Mr. Speaker, with your permission I should like to make the following statement:

1. (1) At 11,50 a.m. last Saturday, i.e. 22nd May, 1971, while two police vehicles with a number of policemen were returning from a vehicle and foot patrol along the border between the Caprivi and Zambia, the right front wheel of the leading vehicle set off an anti-vehicle mine that had been planted in the road by terrorists. In the subsequent explosion Constable J. J. Henning of Bloemfontein and Constable W. P. Dobbin of Ladysmith, Natal, were killed instantly. The explosion was so violent that the mutilated body of Constable Henning was found about 24 yards from the vehicle. Constable Dobbin’s body was found about 5 yards from the vehicle.
2. (2) The following individuals, who were in the same vehicle, were injured: Sergeant E. Winfield of Cape Town. Constable F. Vermaak of Pretoria North, Constable G. T. Alberts of the Police College, Pretoria, Constable C. L. Wiehahn of Langlaagte and Constable D. E. Lombard of Benoni. Two trackers were also injured. None of the individuals sustained serious injuries.
3. (3) Two of the occupants of the second police vehicle, which was brought to a sudden Stop by the explosion, were also injured. They are Constable C. McCarthy of Knysna and Constable B. Snygans of New Law Courts, Port Elizabeth.
4. (4) On investigation it was ascertained that the mine had been hidden on the northern side of the trail, i.e. on the Zambian side. The explosion ripped a crater in the earth about 6 ft. in diameter and 2½ ft. deep. The vehicle was hit about halfway between the bonnet and the right-hand side rear wheel, ripping a hole about 5 ft. by 3 ft. in the body of the vehicle. Indications are that the vehicle was flung about 12 ft. through the air, landing on its wheels about 16 yards from the scene of the explosion.
5. (5) From the scene of the explosion the footprints of six persons were followed to the Zambian border. Since the same road had been patrolled on the afternoon of 21st May without incident, it is concluded that the mine was planted during the night of 21-22 May. This is not the first attempt by terrorists to plant mines on roads in our territory. However, I should like to give the House the assurance that the Police will take the necessary precautions to combat this danger.
6. (6) I should like to express my genuine and sincere sympathy to Mrs. Henning and her two children, the parents and the relatives of the deceased on their irretrievable losses. At the same time I also want to express the hope that the injured parties will recover quickly.

Mr. Speaker, on behalf of this side of the House I should like to associate myself with the sympathies expressed by the hon. the Minister to the relatives of the deceased and wounded in this matter.

Mr. Speaker, I move—

That the Bill be now read a Second Time.

Mr. Speaker, in the Budget Speech of the Minister of Finance, the main aspects of the new dispensation with the provinces were mentioned, and further aspects were broached in the course of the Budget debate. At the time of the Budget Speech a White Paper on the report of the Schumann Commission was tabled, in which the new dispensation was set out in more detail, together with the standpoint adopted by the Government with regard to the recommendations of the Commission. The Bill before this House at the moment, embodies the statutory provisions required to give recognition to the new dispensation.

In the first place. Sir, I want to draw your attention to the background to the question of subsidies. The report of the Schumann Commission gives an exposition of the various changes which have been effected since 1910 to the basis on which the provinces are subsidized by the Central Government. Hon. members who want more information in this regard, may ascertain the details and references from the aforementioned report, and I shall confine myself only to the most important aspects, especially those to be amended now.

In terms of section 6 of the Financial Relations Consolidation and Amendment Act, 1945, the subsidies to the provinces were determined on the basis of the so-called R-for-R (or the then £-for-£) system. In terms of this the Government compensated the provinces for 50 per cent of their normal current expenditure, but on increases in expenditure in excess of 5 per cent per year a subsidy of only 33½ per cent was paid. In essence this arrangement meant a return to the system which prevailed from 1913 to 1925.

In the years subsequent to 1945, however, it was evident once more that this system was not operating satisfactorily, and a change-over was then made, in terms of section 2 of the Financial Relations Amendment Act, 1957, to an arrangement which was regarded as a purely temporary one, i.e. that provincial subsidies be determined in accordance with the general principle that an accumulative increase of 6 per cent per year above the subsidy for the 1955-’56 financial year be allowed, with certain exceptions. However, this system, which has subsequently been perpetuated by means of legislation virtually from year to year up to the 1970-’71 financial year, has gradually been becoming more involved and cumbersome, particularly in view of the fact that exceptions and adjustments, as well as the addition of extra-statutory allowances, complicated the financial control exercised by the Treasury. On account of these circumstances, and furthermore, particularly on account of the fact that the existing system was regarded only as a temporary one, the Schumann Commission was appointed early in 1960 to investigate the provincial subsidy system, together with related questions such as the division of functions between the Central Government and the provinces, and the adequacy of provincial sources of revenue.

The Schumann Commission made certain suggestions which, however, have notproved to be quite suitable to the particular circumstances in which the country finds itself at present, particularly on account of the demands which have been made on State finances since the middle of the sixties. In 1967, just after the last of the Borckenhagen reports on local authorities had been submitted, my Department of Finance consequently proceeded to subjecting the whole question of inter-authority relations, and in particular that of provincial subsidization, to a penetrating departmental investigation once more. This investigation, and the attendant consultation with the provinces as well as the local authorities in so far as the latter were affected, took up more than three years, and the proposals which resulted from that investigation were embodied in the two White Papers on the Schumann and Borckenhagen Reports.

Mr. Speaker, I now come to the new subsidy basis. In essence the new basis, which is now being proposed as from the 1971-72 financial year, consists of the calculation of—

1. (1) the requirements of the different provinces i.r.o. the services they have to render;
2. (2) the capacity to pay of the different provinces in respect of their “own” sources of income; and
3. (3) the deficit arising when each province’s disposable income, as reflected in its capacity to pay, is subtracted from its expenditure, as adjusted according to its need.

This deficit has to be covered by the subsidy at least.

As hon. members will understand, the actual statistical methods of calculating the subsidy, are of an extremely technical nature. In Schedule I of the White Paper on the Schumann Report, these methods are explained in broad outline, and at present a handbook is being prepared in which the details of these methods will be set out. I can give this House the assurance that the methods were properly discussed beforehand with the provinces and the Government departments concerned, arid that these methods have already been tried to a certain extent. As far as we are able to judge at this stage, the new formula will eliminate most of the shortcomings of the old formula, and will, at the same time, have the added advantages of—

1. (1) providing for the real financial requirements of the provinces;
2. (2) ensuring equal treatment of the provinces;
3. (3) making proper provision for increases in the requirements of the provinces;
4. (4) providing greater certainty as to the size of the subsidies; and
5. (5) enabling estimates of the subsidies to be made for periods of five years and more in advance.

