from the Baster councillors, in anticipation, that they are not agreeable to such an appointment. Even before this discussion took place, that was one of the things which had already been rejected in Rehoboth in anticipation. We are therefore dealing here with people who are in actual fact adopting a basically mistrustful attitude towards virtually everything which is being done by the Whites. That is why we shall simply have to tackle this problem very courageously and very optimistically.

The hon. member for Gardens also referred to a few other matters, to which I shall return. For instance, there is the question of the further integration of the Basters themselves in the branches to which the last speaker also referred. In that statement I told them, and I also said this in my introductory speech here, that Basters could serve on those committees which were being regarded as branches of the corporation, and that they would be able to gain the necessary experience in business administration in those branches. This ought to afford them the opportunity of being trained in business administration. In addition this ought to make them feel that they are capable of contributing their share as well. As a result of this an administrative corps may in due course be built up out of the ranks of the Basters. This whole object has also been incorporated in the Bill. However, I am afraid that we shall have to exercise the necessary patience in this regard. To expect us to be able to accomplish this tomorrow or the day after, would only cause us disappointment. I want to give the hon. member for Windhoek my full support as regards his observation and conclusion that a great deal of assistance is required in this Gebiet. While I was there I was not, as my hon. friend from Bezuidenhout said, flown about in a helicopter only. In addition to that I spent many hours speaking to the Basters themselves. Over and above my visits to them on their farms, I requested them to come and see me at the office of the chief. It astonished me that those who came there, asked me for assistance at that stage already and wanted to know what they had to do to obtain assistance for fencing their farms. One of them asked me how he was to bring up his 11 children on his farm if we did not help him. There is, therefore, a need for assistance. I can endorse in full the finding of the Du Plessis Commission in this regard. On this occasion I should like to express my appreciation to the hon. member for Windhoek for the valuable assistance he and his committee rendered as regards the development of the Rehoboth Gebiet. They submitted to us a comprehensive report …

Who are “us”?

To us, the Administration. In a moment I shall deal with the criticism you levelled at the fact that this report is not generally available. It was the task of this commission to gather information, primarily for the Administration of South-West. Since that time this Gebiet has of course been transferred to the Government of the Republic to administer. The report of the committee is merely a departmental factual document to which reference can be made in the implementation of this development plan. As such the hon. member and his committee members performed valuable work; this is a work which will be a valuable source of reference for the Department of Rehoboth Affairs. There are no secrets in regard to this matter; it merely contains facts which they collected, on the strength of which certain recommendations were made, some of which can be implemented at this juncture and others later.

The hon. member for Windhoek raised the question of security for loans. He pointed out that the security we require in terms of clause 4, might give rise to an agitation in that they might regard this as an attempt on our part to acquire their land in a cunning Trojan way. I admit that such a fear does exist. In the course of my last interview there I asked one of the leaders, a certain Mr. Louw, to tell me why they thought we would take their land. The hon. member for Middelland has already pointed out that years ago 40,000 hectares of so-called “white islands” were bought out—in other words, white farms. The land that was bought out in this manner was added to the Gebiet. As a result of this inquiry another 60,000 hectares were bought out and added to the Gebiet. At any rate, I asked this Mr. Louw how they could think that the Government wanted to take their land. I pointed out to him that we had just bought out for them 60,000 hectares and added them to their territory Where did they get the idea that we want to take their land? He said, “Mr. Viljoen, I do not know why this is so, but this is simply how it is.” In other words, an attitude with which one simply cannot argue. This is similar to the attitude adopted by Councillor Olivier who told me that he was born in mistrust and brought up in mistrust. These are things which we simply have to accept in practical politics. All we can do is to try to overcome that attitude by way of well-intended and positive action. And this is what this measure seeks to achieve.

That is why I am appreciative of the support we are receiving. There is no political gain to be derived from this matter for any side. The sole object of this measure is to place a national group on the road to development.

The hon. member for Windhoek wanted to know whether the interest rates would be within bounds—in other words, whether they would be reasonable. I am giving that assurance to the hon. member and, through him, to the Basters as well. The interest rates will definitely be reasonable. Of course, they will differ; there will, for instance, be differences between agricultural loans and loans for business undertakings. But whatever the case may be, I can give the assurance that the interest rates will be reasonable and within the means of those people.

The hon. member for Bezuidenhout wanted to know whether we could not make a further attempt at clearing up the existing misunderstanding. But I think I can say that what can be done, we have already done. Earlier this year the Prime Minister paid a visit to South-West. Even if the object of this visit was primarily concerned with constitutional matters, this should, after all, also serve as proof to the Basters and to the world that the Government does not consider itself to be too superior to have talks with them. If one’s Prime Minister goes to Windhoek in order to have talks with the Baster Council, this is surely proof to the effect that one wants to consult them. Subsequent to that I, and later on the Secretary to my Department, went there in order to discuss the Bill with them. By doing that we also proved that we wanted to consult them. It is in fact true that the Baster Council did not agree to this Bill; in fact, initially they did not even want to discuss it with the Secretary. In the end he applied his experience of human relationships and persuaded them to discuss it with him. At that stage they even came forward with suggestions. The provision relating to the 14,000 hectares was embodied in this measure upon their recommendation. Other suggestions made by them have also been embodied in this Bill. In other words, we consulted them, we gave them a hearing and we included any suggestions of theirs which were at all practicable.

Now there is the question of the directors. Virtually every hon. member opposite pleaded that we should have Basters as directors. A moment ago I said what their reply had been in regard to designating one of them as a director of the board. Now I just want to draw attention to the fact that in these burgher companies which are to be established, it will be possible for the Basters to serve not only as shareholders, but also as directors in the fullest sense of the word. This is over and above their service on the committees on which it is in fact possible for them to hold an office equivalent to that of a director. From the ranks of these people persons from whom we will be able to obtain the necessary assistance, may in due course come to the fore.

The hon. member for Green Point spoke about the question of housing. He wanted to know whether housing would be covered by the corporation or whether it would have to be provided by another body. The intention is that housing should also be covered by the corporation. In fact, this corporation covers everything. The community is so small that we cannot establish various bodies; for that reason this corporation will also have to look after the question of housing. However, we are providing in the Bill that the State President may cover new developments by proclamation. This can also happen in regard to housing. But in this respect the question of co-operation is also at stake. Before being able to provide housing in Rehoboth, we shall have to obtain the co-operation of these people in planning the Gebiet. Those of you who have driven through that part, will know that there is no planning in that area. And in addition to that one still has the Bantu location which is situated near the town of Rehoboth and which is like a wart on one’s nose which ought to be removed. But for that purpose we need the co-operation of the Baster Council, which I hope we shall obtain in the course of time when it dawns upon them that we do not want to take their land away from them; that we actually want to help them to fence in their land properly, to cultivate and preserve it. As and when this becomes clear, I believe that we shall obtain the co-operation of those people. In this respect we merely have to think of the experience the Department of Coloured Affairs had as regards the various Coloured rural areas in our own country. The officials of the Department tell me that this opposition, this mistrust, which we find in Rehoboth today, is exactly the same as the mistrust the Department encountered five or ten or more years ago here in South Africa. Every development plan was regarded as a cunning attempt on the part of the Government to take their land away from them, and this mistrust only disappeared after they had seen that this was not the intention, but that one had come forward in order to develop that place for their own benefit.

The hon. member for Green Point asked me what the position was in regard to business undertakings. Yes, it is the intention that this corporation should also help as regards business undertakings. We are also talking about industries. It may appear somewhat ambitious for such a small place, but in this regard I am thinking in particular of a home industry such as the dressing of springbok skins. As hon. members know, this is one of their commendable home industries. Two of my proud possessions are two springbok skins which the Basters gave me there. But this is an art which is dying out at the moment. I think that home industries of this kind can be encouraged by this corporation in the future. The corporation may perhaps encourage the dressing of springbok and other skins again, for the benefit of Rehoboth itself and with a view to the tourist industry. If one thinks of the fuss made in places abroad of these objects which are peculiar to the Basters, it is possible to appreciate how much a home industry such as this could mean for Rehoboth in the future.

The hon. member also referred to agricultural training. The intention is that the Tsumis farm, of which hon. members saw reproductions in that brochure, will start as a breeding station for rams and bulls which will be sold exclusively to the Basters, but that the farm will gradually be developed into an agricultural school where young Baster farmers may receive training in farming methods. It is a beautiful farm which is eminently suitable for that purpose. We hope that this will be the beginning of an agricultural school or an experimental farm in the future. Then the hon. member wanted to know how we were going to start. This is an important question. The hon. member said that there should at least be a pilot scheme. Apart from the Tsumis farm which is something visible which one can offer there, there is of course the other method whereby loans can be made available to those people for, say, fencing or boreholes or inner camps. These are the most urgent needs which exist there. In this respect I fully endorse the impression gained by the hon. member for Windhoek and other hon. members on my side who said that these people who at the moment were adopting such a critical attitude towards this measure, would be the very people who would be most eager to avail themselves of these facilities. They need them. At the moment they may perhaps be adopting an attitude of aloofness towards this matter because of other motives. But the scheme will be offered to those who wish to avail themselves of it, and it will be the pilot scheme. When I think of the number of people who, in the few days I spent there, approached for assistance, I think that in that sphere the scheme has already been launched.

You need one successful borehole.

Yes, it would be rather good to have a person with radar there to determine where one might sink a borehole successfully! Mr. Speaker, I want to conclude by saying that we are faced here with a mountain of prejudice which in actual fact we can only try to overcome in one practical way, i.e. to go on taking this positive action. One has to proceed with this positive action in order that the underlying goodwill of such action may be brought home to these people. In this respect one will have to exercise patience, but one will also have to remain optimistic at all times. Fortunately we are optimistic people in this country, and I have no doubt that in the course of time these people will realize that we have not taken their land away from them, but, on the contrary, that we have helped them to make this place, which is one of the most beautiful parts of South-West Africa, a proud possession which one grants this interesting and most striking people, the Baster people.

Motion put and agreed to.

Bill read a Second Time.

I move—

This measure is chiefly necessary to regulate matters in connection with the transfer to the Post Office of employees of the Durban municipal telephone system.

The telephone system which serves the central parts of Durban and which was previously owned by the Durban City Council, was taken over by the Post Office on the 1st April of this year by agreement with the City Council, and upon payment of an amount for which provision was made in the Post Office Estimates for this financial year. The agreement was that the telephone system would be taken over by the Post Office as a running concern, and its staff were accordingly engaged by the Post Office on 1st April. They were provisionally engaged as staff additional to the Post Office establishment, retaining their emoluments and conditions of service, pending the passing of this legislation by which provision can be made, on a fixed basis, for their transfer to the Post Office.

In the negotiations with the City Council about the taking over of the telephone system, agreement was reached about how the staff would be taken over. The staff were also fully informed about the matter. Sir, the principle has been observed throughout that the staff must not be prejudiced as a result of the takeover, and the Post Office has gone out of its way to accommodate the staff and to ensure that the arrangements would be accepted as reasonable from their point of view. I can say that, as far as such a position is practically possible in a matter such as this, everyone concerned is satisfied with the arrangements which were agreed upon and for which provision is made in this Bill.

In order fully to satisfy any employee who entertains doubts about how the conditions of service of the Post Office will affect him, that it would not be possible to prejudice him in this respect, each one is being offered the opportunity of electing whether the conditions of service of the Post Office or those of the City Council will be applicable to his service in the Post Office. Clause 2 (8) makes provision for this. I think all hon. members will agree that this approach is beyond criticism, and that from the point of view of the staff a more equitable arrangement is hardly possible. Although the two sets of conditions of service, seen as a whole, compare fairly favourably with each other, they differ to quite an extent as far as sundry details are concerned. From the nature of the case it would be administratively inconvenient for the Post Office to treat those who choose the conditions of service of the City Council, according to those conditions. Nevertheless I was prepared to accept this inconvenience so that the employees could be satisfied, beyond any doubt, about their conditions of service. Apart from this choice which is being offered to all employees, the Bill provides that all who held permanent positions under the City Council must be appointed to permanent positions in the Post Office—regardless of the restrictions in respect of age, health or educational or other qualifications which, according to the Public Service Act, apply to permanent appointments in the service of the State. It is also being provided that, in respect of promotion to a post the functions attached to which are to be performed mainly in the area of the former Durban telephone system, no transferred employee will be disqualified on the grounds of being proficient in only one of the two official languages. This arrangement is necessary as a matter of fairness because knowledge of both official languages was not a condition of appointment of employees to the service of the City Council as far as all the grades were concerned.

Mr. Speaker, provision is also being made for a person’s service with the City Council to be regarded as continuous with his service in the Post Office. By the same token accumulated leave earned in the City Council is regarded as accumulated leave earned in the Post Office. As far as accumulated leave is concerned, everyone could request, before the 1st May, to have 25 per cent of this leave paid out to them in cash by the City Council. Of the 244 White and 237 Bantu employees taken over, 118 Whites and 234 Bantu made use of this.

As far as conditions of service are concerned, the Bill furthermore provides for the legal safeguarding of all transferred employees against any reduction of the remuneration they received or the salary scale that was applicable to them at the time of their transfer. Neither can they be transferred from Durban without their consent. All these regulations in respect of conditions of service are contained in clause 2.

As far as the remuneration of employees is concerned, I just want to place on record here that the transferred employees will also receive, with retrospective effect, the improvements in remuneration which apply to all Post Office officials as from 1st April.

Mr. Sneaker, clause 3 deals with the pension rights of the transferred employees. Provision is being made for all persons who were members of the superannuation fund or the provident fund of the City Council, to continue, provisionally, to be subject to the rules of those funds after the take-over date. Everyone may then elect, subject to the approval of the Secretary for Social Welfare and Pensions, to be admitted to the Public Service Pension Fund. As far as the Public Service Pension Fund is concerned, a transferred employee’s full period of pensionable service with the City Council will be reckoned as pensionable service in the Post Office.

To those who do not elect to be admitted to the Public Service Pension Fund, the rules of the City Council’s funds remain permanently applicable. The employees are allowed six months, from the date on which they are appointed to a permanent post in the Post Office, to exercise the choice. If particular circumstances exist in any case, an employee may be allowed even more time.

Male transferred employees who are admitted to the Public Service Pension Fund shall, according to the regulations of that fund, be obliged to contribute to the Government Service Widows’ Pension Fund as well as from the date of their admission. The Bill provides that, as far as the period prior to their admission to the Public Service Pension Fund is concerned, they shall be deemed to have started contributing to the Government Service Widows’ Pension Fund when they began their pensionable service with the City Council. Their benefits from the Widows’ Pension Fund will therefore be the same as if they had served their full pensionable service in the Post Office.

The normal retirement age laid down by the City Council’s pension funds is 63 years, as against the retirement age of 65 which applies in the case of the Public Service Pension Fund. Those who elect to be admitted to the Public Service Pension Fund will have to accept this fund’s normal retirement age. However, clause 7 provides that those who took up employment with the City Council prior to 24th June, 1955, shall, just as Post Office officials who commenced their service before that time, have the right to retire at 60 years of age.

White and non-White employees who did not occupy posts on the permanent establishment of the City Council, and were therefore not members of the City Council’s pension funds, will be admitted to the Government Employees’ Provident Fund and the non-White Government Employees’ Pension Fund, respectively, when they have served the necessary qualifying periods of service. Their previous uninterrupted service with the City Council will be recognized for this purpose.

The remaining provisions in regard to pension aspects in clause 3 relate to administrative matters and the necessary financial arrangements, as regards contributions and the transfer value of pensions, which will apply mutually among the Superannuation Fund and the Provident Fund of the City Council, the Post Office Fund and the Public Service Pension Fund. These matters are of a purely domestic nature and can definitely be discussed more profitably in the Committee Stage.

In connection with the staff provisions of this Bill, I may perhaps just refer, in addition, to clauses 2 (5) and 3 (11). These clauses make provision for certain employees who resigned owing to a misapprehension and who are taken into service by the Post Office after the date of the take-over, but before this Act comes into operation. What the provisions amount to is that they will be treated as if they had not resigned. Their period of absence will be considered as leave or unpaid leave. They will also be allowed, if necessary, to pay, in instalments, the amount by which the transfer value of their pensions was reduced due to the fact that they received payments from the superannuation fund when they resigned.

Mr. Speaker, clauses 4 and 6, to which I have not yet referred, are also purely domestic in nature. Clause 4 relates to a piece of land which the City Council expropriated for the erection of a telephone exchange, but which could not yet be registered in the City Council’s name because the compensation had not yet been finally determined. It is necessary to provide for the transfer of the land to the Post Office as if it had been expropriated by the Post Office. In clause 5 the necessary provision is made for the legal transfer to the Post Office of the City Council’s rights and obligations in connection with the telephone system, and clause 6 grants the necessary legal authority for entering into the agreement for the taking over of the system.

With that, Sir, I think I have dealt with the Bill as extensively as hon. members wanted me to do. Agreement has been reached with the Durban City Council in regard to the Bill, and I trust that it will be supported by both sides of the House.

We on this side of the House intend supporting the Second Reading of this Bill. There has undoubtedly been long and protracted negotiation concerning the take-over of the Durban Corporation’s telephone service, and I believe paramount in the minds of the persons dealing with this transfer has been the interests of the employees. Consequently the Bill before us, in clauses 2, 3 and 7, makes provision to safeguard the rights of these employees in terms of their conditions of service as well as their pension rights. In considering this position one has to take nto account a little of the background concerning this take-over of the municipal telephone service, particularly as affecting the position of the employees and their future as employees of the Minister’s Department.

When the negotiations first commenced there were members of the telephone service who had grave misgivings about the conditions of service and the preservation of their pension rights. For instance, some of the older employees felt that they might be prejudiced to a certain extent because of their lack of proficiency in the other official language, and also the question of being transferred to other centres in the Republic. However, in terms of clause 2 of the Bill there are two paragraphs which cover this particular aspect. As far as the transfer of the employees is concerned, they will not be discriminated against, and they will not be transferred to another area unless at their own request, or with their consent. As far as the proficiency in the official languages is concerned, this Bill makes special provision to safeguard the future of these persons as employees of the Central Government.