Clause I of the amending Bill provides for the amendment of section 6 of the Act concerned, in order to enable the Minister to apply the new subsidy basis after there has been consultation with the respective Administrators.

Clause 2 of the Bill amounts to a slight adjustment of section 7 of the Act, which lays down the procedure in terms of which the subsidies are paid out to the provinces. This represents no basic deviation from the procedure described in the Act, and what it amounts to in the main is that the subsidy may be paid in instalments as required by the provinces from time to time.

Then I want to draw the attention of hon. members to the amendments proposed in clause 3 with regard to the power of the provinces to levy taxes. The Minister of Finance explained in his Budget Speech that the Government had accepted the recommendation of the Franzsen Commission, i.e. that the provinces would lose their powers to levy personal tax and personal income tax, but that they would be fully compensated for that under the new dispensation. The implications this has for the budgeting margin of the provinces, and, therefore, for their autonomy as well, are fully set out in paragraphs 36 to 42 of the White Paper. This is a matter on which the Government, for understandable reasons, did not decide lightly, and for that reason the White Paper pays special attention to it. Moreover, the matter was thoroughly discussed beforehand with the provincial authorities, the Government departments concerned, as well as Prof. Schumann and Mr. Borckenhagen, and I can assure this House that the Government is convinced that the various arrangements made in consequence of these discussions, will work out all round in the best interests of the country as a whole and, therefore, in the best interests of the provinces themselves in the long run.

Clause 3 (a) of the Bill contains the necessary provision for the abolition of the powers of the provinces to levy the aforementioned taxes, and clause 3 (b) indicates the date as from which moneys shall no longer be collected from the aforementioned taxes on behalf of a provincial revenue fund, the date being 1st April, 1971. This date is, of course, the date of commencement of the new dispensation.

As far as company tax is concerned, it may just be pointed out in general that in terms of section 3 of Act No. 38 of 1957 the provinces have no levy powers in respect of company tax. Since the 1957’58 financial year up to the 1970-’71 financial year the provinces have been sharing in the proceeds of company tax on the basis of specific ratios. For the 1970-’71 financial year this was, for example, per cent. In practice this meant that basically their share in company tax became part of the subsidy. In terms of the new subsidy system the provinces’ share of company tax will he included in the subsidy directly, and, therefore no indication will be given any longer in future as to what share of the subsidy derives from company tax.

Mr. Speaker, as you will conclude from my explanation, the new subsidy basis has as its object the elimination of numerous and comprehensive administrative problems experienced by the Government as well as the provinces under the present dispensation, and I want to emphasize once again that the provinces will in no way be in a weaker position financially as compared to their position under the old dispensation.

I should also like to avail myself of this opportunity to thank and express appreciation to Dr. J. C. du Plessis for the valuable contribution he made as regards the investigation into the proposed basis of subsidization.

Mr. Speaker, the financial relationship between the Central Government and the provinces has a long history of seeking to find some formula which would be acceptable to both the Government and the provinces. This history goes back to the time of Union, when it was accepted that although the provinces were not likely to be able to finance themselves out of the direct taxation they were allowed to impose, the National Convention at that time could not find a solution to the problem. In 1911-’12 the Murray Commission was appointed, which duly reported and this led to the Financial Relations Act of 1913. Subsequent to this, we had the Jagger Commission of 1916, the Baxter Commission of 1922-’23, the Roos Commission of 1933-’34 and the Grobler Commission which reported in 1943. Finally we had the Schumann Commission which was appointed in I960, which reported in 1964 and whose report we received together with the White Paper some seven years later in 1971. We have also had some recommendations from the Franzsen Commission on the same question.

One thing we have learnt from history is that the financial relationship between the Government and the provinces is a vexed question. There is no easy solution to this problem. This we accept. Finally, the subsidy from the Central Government to the provinces has been increasing year by year, until in 1970-’71 we found that the subsidies to all the provinces reached the figure of R362.65 million. As the hon. the Deputy Minister has correctly said, there is at the present moment really no proper basis for subsidizing the provinces. Since 1956-’57 we have been working on a purely ad hoc basis: The annual subsidy of 50 per cent of the net provincial expenditure in terms of Act 38 of 1945, plus the annual accumulative increase of 6 per cent, plus the additional subsidy to cover the revision of salary scales, allowances and benefits since 1958.

There is one thing we are all agreed upon, that the finances of the provinces must be put on a proper basis and, particularly, that there must be some certainty in their financial positions. I am interested to hear from the hon. the Deputy Minister that he believes that the Bill before us, will achieve this. This was the reason for the Schumann Commission, namely to get some stability in the financial lives of the provinces. We now have the report of the Schumann Commission and we have a White Paper on that report as well. What has happened? The Schumann Commission recommended on page 163 of the report that—

1. (1) The normal income tax on persons, based on standard rates prescribed in terms of a Provincial Income Tax Act, and fixed by Parliament, be allotted to every Province;
2. (2) the Provinces be empowered by Act to levy surcharges on the standard rates up to a maximum of 35 per cent;
3. (3) the Provinces be deprived of their

right to receive any revenue from the companies’ tax.

The motivation for these recommendations, as set out in paragraph 1179, were—

1. (a)the original right granted to the provinces to levy direct taxes;
2. (b) the practical problems connected

with a just division of the companies’ tax between the provinces;

and

1. (c) the direction to your Commission in regard to the elimination of or the reduction in the subsidies to the Provinces.

But this has been rejected in toto by the Government. Not a single one of these recommendations has been accepted by the Government. Instead, the Government has gone to the recommendations of the Franzsen Commission. In paragraph 37 on page 20 of the White Paper the Franzsen Commission recommended that—

1. (a) the rights of provincial authorities to levy personal taxation and income taxation on individuals be withdrawn.

This is exactly what the Government has done. But the Franzsen Commission was not really concerned with the relative financial problems of the State and the provinces; the commission was concerned with fiscal and monetary matters of the Republic as a whole. Yet its recommendation has been accepted. However, it has not been accepted in whole, because the Franzsen Commission further recommended that—

1. (b) provincial authorities share in the revenue from taxation collected by the Central Government on the income of individuals, as is already the case with company taxation.

This recommendation was not accepted by the Government. We have had two commissions which made two recommendations. Neither was accepted by the Government.