The other points which caused concern among the employees were, firstly, the question of accumulated vacational leave which had been built up to their credit whilst in the employ of the Durban Corporation. Some of these people had accumulated the maximum of 180 days vacational leave. Many of them felt that with the transfer of the control of the municipal telephone service their employer, who at that stage was the Durban City Council, would be compelled to pay out the accumulated leave which they were entitled to receive. However, this was not to be, because in terms of the agreement between the Durban Corporation and the Central Government, this matter was not provided for on that basis. It was a matter mainly concerning the employees and the Durban Municipality. There were certain members of the staff who indicated that they would resign so as to obtain immediate benefits and as the result of a compromise, which is also contained in the Bill before us, in terms of the conditions of service this accumulated leave has been specially provided for in the Bill. This compromise consists of the fact that a person will be able to receive up to 25 per cent of the accumulated leave, provided that leave is not in excess of 23 working days. In other words, they could receive an immediate payment from the Durban Corporation for any amount up to 23 working days of their accumulated leave, and the balance of the accumulated leave would then be transferred to the Central Government as part of their conditions of service. This, I believe, was an important compromise in that it met one of the objections of the employees to a great extent.

However, there is one other aspect in dealing with this question of the accumulated leave on which I would like the Minister to give us further clarity. With the transfer of these employees to his Department, this balance of accumulated leave is specifically mentioned in clause 2 (7) (d), which says that if any person to whom such an amount has been paid resigns from the service of the Department he shall not be entitled to any payment in respect of accumulated leave. This is evidently a necessary provision to enable the Department to see that the accumulated leave is carried forward with their pensionable service until such time as they retire from the service. However, the point has been raised in regard to the unpaid accumulated leave should the employee be compelled to resign from the Government service, in other words if he is discharged, or if he is required prematurely to retire from the service perhaps due to ill-health. It would be interesting to hear from the Minister what the position would be in regard to the accumulated vacational leave standing to the credit of such an employee, and whether he would then become entitled to the payment for that leave if he had to retire prematurely from the service of the Government.

The right of election as far as the employees are concerned is another important provision, so that those persons who feel that they wish to continue to be subject to the conditions of the Durban Municipality may elect to do so. However, the important factor in this regard concerns their pension rights, because in terms of clause 3 they also have an election as far as their pension rights are concerned. I think it is common knowledge that the Government Service Pension Fund is superior in regard to the cover it provides for the employees, to the superannuation fund of the local authority of Durban. Consequently it would be in the interest of the employees to take the opportunity of electing to join the Government Pension Fund, which would then give them greater protection as far as their pension rights are concerned, and it would also entitle them to be members of the Government Service Widows’ Pension Fund, which is another important provision.

The question of safeguarding pension rights is of course a vital matter. We know that in terms of other legislation it is always of vital importance to see that the pension rights of the previous employment are carried forward wherever possible, as they have contributed towards a pension fund or superannuation fund on that basis, and therefore they should have the right to carry it forward and to preserve the rights that have arisen in that regard. The hon. the Minister mentioned the fact that in regard to the right of election there would be a period of 180 days in which they may elect in writing to join the Government Pension Fund, and he also mentioned the fact that in certain special circumstances this period could be extended. This, I believe, is also an important provision which should be brought to the notice of the employees, as there are many occasions on which transfers have taken place and employees have joined the new pension fund and they have sometimes made the wrong election in regard to their pension rights and at a later stage they then realize their mistake and it is then too late for them to rectify their mistake they made in the past, particularly when a man nears retirement age and realizes that he would have been entitled to greater pension benefits if he had made a different election.

As far as the other provisions of the Bill are concerned, the amendments to the Government Service Pension Act also cover the pension rights, particularly as far as age is concerned, and here many persons are looking forward to retirement and have set their sights on a certain age at which they should retire and then they find that due to a change of circumstances, as far as the provisions of the fund are concerned, they then have to alter their ideas and stay in employment for perhaps another five years. Provision is made in this Bill which we welcome as far as the pension rights are concerned.

The hon. the Minister said that this was an agreed measure, which is true. After long negotiations this measure met with the agreement of the City Council and the employees’ organizations. These employees in the telephone service who had their own trade union have now of course disbanded that trade union and consequently their interests were looked after by the Durban Municipal Employees’ Society, and the Durban Municipal Employees’ Society has made certain comments which I believe the Minister should reply to, particularly in view of the fact that the Bill validates the taking over of the telephone exchange in Durban, and that is in regard to the number of hours worked; I understand that at the time of the agreement the hours worked per week were 40 hours, and it was understood by many of the employees that that would be the position when they moved into the Government Service, and that a 40-hour week would prevail, but after transferring to the Government Service they now find that they have to work a 44-hour week, an increase of 4 hours per week.

The other aspect concerns the position of adequate staff in taking over the undertaking. When one looks at the position, we find from a reply the Minister gave to a question in the House in April that of the 524 employees of the Durban telephone system at the time of the agreement, 457 had transferred and 49 had resigned. A further question concerned technicians. We know that the telephone service of the country is curtailed by the shortage of skilled technicians. When this service was taken over there were 111 skilled technicians, of which 85 transferred, 24 resigned and two retired. The point here is that 24 of the skilled technicians resigned, which is almost a quarter of the skilled technicians on the staff, and that caused to a certain extent difficulties in maintaining a reasonable service on the telephone exchange.

I do not believe that the reports which appeared in the Press on 1st and 2nd April, saying that the telephone system was now in a chaotic condition and that chaos reigned in the Durban telephone service, are factual. However, it is important to know that in taking over this service the hon. the Minister is confident that he has sufficient staff to maintain the service and to replace those persons who unfortunately resigned and did not take the opportunity of joining the Government service or transferring to the control of the Government in terms of this undertaking. We do hope that the hon. the Minister can give an assurance that there will be a reliable and satisfactory service as far as the functioning of this telephone service is concerned. We on this side of the House support this Bill in principle.

Mr. Speaker, we on this side of the House are grateful for the support which this measure is receiving from hon. members opposite.

You must also be grateful to Durban.

I think Durban is also grateful to the Government for this measure.

I should not like to go into this measure in detail because this was done very comprehensively by the hon. the Minister. The hon. member for Umbilo also furnished quite a few particulars. These are the fruits of long discussions between the hon. the Minister, the Department and the corporation concerned. The fact that agreement was reached about the measure, attests to the very thorough work done by all parties concerned. The interests of the Durban Corporation have been very well looked after and the conditions of their transfer are very reasonable. By way of this measure the Department has also gone out of its way to make provision for those persons who were perhaps a little over-hasty and who resigned from the Durban Corporation. Usually, when there is a take-over of one undertaking by another, there is a measure of uncertainty among the staff. This is quite natural. By way of this measure that uncertainty is being eliminated altogether. The sound principle and the truism that a sound agreement breeds good friendship will also apply here. I am not very concerned, like the hon. member for Umbilo, about the fact that a mere 49 out of a total of 457 staff members resigned, nor about the problem of technicians, which was mentioned by the hon. member. Those resignations most probably resulted from the uncertainty which existed. The hon. the Minister has, by way of this measure, made provision for those people to return to the Department. I am sure that the staff members will find that the employer they have now got will look to their interests as well and much better than their previous employer. If one now considers the fact that they have become a part of a much larger undertaking with much greater possibilities for promotion, one finds that they have a great deal to be grateful for. One would just like to see those people, who have been specially accommodated and who are perhaps not conversant with both languages, making use of the opportunity to acquaint themselves with both languages so that they can be considered for possible future promotion.

But that will surely not be taken into consideration when it comes to promotion.

Perhaps the hon. member for Orange Grove did not understand what I meant. When possibilities for promotion come up in other places where bilingualism is a requirement, the factor ought surely to be taken into consideration. The longer working week is perhaps a disadvantage for them, but this will not be a big obstacle, because more work is beneficial to one. It is specifically one of the disadvantages of the modern age that we want to give increasingly less and want to receive increasingly more. Here the opportunity is presenting itself for those people to give a little more.

I am glad that I have also had the opportunity, in these few words, to say to the hon. the Minister that we are very grateful that this Bill, which followed upon the take-over of the Durban Corporation’s telephone system, will take its course and will be placed on the Statute Book before the year is out.

Mr. Speaker, it has already been said that we support this Bill. However, I think in doing so we must pay tribute to the Durban Telephone Corporation for having run a highly successful telephone department for so many years. It has been a source of pride to the city of Durban. While it is a sad day for the city of Durban that it has now lost its telephone exchange, it was inevitable in the course of events. In fact, the take-over of the Durban Telephone Company by the Government was suggested as far back as 1910. Therefore, while it has taken many years to come to this take-over, it is something that had to happen for the benefit of progress.

But there are one or two matters which I should like to raise with the hon. the Minister, matters which are not altogether clear in the Bill before us. I have raised these matters on a previous occasion, but I should like to have some clarity from the Minister in this respect. In his Second Reading speech the Minister mentioned the number of white and Bantu workers, but made no mention of the number of Indian or Coloured workers.

I should like to ask the hon. the Minister whether there were employed Indian or Coloured workers by the Durban Telephone Company. I think this is important because I am quite certain that I have seen Indians or Coloured employed by the Durban Telephone Company in the past. Therefore, I should like to ask the hon. the Minister how many of these people were employed. This leads me to the second and main point which I should like to make. I should like to know what is the number of hours worked per shift by the non-European workers now coming in under the control of the Post Office. The white workers of the Durban Telephone Department, as mentioned by the hon. member for Umbilo, worked a total of 40 hours per week. This has been increased to 44 hours and their earnings have been increased by 10 per cent. I want to ask the hon. the Minister if he could please tell me whether the non-White workers have had their shifts increased accordingly and whether their shifts are the same as that of the white worker. I ask this particularly because in the Post Office Coloured workers working with Whites work a 48 hour week. The Whites with whom they work, work a 44 hour week. What actually happens in practice is that a Coloured worker working alongside a white technician works 48 hours while the white worker works 44 hours. Therefore, when the white worker has done 44 hours and he works another four hours he has four hours overtime. But the non-White worker working alongside him in fact does not complete his shift until he has worked 48 hours. I know that this has been a bugbear in the Department and among the technicians of the Department. The European technicians of the Department for many many years have felt that this is unfair.

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

Mr. Speaker, this concerns the conditions of service of people taken over by the Government from the Durban Telephone Department. I should like to ask the hon. the Minister whether the shift hours of the non-White workers who now come under his Department as a result of this takeover, have been increased. If they have been increased, I should also like to know whether, like the white workers, their salaries have been increased at the same time.

What was the position in the Durban Municipality?

Order! The hon. member may proceed.

I ask this in all seriousness and should like the hon. the Minister to give me a reply to these questions. I am not trying to make any politics of the issue. For my information, I should like to know whether these people are in as good a position or in a worse position than they were before. It is quite a simple matter for the hon. the Minister to reply to me despite the noise that came from the other side.

Mr. Speaker, I just want to reply to the two matters which the hon. member for Port Natal has just raised. There were no Indians or Coloureds in the employ of the Durban Corporation. Consequently no Indians and Coloureds were taken over by the Post Office, but only Whites and Bantu.

Then he asked whether the working hours of the white and the non-white staff had been increased. No, the working hours have thus far not been changed at all. The staff first have to elect under what conditions they want to serve. Then further arrangements will be made in this connection. But thus far there has been no increase in the working hours of Whites and non-Whites. They are still working under precisely the same conditions as those under which they worked for the Durban Corporation.

The hon. member for Umbilo referred to newspaper reports. Well, there were many conflicting newspaper reports in connection with the take-over. The hon. member is probably aware of the fact that one afternoon paper said that the take-over had been chaotic, and that another paper said the following day that everything had gone off smoothly. I should like to give the hon. member the assurance in any case that there was no disruption of the service at all. Everything went off well. Some newspapers perhaps simply wanted to make a little propaganda against the Post Office, but it misfired in any case. That rabbit simply did not want to run. I want to give the hon. member the assurance that we are paying attention to the shortcomings in the service up to now. There are shortcomings. In the past there were complaints from telephone subscribers in the area. The maintenance of the system was not always satisfactory either. There is a serious overloading of the telephone system as such. The quality of the service, technically speaking, has been unsatisfactory for quite some time. This, of course, cannot be rectified overnight as a result of the take-over by the Post Office. On many occasions this session I have had to listen to complaints about the tremendous shortage of telephones. For the hon. member for Orange Grove’s information, I found it interesting that the number of outstanding applications in the Durban Corporation area in relation to the overall number of subscribers was 8.5 per cent, as against the 5 per cent of the Post Office. In any case, I should like to give the hon. member the assurance that the Post Office will try to live up to its reputation of doing its utmost to provide good service, sometimes under difficult circumstances, in the Durban Corporation area as well. That is the assurance the hon. member asked me to give.

Then the hon. member also referred to the number of working hours. I have already given the hon. member for Port Natal a reply on that. He also said that he would like to know what was being done in connection with the choice exercised in respect of pensions. He said that some of the staff may easily make a wrong choice. I want to tell him that the staff will be fully informed in respect of the privileges attaching to the pension scheme offered by the State as against the benefits offered by the City Council’s pension fund, so that they can have all the information at their disposal before making a choice in that connection. However, I am sorry, but once the staff have chosen, the choice is a permanent one. I think that they are getting a long time in which to do so, i.e. six months, and in exceptional cases, if they request it, a bit longer. I am genuinely sorry, but I do not think I can give them another choice once they have chosen after having been properly informed about the various benefits and privileges attaching to the pension funds and after they have had such a long time in which to exercise their choice.

Mr. Speaker, the hon. member also referred to a figure of 457 out of 524 employees who came over to our service. The figure of 457, which was previously furnished in reply to a question by the hon. member, appeared to be wrong after all the information had been gathered and a better idea had been gained of the decisions of the staff. The actual number that came over was not 457, but 481.

How many resignations were there?

The number of employees who were not taken over by the Post Office was 66 Whites and I non-White, a total of 67. The figure of 66 was made up as follows: Resigned—39; retired on pension—9; transferred to other posts with the City Council—18. In other words, 39 resigned, but an overall total of 66 Whites did not come over to the service of the Post Office.

The hon. member also wanted to know something about the leave benefits. If an employee resigns from the Post Office and he did not take 25 per cent at the take-over, he is paid out for that if he chooses the conditions of service of the City Council. Everyone is credited with his leave at the Post Office, and upon retirement he can be paid out for a maximum of 180 days if he chose the conditions of service of the Post Office. This also applies if he is discharged before retirement owing to poor health or reorganization. If he resigns or is discharged owing to misconduct, he does not, of course, get this.

Mr. Speaker, I think I have replied to all the questions. If there is something I have omitted, it can be raised again during the Committee Stage.

Motion put and agreed to.

Bill read a Second Time.

Mr. Speaker, I move—

The object of the amendments contained in this Bill is to make provision for—

1. (a) the application of the provisions of the Companies Act, 1926, to South-West Africa; and
2. (b) the transfer of the business, rights, obligations and property of a company registered abroad to a company established in the Republic for the purpose of taking over such business, rights, obligations and property.

The first amendment to which I referred is consequent upon the South-West Africa Affairs Act, 1969, which was put into operation on 1st April, 1969. This Act provides, inter alia, that matters relating to the promotion, incorporation, registration, management, administration, winding-up and dissolution of companies shall be reserved from legislation by the Legislative Assembly of South-West Africa. Since the commencement of this Act the Registrar of Companies in the Republic has therefore been dealing with the administrative matters in respect of companies in South-West Africa in accordance with the provisions of the Companies Ordinance of South-West Africa, and all the registers and records of the Companies Office in South-West Africa have been transferred to Pretoria. As from the same date matters relating to the winding-up of companies fall under the Minister of Justice and are being dealt with by the Master of the Supreme Court in South-West Africa.

The Companies Ordinance of South-West Africa was based on the Companies Act of the Republic and has been adapted from time to time in pursuance of amendments to the South African Companies Act. However, although differences between the two Acts occur here and there, the Companies Act and the Ordinance correspond to a large extent, and therefore the application of the South African Companies Act to companies in South-West Africa ought not to present those companies with any problems.

The application of the South African Companies Act in South-West Africa will also eliminate certain anomalies resulting from the application of the various Acts in the two territories. One of these anomalies is that, in terms of the Ordinance, a company which has been registered in the Republic and is doing business in South-West Africa has to be entered in the register of companies of South-West Africa as a foreign company. The same applies to a company which has been registered in South-West Africa and is doing business in the Republic. Such a company must also be entered in our register of companies as a foreign company. The Ordinance also provided for the recognition of the existence of companies registered in terms of an old German Act, of 1892, whereas our Companies Act does not contain a corresponding provision. The consolidation of the registers of companies of South-West Africa and of the Republic will obviate the problem which is being experienced in regard to foreign companies of this type. As regards companies which have been registered in terms of the old German Act, a provision is being incorporated in our Companies Act which will ensure the continued existence of those companies in terms of the Republic’s legislation.

With a view to the application of the Republic’s companies legislation to South-West Africa, quite a number of the sections of the Companies Act will have to be adapted. The amendments include, inter alia, provision for the consolidation of registers, the regulation of company names, the adaptation of address requirements and the advertisement of company meetings in South-West Africa. In the course of analysing the Act with a view to determining what adaptations had to be effected for integrating under one Act the companies in the two territories, it was found that to amend one of the subsections of the section dealing with company names would result in ties with the Crown and the British Commonwealth having to be reconfirmed. Something of that nature would have been foreign in present legislation in the Republic, and subsequent to careful consideration and discussions conducted by the Registrar of Companies with the Commission of Inquiry into the Companies Act, it was decided to delete the section in question instead of amending it since the Registrar of Companies had enough powers under the Act to enable him to refuse to register undesirable names.

The second amendment contained in the Bill is consequent upon the problems experienced by foreign companies which carry on their principal business within the Republic when they wish to transfer the legal personality of the foreign company to a company established locally for that purpose. The principle of granting concessions to such foreign companies which are voluntarily wound up in the country of registration, has already been embodied in our Companies Act. These concessions are being granted by the courts by way of court orders and include exemption from transfer duties on the transfer of immovable property to the locally established company, as well as the transfer to that company of licences, permits, certificates and authorities held in terms of other laws. However, to large foreign companies which are carrying on their business in the Republic, voluntary winding-up in the country of registration virtually amounts to attempting the impossible, especially if regard is had to the fact that in such a winding-up all the claims of the creditors become payable. This problem is even greater in extent in cases where such a company has issued long-term debentures and has to redeem these debentures upon winding up. In order to cope with these problems which are involved in a voluntary winding-up, such companies may make use of a plan whereby the shareholders and debenture holders in one company transfer their shares and debentures to another company in exchange for shares and debentures in the latter company. This also implies that the business, rights, obligations and property of the company concerned have to be transferred to the other company. In the Republic such a plan requires the consent of the court, which does of course see to it that interested parties do not suffer any loss. Such a plan in respect of the transfer of shares may also be carried through between a foreign company and a locally registered company. But in view of the fact that in such a case two separate systems of law are involved, a statutory provision is required for the purpose of ensuring the continuation of the foreign company’s legal personality in the locally registered company. It is, therefore, essential to extend the powers of the local courts—which have already been incorporated in the Act—in respect of granting concessions to foreign companies, which are desirous of transferring their legal personality to South Africa. These powers must include the take-over by the local company of the business, rights, obligations and property of the foreign company in order that the legal personality of the foreign company may in this way be continued in the local company. Apart from these statutory provisions, provision is also being made in the Bill for exemption from stamp duties on shares which are being exchanged between the shareholders of a foreign company and the shareholders of the locally registered company. As has already been mentioned, the principle of exemption from transfer duties on the transfer of immovable property under such circumstances, has already been embodied in the Act. Therefore it is hoped that there will be no objection to exemption being granted from the payment of stamp duties in such cases.

Mr. Speaker, if I may say so, I think it is a pity that the hon. the Deputy Minister is so confidential when he introduces his Bills. He reads them so quietly that it seems as though he is still practising in his dressing room. This can make it very difficult to reply to him. I know the Deputy Minister can speak quite loudly when he wants to, I would ask him therefore, when he is introducing Bills, to use that stentorian voice which I know he can use. However, on this occasion, this Bill speaks for itself, and so we can reply without having heard much of what he had to say. The Bill has two objects. The one is to incorporate the territory of South-West Africa into the Companies Act. That part of the Bill deals with administrative details to make that possible. The second part is to make it possible for a foreign company, which is registered abroad, to transfer its head office and its shareholding to this country. We on this side of the House are in agreement with both those objects and therefore we support the Second Reading of the Bill.

Motion put and agreed to.

Bill read a Second Time.

Mr. Speaker, I move—

For quite some time a number of odd matters in respect of the S.A. Reserve Bank Act of 1944 have been requiring attention. However, no single one of these matters was deemed sufficiently important to be introduced as a special amendment to the Act. It is only now that South Africa has to create the empowering machinery for accepting, if South Africa should be of the opinion that that would be in its best interests, the new international means of payment called special drawing rights (SDRs), which will probably be created by the International Monetary Fund within the next few months, that an opportunity is offering itself for including all these miscellaneous items in one amending Bill. Because those clauses in this Amendment Bill which deal with SDRs require a more detailed explanation at this stage, I should like to deal first with the other amendments which are being proDOsed now.

Clause 1 (a) and 2:

In clauses 1 (a) and 2 it is being proposed to substitute the wider concept of “banking institution” for the definition and use of the concept of “commercial bank”, not only for the purpose of ensuring agreement with the use of these concepts in the Banks Act of 1965, but particularly for the sake of preventing, in the appointment of the Governor and Deputy-Governor as well as other directors of the S.A. Reserve Bank, the possibility of appointing any person who, although he might not be associated with a commercial bank, could nevertheless be legally associated with a discount house, general bank, hire-purchase bank, merchant bank or even a savings bank, all of which are institutions which fall directly under the supervision of the Reserve Bank itself. It is deemed desirable that no member of the Board of Directors of the S.A. Reserve Bank should be a director or employee in any capacity of the said types of banking institutions.

Clause 3 (a):

In this clause authority is being asked for the S.A. Reserve Bank to issue its own interest-bearing securities. One of the recognized objects of the monetary policy of every country to-day is the orderly regulation of the amount of money in that country. In an open economy such as that of South Africa, however, on account of our relatively large goods and financial traffic with the outside world, the maintenance of internal monetary stability is aggravated by the large fluctuations which may flow from the balance of payments. Open market transactions, in other words the purchase and sale of Government stock and other securities, is one of the proven methods by means of which a central bank is able to control the amount of money in a country. In a time of excess liquidity the S.A. Reserve Bank can therefore sell a portion of its holdings of Government stock on the open market with the object of withdrawing surplus money from the market, thus also making the bank rate more effective.

This policy was followed deliberately by the Reserve Bank in the post-war years, but the ability of the bank to undertake such open market transactions over an extended period of excess liquidity was always subject to the statutory restrictions on the holdings of Government stock. These restrictions were made less comprehensive in 1941 and 1961. The Finance Act of 1941 allowed an increase in the Government stock holdings of the Reserve Bank whereas the South African Reserve Bank Amendment Act of 1961 extended this increase. In 1964 it was decided that the Treasury should also assist the Reserve Bank as regards the absorption of surplus liquidity. The Treasury therefore used its powers which it obtained in 1964 in terms of section 3 (bis) of the General Loans Act, to borrow further amounts over and above those required for financing its own expenditure. The disadvantage of this type of action by the Treasury is, however, the considerable direct costs this entails for the taxpayer as a result of the increase in the public debt interest burden, a factor to which I referred in my latest Budget speech. At the same time public deposits with tjie Reserve Bank are also increasing. Some years ago when this excess liquidity started building up it was not possible to foresee how prolonged this process would be and what the magnitude of it would be. For example, the balance of payments position gave rise to an increase of as much as R500 million in the level of internal liquidity last year alone. Consequently it was felt that the monetary authorities should have even wider and more flexible powers than those which were decided upon in 1964, by allowing the Reserve Bank now to issue its own securities. This will be a supplementary instrument which will have the characteristic that public debt and the attendant sterilized deposits of the Treasury with the Reserve Bank will not grow either, although, of course, the Reserve Bank itself will have to carry the burden of interest now. Such powers were recently granted to two old established central banks in Europe, viz. the Swiss and the German Central Banks. In both cases the prolonged inflow of foreign money and the attendant increase in their internal quantity of money formed the underlying reason for the granting of this new instrument of control. What is more, at present this is generally found in the articles of association of newer central banks established during the past few decades. Examples include the articles of association of the Central Banks of Ceylon, the Philippines, Nicaragua, and others.

Clause 3 (b):

In terms of section 8 (f) of the South African Reserve Bank Act, 1944, the pension fund of the Bank may invest its funds in Government stock only. Now it is being proposed to omit this provision in order to render possible investments at higher returns in securities of local authorities and utility companies as well.

Clause 4:

The South African Reserve Bank is experiencing a great deal of difficulty with regard to claims made by the public in respect of partially destroyed, burnt, or otherwise mutilated notes. At present no provision exists in the principal Act with regard to the validity or otherwise of such mutilated notes, but it has always been the practice of the bank to pay to claimants, in its discretion, the full value or only part of the face value. The bank bas often had to refuse to make any payment if only small fragments of a note were offered, whereas in most cases it paid only half of the value of a note if only half a note was handed in. However, the right of the Bank to refuse full payment is not clear and not defined. This is an unsatisfactory state of affairs and it can cause embarrassment when the full value is claimed and only a small part of the note is offered for payment. Clause 4 seeks to define clearly this discretion of the Bank.

Clauses 1 (b), 3 (c) and 5:

During the past year or so hon. members probably often read about the new international means of payment which, in addition to gold and other internationally acceptable monetary units, such as dollars and sterling, was going to be created by the International Monetary Fund and was going to be distributed to participants for use. The reason for this step must be sought in the events which have occurred since the end of World War II, and particularly in the events which occurred during the past six to eight years. One of the most important after-effects of the war was the severe set-backs which most of the European economies suffered and which it would have been possible to remedy only over a period of years and with difficulty. On the other hand the economy of the U.S.A, emerged from the war relatively unscathed with the result that that country felt called upon to assist to a large extent with the rehabilitation of Europe, particularly by providing the necessary financing. The dollar became a sought-after monetary unit and was often described as the “hardest” unit of currency. In the course of years billions of dollars were pumped into the rest of the world in this way and countries started to add, in addition to gold and smaller amounts of other important currencies, relatively more and more dollars to their reserves of foreign exchange. Moreover, the expanding trade of the U.S.A, has been yielding a shortage of several billions of dollars virtually every year since the late fifties, which dollars had merely been retained or had to be retained by receiving countries in their reserves. This state of affairs could only continue as long as the U.S.A, was prepared and able, in accordance with its policy at that time, to exchange dollars freely against its gold reserves. Its gold reserves, however, started showing a tendency of decreasing rapidly and countries became progressively less willing to retain additional exchange assets in the form of dollars. Accordingly it soon became clear that, with the ever-increasing world trade, a constant gold price and limited new gold production, the gold and exchange reserves of the world had failed to keep abreast of the requirements of this trade and therefore a serious shortage of international liquidity was developing. This shortage would be aggravated if the U.S.A, and Britain were to succeed (as they intended domg) in arresting their balance of payments deficits and consequently the outflow of dollars and sterling which had been feeding the exchange reserves of other countries up to this time. Numerous academic people, study groups, committees, commissions, and the like, viewed this problem from all angles and came to the conclusion that, in their opinion, the past solution was to be found in the creation of some new internationally acceptable means of payment.

It is a pity that virtually none of those investigations and discussions thoroughly investigated the obvious solution, i.e. the simple increase in the official price of gold. There is no need for me to repeat all the arguments in favour and against that. It would be sufficient if I gave hon. members the assurance that we used all possible occasions and platforms for investigating this proposed solution to the liquidity problem at least as thoroughly as all the other plans and artificial devices. We were firmly convinced that if we were to succeed in that endeavour no other conclusion would have been possible but the conclusion that a simple increase in the official gold price would be the easiest, most expeditious and best solution to the problem. Be that as it may, the general feeling of the large powers was that the world should resort rather to the so-called “paper gold” than to an increase in the gold price, with the result that the International Monetary Fund took the initiative in designing a neutral, international type of exchange asset, called special drawing rights, which can be made available to all members of the Fund that would want to participate, in the expectation that an extension of international liquidity would follow in this way. The entire SDR scheme is embodied in the amended articles of association of the Fund which, up to this date, has not been adopted by the required number of members and percentage of votes but which will probably be operative before the next meeting of the Fund at the end of September this year.

There is no need for me to fatigue hon. members now with all the finer details of how it is being envisaged that the system will work in practice in the case of South Africa. This I shall do in my speech at the Second Reading of the Finance Bill this year which will be taken later. At this stage it is only necessary to explain in broad outline the basic features of the special drawing rights scheme and how it may affect South Africa. SDRs are tied to a fixed quantity of gold (the same quantity of gold as that to which one dollar is tied at present) but they are not directly negotiable for gold. In essence SDRs are credits created on the books of the International Monetary Fund which are allocated to countries in relation to their quotas in the Fund. Each member of the Fund (at present there are 111) may decide for itself whether or not it will participate in the SDR scheme. The governors of the Fund, when the decision has to be taken how many SDRs have to be created periodically, have the task of estimating the quantity required annually per basic period of five years in such a way that that will promote the objects of the Fund and will at the same time avoid economic stagnation, deflation, excessive demand and inflation. In addition, in respect of the first creation of SDRs, the achievement of a better balance of payments equilibrium and the purposeful smoother operation of the adjustment process in the future have to be taken into account as special factors. This indeed is an unenviable task.

The idea is that as soon as a decision has been taken with regard to the overall amount to be created initially, allocations will be made to all participants in proportion to their quotas in the Fund. These allocations will be made only to the member country, that is to the Government, and not to other organizations, such as central banks. Moreover, these allocations are a type of “loan” made to such a member without the obligation of repayment for as long as such a member remains a participant or for so long as the allocation is not cancelled. It is possible for a member country to participate in the scheme but to give notice in advance that it will not want to receive any allocation of SDRs, and consequently no benefits or obligations either during any basic period of five years. Should it participate, however, and accept one or more allocations, it must also be prepared to accept subsequently the obligations attaching to such an allocation or allocations.

SDRs, like ordinary foreign exchange, can be used by countries for the payment of imports and services rendered, in other words, for balance of payments purposes, with this difference that all SDR transactions by the participant must take place via the Fund instead of directly and that SDRs may not be sold simply with a view to changing the composition of a participant’s gold and exchange reserves. It will not avail a country, as soon as it has received SDRs, to dispose of them immediately by offering them first for the payment of goods and services as such a country, as one which has relatively few SDRs, will soon be obliged by the Fund to resupplement its supply. What is more, a country is prohibited from exchanging its SDRs for gold or exchange of other countries if that will merely have the effect of changing the composition of its SDRs, gold and exchange reserves.

Apart from the allocations which actually are nothing but loans for which participants need not pay, participants can also be compelled to accept further SDRs from other countries via the Fund in exchange for a portion of their existing gold or convertible exchange as soon as they are “designated”, as it is called, by the Fund to do so. Designation by the Fund after allocation is a method of ensuring that SDR reserves will remain distributed fairly evenly amongst members. Designation may occur if a participant’s balance of payments and gross reserves are strong enough or also when a participant has a moderate balance of payments deficit provided its reserve position is nevertheless strong. What is more, a participant may not use more than 70 per cent, on an average, of its SDRs over any basic period of five years.

Hon. members will agree with me that this is a highly artificial type of reserve asset and that its acceptability will largely depend on the trust countries will put in it and the equitableness and moderation with which it will be used in practice. Originally there was talk of the SDRs being created at a rate of two billion per annum over the first five years, although there already is talk from the side of America of much larger intial amounts, as much as four to five billion and even more over the first year or two.

If South Africa were to become a participant and if all other members of the Fund were also to participate, it would mean, on the basis of our present quota in the Fund and on the basis of an annual allocation of two billion SDRs over five years, that we would receive an allocation of approximately R68 million in total in SDRs and would have to accept an obligation to absorb over that period of five years on designation up to double this figure, approximately R136 million, in SDRs in exchange for gold or exchange. As fewer members countries participate and/or allocations are increased, South Africa, if it participates, will, of course, have to accept more SDRs in accordance with that by means of allocations and designations.

Hon. members will notice that throughout this account I have been referring to the conditional participation of South Africa. I should like to state very clearly and frankly that at this stage the Government has not taken any decision at all with regard to participation or non-participation and that the provisions concerned in this Bill as well as those which will be proposed in the Finance Bill do not bind South Africa in any way to become a participant. The actual decision in this regard will be taken at a later stage when the first creation is imminent but in the meantime it is necessary to prepare all statutory powers if the decision should be “yes”, as the Fund requires that before a member country may participate in the scheme it must be able to confirm that it has taken all the necessary statutory steps for meeting its obligations under the scheme.

As regards the time-table, there still are a considerable number of stages which will have to be passed through before it will become possible to create SDRs in reality. My latest information is that the amendment of the articles of association of the Fund which will give the Fund the power to create SDRs has only been accepted by 54 countries with a voting strength of 74.74 per cent as against the required three-fifths, i.e. 67, of the member countries with four-fifths or 80 per cent of the voting strength. The expectations are, however, that this minimum qualifying number and percentage will be reached within the next month or so.

Subsequent to this at least as many countries as represent 75 per cent of the total quotas of the Fund should have received the necessary statutory Dowers to participate in this scheme and should have deposited their “instruments of participation”, with the Fund. Only then can the Fund start with the activation of creation of SDRs. At the moment 34 countries controlling 62.81 per cent of the quotas have deposited their “instrument of participation”. I do not expect all these steps to be completed before the end of the year, but it would not be advisable to postpone our empowering legislation until next year.

As regards the amendments to the S.A. Reserve Bank Act which are now being proposed as far as SDRs are concerned, clause 1 (b) merely gives the definition of SDRs whereas clause 3 (c) specifies that the Reserve Bank may deal with SDRs in the same way as it is dealing with its exchange reserves at present. The Reserve Bank will attend to the transactions in SDRs on behalf of the Treasury, but the methods in which this will be done will be laid down in the Finance Bill. As SDRs have to be dealt with in exactly the same way as an ordinary foreign exchange asset, clause 5 in turn makes provision for SDRs to be taken into account as well when foreign assets are deducted in the calculation of the Reserve Bank’s minimum obligation in respect of gold holdings for covering its note issue and other obligations towards the public.

Mr. Speaker, the hon. the Minister has introduced a very small Bill which we intend to support, but I think the hon. the Minister will agree with me that it is a very important Bill as it affects the financial disciplines of the banks of the country. Clause Ideals with the new definition of a banking institution. In recent years we have seen a growth of banking institutions. We have seen a growth of both the normal banking institutions and that of the new kinds of finance houses. This shows a more sophisticated approach to finance in this country but it also necessitates further disciplines, not only on behalf of the Treasury but also on behalf of all those who administer banking institutions. Banking institutions create the hon. the Minister’s biggest headache, namely credit. The problems of the Minister, the Treasury and the country as a whole are not determined by the amount of money that is available but by the amount of near-money that is available and which adds to the Minister’s inflation headaches. We hope the hon. the Minister will keep a close watch on the development of banking institutions and satisfy himself that where they cannot exert their own disciplines, he is in the position to exert the necessary disciplines. I say this because it is a tragedy for any country when finance houses go out of control. I am not suggesting that there are any finance houses which are out of control. When there is competition for finance and when rates are fixed and all the institutions are offering the same rates, there is the tendency for one institution to offer slightly better facilities by way of increased credit and that in turn can affect credit in the country as a whole. While widening the definition of a banking institution I hope that the hon. the Minister will ensure as far as possible that the disciplines of financial institutions will be maintained.