The Government came along with a scheme of its own. The decision of the Government is set out in this White Paper which we have before us. It is the principles that are set out in the Bill that we are going to discuss, because there is a wide difference between the White Paper and the Bill. The Bill is a short one. It comprises only four clauses. However, these four clauses can have a profound effect. The basic principles are, as the hon. the Deputy Minister has said, that each province will get a subsidy determined by the hon. the Minister of Finance in consultation with the Administrators. It will not be done in agreement with the Administrators, but in consultation with them. In other words, the rights of the Minister of Finance are absolute, irrespective of what any Administrator might think. In determining the subsidy for each province, the following factors must be taken into account; the financial requirements of each province, the capacity of the province to pay and furthermore, the subsidy must be sufficient to meet the financial requirements of the province. Here we have to add in parenthesis “as determined by the hon. the Minister of Finance”. Each Administrator must submit to the Treasury each year an estimate of the province’s requirements for the ensuing year. The rights of the provinces to levy personal income tax are taken away. What is the total effect of this? It is that the provinces, except for a minimal amount of taxation which they can still impose, are completely at the mercy of the hon. the Minister of Finance for the funds they need to provide the essential services for their provinces. The Minister is the arbiter; he will decide.

Why do you say “at the mercy”? They now have the security.

We shall test that just now. I know there is a formula in this White Paper and I will deal with that at a later stage. However, the formula is not in the Bill. We are dealing with a Bill and not with thoughts in a White Paper, The thought behind the White Paper, in other words, the formula as set out in the White Paper, can be changed at any time by the hon. the Minister of Finance without reference to anybody, without reference to Parliament, without reference to the Administrators and without reference to any single person. That is why I say we are at the mercy of the hon. the Minister of Finance. He does not have to consult with anybody because what he has to do is not based on this White Paper, but is based only on what is contained in this Bill, because this Bill will become law.

What do the provinces get in exchange for this? They have taken away from them the right to impose direct taxation on persons. We cannot accept that they are going to be better off than they are today and therefore we shall vote against this Bill. We base our objection to this Bill on two major principles. Firstly, that the taking away of the old established rights of the provinces to impose personal and provincial income tax reduces the ability of the provinces to finance at least a meaningful part of their expenditure to almost nil. In other words, they can do practically nothing with their own income. This makes them completely subservient to the Central Government and to the executive committees. We have already seen something of this. We have the strange situation that some of the provinces, anyway, are presently discussing their budgets based on the Bill before us when the Bill has not yet become law. This is what is going to happen in the future. Even Parliament is being disregarded. The Government have adopted the attitude that they are completely paramount and supreme and therefore they have told the provinces and the Administrators to go ahead with their budgets as if this Bill were law already. However, the fact remains that it is not law: it has not passed through this House yet. This is a direct indication of what we are going to get after this Bill has become law.

It is a known fact and it is a historical fact that the ability of a legislative body to withhold taxation from the executive, is the traditional method of controlling that executive, It goes back almost to antiquity and the troubles between the British Kings and the House of Commons, when the House of Commons took away the power of the Kings to control the purse strings, This was really the beginning of the first real democracy. If a legislative body cannot impose taxation, it is crippled in its power of control over the executive because its right to impose taxation is its strength and its power. These powers are being taken away by these proposals. Without the power to impose income tax, the teeth of the provincial council are drawn and its autonomy is lost.

Secondly, although the hon. the Deputy Minister does so, we see no certainty in the financial position of the provinces for the future. Each year they have to go to the Central Government with a request for funds. Despite the formula in the White Paper they will not know what funds are going to be available to them for the ensuing year until the Minister decides what he is going to give them. We have a continuation of the present position where there will continue to be uncertainty in the minds of the provincial authorities. The removal of the uncertainty regarding the whole aspect of this problem was one of the main functions which the Schumann Commission had to perform. We do not believe that that uncertainty has been removed. It is true that the hon. the Deputy Minister has said that they will now be able to plan for five years ahead and that they will be able to prepare their estimates five years ahead. I have gone through this White Paper very carefully and there are so many factors which have to be taken into account that it seems to me that it will he an impossibility for anybody to prepare estimates of what they are going to pay over to the provinces five years ahead It depends on the economic situation of the country, the growth in the G.N.P, what base factors are to be taken into account, and a host of other considerations. There are so many variables that I would not like to depend on a five-year estimate on this basis.

If this Bill becomes law there will be other unhappy features. Firstly, by far the greater part of the income of the provinces will now come from the Central Government. The subsidies in the future are going to amount to 82 per cent of the income of the provinces; but worse still, these subsidies are going to account, in terms of paragraph 44 of the White Paper, for 33 per cent of the total expenditure of the Central Government. 33 per cent of the total expenditure of the Central Government will now be paid out in subsidies. Any member of this House who has been a member of a provincial council will know that the one thing the provincial councils have always feared is that the subsidy from the Government will represent too great a part of their income. We have now built that portion of their income up to 82 per cent. The fear has always been that he who pays the piper calls the tune. This is what has always worried us in the Provincial Council, and this is exactly the situation we have reached now. 82 per cent of the provinces’ expenditure is now going to be financed by subsidies from the Central Government. What say are the provinces going to have now?

Sir, there is a second factor. The only source of revenue that is now left to the provinces will be provided by taxes on motor vehicles, fishing and game licences, fines, and betting and entertainment tax in some of the provinces. I suppose one can now expect all these taxes to be increased. I understand that motor licence fees have already been increased in the Transvaal. This is one of the few sources left to the Transvaal to supplement its income. The Transvaal is also going to acquire off-course totalisators, so that more of their income will be derived from gambling. I am very surprised that this House tolerates such a situation, after having thrown out a suggestion that we should have premium bonds, because gambling is now going to constitute the major source of income of the provinces. Entertainment tax, which we in the Transvaal did away with some years ago, is now likely to be reintroduced. All in all we are not faced with a very happy picture. There is also no mention in this report of the capital requirements of the provinces. What is going to happen to their capital needs in terms of the new arrangement?