Clause 2 deals with the persons who may not be appointed as the governor or the deputy governor of the Reserve Bank. We agree with this suggestion. It is quite right that no person who has an interest in a commercial bank should be the governor or the deputy governor of the Reserve Bank. Very little can be said about clause 3 which deals with interest bearing securities.

In clause 3 (c), however, the Minister deals with the question of Special Drawing Rights and he has given a long explanation of SDRs. He has also indicated that at present he was preparing the ground for SDRs. At present he is not dealing in SDRs and the country is not buying nor selling SDRs.

I would like to know from the hon. the Minister whether, when we do deal in Special Drawing Rights, they will be shown separately in the Reserve Bank statement? The Reserve Bank statement shows the amount of gold reserves. Will Special Drawing Rights be shown as a separate item? The Minister knows that the position to-day is that we have a fortnightly statement from the Reserve Bank showing their financial position. At the present moment the Minister is not anxious that we inquire too deeply into the amount of reserves from time to time. We know the Minister’s difficulties. It is unfortunate that at the present moment, with South Africa as the biggest gold-producing country in the world and with the Minister and his predecessors having endeavoured for years to get the world to pay a higher price for gold, we find that the Minister has to accept Special Drawing Rights which, as is generally known, are regarded as paper gold. As the Bill indicates, the value of Special Drawing Rights is tied to the value of the gold content of the dollar. It is a device which is still in the experimental stage. The Minister has indicated that there are over 111 financial institutions in various parts of the world which are members of the International Monetary Fund; these are tied to the agreement under the International Monetary Fund and have to exert their own disciplines. One hopes that all those member countries will exert the disciplines required of them under the agreement. When they do not, it is very difficult to find out, and sometimes it can only be ascertained perhaps later than is necessarily healthy for the financial institutions as a whole. I hope that the hon. the Minister will maintain his plea for a revaluation of gold. But if he has to maintain Special Drawing Rights for some time to come, I hope that the Minister will ensure that they are shown separately in financial statements, so that the country will know exactly where it stands, i.e. how much is held in gold as distinct from the amount held under Special Drawing Rights.

Clause 4 deals with the bank’s obligation to deal with mutilated notes. The Minister says that this is a power which the bank has not had before, but I think this is a matter which should be dealt with sympathetically. After all, quite often these mutilated notes are in the hands of the poorer section of the community, our non-Europeans, and therefore this matter will have to be handled sympathetically by the banks and by the Reserve Bank to ensure that these people are not unduly prejudiced by this new insertion in the Bill. With those words, Sir, we support the Second Reading.

Mr. Speaker, I am not widening the definition of “bank;. The definition has already been widened under the Bank Act of 1965. I am just applying the new definition to this new Bill, which provides that a bank is not only a commercial bank but that a bank or a banking institution includes all these other types I of banks; so I am not actually widening the sphere of banking institutions.

You are widening it as far as the Reserve Bank is concerned.

Yes, I am widening it as far as the Reserve Bank is concerned, which only means that nobody who is a member of a discount house or of a merchant bank can be a member of the Board of the Reserve Bank. That is all its means. I fully agree with the hon. member with regard to the discipline that has to be exercised in regard to the creation of liquidity, but that is not the point at issue at the present moment.

Sir, the hon. member has asked me whether SDRs are to be shown separately in the reserves of the Reserve Bank. Yes, they are going to be shown separately. They will be shown separately from gold, foreign exchange, etc. The hon. member says that it is unfortunate that we are forced to accept paper gold instead of a real re-valuation of gold and that we must never neglect to force the issue or to press for a higher price for gold. I can assure the hon. member that we will never neglect our duty in this regard and that we shall always put the case for an increased price for gold. We are not yet forced to accept SDRs. We have not yet decided whether we are going to accept them or not, but if we do accept them, we will accept them not as a substitute for gold but as a supplement to gold. That is the only way in which we see SDRs. They are based on gold, and it has been stated quite clearly by the International Monetary Fund that SDRs are not a substitute for gold but merely a supplement to gold, and in that spirit we shall pursue our endeavours to have the price of gold re-valued.

The hon. member also referred to mutilated bank notes and the hardships that may be imposed upon the non-Whites of this country. I think the new section which is proposed in this Bill will provide for these cases because the Reserve Bank has complete discretion in this matter, and I am quite sure that the Reserve Bank will always apply its discretion sympathetically.

Why is a discretion necessary?

When a mutilated bank note is handed in, somebody must decide whether anything can be paid back on that particular note. If somebody walks into a bank and hands in a soiled or mutilated note or one-quarter of a note, somebody will have to decide what the value of that one-quarter of the note is or whether it has any value at all. We therefore leave it to the discretion of. the bank to decide what the value of the note is and we think that the Reserve Bank is the best body to decide that.

But the intention is to meet bona fide people?

That is the intention and in fact they have often repaid the value of the whole note instead of only a portion of the value of the note, but there are some instances where they cannot do that. If you present only one-quarter or a tenth of a note, the bank cannot be expected to repay the value of the whole note. It is very difficult to lay down specific regulations about soiled and mutilated notes; so we leave it completely to the discretion of the Reserve Bank.

Motion put and agreed to.

Bill read a Second Time.

I move—

Mr. Speaker, the proposed amendments set out in the Bill before the House will enable building societies to extend their activities in order to make a greater contribution towards the provision of housing and to exploit additional sources of income to finance their activities.

The activities of building societies in the Republic are almost exclusively restricted to accepting moneys by way of deposits and shares and using such moneys for the granting of advances against the security of mortgages of immovable property, mainly dwelling houses. As a result of the existing restrictions all the income required to pay interest on deposits and dividends on shares and to defray administration expenses must be recovered from the borrower. The burden thus placed on the borrower can only be alleviated by allowing building societies to supplement their income from other sources.

Building societies are finding it continually more difficult to draw sufficient funds from the public at reasonable rates of interest in the traditional way to provide in the community’s housing needs. In order to avoid further increases in the rate of interest on housing loans it was already necessary to grant certain income tax concessions, as an incentive to the public to invest more of their savings with building societies. Such concessions can only be of temporary assistance to societies and other steps must be taken to place societies on a firm footing again.

The proposed amendments will enable building societies to hold fixed property jointly with other persons (only sole ownership is presently permitted). In this manner substantial amounts which are at present invested in administrative buildings could be released for investment in housing. A building society will also be permitted to acquire a controlling interest in a company which may hold and develop fixed property, i.e. a company which, inter alia, may purchase land, develop such land into townships and erect dwelling houses and other buildings thereon. In this manner residential stands and dwelling houses will be made available more readily at reasonable prices. As this will be a new field for building societies and in order to ensure that undesirable practices will not arise, it is proposed that the Minister be empowered to lay down, after consultation with the Minister of Community Development, who is closely concerned with the general question of providing housing, conditions in regard to the operation of building societies in this field. Thirdly, a building society will be permitted to acquire a limited shareholding in a fixed property company to which the building society has granted a mortgage advance on a building of which at least 50 per cent of the floor area is being utilized for residential purposes.

Building societies will in this manner be permitted to enter the field of developing fixed property in respect of which they already have practically all the necessary expertise, and to share in certain respects in the appreciation of assets, which in many cases is made possible only on account of the financial assistance given by building societies, while under present circumstances the lending society has no share in such appreciation. In the final result these additional activities of societies should benefit both the investors and borrowers of building societies and also stimulate the flow of funds to societies. By developing townships building societies can contribute considerably more towards the provision of housing.

Apart from the matters already mentioned, the Bill also contains an amendment dealing with the application of the Limitation and Disclosure of Finance Charges Act, 1968, instead of the Usury Act, 1926.

Mr. Speaker, this Bill was duly discussed with the Association of Building Societies and the proposals contained therein have the full support of the building society movement.

Mr. Speaker, the hon. the Deputy Minister has, in a “stentorian” voice, introduced a Bill which fundamentally changes the functions of the building societies as we have known them for something like 100 years. The hon. the Deputy Minister has said that the concept of the building society was really to provide a channel through which the funds of the public could go to help the public in establishing homes. I think it is only right that we should place on record our appreciation of the work that the building societies have done in this field. They have provided an avenue for short-term investment and they have enabled hundreds of thousands of people in South Africa to acquire their own homes. But, Sir, times change and investment patterns change. In the course of this Session, we have discussed fairly broadly the change in the investment pattern of the individual from interest-bearing investments to equity investments. Over the past few years we have had new sophisticated methods of investment offered to the public, such as the mutual funds and participation bonds, and the building societies have found that funds which normally flowed to them have been diverted to other financial institutions, and therefore the Government has seen fit to introduce this Bill, which will enable the building societies to depart very radically from their activities of the past. Sir, we welcome this Bill.

A sigh of relief from the other side.

I think it is only a first step. I think we are going to find in the course of time that other adjustments will have to be made in so far as building societies are concerned. This is really not the first step: we have already had three changes in building society legislation in an endeavour to help them. Some little while ago we gave the building societies the right to form their own insurance companies; we gave them the right to issue tax-free shares, and the Government repaid the guaranteed portion of the 100 per cent loans given to civil servants. These steps have apparently been insufficient, as we read in the paper yesterday that the building societies say that they will have no funds to lend for the next three months. That may or may not be the case, but it is certainly a very appropriate moment to release this news just before this Bill came under discussion in the House. There is no doubt that the building societies are short of funds and there is no doubt that they are an essential part of our financial structure and that they play an essential part in encouraging the building of homes in this country. The new type of investment that is permitted in terms of this Bill means that there is a modicum of greater hazard as far as the investor is concerned, because the building societies are now leaving what one might call the realm of a simple mode of business operation, where they borrowed money and invested it on bonds, and they are now going out into the competitive field and leaving the field of sheltered employment. Had it not been for the fact that the building societies have established a reputation in this country for the way in which they have organized their own affairs, I think one might have had to look more deeply into this Bill. But the reputation of the building societies is an enviable one and we are more than happy that they should undertake these new types of business. As I have said, they are now moving into a new field, a field of competition, whereas before the competitive element never really entered into the activities of the building societies except in so far as getting funds from the public was concerned. There is no doubt that the building societies will now have to gear themselves, their organizations and their managements to meet these new challenges. In the long run we hope, with the Minister, that the proposals made to-day will give the building societies greater funds and will enable them perhaps, if not to reduce their interest rates, to avoid having to increase them. We hope that it will also bring down the cost of housing to the average person who utilizes the building society. I am glad to see that the building societies are following what has been the practice for a great number of years now, he where the big investor on mortgage bonds for large building schemes ensures that he will get a participation in the equity of that building, and that the building societies will now be able to take up 25 per cent of such shareholding. What has been happening in other fields of financing of this type is that the lender has given a mortgage to the company which is going to erect the buildings. The balance of the capital has been put in by way of loan account by the originator of the scheme, and a small capital amount has been formed to represent the capital of the company, of which the lender has put in perhaps R20 or R30, to ensure that in the event of capital appreciation, he, the lender, will get his share. If the building societies can invest in this way, the profits they will receive eventually through capital appreciation can help them in their problems and it can help the persons who want to borrow from them. We support the Bill, and as I say, I think we will find in the course of time that additional steps will have to be taken as regards the building societies, but this is a step we welcome.

We are dealing with this Bill at a time when the building societies are in difficulties. Last night it was reported in the Press that the building societies were in difficulties and would not be able to lend funds for building houses for three months. This morning’s paper denied it, and to-night’s papers confirm it again that the building societies are short of money. I would like an assurance from the Minister that when this Bill comes on the Statute Book the building societies will be able to build more houses. That is the acid test. It is the ordinary small man who wants a house. The young man who is starting a family wants to leave his flat and he wants a house to live in. Eventually he will pay that house off during his lifetime as his parents did before him. It is the ordinary man with whom we are concerned to-night. We want to be assured that when this Bill is passed it will not change the building societies into big property-developing institutions which forget the small man. This is an experiment. As the hon. member for Parktown has said, it is a first stage, because building societies have got competition, and one of the persons who must be asked for an explanation of their troubles is the Minister of Finance himself. One of the leading representatives of the building societies said this—

But the Minister of Economic Affairs knows that the Government is in this National Growth Fund. On the one hand the Minister of Finance wants money for his R.S.A. for his, and on the other hand the Minister of Economic Affairs appoints his own directors to the board of the I.D.C., which invests in the National Growth Fund, and is taking the money away from the building societies. One hand does not know what the other hand is doing. We want to be sure that when we pass this Bill the difficulties we are experiencing now, where millions are going into speculation which should be going into the building of houses for people who want them, young people who want to get away from their parents but cannot get accommodation, will not be made worse. I know at least half-a-dozen young couples in Cape Town living in flats who want to go into houses but they cannot get bonds from the building societies. This Bill gives the building societies additional powers, but I am doubtful whether it gives them all the powers they need. In recent years the Government stopped building societies from accepting money from companies for investment on fixed deposit and, furthermore, made it a condition that the fixed deposit should be for periods of not less than 12 months. We have had conditions placed on building societies with regard to the interest rate they charge on bonds, and they have found that their ordinary business has ground to a halt. While we support this Bill, while we know that the Association of Building Societies supports it, and while we know that some building society directors may be hungry to get into the big property-development business, our main concern to-night should be to ensure that the building society movement will continue with its basic function. Apart from property development, which is a new function, it should continue with its basic function, and that is to provide the money for Qur young people to own their own homes.

The hon. member for Parktown pointed out the problems of building societies and he also pointed out that funds which traditionally always flowed to building societies are now flowing in other directions. Well, the Government has shown in the past that it is not unsympathetic as regards the financial needs of the building societies, and by means of the various measures that were also mentioned by the hon. member for Parktown, such as taxation concessions and the right that was granted to building societies to issue their own debentures, and now by this measure as well, we have tried to solve the problems experienced by building societies in respect of funds. The hon. member for Pinetown made a somewhat emotional speech here, in which he said that he wanted to see houses, and that he wanted to know what assurance we had that the houses would be built. Well, this is our objective with this Bill. The hon. member for Pinetown knows that the Bill provides very clearly that as regards this development company which a building society is allowed to establish, the society may not invest more than a maximum of R4 million of its capital in that company. The hon. member will also know that the Building Societies Act—I think it is in section 42 (1)—provides that a building society may never invest more than 25 per cent of its total funds in bonds larger than R15,000; that is to say, the Building Societies Act restricts a building society to investing 75 per cent of its funds in bonds smaller than R15,000. I really think the hon. member for Pinetown may accept this as a very strong guarantee that the building societies will never be able to move into the direction of only making provision for large buddings. But I also want to point out to the hon. member that one of the conditions on page 6 under which the building societies will be allowed to establish these development companies, is that the Minister is entitled in terms of paragraph (c) to impose conditions as to the scope, the nature and the manner of performance of that development; not only in respect of the general concession he is granting to a building society, but also in respect of every specific development project undertaken by that building society. The hon. member may accept the assurance that the Minister, in consultation with the Minister of Community Development, will most definitely impose such conditions as will ensure that the housing needs of all groups will be looked after by the building societies. I may also tell the hon. member that we have specially brought in a new provision here, i.e. paragraph (mC) on page 6, in terms of which the Minister may enter into an agreement with a building society to develop a development project specifically for low-paid groups of people. How we shall do this, no one can tell at present, because we are entering a new field here to-day, but all the machinery is being created here to render a major service to our people, and I think all the safety-valves are included in this Bill. I may also tell the hon. member that the building societies have also given the Minister assurances that as far as their normal housing funds are concerned, they are also prepared to submit half-yearly reports in respect of those funds to the Minister in order to satisfy him at all times that proper provision is being made for the housing needs of the lower-income groups.

You are creating a machine, but will the machine work?

Yes, I am most positive that we are going to make this machine work. It is a new field. We will have to find our way, but we are dealing with very dependable people and people of very high standing. They have come to an agreement with the Minister and we are quite sure that they will honour their part of the agreement and that we will not regret passing this Bill in this House to-day.

Mr. Speaker, I move—

A few years ago my predecessor promised that the Government would once more review the electoral laws, and consequently all political parties and other interested bodies were invited to consider the matter and to submit comments and recommendations to my Department. After my Department had received all the documents, it submitted a draft Bill to me and to the Cabinet, which was approved by the Cabinet. The Bill was read a First Time in this House early this Session and, as is customary, and in accordance with the gentleman’s agreement which exists between the governing party and the Opposition, it was referred to a Select Committee for consideration. The Committee was given power to call for evidence and to submit an amended and/or new Bill. This step has proved once more what a democratic country the Republic of South Africa is and to what extent the Government and the Opposition co-operate on matters of national interest.

Our electoral laws contain the real principle on which our structure of national representation is based, namely the principle of a free vote, a free vote which entails that improper influence must not be brought to bear upon a voter, and in order to eliminate this the voter must, inter alia, cast his vote in secret. For that reason care must be taken that those facilities are made available to a voter which enable him to cast his vote in as convenient a way as possible without affecting free voting.

We shall now proceed to deal with the final product of the Select Committee, which consisted of men of both the main parties, and, that, in addition to capable and experienced men who were well-equipped for the task. It is quite evident that they not only performed the task very well, but also made a searching study of the whole matter and of all the documents and evidence. They conducted their deliberations in a serious, meticulous and precise manner and no over-hasty decisions were made. There was no question of party-political gain either. Moreover, there is no doubt at all that they have succeeded admirably in their task. Therefore I should like to avail myself of this opportunity of conveying to them the gratitude and congratulations of not only the Government and myself, but also of the entire electorate of the Republic.

I do not think anybody will take it amiss of me if I convey a special word of thanks and appreciation particularly to the Chairman, Mr. D. J. G. van den Heever, for the capable and valuable services he rendered. For this we are indebted to him. The particular interest and diligence he displayed is reflected both in the Bill which was submitted to us by the Select Committee and in the proceedings of the Committee as is evident from the minutes.

Sir, this Bill of the Select Committee has been on the Table of this House for a considerable time now and it also enjoyed widespread prominence in the Press and over the radio. Since the decisions and recommendations of the Committee were unanimous, I think I need not deal in detail with and dissect the scope and aims of the Bill clause by clause as is customary in the case of other amending Bills. The Electoral Act is the one Act that affects every member of this House most closely and I therefore take it that hon. members have acquainted themselves with the contents thereof. If there is anything that needs to be clarified, we may deal with it in the Committee Stage; however, I do not even think this will be necessary.

The basic objects of the amendments are mainly aimed at making it easier for the voter to cast his vote and at facilitating and expediting administrative procedures during elections as well as preventing abuses and malpractices. However, the most important amendments to the principles of the existing provisions are briefly as follows—

1. 1. Police trainees are being placed on the same basis as military trainees as far as the registration of voters is concerned.
2. 2. Persons who are being dealt with in terms of the Retreats and Rehabilitation Centres Act, 1963, are no longer disqualified in terms of section 6 of the Electoral laws from registering as voters.
3. 3. There shall not be another de novo system of registration of voters and we shall therefore revert to the system of using the existing voters’ rolls as a basis, to adjust and supplement them by means of visits paid to every home in the Republic and South-West Africa by official canvassers. In this connection I may announce for general information that it has been decided to commence the next general registration of voters on 13th October, 1969.
4. 4. The period of the registration is being extended from 30 to 42 days.
5. 5. The supplementary list of voters which, at present, comes into operation two months after the closing date of a supplementary period, will henceforth come into operation after 42 days. The effect of this will be that it will henceforth be possible to hold an election, where necessary, on an earlier date after the closing date of a supplementary registration if it is deemed advisable that such supplementary list should be used in such election as well.
6. 6. The two months’ residence qualification which is a requirement at present, is being abolished.
7. 7. The adjustment of voters’ lists (section 30bis) is defined in clearer terms.
8. 8. In order to allow a longer period in which special votes may be cast, the period between nomination and polling day is being extended from 28 to 35 days to 35 to 45 days and, where possible, applications for special votes may be submitted the day following nomination.
9. 9. The deposit candidates are required to pay when they are nominated is being increased from R200 to R400.
10. 10. Henceforth a returning officer has to be informed either by telegraphic message or by letter five instead of seven days before polling day if a special voter has cast his vote.
11. 11. The uncertainty that existed in the past as regards the fixing of the date of resignation of a member of the House of Assembly is now being eliminated.

Mr Speaker, the abovementioned amendments are the most important ones. The other amendments, although not of lesser importance, need not be explained since they are more of a consequential nature. All they are actually doing is to facilitate and simplify the whole voting procedure.

There are certain amendments my Department and I, with a view to experience gained over many years and the shortage of staff, do not feel quite happy about. We accept the Bill as drafted by the Select Committee, and after the first election we shall try and see in which way the difficulties may be overcome. If there are any insurmountable difficulties, we shall have to reconsider the position.

As I have said, this legislation of the Select Committee is aimed at facilitating matters for the voter. In view of this I expect that this measure will be passed unopposed.

Mr. Speaker, I am glad that I need not disappoint the Minister in his fondest expectations. He can be assured of the fact that the Opposition supports the Bill in principle. There is one matter on which we could not agree in the Select Committee and we shall accordingly move an amendment in the Committee Stage. As always, it was a particularly interesting experience to serve on this Select Committee, for as students of politics know, when it comes to electoral laws the two parties act as watchdogs over one another. The best guarantee one has of honest politics during election time is the fact that the one party does not trust the other completely. That is also the time when each party does its best to catch the other committing irregularities. When we convene as a Select Committee in the quiet atmosphere of the Committee room, we, as opponents who respect one another, can try to draw up an Act which will be in the best interests of the democratic process in South Africa. In this spirit the majority members of the Committee and the minority members of the Committee cooperated in order to bring this report before the Assembly. I do not want to go into details, because that was done by the hon. the Minister. There are certain matters which required discussion before we could agree on them. There is for example the interesting provision that in future it will no longer be necessary for a voter to register in a new constituency after having lived there for two months. He only has to state that he is now permanently resident in that constituency, and that is accepted. This corresponds to the practice in other countries, especially in some States of the United States, that a person can register at the polls and then vote immediately afterwards. But then, of course, the sanctions, in the case where he makes a false statement are very painful and very severe.

Is the man standing there a living person?

He must present himself in person before he can be registered. I would just like to say that I expect, and I hope the hon. the Minister will confirm this so that the public can know about it, that since this important concession is being made, if any offences are committed in the form of false statements, the State will take harsh steps to prevent them from doing so, irrespective of who or what person may be concerned. I know of many cases, not on our side mind you, where the two months’ regulation was in fact not strictly complied with! Then we in the Select Committee also spent a great deal of time on the extremely difficult question of absent voters, the postal vote system. When we convene in private it is a foregone conclusion that we will regard the postal vote system as being an evil in our public life. The ballot paper is lost to the control of the State, of impartial persons. As soon as the ballot papers fall in the hands of people who have an interest in party matters, people with party affiliations, the temptation to commit malpractices is virtually irresistible. I think we have reached a stage where both sides of the House admit this. If it is possible to devise an alternative to the postal vote, it must improve the quality of our public life. This Committee and its predecessor, which was also under the guidance of the same chairman, devoted a great deal of attention to this matter. The Committee came to the conclusion that the system which the Bill goes on to deal with, i.e. the system of special ballot papers, offered a possible solution to the moral problems which are created by the postal vote system. The principle involved there is that persons have to vote before an impartial presiding officer if they are not able to attend the polls on polling day. The ballot papers will remain under the control of State officials. In our experience these people are impartial and unimpeachable when it comes to dealing with these matters. However, at the 1966 election we found that practical difficulties arose. From personal experience I can attest to the most important practical difficulties. In the constituency which I have the honour of representing, my opponent and I agreed not to use the postal vote system at all. All our votes were polled by means of the special system. We found that there were endless delays, because it is an extremely slow process. As the hon. the Minister said, this Bill tries to overcome this problem by increasing the number of presiding officers for special voters as far as possible. It means that, as a result of an agreement between the parties concerned in the election in a constituency, a larger number of impartial persons are going to be appointed as presiding officers for special votes. The times are also appointed so that persons will be available from 8 in the morning until 8 at night, except Sundays, to provide for the needs of special voters. That is apparently one of the questions to which the hon. the Minister referred. He said that the Department was concerned about the manpower position and the ability of the Department to carry out this task. I, in all sincerity, want to express the hope that this problem will be solved. The Select Committee adopted the standpoint that in the next provincial election this new system must be put to the test alongside the old postal vote system. If the special vote system operates smoothly and efficiently I think all public representatives who are concerned with elections hope that we shall at last be able to rid ourselves of the postal vote system and the offences which inevitably accompany it. We of the Opposition and I know, through my contact with members of the Government side, they, too, would be grateful if it were possible for the Department of the Interior to apply the special vote system in such a way that the postal vote system can be replaced.

I should like to come back to one aspect which does not appear in this Bill. Personally I regret that it does not appear here. The previous Select Committee, under the chairmanship of the hon the Deputy Speaker, made a suggestion to the effect that all public institutions concerned with any change of address in the course of their business, should make all such changes which come to their attention available to the chief electoral officer. It must be done so that the voters’ lists can be brought up to date regularly. We had in mind institutions such as the Receiver of Revenue. In the case of the Receiver of Revenue legislation will have to be passed in order to make it possible for him to furnish any change of address to the electoral officers. We also thought of the Broadcasting Corporation and the municipalities which deal with the water and electricity accounts of ratepayers. We had the Population Register in mind, and all the bodies which control changes of address. If they furnish the chief electoral officer and his officials with the information which they come across in the course of their business, the voters’ list can be brought up to date regularly in a way which it is not possible to do under the existing system. If this were to be done there would be an ever-decreasing need for postal votes and special votes. The manpower problem at election times might also be alleviated then. Nor will the tremendous demands which are at present being made on party organizations and candidates as a result of the problem of absent voters, then be made. I should like to express the hope that this idea has not been lost. I do not think it has been lost because we have heard about a Book of Life which apparently stems from the same idea. I want to say that in my opinion the Department is overreaching itself. Perhaps they should start by applying the idea to the voters’ list. There it may be of immediate and practical value. As experience is gained and as we get to know more about how it functions, it could be extended, in a planned way, to other aspects of our national life.

I have mentioned these ideas not with the object of being negative and of delaying matters, but because I know that it really is the desire of each member of the House that our vote system should be brought up to date and placed beyond suspicion in order to make the democratic processes of our country effective.

Mr. Speaker, I am very glad to be able to associate myself on this occasion with what the hon. the Minister and the hon. member for Yeoville have said. In the first place, we as members of the Select Committee want to say that we are highly appreciative of the guidance we had from our Chairman, Mr. Van den Heever. We know Mr. Van den Heever as somebody who is very interested in these matters, who makes a thorough study and undertakes research as far as electoral laws and demarcation are concerned, and as somebody who makes himself familiar with elections and all that goes with them. Thanks to the research work he has undertaken, the patience he has displayed and the guidance he has given us we were able to reach unanimity on a matter such as this, except for one minor point which, as far as I am concerned, is not a matter of principle and which may be discussed fruitfully during the Committee Stage. We want to express our appreciation for the sound understanding displayed by Mr. Van den Heever. As I have said, as a result of all these things we were able to reach a large degree of unanimity on this matter—a matter that could quite easily become controversial and contentious—and submit this Bill to this House. We are convinced that all of us who served on the Select Committee co-operated harmoniously to streamline our electoral laws and particularly the votes of absent voters to enable us to give more people an opportunity of casting their vote more conveniently when they cannot be present themselves. When speaking about votes of absent voters, I do not only mean the system of postal votes, but particularly the system of special votes.

It is a fact that the South African voter attaches great value to his vote. He does not do so simply because he wants to cast his vote, but because his vote will be counted in favour of the candidate of his choice. By that I do not want to suggest that the votes are being tampered with. That may be so. This matter is possibly being exaggerated a great deal more than is actually the case …

What about the evidence given before the Select Committee?

Let me just finish my sentence. The system of postal votes makes it possible for suspicion to be created. As the Minister has also said, one rather wants to avoid malpractices than to allow them to arise in such a fine thing as an election and to try to remedy them afterwards. Malpractices can therefore, arise, and this system lends itself to suspicion. I do not think this side of the House has ever been guilty of tampering with postal votes. [Interjections.]

I have said that the South African voter is very jealous of his vote and his franchise, because he knows that when he goes to the polling-booth to make his cross in a country such as South Africa where we are very conscious of politics, he goes there to exercise his franchise and that he helps to determine the future by casting his vote. I think G. A. Water-meyer expressed this particularly well when he said the following in one of his poems: “Want elke hand wat kruisies maak, is hand wat aan die toekoms raak.” With this Bill we are creating opportunities for such voters to cast their votes. On my part I trust that we shall make things much easier for absent voters during the next provincial council election, and that an appeal will be made to the State and the Department of the Interior to make available the necessary assistance to see to it that it will be possible to apply this Bill in practice. I trust that the opportunity will be created for the special vote to prove itself, because I do not think we should continue to have these two parallel systems indefinitely.

In fact, I have nothing more to say, except to say that I am grateful. I think it is a good thing that the House of Assembly of South Africa, where possible, should reach unanimity on matters such as this one, when we have to place legislation on the Statute Book to control elections and when we affect the franchise of the voters of South Africa. That is why we are grateful to have been able to reach such a degree of unanimity.

I now want to refer to one minor matter which may be interpreted incorrectly outside. This matter concerns the increase of the amount of the deposit from R200 to R400.

That is too little.

My friend here says it is too little. I am inclined to agree with him. The Bill which had been referred to the Select Committee, provided for an amount of R500. However, we have reached agreement and fixed the amount at R400. It is not the idea to keep candidates out of an election. One does not buy the right to qualify as a candidate with this deposit one pays. It is a deposit one pays. I want to say immediately that when somebody is not sure that he will get at least one-fifth of the number of votes cast in favour of the victorious candidate, he merely has a nuisance value when he participates in an election. Therefore, we are not trying to keep people out of elections. If a person is sure he stands a chance of winning the election if he participates, we do not encroach upon his democratic right to stand for election, because this is merely a deposit. This money will be paid back to him and he does not forfeit if. This is all I want to say in this connection. I am grateful that we have been given the support of the Opposition at the Second Reading of this Bill. I trust that it will be possible to dispose of the Committee Stage on the same high level.

Mr. Speaker, the hon. member for Wolmaransstad obviously has a headache. His halo must be fitting far too tightly.

We do at least have a sober view on this matter at this stage.

Sir, the hon. member for Wolmaransstad and I first met during the election of the hon. the Minister of Justice in 1949. I can assure you that if the hon. member really meant what he said to-night about having no doubts about the Government side’s handling of postal votes, he has a very poor memory.

What are you insinuating?

I am insinuating nothing. I do not need to insinuate. I have here the report of the select committee on this measure which is before us now. If the hon. member refers to page 15 of the report, he will find the views of the two senior officials who deal primarily with elections. Their views on postal votes are mentioned here. The one official referred to the commission, of which the hon. member for Pretoria (Central) was chairman. May I say at once that I should like to pay tribute to the hon. member for Pretoria (Central), the chairman of the select committee which has produced this measure which is now before the House. He was also chairman of the previous select committee, where he was largely personally responsible for introducing the idea of a special vote. In the evidence before the select committee on this measure, reference was made to the commission of 1962. I want to quote what was said in evidence. The evidence of the one senior official I mentioned, reads, inter alia, as follows—

1. (a) personasie (valse aansoeke);
2. (b) misbruik van identifikasievorm (omseiling van voorgeskrewe prosedure);
3. (c) vervalsing van die stem (oopmaak van koeverte en verandering van die stem);
4. (d) opsetlike nalatigheid (posstem opsetlik laat verwerp);
5. (e) vertraging van voltooide stem (blocked votes); en
6. (f) intimidasie.

Now I want to ask the hon. member for Wolmaransstad whether he intends to suggest tonight that that side of the House has not been party to any of these abuses of the postal vote system.

Never!

Does that hon. member mean to stand up and with his halo around his forehead and his hand on his heart, say that his party has not been guilty of any of those abuses? I want to say that I challenge any party that has fought an election to deny that it has been guilty of one or other of these offences. I believe that any person who has fought an election, and who says that none of his workers have been guilty of any abuse of the postal vote system, either does not know what he is talking about, or should know far better. It is not the candidate and it is not the parties that do this. It is the workers whose task it is to elect their candidate, as the workers worked to elect the hon. member for Wolmaransstad and every other member on that side. Those workers go flat out in every way they can in order to get their candidate elected. Any politician who gets up and tries to pretend that it is otherwise, does not know what he is talking about. When an hon. member stands up here and tries to pretend that he belongs to a party that has never abused the postal vote system, I want to say that he has either never fought an election at close quarters, or he has not kept his finger on the pulse of what has taken place. Let me give you an example, Sir. In my first election, which I fought and lost, a certain voter sent a message to us saying: “Die Natte was by oupa gewees en hulle het hom laat stem”. So we went and fetched him and we took him to the Nationalist Party office. My opponent was a person who is now very highly placed in public life. We took this person to the Nationalist Party office. He asked for his vote and signed the necessary declaration, demanding his vote back. We were kept waiting about ten minutes, and the vote was eventually handed over, but unfortunately they had forgotten to put it in the oven or something, because the glue was still wet on the envelope. We opened up the envelope in front of a magistrate, and it was found that his one cross had suddenly become two crosses, but the ink had not dried either. [Interjections.]

On what authority did the magistrate open that postal vote?

Sir, the magistrate had no authority. [Laughter.] I would not have raised this point if he had not retired. In fact, I think he has died, God bless his soul, but I bluffed him into opening it. [Laughter.] Mr. Speaker, let us be honest about this. What is more, I had a torch with me. We shone the torch behind the ballot paper and one could see the pencil cross the voter had made, and the nice big ink cross which had been folded over and blotted to make two crosses. I mention this just to indicate that it is strange what can happen. Of course, this never happens in the Nationalist Party. My opponent happened to be a Nationalist. He won too. The reason for my relating this incident is because I think it would be dishonest of this Parliament and of any member of Parliament to pretend that this evidence which I quoted and which was given before the 1962 committee, was not the factual position in regard to postal votes.

Are you confessing or are you bragging?

Where the hon. member for Wolmaransstad said that there was a very small difference of opinion, the difference of opinion in the select committee was on this specific issue. The select committee had before it a draft Bill which abolished the ordinary postal vote. This postal vote was open to the sort of abuses I have quoted here and open to many more. We may think that we know something about handling postal votes, but there is somebody who knows much more, namely the returning officers in charge of elections. They watch both sides and they get the accumulative knowledge. The evidence again this year before the select committee was that abuses of that system take place. The measure before us …

You are talking nonsense.