Now I want to come to part 3 of the White Paper itself, which is headed “The subsidizing of the Provincial Authorities”. I have gone through this White Paper as carefully as I can, and I must say that my reaction, after having done so, reminded me of the time when I as a young man had occasion to consult one of the most eminent lawyers in South Africa, the late Advocate Rosenberg. I presented a document to him. He looked at it, and as was usual with him. he tipped his spectacles back on to his head and said: “The suggestion in these documents is perfectly good in law. I think it will stand up in any court, but the product of whose tortured mind is it?” This was my reaction when I read some of these recommendations and the foundations upon which they were based, because to find your way through them is almost impossible. Paragraph 43 on page 23 states: “The inherent simplicity of the proposed formula, which essentially consists of the statistical determination of the differences between the needs and the capacity to pay of each province ensures that it will be readily comprehended and consistently applied.” Sir, I wonder. I prefer to take more cognizance of the statement on page 36 in paragraph 15, of the same White Paper, which states: “Although the general principles underlying the proposed formula are relatively simple, their application in certain cases involves refined definitions and procedures, as may be inferred from the foregoing description. The need has therefore, been felt for the compilation of a manual on the application of the formula, especially with a view to elucidating specific aspects about which uncertainty may exist.” I think we are going to need this manual. Sir. The system as a system may work, but even if it does, we are still going to be left with this question of uncertainty.

One of the main concepts of this White Paper is standard expenditure. This concept is dealt with under the heading “Statistical Content” in paragraph 32 of the White Paper as follows—

Then it explains how they are standardized. What does all this mean? It simply means that in future each province will receive its subsidy in terms of a basis of expenditure standard to each province. In the field of education, for example, there will be so much per child per province; in the field of health, so much per person or hospital bed, whichever the case may he, per province. Even roads will have a standard expenditure. Because at present the economic attraction, to use the words of the White Paper, of the Transvaal is higher than that of the other three provinces, the development of the Transvaal must be lowered to the development of the other provinces to the extent of R20 million per annum. Paragraph 47 on page 25 of the White Paper reads—

Here you have the crux and the basis of this whole Bill, the development of “the country as a whole”, the removal from the provinces of any meaningful economy. Everybody is to be standardized. Everybody is to be a cipher. Everybody is to be treated the same way on a broad concept of one South Africa without the independence or the individuality of the provinces being taken into account at all.

We are going to be left with the provinces in form only. Through control of the purse strings the autonomy of the provinces is going to be destroyed, and thus a more even spread of economic development will be promoted in the country as a whole. There will be no such thing any more as one province being able to forge ahead if it so wants to. We are completely opposed to this type of thinking. We believe in provincial autonomy. We believe that every province should be entitled to develop in any way it sees fit. We do not believe that this Bill is necessary; nor do we believe that it is going to correct the unsatisfactory situation that has developed.

We do not agree with the Schumann Commission, who said that personal income tax should accrue entirely to the provinces. We believe that the formula of 1948, which has continued until now, could have been adjusted upwards. Perhaps some cognizance could even have been taken of the sales tax, so that a far more simple formula could have been found to provide the provinces with the funds they need, but a formula which would have left the provinces to develop to the fullest possible extent in terms of the wishes and desires of the people of each province. Each province in South Africa has an individual character. This Bill seeks to destroy that individuality and to make everybody the same.

We do not believe that this proposed legislation is either in the interests of the provinces or of South Africa.

We believe that this is legislation of a power-hungry Government which is determined that under no circumstances will the other tiers of government be able to express individual opinions—they want regimentation, and this Bill will provide that regimentation. We believe that this Bill is going to thwart those lesser tiers of government. We also believe that we should be following the trend which is being followed throughout the world today, namely that the other tiers of government should be strengthened and not weakened. This is what is happening in all the great countries of the world today. They are not concentrating power in the hands of the Central Government, but moving some of the authority and power from the Central Government to where it rightly belongs, in the hands of the people at the lower tiers of government. We will vote against the Second Reading of this Bill.

I do not want to reply in full to what the hon. member for Parktown said, since other hon. members on this side will reply to the more technical aspects.

I want to begin with a few general remarks. In the first place I want to say that this entire question, which has been a “vexed question” over the years, as the hon. member also expressed it, is being presented by the Opposition in recent times as quite a simple little problem. The one point of attack they launch repeatedly without giving it any substance, the one cry that is raised every time, is that we are undermining the autonomy of the local authorities and of the provinces. There was another glimmer of it this afternoon in the whole argument of the hon. member who says that we are attempting regimentation and trying to get everything under one central authority.

In his little book about Central and Municipal Institutions of South Africa, Prof. Cloete writes the following about the powers of provincial councils (translation): “Because South Africa is a union, it is understandable that the legislative powers of the provincial councils should be expressly prescribed and limited. The legislative powers of the provincial councils were limited at the onset by the Constitution and by other laws of Parliament. The provisions of the South Africa Act, 1909, concerning the powers of the provincial councils was retained, almost without any changes, in the Constitution of the Republic of South Africa, 1961”. I am mentioning this because this word, which is so handy to use, is at present being extremely abused in our country. There is talk of the “autonomy” of the provinces and the “autonomy" of local authorities as if those government bodies, for which I also have the highest respect, in themselves have a perfect right to administer their own affairs as they think fit and without anyone else approval. It is, as Prof. Cloete states: In a Union Constitution there is one central authority, and whether we want to acknowledge it or not this has been the overall set-up throughout the years, and this is how it is embodied in the Constitution of the Republic of South Africa.

But the hon. member mentioned a second point, which he made great play with, i.e. that a situation would supposedly now be created here whereby the provinces would be compelled to come to the Government year after year and ask the Minister of Finance what they are now allowed to do and how much money they could get for that purpose. Sir, one could have asked where the ignorance springs from, if we did not know that the hon. member was a competent member of the provincial council, and that he is a leading member on that side of the House. Has this not been the position throughout the years. The hon. member mentioned several commissions that have sat since 1910 in order to deal with this question. He could have added mere names to that list. I could, for example, add the name of the Stals commission, which was appointed in 1931 and dissolved prematurely, but which made the drastic recommendation, a recommendation which was supported by the late Gen. Hertzog, to the effect that thought should be given to abolishing the provincial councils. Things have been so bad throughout the years that commissions have repeatedly had to be appointed about this matter.

This side of the House has expressly declared, as the Schumann Commission expressly declared in its findings, that it is opposed to the abolition of provincial councils and what is more, that it is in favour of giving provincial councils as many powers as they had in the past and as many as they can carry in future. There is no question of stripping them of their powers, but the fact remains that in the past the provinces have always had to come to the Minister of Finance for the financing of their projects. It makes no difference whether it was 82 per cent or 53 per cent of their eventual expenditure, but there was the intrinsic principle, and it exists to this very day, that year after year there would be consultations between the Minister of Finance and the four administrators before an allocation is made to the various provinces.