That hon. member says I talk nonsense. I say that he does not know what he is talking about. The select committee had before it a measure which would have abolished the ordinary postal vote which is open to abuse. We supported the abolition of the postal vote. We supported its total abolition and the retention only of the special vote system which has now proved that it can work subject to certain weaknesses which this Bill before us now eliminates. This Bill eliminates those weaknesses. I must say that we were swayed by some of the arguments put forward. There were members who put forward the case that there could be exceptional circumstances in which a person could not easily or conveniently vote by special vote. Therefore, as is recorded in the evidence of the select committee, we proposed a compromise which accepted at its face the statement made by the hon. member for Wolmaransstad that it was the wish of all political parties that the postal vote would eventually give way to the special vote. We accepted the bona fides of the hon. members of the select committee representing the Government side who agreed with us that they would sooner see only the special vote, but who foresaw certain exceptional difficulties which could occur in exceptional cases. Therefore we moved that the unanimous desire of the committee that ultimately the special vote should be the only form of vote, should be given a legislative meaning. We proposed incorporating into our legislation that whilst the two systems would remain side by side, the ordinary postal vote should only be used where a voter found it difficult or inconvenient to vote by special vote. In other words, we wanted this measure before the House now to include a provision indicating clearly that the preference of Parliament was for the special vote to be the first choice of a voter. Only where that vote created difficulties should a voter use the ordinary postal vote. That was to do no more than to confirm in the legislation of this Parliament the views expressed unanimously by every member of the select committee. If that was our joint view, then why not put it into the Bill? Let us then say to the voters of South Africa that we, Parliament, want them to vote by choice by special vote and only if they have a problem should they use the postal vote. That went to a division in the select committee and was rejected. As the hon. member for Yeoville said, we will move to incorporate that into the legislation at the Committee Stage. I ask the members who say this is nonsense whether they disagree with the select committee’s unanimous view that the special vote is the first preference and should be used by choice.

Is your conscience worrying you?

No, my conscience does not worry me at all.

You do not have a conscience.

Order! No, the hon. member is not allowed to say that. He must withdraw it.

I withdraw it.

The Select Committee was unanimous on this issue and those who say that this is nonsense disagree with their own representatives. We all believed that it would be better to have the special vote system provided it did not create hardship for individual voters. I know the hon. member for Wolmaransstad and the hon. the Minister are amongst those who emphasize the ease with which a person should be able to vote. But the hon. the Minister emphasized two other vital aspects. One was “vrye stemming en geheimhouding van die stem”, the right to vote freely and the right to secrecy. We feel that one should not over-emphasize the ease of voting at the cost of the right to vote freely and at the risk to the secrecy of your vote. Those principles are of equal weight. Whilst there is the ordinary postal vote system, we are giving the postal voter a privilege not enjoyed by any other voter. If one votes by post it is easier to vote than if one votes as an ordinary voter on election day, because an ordinary voter must go to a polling booth and must record his vote. But the postal voter sits at home, has his application brought to him, has his ballot paper brought to him and does not have to lift a finger. Our argument is that the same conditions which affect the ordinary voter who votes on election day should apply to the person who votes as an absent voter. In other words, he should have to go before a Government official and cast his vote. If he is bedridden it should be arranged only in those circumstances that a Government official should come to him. He should not be privileged above the ordinary voter. There should be the same conditions, the same circumstances and the same security applying to an absent voter’s vote as applies to a person who goes to vote at a polling booth. Therefore, while we accepted that there may be a case for the retention of the postal vote to deal with emergency conditions, we feel that the vast mass of voters do not need it and should vote under the same circumstances as any ordinary voter.

We will argue this further during the Committee Stage, but I want to point out that the hon. the Minister mentioned that his Department was not entirely happy. The representatives of his Department in the Select Committee made it clear that they felt that the special vote was the best, that it could serve the purpose and that it would eliminate abuses. I do not want to quote at length from the evidence, but there is ample evidence where not only did one witness say that he knew of no country in the world which gave a preference and made it easier for an absent voter to vote than for an ordinary voter, but he also gave the following reply to three questions put to him. I want to quote the questions and answers from the report of the select committee. They read as follows—

This expert official answered as follows—

We therefore have the evidence of the hon. the Minister’s own Department that it would be preferable to have had the system for which we have pleaded. I will take this matter no further, other than to say that the hon. the Minister said that this measure was unanimously accepted. This was the major point of difference, but we accept the principle because the provisions of this measure improve the special vote system and we believe that it makes it much easier to work and to operate.

There were a number of other improvements which were introduced by the select committee. I want to mention, simply because I think it is important to Parliament, the fact that here was a select committee which had before it a draft Bill which one would expect to be controversial and which was able to produce out of that draft Bill unanimous decisions on every other aspect of the Bill. There were some important aspects on which we reached agreement, for instance the question of objections, the question of the two months residential period, the question of presiding officers for special votes, the question of removing the three-year period of disqualification after a prison sentence, and so on. There was even agreement on the amendment to section 30, where as the hon. House will remember, we charged the Government with having allowed 432 voters at the Swellendam by-election to be registered when they should not have been registered. This happened during the Swellendam by-election last year. We obtained legal advice on this point and we maintained that those 432 voters should not have been registered on the voters’ roll before that election was held. I raise this matter because I can remember the roars of dissent from the House when I first raised this matter. We were told that we did not know what we were talking about. Now we find that in clauses 9 and 12 of this Bill the very contention which we made at that election has been upheld. I mention this matter because the 432 votes that were cast and which we challenged at the time, and which we said should not have been allowed, were in fact allowed to count in that election. This would have reduced the majority of the Government in that election to well under 1,000 votes. Now this measure, by unanimous agreement, establishes and records the point of view which we took up in that dispute.

There is also a small matter which we will deal with during the committee stage regarding the translation where a wrong word has been used. Finally there is the question of election periods, namely the extension of the period between nominations and elections. I want to mention it so that it can become known that the purpose behind this extension is to allow a longer period for voters to be able to vote by special vote. At the moment a postal or a special vote can only be cast from 21 days before an election. The extension of the period and the introduction of special votes from the day after nomination, means that a voter will be able to vote for at least 34 up to 45 days depending on the date of the election. This will give a far longer period to vote by special vote, and I hope this will help to achieve the objective which the select committee unanimously accepted, namely, that we sought to see the special vote replace the postal vote so that the abuses which I maintain representatives of all political parties have perpetrated can be eliminated from our public life.

Mr. Chairman, it is most gratifying to see such a large degree of unanimity between the two parties as we have had to-night in regard to this measure. Certain reproaches were hurled across the floor of the House about malpractices which had occurred from time to time. I think it was the hon. member for Durban (Point) who made the most significant admission when he said that it was not the party itself who practised malpractices, but the workers. That was the only admission made to the effect that malpractices did, in fact, exist and I found it interesting that the admission should come from the hon. member for Durban (Point) who, I think was a worker for many years.

Do you deny it; am I wrong?

I do not have to answer, because I am not regarded as being an expert on elections. It is those hon. members on that side of the House who are. I also find it interesting to hear from the hon. member for Yeoville that the degree of unanimity they have obtained was actually based on the fact that they did not trust one another. I have to admit to-night that I regard the hon. member for Yeoville as someone who can teach me a great deal about elections. As a matter of fact, he is not only a student of elections, he is an expert on elections. I recall what happened a year or two ago when the two of us served on a select committee. He demonstrated to me at that time what a prominent student he was on elections and how far back he had gone to study the technique of elections. The hon. member told me of an election that was held to elect a president in the days of the old Transvaal Republic. After the election the ballot box was taken to Pretoria by horse-cart from Western Transvaal. On the way to Pretoria a plover was shot, and, as hon. members know, a plover has a long thin leg and when it is cut off at the knee a small sinew is found which, when pulled, causes the toes to contract. This is not my story, but that of the hon. member for Yeoville, and I do not want to deprive him of the credit for it. This long leg of the plover was thereupon pushed into the ballot box after which the sinew was pulled so that the ballot paper was caught between the toes. [Laughter.] This gave me an indication of how much the hon. member really knows—I have a great respect for his experience, knowledge and technique as far as elections are concerned. The hon. member indicated that we were actually making it our task to facilitate elections for the public. To my mind one of the characteristics of this Bill is that the parties are trying to transfer even more of the work and responsibilities in connection with elections to the administration and the Department responsible for them. While we are making it easier for the voter to cast his vote, if we may call it that, particularly by exercising the special vote, it is obvious that the easier one makes the procedure the more often declarations will have to be made as regards the casting of a vote. I think I can agree wholeheartedly with the hon. member for Yeoville that since we are to a greater extent allowing people to vote by declaration at elections in order to make it more convenient for the public, we must also see to it that drastic action will be taken against persons making false declarations. I have mentioned the fact—and the hon. member for Durban (Point) has also referred to it—that the Department has certain misgivings in regard to this. These misgivings do not concern the procedure itself. The misgivings I have referred to, concerns the staff and the availability of staff. It has been found that the period in which the special vote may be cast, is a considerably longer period than the period which obtained in the past. A special vote may now be cast as from the day of nomination. The period between nomination and election day has been extended. The period of 28 to 35 days has now been extended from 35 to 45 days. Under the circumstances hon. members will appreciate that the Department will henceforth be subjected to greater responsibilities and demands. It is in this connection that I have expressed my concern. I just want to say that the hon. member for Yeoville referred to population registration. I have said before now that we are going to introduce legislation next year. I personally feel that if we could succeed in bringing this about, changes of address should, for all purposes, be centralized at one point. This will have to be done for the purposes of radio licences, the Defence Act, licences for arms and the Electoral Act. This will facilitate matters for us. This is one of the benefits this new system will have, a system which the hon. member tried to criticize to-night. I hope and trust that when we introduce this system, we shall have an easier and more convenient system as regards changes of address which will enable us to derive greater benefits in all the various spheres of our national life. These are the only comments I have to make at this stage. As a matter of fact, this is not my Bill. This Bill was dealt with by a Select Committee. I hope and trust that this Bill will make it more convenient for us as regards the exercising of our votes in future.

I move—

That the Bill be now read a Second Time.

Mr. Speaker, as hon. members know, the South-West Africa Affairs Act, 1969 (Act No. 25 of 1969), was placed on the Statute Book by Parliament during this session, as a direct result of which essential amendments have to be made to the Income Tax Act of the Republic in regard to, inter alia, South-West African companies, which will henceforth fall under our Act for taxation purposes. Such companies will now be registered in the Republic, and will be deemed to be companies of the Republic.

While I am discussing this matter now, it is perhaps the appropriate moment to elucidate certain other aspects of taxation in regard to the Territory. In the first place I want to revert to the taxation proposals I tabled on the occasion of my Budget speech, and in terms of which the company tax scale for companies in the Republic and the Territory were to be uniform, i.e. 40 cents in the rand. In the meantime representations have been made to me, and it was argued that since the present company rate in the Territory was only 30 cents in the rand, an increase of 10 cents to 40 cents in the case of South-West companies was disproportionately large and that a lower scale of taxation would be more equitable. It was intimated that at the time of the deliberations of the committee of experts, the scales in the Republic and in the Territory did not differ a very great deal, but that the position had subsequently changed substantially as far as the Republic was concerned, and that an immediate jump of 10 per cent was too drastic. These representations were considered, and because there was undoubtedly some merit in the case presented by the persons who made the representations, it was decided for the present to tax companies in the Territory at a rate of 33⅓ cents in the rand.

As a result of the rearrangement there is no longer any justification for inhabitants of the Republic to continue to enjoy tax exemption in the future on dividends paid to them by companies deriving their income solely or mainly from the Territory, and the exemption is being withdrawn under the Bill. This places such persons on the same basis as inhabitants of the Republic who receive dividends from other foreign companies, and who have always been subject to taxation thereon. I also want to point out to hon. members that companies in the Territory will be subject to undistributed profits tax and that interest tax on foreigners in respect of interest paid by such companies to foreign companies (except companies in the Republic), is being introduced under the measure.

The Bill gives effect to the concessions I held in prospect on the occasion of my Budget speech, and I shall just mention them briefly: The tax rate concession to mineworkers who combat fires and floods in mines and are remunerated therefor; the rebate in respect of expenses incurred by engineers and scientists in connection with post-graduate study courses; the exemption from tax on the value of uniforms on account of the administrative costs involved and the fact that the tax is minimal because it is persons in the lower-income groups who normally receive uniforms; and the implementation of the recommendation by the Fiscal and Monetary Commission of Inquiry in regard to Working Women. In future R500 of a working woman’s emoluments will be exempted from taxation, and where the joint income exceeds R8,000 the exemption will gradually decrease until it disappears at R13,000. It should be noted that this concession only applies to emoluments. A married woman who, for example, conducts a business in her own right or practises as a medical doctor, does not qualify for the rebate.

Another concession I want to bring to the notice of hon. members, is the so-called tax holiday for which provision is made in clause 20 (1), and in respect of which my colleague the hon. the Minister of Economic Affairs has already made an announcement. This concession consists of a special deduction to industrialists who establish or initiate new industrial undertakings in economic development areas, or who expand existing industrial undertakings in such areas. This matter is dealt with and explained at length in the explanatory memorandum.

This brings me to three other aspects of the Bill with which I want to deal.

Hon. members will notice that under clause 11 it is proposed that directors of companies and employees to whom an option is given to take up shares, must be taxed on the difference between the value of the shares as at the date of the exercising of the option and the consideration paid therefor. This amendment is aimed at combating a practice which has arisen and which is designed to grant a benefit to key officers in respect of services rendered or services to be rendered, in the form of shares without income tax being paid thereon. Under the scheme directors or employees get an option to buy shares in the company at the market value of the shares, on the date on which the option is granted, but they need only exercise the option months or even years later. Under the provisions of the Act the officials can only be taxed on any profit existing as at the date on which the option is granted, but because the purchase price of the shares under the option is normally the same as the value of the shares on the date of procurement of the option, there is never any taxable profit on that date. The official waits until the date on which he must exercise the option, and it goes without saying that he only exercises it if the shares have increased in value on that date. The amendment to the Act will now make it possible to tax the profit as determined according to the value of the shares on the date on which the option is exercised.

Under the existing section 11 (w) of the Act a taxpayer is, subject to certain conditions, entitled to a deduction of the premiums under an insurance policy on the life of an employee or a director in the case of a company. This provision was originally introduced at the request of life insurers, and for sound reasons. It came to light recently, however, that the concession was being abused by certain concerns as an argument for promoting the sale of insurance policies with the express object of obtaining the tax concession, with the result that the Treasury was subsidizing the premiums by way of deductions against income. The object with which the concession was introduced, i.e. the making available of funds in order to meet certain requirements, is totally frustrated by such action on account of the large loans provided as a result of which the yield under the policy on the date of maturity is taken up by the amount due under loans. The proposed amendment by way of clause 14 (1) (i) will curb this undesirable practice and will ensure that premiums will only be granted in deserving cases.

In the third place I should like to draw hon. members’ attention to clause 23 of this measure, which deals with the exchange of shares in an existing company or of property belonging to an individual or a company, for shares in an existing company or a company to be established, which usually is a public company. Depending on whether the shares or the property in the hands of the person or company by whom they were exchanged, represent trading stock, the person who exchanges the shares and who makes a profit thereon, is subject to taxation on the profits, as the Act is interpreted at present. Because this is an unrealistic profit and there are no moneys available to pay the tax thereon, it happens, on account of the taxation implications, that schemes of this nature cannot be implemented. Because the amalgamation of companies may be of great economic importance and the taxation implications tend to nip such schemes in the bud to the detriment of the country’s development, it is proposed that the liability for taxation on any profits arising from this kind of transaction may be delayed by arrangement until such time as the taxpayer sells his shares in the new company and he is able, from the moneys that have become available in this way, to pay the tax on the profits.

As in previous years, I made an explanatory memorandum available to hon. members this year which is drafted in such a way that I am confident hon. members will much more easily be able to follow exactly what sections are being amended and in what respect. Because the memorandum is so complete, I have only dealt with certain of the more important clauses.

Mr. Speaker, it is tradition in this House that when the Minister introduces the Income Tax Bill, it generally follows the Budget proposals. Apart from the Budget proposals the Income Tax Bill includes certain items of detail which in the main are administrative. I am sorry to say that unfortunately that practice has not been followed this year. In the Budget proposals we were informed of the removal of the tax bulge and we welcomed that. We were also informed of the proposals in regard to South-West Africa. We were not, however, informed of the options tax with which I shall deal later and the effect it will have on all sections of the country which may be affected by this tax. I submit that during his Budget speech, the hon. the Minister should have given some indication that this tax was contemplated. On the other hand, the hon. the Minister was good enough to give us an advance copy of the Income Tax Bill on a confidential basis. After studying the Bill we indicated that that particular clause had certain retrospective effects. Following representations made to the Minister by the hon. member for Parktown and myself, we were able to convince the hon. the Minister that that element of retrospectivity should be removed. The date of commencement as stated in the Bill was changed to 1st June and we appreciate the fact that the hon. the Minister went so far to meet our suggestions. On the other hand, when the hon. the Minister contemplates any major change in the Act, such as this one which has the effect of bringing in a new section of the taxpaying public, I do think that such notice should be given during the Budget speech. If that is not done, people are led into a sense of false security. When a Bill of this kind is introduced at short notice, one also does not have the opportunity of having a general discussion. The hon. the Minister will appreciate that when a Bill such as this is made available to a limited circle on a confidential basis, that circle can be asked for their point of view, but when one has time to study the Bill in detail, one finds that clauses such as clause 11 are shot through with anomalies. At the moment I can think of half a dozen ways of getting round this clause. I shall, however, deal with the details of this clause shortly.

In clause 7 of the Bill the hon. the Minister deals with that class of person to which he referred in the Budget, namely, persons who receive special remuneration for their work during emergencies in mines or works. The hon. the Minister has given relief by providing that a person who receives special remuneration for facing danger while during an emergency, must pay tax on that remuneration on the same basis as ordinary tax. The hon. the Minister has provided that a person’s tax bracket shall not be raised as a result of that additional income. While that is a concession I wonder whether the time has not arrived when men who receive special danger money during an emergency should not receive this remuneration altogether tax-free.

I come now to clause 11 which deals with options. The hon. the Minister has indicated that this measure provides for taxing the option exercised by an employee or a director. The logic of this provision is sound. The logic is that this income flows from a man’s occupation. On the other hand, it exempts another class of persons’. The customer of a company who receives an option and exercises it will have this income tax-free. Then again, the employee who receives an option for shares in a private company, will be entitled to take up shares which are not marketable securities, as they are not quoted on the Stock Exchange. As far as I can see such people do not fall into this bracket. I also suggest that there is a further consideration. Where a person exercises his option but does not realize his marketable securities, he will pay tax on the difference between the option figure and the value of the marketable securities as quoted on the day he exercises the option. Presumably the hon. the Minister relies for his valuation on the Stock Exchange quotations. But what will happen if a young man retains a share and the share price subsequently falls? He will then have paid tax on the difference between the price at which he received the option and the price of the marketable security on the day he exercises the option. He would not, however, receive any rebate if he sold those shares considerably later.

Surely, Mr. Speaker, in these days when organizations are endeavouring to achieve a stable complement of executive officers and preserve continuity in the organization, the whole object of giving men an option is certainly not to ask them to dispose of their shares on the market right away. Surely the object is to retain those men in the organization by encouraging them to have a share in the stock of the company. I submit that it is an advantage to have a man in the company who is a shareholder of the company and prepared to work for the company, particularly if one can build up an executive force in the organization in that way. With a shareholding, it is more in the interest of the company than a lot of young men getting options and throwing the options on the market the next day, either to make a quick profit, or because they cannot afford to hold them because of the tax position. I suggest that not enough time and consideration has been given to this section. There has been a new pattern in taxation. We have the sales tax, which I do not intend to refer to now, because it would be quite out of order. But the income tax incidence has been altered. Therefore, when providing amendments of this kind, I suggest that more time should have been given to this matter. Surely, the most equitable basis for taxing gains is at the point where the gains have materialized, rather than when the shares that were acquired have actually been sold and not the difference between the option price and the market quotation on the date of the exercise. If that suggestion was met, it would not be so onerous, because the employee or the director who held the share, could decide in his own time when he wanted to exercise the option. He would not be taxed when he had not sold the stocks. If he exercised the option and decided to hold the stock, then, I suggest, consideration might be given to taxing him when he realized his stock, and not to inflict the tax on him when he exercised the option, particularly when he remains in the employ of the company as a servant of that company.

I hope the Minister will also give an indication as to why he has exempted that class of person who is not in employ and not a director and yet gets an option from the company by reason of being a customer. While dealing with this matter, the employees of this class were lulled into a sense of false security by reason of the Minister’s own statement. The Minister indicated during the course of his Budget speech that the Franzsen Commission had reported and that the first report was available. While the recommendation was for a capital gains tax, the Minister indicated that he was opposed to capital gains tax and that that was his policy. On the other hand, we had a surprise the other day when we read a report —I do not know whether the report is correct —in the Sunday Times, which I want to quote now. If it is correctly reported, perhaps the Minister will be able to identify the official concerned. It read as follows:

Is that official, Sir? As I understand the law, if a person makes a habit of buying and selling shares, he can be taxed, if it is a source of income, if it is a business and if it is a part of the person’s policy to earn his income by dealing regularly on the Stock Exchange. Under those circumstances, a person can offset his losses in terms of the Act. But this report says, if the official is correctly quoted, that if a person buys with the object of making a profit, even one transaction, he may be taxed.

If that is the hon. the Minister’s intention, I think it is high time he should tell the country or he should repudiate the officials concerned because that is not the law as we understand it to-day. If the Minister does intend to have a capital gains tax and thus in turn to tax speculation on the Stock Exchange, I suggest that the information for the country should come from the Minister and not from departmental officials. I make the reservation that this may be an inaccurate Press report. I hope it is. If, on the other hand, it is an official who is talking out of his turn, I have no doubt the hon. the Minister will deal with him. If one transaction can be taxed, surely the next transaction has to get a rebate if it is a loss. That is only equitable. We submit that there should be clarity on this matter, because the fact that there have been capital gains has been due to the fact that the market conditions allow capital gains. Capital gains also have the approval of the Minister. If it did not have the approval of the hon. the Minister, he would have taxed them. The Minister has made it perfectly clear in his Budget speech that capital gains, as far as he was concerned, are not going to be taxed. I think the country should know exactly where it stands on this matter.

Clause 30, deals with the undistributed profits tax. The hon. the Minister proposes an amendment as regards the undistributed profits tax. I want to direct the hon. the Minister’s attention to an opinion which was given in the June 6th issue of the Financial Mail. This opinion is about an anomaly in regard to the undistributed profits tax. It reads as follows—

I suggest that the undistributed profits tax creates anomalies which allow pyramiding in the third and fourth stages. We have already examples of this taking place.

I suggest that getting this Bill through at this time of the session with a very limited time to study it, is unsatisfactory. The hon. the Minister has had the opportunity of getting the views of the departments and the views of a very small circle of outside interests. I suggest that this is being hastily tackled. I foresee that next year the hon. the Minister will be forced to come with amendments to close up the gaps. Of course the hon. the Minister knows as well as I do that he is waging a continual war. There is always the outside public who do not want to pay taxes and the Minister on the other hand wants to collect taxes. The hon. the Minister’s officials are concerned with finding holes in legislation and they advise him how these gaps should be closed up. The tax experts outside are concerned to see how they can get through the holes. That is part of the hon. the Minister’s lot. I think it is unfortunate that the hon. the Minister has made such a major change in policy on a matter of such importance as income tax in this way. Income tax is not only a tax-gathering instrument, but it is also an instrument of fiscal policy. It is an instrument which can assist in directing industry and commerce in one direction or another. It can provide incentives or it can provide disincentives. Having regard to the great importance of an Income Tax Act, I suggest that more time should be given to studying the Bill before it is debated in this House. When major matters of policy are under consideration, they should be dealt with in general terms in the Budget speech. When this Bill is tabled in this House it should include the main Budget proposals and any extraneous matters should be avoided as far as possible.

Mr. Speaker, the hon. member for Pinetown made a point of referring particularly to the fact that they did not have sufficient opportunity to study the Bill. I think it is right that as much of an opportunity as possible ought to be afforded members to study legislation, particularly when we are dealing with difficult legislation such as this. We admit that it is a difficult Bill. On the other hand, virtually all the points to which the hon. members referred, with the single exception, i.e. the question of the taxes on options, were contained in the Budget Speech of the hon. the Minister. I must say that I do not think that those points, in the legislation concerned, to which the hon. member referred, are so complex that it should take him days to understand the provisions.

This is the rule, and it is desirable that the changes in taxation, such as the option tax, should be mentioned in the Minister’s Budget speech as far as possible. This is customary, but when new circumstances develop, particularly when new deficiencies are discovered in the Act, this can, however, not be done. In this case there was obviously a very large gap in the Act. I think the hon. the Minister would be neglecting his duty if he did not come back and plug that gap in the Act. What is the position in respect of options granted to employees and directors? It has been fairly general custom in recent years and it is a very obvious method of tax evasion. Instead of granting the employee or the director greater remuneration, on which he would then have to pay tax, they made use of the method of options; options on which, in many cases, not a single cent is paid. Those options can be exercised within a period of as much as ten years. It is nothing more than a new method of remuneration to employees and directors. I consider it high time for the hon. the Minister to have plugged that gap.

The hon. member also referred to private companies which are not quoted on the Stock Exchange and, therefore, in respect of which the particular tax would not apply. I agree with the hon. member. But the hon. member must also admit that in practice that evasion chiefly takes place in respect of public companies. There is also another reason. It is extremely difficult to determine the value of a private company share at any one moment. It is much more difficult. If the company is quoted on the Stock Exchange there can be no misunderstanding. This is obvious and it makes it difficult for us to make it applicable to private companies as well. Seen in the light of the fact that to-day it particularly occurs in public companies, it was less essential. I do not want to say that one cannot have a look at it in the future, but at this stage, however, the biggest gap has been plugged by the hon. the Minister.

As far as the question of share options not being taxable in the hands of a person other than an employee or a director is concerned, I do not think it was a practice that took place frequently either. Here we are faced with a specific method of tax evasion. If the hon. member’s request were to be complied with, i.e. that when, for certain reasons, I obtain an option to buy shares and I exercise the option within two or three years, but I do not have anything to do with the company concerned, i.e. it is not remuneration, and that profit must then be taxed, it would amount to capital gains tax. And I think that this is most surely not what the hon. member wants, because he is also in favour of capital gain being taxed.

The hon. member also referred to a report in connection with a company or a person making a regular habit of buying and selling shares and then having to pay tax on that in the normal way. On the other hand, there is that company which does not make a regular habit of buying and selling shares and consequently is not taxed upon its capital gains. As far as my knowledge goes, this is and will remain the position. Any report to the contrary is therefore incorrect.

In conclusion the hon. member referred to undistributed profits tax which allows a company to plough back 25 per cent of the dividend portion of his income and compels it to pay out the remaining 75 per cent or otherwise pay tax on it. As far as I am concerned, I want to express my appreciation for this specific provision. If there was ever a method whereby there were large tax payment evasions, this was it. It is therefore not the poor man. Hon. members opposite accused us of the fact that this Budget is the rich man’s budget. But this provision specifically affects the rich men, because they are chiefly the people who have jumped this gap, who did not pay out dividends and who, consequently, were not assessed for normal tax. I say that we appreciate the fact that the Minister has now plugged this gap. It is calculated that by these means the State will collect R1 million, but I expect it to be much more because companies are now being compelled to pay out. The 25 per cent which is kept back is regarded as a very reasonable figure for a financial institution. None other than Dr. Louw, chairman of Bonuscor, said that when a company is an investment company and is chiefly dependent on dividends for its income, the ploughing back normally takes place with the production companies. Such a company could even pay out up to 80 or 90 per cent if its net income. I want to say that in my opinion this provision is a very reasonable one.

The hon. member must concede that all these aspects, except for one specific matter for which there is a good reason, were specifically mentioned in the Budget debate. The Budget was delivered on 26th March and I think that hon. members opposite have had sufficient time since then to study it. We are, of course, in agreement with them when they ask for as much time as possible, but it is unfortunately not always possible to give them as much time as they want.

I support the hon. member for Pinetown wholeheartedly when he complains about certain taxation proposals appearing after the Budget, in this case in this Income Tax Bill. It is said that there are only two things which are certain in life—death and taxes. Surely the taxpayer is entitled to know after the Budget has been delivered what his tax obligations will be for the coming year. The hon. member for Florida says that this question of stock options is merely for stopping a gap. Well, I do not see it that way at all. For me it is a new form of taxation; even more, it also involves a new principle of taxation. It does away with the principle of taking tax at the time of accrual.

But before I say something more about stock options, I should like to congratulate the hon. the Minister on the White Paper he issued in connection with this legislation. It is really a first class document and as such it helped us considerably in studying this legislation.

Let me now get back to stock options. Although the date will be the 1st June, 1969, the tax on these stock options is retrospective in that if a man has been given a stock option one, two, three, four or five years ago he now becomes liable for the tax. The hon. the Minister is trying to meet the situation by introducing a time basis by taking the time when he got the stock option up to the 1st June, 1969, then continuing up to the date when the option is exercised and then abating the tax proportionately. As he says in his memorandum, the tax “will be reduced proportionately on a time basis”. Well, this is better than nothing at all. However, I still think the hon. the Minister should have gone further; he should have done what they are doing in the United Kingdom. In terms of section 25 of the Finance Act of the United Kingdom, the Finance Act of 1966, the British Government decided that they would value the stock option at the date the tax was introduced. Prior to that date any profits made were not taxed. This is fair and reasonable, and I should like to ask the hon. the Minister to give consideration to drawing the line on the 1st June, 1969. Then, if a man was given a stock option three years ago at X amount and on the 1st June, the value was X plus Y, that should be the basic price on which he would have to pay tax. There is yet another discriminatory aspect of this tax. Where a man has been given a stock option and he has already exercised that option, he is not liable for tax. But if another person was given a stock option at exactly the same price and on exactly the same date, but he has not exercised that option, he becomes liable for tax. So, we have discrimination between two people. Another problem is the question of payment of the tax. You become liable for tax in the year in which you exercise the option. But at that stage you haven’t yet disposed of your shares. You, therefore, have shares but no funds from which to pay your tax. The hon. the Minister may say that you must then sell sufficient shares to pay your tax or spread the exercising of your option over a period of years, in other words not to exercise it all at once. But that you cannot always do, because sometimes you are forced in terms of the option arrangement to exercise the option at a particular time. The effect of exercising a stock option and having to pay tax on it in a particular year can create havoc with a man’s personal tax because the rate of his tax can rise tremendously. Instead of being in the tax bracket of, say, 40 cents in the rand, he may find himself in the 60 cents in the rand bracket. I believe the hon. the Minister would have been well advised to have spread the tax payment over a period of time and also the rate of tax over a period of time. In other words, when an option is exercised, he should have spread the full impact of exercising the option on the rate and on payment. There is a very important question which has now come to light. That is the matter raised by the hon. member for Pinetown. It is really essential that we should have a reply from the hon. the Minister tonight whether this report in the Sunday Times of last week was correct. This report as the hon. member for Pinetown has already told the House, purports to come from a senior official of the Department of Inland Revenue. It says that if a person buys or sells shares with the intention of making a profit, the department contends that he can be taxed on his profit. I should like to find any person, except the hon. member for Brakpan who is no longer present, who buys shares other than to make a profit. I do not know of anybody. Perhaps the hon. the Minister can tell us of people who buy shares with the intention of making a loss. If one does not buy shares with the intention of making a loss, obviously one buys them with the intention of making a profit.

It always happens to me.

I can understand that perfectly. When the hon. the Minister tells us that he always makes a loss it does not come to me as any surprise whatsoever. However, let us get back to more serious matters. Let us assume that this statement is correct, because if this statement is correct, I do not believe the hon. the Minister needs the provisions he has put into this Bill regarding stock options. What is the position now? I am given an option to buy shares. I exercise that option and eventually dispose of the shares. I am then a sharedealer the same as any other person. The hon. the Minister does not need to tax me earlier because I have exercised the option. He must determine whether I have exercised this option for a capital gain or whether I have exercised this option for a revenue gain. On that basis he must tax me. I believe that if what is said here is correct, we do not need these provisions at all. What do we want them for? The hon. the Minister will get his tax. If these provisions apply and one is going to be taxed on share profits, the man who has an option, exercises it and makes a profit will pay his tax the same as anybody else. There is no reason for any differentiation. We are in a little bit of a difficulty here, because we do not know whether this statement is correct or not. If it is correct I would have quite a lot to say on this subject. I am not altogether at one with my hon. colleague from Pinetown, from a tax point of view. It may well be that the hon. the Minister could say to us that this is no new departure, that this is the position in terms of the present Income Tax Act, i.e. that if one makes a profit by dealing in shares, one is taxable unless it can be proved that the investment in shares was an investment and not for the purpose of buying and selling. In other words, that it is not a question of profit, but a question of investing instead of dealing. It is a question of whether one is a dealer in shares or an investor in shares. If a man is a dealer in shares, I am inclined to subscribe to the view that in terms of our present Income Tax Act. the hon. the Minister could tax such persons. But, this has been the law for more years than I can remember. The hon. the Minister has never used the tax rights which he has. If he will get up and tell us that he has the right and therefore will now tax without giving any notice to the public, I think it will be shocking. This has been the law. It is not a change in the law this year; it was not a change in the law of last year: it has not been a change in the law for the last 10 years. If he will change the law suddenly by simply saving that he will now enforce the law, I think it would only be right and moral that he should give proper notice to the public at large. I doubt whether the Minister will do this, because his problems will be so many that it would be quite unbelievable. I should like to quote just two lines from the Taxpayer of April this year. When the writer was dealing with capital gains tax he made this reference. The crux of the whole issue, the crisp point, is whether one is an investor or whether one is a sharedealer when one buys and sells shares. This is what he says:

The hon. the Minister knows and his official knows that it is a question of intention. Therefore, somebody has to interpret what was in my mind when I bought a particular share; what was the purpose of purchasing the share unless it is so obvious that I am buying and selling every day of the week and have no other business or occupation than share dealing; in other words, that my occupation is the same as that of a broker or some finance company whose business is share dealing. But in the case of an average person who buys and sells shares it is a question of what the intention was. The intention is in the mind of the person who buys or sells shares. The hon. the Minister may have great problems. But he can perhaps tell us that this is just an unauthorized statement. If it is not, and this will be the position, I do not believe we need the provisions in this Act regarding stock options.

I want to add my plea to that of the hon. member for Pinetown with regard to these proto teams. It seems to me niggardly, to say the least, when you say to a man that he must risk his life as members of these proto teams do in many cases, and pay tax on the extra pay he receives for doing so at the same rate as if he has not earned that money. These men do not receive fortunes as members of the proto teams when they are actively engaged as members of the proto teams. Surely the hon. the Minister could be big enough to say that whatever such a man earns in action as a member of a proto team, shall be non-taxable entirely. I do not know how much he will collect by simply changing the rate. I doubt whether it will amount to more than a few rand.

I want to come back to clause 14 (1) (i) of this Bill before us, to which the hon. the Minister has referred. This clause provides that before deductions may be made in respect of premiums on an insurance policy on the life of a director or an employee certain additional conditions must now be fulfilled. We agree with the hon. the Minister that there has been misuse of these rights in regard to the payment of pensions. We have no quarrel with the hon. the Minister in what he has proposed here, provided that the proceeds of the policy are treated as a capital accrual. I can understand that if the proceeds of a policy are not to be taxed, then obviously there is no reason for the premiums to be deducted from income. But we have cases where the proceeds of a policy are treated as gross income. In cases like this, there obviously must be a deduction in regard to the premium. I understand that deductions of these premiums will be allowed in terms of section 11 (1) of the principal Act. I should like to have the hon. the Minister’s confirmation at this stage so that we can have it on record. I should also like to have from him confirmation of the fact that this will apply to all past premiums, that they will be deductible in terms of section 11 if the proceeds of the policy are taxable as gross income. Then we will have no objections to it.