Sir, there is nothing new in the administrators of the provinces coming along with motivated requests and having full-length discussions about the needs of their provinces. Each time, year after year, and in the past few years when the Minister of Finance has spoken about this matter, he pointed out that this situation was an unsatisfactory one specifically because the matter had to be discussed annually on an arbitrary basis, that there should at least be a little more permanence in the arrangements between the Government and the provinces. For that purpose the Schumann Commission was appointed. The hon. member for Parktown objects strongly—and this has been done repeatedly in recent years by the Opposition in this House—to the fact that this report was published in 1964 and is only now being submitted to us. Sir, one may tell the Opposition ad nauseam, and I cannot understand why they cannot grasp it, that the Schumann Commission's report could not be dealt with on its own; it had to be seen in conjunction with the report of the Borckenhagen Committee and together with the recommendations of the Franzsen Commission.

As far as these three commissions of inquiry are concerned, it was urgently necessary for the Government first to give its attention to the recommendations of the Franzsen Commission, and that was done. The other commissions’ reports, and the recommendations contained in them, were largely supplementary to the main recommendations accepted by the Government and the Minister of Finance, There is nothing strange in the fact that the recommendations of the Schumann Commission were not accepted in toto either, because we must always understand, in the first place, particularly in the South Africa of the past ten years since the advent of a Republic, that there must be a central authority, as also stated in the White Paper; that overlapping between the various levels of government, as far as their activities are concerned should be eliminated as far as possible and that there should be as great a saving of labour forces as possible while we are dealing with a manpower shortage. It is also stated in this White Paper on page 4, in part 3 of the recommendations—

No secret was ever made of the fact that central control was sought.

Sir, I venture to say that that side of the House, while other motions were being discussed here, repeatedly advocated central and efficient control in conjunction with this side of the House. Let me mention one instance that was discussed repeatedly in this House, and also as a result of private motions introduced here; about the overlapping of health services there were repeated discussions in this House, and each time the Opposition supported the recommendation for co-ordination and for the elimination of overlapping. This has always been the case.

Co-ordination, yes.

The hon. member says that they sought co-ordination. To bring about better co-ordination, the Schumann Commission investigated the possibility of having the services of district surgeons grouped under the provinces. We find the recommendation in paragraph 605 of the commission's report. There it is recommended that the provinces should take over these services with a view to facilitating greater co-ordination and closer cooperation and the elimination of overlapping. This means an extension of the executive powers of the provinces. But who opposed this recommendation?—The provincial authorities.

The Minister did.

No, not the Minister; in the first place it was, in fact, the provincial authorities. Let us look at what the commission has to say in paragraph 605 of its report—

That was, therefore, the standpoint of the provinces when it was suggested to them that their powers should be extended in this respect.

I think we must retain our sense of proportion in our approach to this question. The cry that the Minister of Finance will use his discretion in such a way that the authority of the provinces would thereby be undermined, is surely no justified cry. In 1945, when Minister Hofmeyr introduced the original legislation, there were also similar claims from both sides of the House. Minister Hofmeyr had the following to say about it (Hansard Vol. 54/1945, column 8689)—

He concluded with the following words—

The present Minister of Finance used virtually the same words when he delivered the Budget speech this year. With reference to these reports he said, inter alia—

In respect of the formula for provincial subsidies he concluded as follows—

Nowhere was it claimed, therefore, that this would be a permanent solution. It was repeatedly proposed, in the debates of the past few years and again in this year's Budget speech, that there would be revisions from time to time. But one thing is certain: This side of the House is as eager as the Opposition professes to be not only to see the continuance of the provincial system, But also to work for its realization and for the preservation of the present situation.

In connection with the autonomy of provinces I should like to remark that I am sorry that at present there is no regular link between local authorities, provinces and the Central Government. It is suggested in the Schumann Commission that there is room for improvement, and the White Paper also mentions this. I sincerely hope that this White Paper, and everything that it gives rise to, will pave the way to the discovery of a formula for regular and proper liaison, particularly between local authorities and the other two levels of Government. I want to express the hope that this formula, which has now been found, will play its part for several years to come and that the provinces will be able to continue their excellent work.

I want to say this autonomy not only means receiving things; it also means being allowed to spend. This is being left solely in the hands of the provinces. It is left to them how they want to spend the money allocated to them to the best advantage of their provinces, whatever the basis for calculation by this Government may be. Provision was made for the creation of a revolving fund and a reserve fund, which would enable provinces with growing needs to manage their additional requirements. I am convinced that this formula, which has been found, will offer an approach to the solution of the provinces’ problems.

I conclude by expressing my sincere thanks to the officials who worked on this formula. I also find the formula difficult to understand, perhaps even more so than in the case of the hon. member for Parktown. I think it should be pointed out that in the Department of Finance a tremendous amount is expected of a small group of loyal, good officials, because all the evidence points to a shortage of specialized staff. However, they succeeded in achieving something of particular note, and they deserve the thanks of the House, which we should like to convey to them; in particular to Dr. Du Plessis and the officials who worked under him.

Mr. Speaker, in view of my own experience in public life, this is of course, a sad day. I had my first taste of public life as a public representative in the provincial council and I Had long experience as a provincial councillor and in other offices associated with the provincial council. So I say that this is a sad day. It is a sad day because I think the Government has clearly shown in the measure we have before us that it is determined to take away such autonomy as is left to the provinces, which is based on their right to levy taxation which has come down to them from very early days. May I say that, as a matter of historical interest, which may be of interest to hon. members, that the first income tax levied in South Africa was a provincial tax. It was not a parliamentary tax.

The first income tax was a provincial tax. But I am a realist. I realize that if the Government has made up its mind that it is going through with a Bill of this character based upon whatever principles it may have decided to select for the purpose of this legislation, then it is going forward with this legislation along those principles. I think it is bad for South Africa; I think it is bad for the provinces. I think it is completely contrary to the spirit which has actuated consultations in the past from the days of Union right up till the present time. I participated in those discussions for 38 years. I want to say that at no time during those discussions has there been exhibited the spirit which appears in every line of the measure that we have before us, the spirit represented by the Government saying: “We have the power. This is what we are going to do. If you do not like it. you can lump it. There is nothing you can do about it. We are going our way and you just jolly well have to like it.” That is what this Bill before us says, and I resent that. There was no consultation with the provinces. There was information, according to them, from time to time. They were questioned. But consultation in its ordinary understood form, the substance of consultation, never took place between the Government and the provinces.

That is not so.

The hon. the Minister of the Interior may wish to question that statement. He as Administrator in his time, may have had private discussions with the Government. That is not our concern. That is not consultation between the province of Natal and the Government. The Administrator was never consulted on behalf of the province of Natal. He never had any such authority.

We had Deputy Ministers in our Excorooms.

The whole of the facts and the papers before us and the official records of the province of Natal, show that no consultation within the true meaning of the word ever took place.

Oh!

It is no good the hon. the Minister saying “Oh!” and turning his head away like that. I said it plain enough the first time. I want to repeat it now. The hon. the Minister was the Administrator and it fell upon his shoulders as a Nationalist appointed by the Nationalist Government to have done his best to present that point of view which he knew was the point of view of Natal. But the hon. the Minister did not do it.

I did.

He did not do it. Let me repeat: the fact of the matter is that there was no consultation in the true meaning of the word between the province of Natal and the Central Government, Let me also say that neither was there any consultation between the other provinces and the Central Government,

You are talking nonsense.

The hon. the Minister of Mines who knows nothing whatever about this, cannot interrupt and say that I know nothing about this.

I was a member of the sub-committee and I know everything about it.

Let me say at once that neither the province of Natal, nor any of the other provinces, nor anybody in this House, questions the authority of Parliament to legislate in regard to this matter. That authority is unquestioned. There is no argument about that. It may well be said: “Well, Douglas Mitchell, as a realist, in that case, just sit down. You have said it.” Parliament has the authority. The Government will push this measure through whatever objections are raised, whatever debate may be made. May I say to my colleague, the hon. member for Parktown, that he has done his homework. I thought he made a magnificent speech this afternoon. He traversed in an objective manner, within the time allowed, the whole of the history from the time of Union right up to the present time. But, may I say to the hon. member who has spoken just before me, that when he starts to compare the report and recommendations of the Schumann Commission with those of the Franzsen Commission, he is talking nonsense. The Franzsen Commission was appointed four years after the Schumann Commission had reported. How could the hon. member put those two reports together?

The Government sat for seven years on the report of the Schumann Commission without publishing it, without saying a word to anybody about what was happening. They passed it on to the Administrators who put the members of the Executive Committee under a vow to retain their confidence in respect of some of the provisions of the report of the Schumann Commission. But apart from that, there was no general disclosure of what the commission had recommended The Borckenhagen Commission only came in in an indirect manner for all practical purposes.

One of your Exco members was a member of the Borckenhagen Commission.

May I pay a tribute to him in that he stood by his vow? He kept to himself the confidence in respect of what he obtained in the Borckenhagen Commission.

No, he gave me and every other member copies of it.

What does that hon. Minister mean by “every other member”? Every other member of what?

He had it standing in his office for years.

Every other member of what?

Every other member of the Executive Committee.

What is the hon. the Minister talking about now? Is he saying that a member of the Executive Committee gave his own Administrator a copy of that report? What would I expect? That is not breaking his vow. That report remains absolutely confidential. I wish I could have got hold of a copy, and nobody was more entitled to it—on political grounds—than I, seeing that I am the leader of the party for the province. I could have done something with that report if I could only have got hold of it during the seven years that the Government has been dragging its feet over it. For what reason has the Government been dragging its feet? It has been dragging its feet for the simple reason that it did not like the recommendations of the Schumann Commission. That is the reason why. This Government sat on it, and four years later they appointed the Franzsen Commission, which, as my hon. colleague has pointed out, was really designed to deal with a different issue altogether. They made other recommendations, which the Government has chosen to accept. I repeat that the Government has the power to accept these recommendations and to enforce them.

I want to go back a short while and I want to point out that my hon. friend who spoke before me is also at fault in indicating that there has always been the case of a large hand-out to the provinces as a final settlement year by year of the necessary funds for expenditure, in effect by that province. That has not always been the case. In 1945, in 1946 and in 1947 the late Mr. Hofmeyr was drumming it into the provinces that from their own resources and with the formula then existing they had to find the means with which to meet the costs of their services. He also said that exceptions would only be made in special cases. Because of the drought in the Free State at that time, he was making a special provision in the case of the Free State to pay a grant to them. He was most careful and most cheeseparing in respect of the granting of a separate ex gratia grant to the provinces over and above the amount of the funds which they were able to procure from their own taxation sources and the money which came to them as the result of the then existing formula. Had the Government wished to leave the power with the provinces, and had it wished to leave the provinces as bodies which were free to interpret the individuality, each of its own province, then that formula which has come down to us, and which this Government inherited in 1948, could again have been modified. It could have been modified so as to have brought a more reasonable formula to bear on the circumstances under which the provinces found themselves. Not only are the circumstances different in each province, not only are the compositions of the population so different, but the circumstances of their development at the present time and in the future are so different as well. Those are all factors which have to be taken into account.

My colleague made the point here that notwithstanding what is in the White Paper, we are not concerned with that. I think of my old mentor, that hardheaded old Scots lawyer from Ladysmith who was on the Executive Committee before me, who when I was dealing with a Bill and a White Paper one day said to me: “You will note what the written word says in the Bill, my boy.” That is still a good rule to abide by. We shall note what is in the written word in the Bill. Never mind about the White Paper, never mind about the thoughts of hon. members who talk here with or without the book; at is the Bill that is before us that is of importance. The Bill that is before us makes it clear that as to the overwhelming bulk of their income in Future, the provinces go cap-in-hand to the Government, each one to plead its own cause. There is the issue that is facing us at the present time. If the Government in its wisdom appoints a good pleader as Administrator in a certain province, that province is going to be fortunate.

May I just say that for years I was given everything Natal asked me to obtain from the Minister.

Cap in hand.

I do not even use a cap.

Mr. Speaker, the hon. the Minister had taken his hat off so often that he decided to leave it off permanently when he approached the Government. That is the truth of the matter. Let us not be put off by that type of issue. Here then is the position: There is no formula before us. There is only the will of the Minister of Finance. What is more, with this extremely large hand-out to the provinces, something like 82 per cent of their total revenue, the provincial councils will not have a hand in the levying of the raising of that money. This is bad, Sir, I want to emphasize that. The provincial councillors themselves, sitting as a provincial council, will not have any hand whatsoever in the raising of that money. They will incur expenditure, but they will not be able to vote the raising of revenue. The Administrator and the Executive Committee, or perhaps only the Administrator, will meet the Minister of Finance, and once a decision has been reached, there is nothing the Executive Committee can do about it.