I now want to come to the question of postgraduate study. I think we are all delighted that the hon. the Minister has extended the scope where deductions can be made in regard to overseas study. We still feel that it is too limited. The deduction in respect of postgraduate study courses hitherto allowed to dentists and medical practitioners is extended to engineers and certain specialist scientists who hold degrees awarded by a recognized university on completion of a prescribed minimum period of study of not less than four academic years or the equivalent thereof. We have no objection when it comes to degrees or academic study, but we think that the scope of this clause is still too narrow. It is now limited to dentists, medical practitioners, engineers and certain specialist scientists. I do not know what “certain specialist scientists” means. Does an architect, for instance, fall under this category? I do not know. It may be so. Let us assume that he does. If he does not, it will be terrible, because architects are the people we want to send overseas to-day because of the problems we are having with housing and building. I believe that it is in the interests of the country that, if any professional man can afford to go overseas for further study, he should be allowed the tax rebate. I believe that this should be applied to accountants, lawyers, barristers and anybody who wants to further his knowledge and bring that knowledge back to South Africa. I believe it is important to the country. The amount involved is infinitesimal. I hope that the hon. the Minister will, if not this year, extend the scope of this provision to any professional man who is prepared, at his own expense, to go overseas, increase his knowledge and bring that knowledge back to South Africa.

Now, Sir, I want to come to the question of married women. Here we have some radical changes. The whole position has changed. As we know, and as the Minister told us again to-night, there is a basic allowance of R500. I have two complaints in this regard. The first is that the hon. the Minister has again made a ceiling, in this case a ceiling of R8,000. He has said that if the joint income of a husband and wife exceeds R8,000, the allowance of R500 shall abate by R10 for every R100 of additional income. Therefore, when a man and a woman’s joint income reaches R13,000, the allowance of R500 disappears altogether. This is perpetuating what we complained about previously. The women we want to retain as workers, are the scientists, the doctors, the teachers, those who are in high income groups. By this I do not mean that we do not want the services of people who are not in that income group. What is a joint income of R13,000 to-day, Sir? One must be realistic. It is not a large income. For a professional man and a professional woman it does not constitute a large income. Therefore the hon. the Minister is taking away from such people the small rebate of R500.

The Minister also differentiates between the ordinary working woman and a woman who works for her husband or her husband’s company, or who works for herself. There is one basic principle involved here, and that is that we differentiate between earned income and unearned income. In other words, if a woman’s income is derived from investment, there is no allowance. I think that such a differentiation should be sufficient. It should stop there. Let us differentiate between earned income and unearned income. But once income is earned, for heaven’s sake let it be deductible. What is the difference between a woman who goes out to work for Mr. Tones and a woman who goes and opens her own business every morning? They are both working women. The Franzsen Commission reported that these amounts were necessary for clothing which women have to buy specially to go to work, for bus fares, for somebody to look after the children, etc. These are expenses a woman has to incur. Why then say that one can only get a rebate if you are working for somebody else, and not if you are going to work for yourself? It does not make sense at all.

The other point I want to touch on is the case of a woman who works for her husband. I suppose it is the experience of most of us in this House who were not fortunate enough to be born with golden or silver spoons in our mouths, that any little success we have had has been in conjunction with our wives. They have worked for us and in many cases they have worked for us very hard. Many of them still do. Now why should one say that because a woman works for her husband, or for a company of which he is a director, she cannot qualify for this allowance? The answer is of course an obvious one. There can be much cheating. This can possibly happen.

R500’s worth.

Yes. that is all. Five hundred rand’s worth But what perturbs me is that the woman who is working with her husband and for her husband is only concerned if their joint income is less than R13,000, because when their joint income exceeds R13,000, the allowance disappears in any case. So who are we penalizing? We are penalizing the poor woman who is working with her husband in a little shop. We are penalizing the woman who goes to help her husband when he starts a little factory, when he is trying to get on his feet and he employs her and pays her a salary. In such cases the Minister says: “You cannot deduct that because you are working for your husband, and it is possible that someone may cheat.” But the cheating will take place in the higher income brackets and it will not matter there because there is no tax saving. I would not mind if the Minister included a provision in the Bill, or made a regulation saying that if a woman applies for this allowance and works for her husband, she must sign an affidavit to the effect that she is working for her husband and is being paid a salary. If such a declaration is untrue, the person will have committed perjury, and she can be punished. However, I think we should certainly not differentiate between a woman working on her own or for her husband and the woman who is employed by someone else.

There is one other aspect in regard to which I should like some information from the hon. the Minister. The medical allowance has now been stabilized at R150, irrespective of whether that amount is used for medical expenses or not. It would appear from the White Paper that this is in addition to payments to any medical benefit schemes. I should like the Minister to clarify this matter and tell us whether that is the case or not. In other words, if one is a contributor to a medical benefit scheme, are one’s contributions to be reckoned as deductions from one’s gross income, and is one still entitled to the R150 per annum?

There are one or two things in the Bill we are delighted to see. I should like to comment on them. The first is the uniform allowance. I think this is certainly a step in the right direction. I want to congratulate the hon. member for Orange Grove for having raised this matter last year, and the hon. the Minister for having met his demand. I am also delighted to see that there is now special provision for the over sixties. The hon. the Minister has been more than generous. When I raised the matter two years ago, I made a request only for the over sixty-fives. The Minister has now more than met us. He has now made these special allowances applicable to the over sixties.

I think the hon. the Minister is also quite correct when he deals with this question of paper profits in regard to buildings and building companies, and shares in building companies, to which he referred to-night I think it is correct that the profit should only be taxed when the sale has taken place. Lastly, Sir, we are also glad to see the increase in the allowance from R600 to R1,000 in a tax year, that can now be deducted in respect of annuities paid to dependants of retired and deceased employees. Before I sit down, I should just like to refer back to the statement which appeared in the Press and to tell the Minister that it is very important for the whole country to know where they stand in that regard.

Mr. Speaker, we can deal during the Committee Stage with most of the matters which hon members on the opposite side raised this evening. I just want to reply to-night to a few of the general comments on principles which were made by speakers on the other side. The hon. member for Pinetown referred to the difficulty with which the Opposition had to cope in that, according to him, new principles and new taxes were introduced in this Bill. He said that they had lacked the necessary time to make a proper study of these provisions. I want to point out that there are very few new provisions which were not foreshadowed in the Budget speech. However, I do not wish to commit myself to saying that in any tax legislation which may be submitted in any year I am only going to introduce what was mentioned in the Budget speech. After all, it often happens, as has now been the case once again, that subsequent to the Budget speech having been made—usually towards the end of March —new matters are brought to one’s attention. This is particularly the case in the difficult times in which we are living at present. In respect of these matters one finds that one has to remedy them. I think it would be unfair to the country if I were to find after the end of March that there is some abuse or other which I cannot remedy, because it happened not to have been mentioned in the Budget speech. Of course, one would try to resist that kind of thing to a minimum. However, I cannot nor will I give the assurance that such things will not happen. I know that the short time which is available to hon. members, is a problem. I hope that in future years we shall have the opportunity of having these documents before us at an earlier stage so that hon. members may have more time to digest them. I myself should like to have more time to digest this very difficult legislation. However, we were in a very difficult position this year. This was caused by the fact that we had changed our method of taxation. In addition to that we also had the special legislation relating to South-West Africa. Time and attention are required in order to become conversant with all these matters, and it is understandable that as a result there was a delay which we hope to avoid next year. I did my best to accommodate hon. members on both sides of the House by making a roneod document available to them before the time. I admit that it was of a confidential nature since the document was not complete, but it was nevertheless a useful document with which hon. members could occupy their time. Therefore we hope to be in a better position next year.

I should now like to speak in general about a few matters to which hon. members referred here. In the first place reference was made here to options on shares and how unfair this system was supposed to be. Without going into the principles or the finer details of this matter, I want to say that we are dealing here with a situation where instead of offering an employee a higher salary, he is offered an option on shares which he may take up one day. There is a great deal of truth in what the hon. member for Pinetown said. It is a valuable asset for a company if its head officials own shares in the company, but here it is not a question of the official owning shares in the company. The official is given the option to buy shares at a later stage, and the whole object of this option is to give him an incentive and higher remuneration. The issue involved here is not capital gains, but is higher remuneration which is given to him in that he may buy shares later if the price of those shares has increased. To my mind there is quite a difference between this matter and an ordinary share transaction in which one makes a profit. The hon. member for Parktown said that this Bill was retrospective and he admitted that I had improved the clause a great deal in that I had made the period proportionate to the period for which the option was held. The hon. member suggested that we should follow the English system, namely that the increase should be calculated as from the date of commencement of the Act. I have two objections to this. The first is that it would present us with enormous problems in regard to the assessment of shares. In five or six years’ time the option is exercised, and then it involves going back to July, 1969, in order to determine what the value of the shares was at that time. These are not only, as hon. members are saying, shares which are listed on the Stock Exchange. Private companies are also included in this. If hon. members go through the Bill they will notice that private companies are also included, and if this were done the assessment of the value of shares, as it was in previous years, would create a problem. The second difficulty is that so many of these agreements have been entered into in recent times that, if this Bill were not made retrospective to a certain extent, it would hardly benefit us any more. Since it was after the Budget speech that it was brought to my attention that this practice was so common, I felt myself forced to intervene by means of this measure in an attempt to catch some of these people, who took up those options even before the commencement of this legislation.

The hon. member for Pinetown and the hon. member for Parktown asked me about the article in the Sunday Times. I now want to tell hon. members frankly that I did not study that article, but only heard about it. I do not want to make any statement before I have made a study of this article. It did not come from me, nor did it have my approval, and I shall go into it. If need be, I shall make a statement at a later stage of this Bill. Before this article was written, the policy was still as it had been in the past. However, I shall inform hon. members about that at a later stage, seeing that I want to study the article first.

Reference was also made here to the undistributed profits tax on finance companies. This profits tax is not a rash measure. If hon. members had read the report of the Franzsen Commission they would have found that a commission of experts had gone into the matter and made recommendations. It is on the recommendation of the Franzsen Commission that we are introducing this legislation. Hon. members opposite all agreed that this commission had done very good work. This commission is investigating the matter further, as they are also doing in the case of many other matters, and they may later put forward an amended form. However, this has been the recommendation of the commission up to now, and we have been working according to that. The reason why we have been working further on that, is, as the hon. member for Florida indicated here, namely that there are numerous finance companies which are accumulating great riches without paying tax or without passing that money on to the shareholders, who then have to pay personal tax on it. I think this is a method—I am not even saying that it is a very strong method—whereby companies can be forced to pay out part of their profits in the form of dividends to shareholders, instead of being able to keep everything for themselves. We believe that it is going to be of great value to the Treasury that this undistributed profits tax should exist in regard to these finance companies. I know there is a difference of opinion among economists and tax experts as to whether it is the right thing economically for profits to be paid out, or whether they should be retained by the companies. We know that this is a cardinal difference which may exist amongst economists, but seen from the Treasury’s point of view there is the advantage that in this way we shall not only collect more tax, but that we shall collect tax from people who are now accumulating great riches because they are not paying any tax on dividends.

The hon. member for Parktown referred to how wrong it was to introduce new taxes now. The hon. member for Pinetown also referred to it. Hon. members said that shareholders in a company ought to know from the Budget speech what the tax for the next year was going to be. This is true as far as general tax is concerned. The Income Tax Schedules which are furnished in the Budget speech give the general pattern which affects every citizen. That is what the Budget speech is there for. However, in respect of cases where there are individual categories, such as these which I have now mentioned and which deserve particular attention, I do not deprive myself of the right to introduce subsequent legislation in regard to such categories.

The hon. member for Parktown also referred to stock options. He referred to the injustice of the fact that people had to pay on the same day when the option was exercised. The hon. member maintained that it would place the taxpayer in an extremely high income group, and he pleaded that we should do something in order to tax these people in a lower income group. The principle which the hon. member opposes here, was recognized long ago in our legislation in respect of bonuses. When an employer grants an employee a large bonus, the employee pays tax at the higher rate on the full amount of that bonus. Therefore this system already exists. Why does the hon. member want to change it now in this particular case, since we have been allowing it in that particular case all these years? I want to submit that it is exactly the same.

The hon. member also put a question to me in connection with the premiums which are involved in the insurance of directors. Hon. members will know what the position is. Companies often insure an important official, such as a director, who is of great value to that company, because if they were to lose him, the company would be losing a valuable asset. Therefore they insure such a person. The object is that that premium should accrue to the company if they were to lose that person. That is the whole object of this insurance, but what are they doing now? As soon as they have paid the first or the second premium, they borrow that money from the insurance company. It sometimes has the effect that when the insured person dies or is killed in an accident, all that money has already been borrowed. Then there is nothing left because everything has already been borrowed. It so happens at present that the State has to subsidize them in respect of those premiums, because they receive a tax deduction in respect of such premiums. I say this is wrong because they use this very subsidy on the premiums in order to obtain loans. Interest is then paid on the loans and the interest is also deducted from their income. That is wrong. Now we provide that in any particular year in which a loan is negotiated the premium cannot be deducted. It is quite correct that the amount is taxable when it is eventually paid out, but that the premiums are not taxable. When the policy is paid out the premiums which have been paid, may be added.

The hon. member also referred to the position of married women. If there is something I fear …

Then it is a married woman.

… then it is the kind of married woman to whom the hon. member was referring. If there is one thing that I fear as far as tax is concerned, then it is a married woman who is in business with her husband. It sounds very fine and idealistic for a husband and his wife to work together in the same shop or in the same factory, but such a practice is open to the greatests number of abuses.

To what extent?

Take the position on a farm. The husband may say the maize crop is his, whereas the wheat crop is his wife’s. In the case of a shop the husband may say that he runs the department for men’s clothing, whereas his wife runs the department for women’s clothing. There is so much scope for evading obligations that we cannot accept this objection. However, I am prepared to meet the hon. member halfway. We are always accommodating on this side of the House. I am prepared to meet the hon. member halfway, and I am prepared to move an amendment which will take the matter somewhat further and include more women in this concession, i.e. by substituting the word “earnings” for the word “salary”, with a few exceptions. I shall place this amendment on the Order Paper and then we can discuss it to-morrow.

The hon. member also put a question to me in connection with the medical allowance of R150, and in connection with the position of the medical schemes. It is correct that the R150 is a separate amount, whereas the rebate in respect of medical schemes is a separate one. They are quite separate.

Is the object of this to encourage schemes?

Yes, the object is to encourage them. I think I have now dealt with the general principles mentioned by hon. members. I shall place this amendment on the Order Paper, and then we may discuss the matter further in the Committee Stage.

Motion put and agreed to.

Bill read a Second Time.

Mr. Chairman, I must apologize to hon. members for the fact that the amendment which I want to move now, is being brought forward at so late a stage. The amendment relates to the Bureau for State Security. All that the amendment comprises is the exclusion of this Bureau as well under clause 2. There is no new principle contained in this, and I trust that hon. members will appreciate that it could not have been introduced earlier. I therefore move the following amendment—

; in line 23, page 6, to omit “or”; in the same line after “(f)” to insert “or (g)”; in line 27, to omit “or”; and in the same line, after “(f)” to insert “or (g)”.

Mr. Chairman, this is not an easy amendment to understand without notice having been given thereof. It would have made things much easier for us if the hon. the Minister could have been good enough to let us have a copy of his amendment earlier on. As it is, we have no copy of the amendment. The hon. the Minister was good enough to tell me that he was going to introduce this amendment, but it is very difficult for us to see what is involved. As far as I am concerned, I think I have the gist of it. The hon. the Minister apparently wants to include this group of people in the group which has already been mentioned in clause 2. What I do not quite understand is the provision that they may not be included unless the Prime Minister wants them to be included. Could the hon. the Minister please explain why that is so?

Mr. Chairman, the same applies to the others that are included, namely the Railway Sick Fund and others. It is only at the request of the Minister in each particular case that they can be included.

Mr. Chairman, I wonder whether the hon. the Minister could give the House any idea about the number of people who would be affected by the inclusion of this group. It makes things difficult for us when we do not have all the details. I take it that there must be a large number of people involved.

I have no idea.

A large number of people may be involved, which brings me to the amendment to clause 2 which appears in my name on page 673 of the Order Paper, and which I now move—

1. (i) if a husband and his wife, respectively, were members of two different registered medical schemes immediately prior to the commencement of the Medical Schemes Amendment Act, 1969, the wife may elect, within thirty days after such commencement, to remain a member of the medical scheme of which she is a member or to become a dependant of her husband for the purposes of the medical scheme of which he is a member;
2. (ii) if a married woman desires to accept employment and is required as a condition of such employment, to become a member of a registered medical scheme other than that of which her husband is a member, she may so become a member of such medical scheme;
3. (iii) if an unmarried woman was a member of a registered medical scheme immediately prior to the commencement of the Medical Schemes Amendment Act, 1969, and marries after such commencement she may continue so to be a member of the said medical scheme.

The object of this amendment is primarily to protect the working woman in particular. The amendment is, however, worded in such a way that in some cases there is protection for the male as well as the woman. Before I go into the details of my amendment, I should like to explain to the House that we agreed to these groups of people being excluded as they were considered to be members of medical schemes. We agreed to that, that they be excluded for special reasons. The hon. the Minister of Transport, for instance, wanted his benefit society to be excluded. Reasons were given for that. We agreed to those reasons. We did not think at the time that because these people were excluded, difficulties would arise whereby the spouses of those people who are included in terms of clause 2, as it now reads, would be affected in any way at all. We felt that there was security in the provisions that were made for both the male, female and any offspring. We were quite sure that that was what was going to take place. Now we find that the hon. the Minister has brought in an amendment to the proposed subsection (2A) which brings these groups, which had previously been excluded as being under medical schemes, back into the Bill and considers them as being under medical schemes for only one purpose, namely to avoid one person belonging to two schemes. In principle I have no objection to that. But what are the difficulties that may arise? The first and most important difficulty is that there are many medical aid schemes and benefit society schemes which are associated with commercial and industrial institutions, as well as for instance the Railways and Iscor, where membership of a medical scheme is a condition of employment. That is where our difficulty arises. What is going to be the position of a woman who is a garment worker and belongs to the Garment Workers’ Union and whose husband works on the Railways? What is going to happen to a woman whose husband is a policeman, while she works as a hairdresser? The condition of employment there is that she cannot continue her work as a hairdresser unless she belongs to a benefit society.

Business interrupted in accordance with Standing Order No. 23.

House Resumed:

Progress reported.