An Executive Committee cannot then say to the Administrator: “One of us is going along with you to meet the Minister of Finance”. That has been done in the past and it has been stopped in the past, it has been permitted and it has not been permitted. That will be entirely at the discretion of the Minister of Finance for the time being. We shall now find the position that the Administrator or the Administrator together with the Executive Committee, will acquire their funds by special pleading and not according to any scientific formula, or even a formula that is not scientific. They will not acquire their funds according to a formula of any kind or character whatsoever. They will acquire a certain lump sum which will be handed out to them and which they will be allowed to spend. Sir, I think that that is very bad indeed. Above all, it takes away from the provincial councillors the right to believe that they are playing a worthwhile and responsible part in the raising of money which they have the privilege to spend. At the moment each province has an individuality of its own, and it is a good thing that we should permit that to continue in South Africa. In fact, we should try our utmost to see not only that that spirit is kept alive, but that its further development is engendered, because it is a good thing. If we in Natal, for example, have something which is not precisely in common with the position in the Free State, both the people in the Free State and the people in Natal are still good South Africans. The Free State with its own individuality and its own character and Natal with its own individuality and its own character, can still go forward in amity. The world over, when you take away from a body the responsibility of raising money and you leave it only with the privilege of spending that money, it can never last because there is no permanent basis for its existence. It inevitably leads to trouble. This system of handouts by the Central Government to the provinces for their expenditure will lead to trouble and more difficulties and it cannot last. We are now adopting measures merely for the time being, until we are called together once more to deal with some other settlement, which may require even more drastic measures, designed to emasculate the provinces and to take away the powers which they already have.

Mr. Speaker, one asks oneself: What have the two hon. members opposite, who have already spoken, really contributed this afternoon with respect to the merits of this affair? My conclusion is that not one of them has a proper understanding of what is really contained in this White Paper or in the Bill. It is actually tragic that the only thing these two front benchers of the United Party, people who have served on provincial councils for years, could make reference to, was a “power-hungry Government”, We are dealing here with legislation which is the result of investigations undertaken scientifically and academically by very responsible people over a period of years. The people who instituted the investigation approached their assignment in a very responsible manner. The only thing the hon. member for Parktown could say was that “the provincial autonomy is lost; the provincial autonomy will be destroyed”. The hon. member for South Coast elaborated on that and said: “The Government is determined to take away the autonomy of the provinces”. But, Sir, that is complete political nonsense.

It is the truth.

It is not the truth, and let me tell the hon. member there that the United Party has been suffering from a complex since the year 1910, since the advent of Union. They cannot shake it off. They have a totally rigidified and sterile approach in this connection. As far as the provincial councils are concerned, we remember how, a few years ago, they objected to the establishment of the management committee system, which today they fully accept. That is the position; that is the approach of the United Party. They cannot realize that we are now in a new era, a new epoch, that this is a time of development in the Republic of South Africa, and that we are dealing here with scientifically formulated recommendations.

This Bill is not a fragmentation of provincial autonomy. It is merely a summary of the recommendations of the Schumann, the Borckenhagen and the Franzsen Commissions, and does not entail any fragmentation. It might entail a new division of finances, but in actual fact it is doing exactly the opposite of fragmentation. It justifies, guarantees and entrenches the existence and the continued existence of the provinces. In fact, it eliminates all speculation there might be, and can only lead to economic stability in the financial matters of the provinces because it entails the financial incorporation of functions. It gives that embodiment to our provincial system which it has never had since the year 1910, and if you refer to clause I of the Bill before the House, you find this proviso—

That gives every province a full guarantee. It gives to the province the guarantee that its financial requirements will be fully met. In fact, it gives the province a further guarantee in respect of any future slump or recession, because in terms of this measure it also creates a reserve source of revenue, a revolving fund, from which the provinces can draw facilities when it is necessary. Sir, it gives greater autonomy; it gives greater stability; it gives independence, because it is quite clear that under the ad hoc basis on which these subsidies were granted in recent years, the provinces were, in actual fact, forced to come to the Central Government “cap in hand", as the hon. member for South Coast put it, and this formula, and the way in which it is going to be implemented, is now specifically going to eliminate this self-conscious position in which the provinces found themselves. It is going to eliminate it altogether; it is going to make the province a more independent body. It will no longer be necessary to go like this, cap in hand, to the Minister of Finance.

But, Sir, there are also other unsatisfactory aspects in connection with the old dispensation. Because a totally unequal tax structure existed, one province used to furnish better or poorer services than another province, and this led to references on our part, within the Republic, to rich and poor provinces. I think it is obvious that this created a very unsatisfactory state of affairs. But there was also the other unsatisfactory aspect, i.e. that departments dealt with by the Central Government and other departments dealt with by the provinces, were placed on an unequal footing. We are thinking, in particular of the Department of Education. For example, the Department of Coloured Education received direct financing from the Central Government, while provincial education departments were dependent upon the funds at their disposal. This sometimes created an unbalanced, unfair and critical position. This new legislation gives a better co-ordination of functions in this sphere as well. But, Sir, there was also the other problem involved, i.e. that because of the instability that did exist, because of the uncertainty in respect of requirements that developed from time to time, use was made, on the provincial side, of measures which, at times, were merely fiscal in nature. Tax sources had, therefore, to be sought, sources that were sometimes difficult to obtain because of their restricted nature. This entailed the levying of taxation tariffs in such a way that various Government bodies had to levy taxes from the same source, that everyone had to get a slice of the cake. In that connection we are reminded, in particular, of the position that developed in respect of licensing. Some businesses were licensed by the Central Government, and others by the provincial authorities, while supervisory and regulating measures in connection with licensing were allocated to the local authorities. In that sphere this resulted in no fewer than three authorities taxing the same source. This is now being eliminated. The hon. the Minister of Finance has already announced that all licensing fees are going to be paid over to the local authorities, and in terms of the Amendment Act of 1968, full powers are now going to be handed over to the provinces. This is definitely not a curtailment of provincial powers. It is not a curtailment or an annihilation of the autonomy of the provinces. In fact, it is an extension of powers being granted to them in that connection.

But there are also other services which, in terms of this commission’s recommendation, are being allocated to the provinces and have, in part, already been allocated to them. Here we have in mind the transfer of the commercial schools, the technical high schools and the domestic science high schools, which is a direct recommendation of the Schumann Commission, so that here there is also wider provincial autonomy. The United Party’s statement that the powers of the provinces are being curtailed cannot, therefore, be accepted at all.

Even in the past few decades it has been very clear that the provinces were not able to meet their financial obligations from the sources of revenue at their disposal. It was clear that from year to year they became more dependent for all their requirements on the subsidy they received from the Central Government. In fact, this tendency increased so progressively that the present subsidy, according to the old dispensation, already constituted 63 per cent of their revenue in this manner. But this position became too arbitrary, and the present position is that 33 per cent of the Central Government’s revenue will be paid to the provinces in that way, by means of subsidies. When a government must control such a large amount, it is necessary that there should be a very close and logical link, with due allowance for all the relevant factors. The proposed formula provides for that according to specific criteria. The subsidy is based on an increase in the local product, the economic vigour, the application of the manpower, etc., and therefore has a direct connection. The method is an altogether realistic one and basically very simple, after all, as one can see when one analyses the figures in respect of education. There need consequently be no progressive increase in tariffs. Neither is this necessary, because the determination of the subsidy depends on the financial requirements of the provinces, i.e. the increase plus the domestic product. Actually a systematic downward trend could take place in the provincial budgetary margin, because the provincial authorities will now be more dependent upon the subsidy, and to a lesser extent on those funds and tariffs it levies on its own initiative. It is nevertheless the provinces’ autonomous right to increase or decrease these tariffs as they think fit.

This must definitely promote permanence and stability. Each province can accurately determine the scope of its capital programme. In speaking of the capital programme, we think, for example, of the position which was created in the past when the provinces budgeted for capital services. As a result of this uncertain position, which developed from time to time—the fact that a budget was drawn up, but that there was no certainty in connection with obtaining funds—some of these services were scheduled, but they sometimes remained on the schedules for years and years, because the necessary funds could not be found. This also resulted in certain of the services having to be suspended owing to a lack of funds. All the provinces, except perhaps for the Transvaal at present, will benefit from this new formula. Taxes in the Transvaal are, on the average, lower than those of the other provinces. This is because of the fact that the Transvaal has a reserve which it has built up. That is why, relatively speaking, the subsidy of the Transvaal is now less. According to that it will have a shortage of R16.9 million. We realize that under the new dispensation there is, however, no necessity for the Transvaal either to increase its taxes or reduce its expenditure, but that it can, in fact, increase its expenditure by 14,3 per cent, in accordance with its present budget, by using the reserve funds at its disposal, those drawing rights which it has on the reserve source of revenue and the revolving fund But since it is perhaps not desirable to be doing it at this stage, and in view of the Transvaal’s greater responsibility for road-building and road maintenance, since the allocation from other sources possibly does not exist and it would perhaps be irritating to reintroduce taxes such as the entertainment tax at this stage, it is perhaps only fair that in the transition stage this province should be assisted to such an extent that it is not asked, at this stage, to make use of its drawing rights or other facilities, but that it be made possible for the province, in some way or other, to stabilize its budget without it being necessary for the province to make use of these facilities.

I think that this legislation gives a stable and durable embodiment to the financial position of the provinces. I regard this as a scientific formula which is going to regulate the relationship between the Central Government and the provinces for many years. This formula is the product of years of intensive scientific endeavour and, with this legislation and its acceptance of the recommendations of the commissions, the Government has succeeded, at least as far as the foreseeable future is concerned, in creating a very satisfactory position as far as the finances of the provinces and their relationship to the Central Government is concerned.

Mr. Speaker, listening to the hon. members for Witbank and Ermelo giving their blessing to this Bill, one is led to believe that, whether they liked it or not. they had to bless it. Some of the arguments they put forward can of course he shot to pieces, since their arguments had no foundation really. What we are being asked to do in respect of this Bill, is to reduce the provincial councils to a mere skeleton. The Minister of Transport and the Minister of Posts and Telegraphs will have more powers than the Administrators or the provincial councillors. That is the state we have got to at the present moment. Those of us who have served on provincial councils, as I understand the hon. member for Ermelo has, are surprised at his speech, knowing the jealousy of the Transvaal for their particular position in the provincial system just as we in the Cape are very jealous of the provincial system of the Cape and all that is built up in this country.

That is why they made him bless the Bill.

The question of the finances of the provinces has of course been a bugbear over the years since the formation of the Union and later the Republic. I was pleased to hear the hon. member for Witbank say that they stand solidly behind the continuation of the provincial system as such. As you are no doubt aware, Mr. Speaker, one of the subjects the Schumann Commission had to consider was whether our provincial system would be done away with or not. As far as I and this side of the House are concerned, we stand by the provincial system.

But, Mr. Speaker, I am disappointed with the reports that have been Tabled. They deal with financial aspects, but not the whole background of the provincial system. There is something more to the provincial system than just the financial aspects. They missed that completely. The tradition of the various provinces, for example, and what the provinces stand for they have missed completely. The financial aspect as far as the relationship between the Government and the provinces is concerned, has been brought to the fore. It is interesting to note, as has been said here, that the Borckenhagen Committee was appointed in 1956 and reported in 1971 and that the Schumann Commission was appointed in 1960 and apparently reported to the Government in 1964. Subsequently we have had the Franzsen Commission. members in the Government side have tried to connect the Franzsen Commission with these two particular commissions. The Government sat with the reports of Borckenhagen and Schumann Committees for a long time. I am convinced, as hon. members have said, that the Government did not like the recommendations in those reports and had to think out another way of getting around them.

It is all wrong to say that the Administrators and their Excos must meet and discuss how much money they want, and come to the Government, fill in the necessary forms and ask for X Rands to operate the provinces for the next year. One must not forget that the provincial councillors are elected on the same basis as the hon. members of this House. They are all representative of the people, with slight differences in the Orange Free State and Natal. They happen to be all responsible members representing the voters in this country. They can make judgments, and a number of them have become members of this House. Some of them are Cabinet Ministers today, some of our best Cabinet Ministers came from the provinces. That shows the calibre of person that come from the provinces.

Now, to say to the provinces: “Well, you have X Rands to spend this year,’’ you turn the provincial council into a secondary type of advisory board. They will have less powers than the hon. the Minister of Posts and Telegraphs and the hon. Minister of Transport. If we are going to go on this way, what are we heading for? The following interesting passage appears in paragraph 19 of the Schumann Commission’s report—

There should have been a measure of recognition by these commissions of the status of the provinces as such and they should not be treated as spending instruments of this House. Much has been said about the autonomy of the provincial councils. We know that the ordinances passed by the provincial councils are subject to the concurrence of this House. Any of their ordinances can be rejected by the Government of the day. We know that. We know that the autonomy of provincial councils is limited. But they do perform a function. They are the direct liaison between the Government and the local authorities. Strange as it may seem, local authorities have more powers than provincial councils. The provincial councils always have had limited spheres of taxation. But any that they have had are now going to disappear, apart from a few million rand from licensing and a couple of other items. They have never been able to raise loans. Local authorities of large cities such as Cape Town and Johannesburg have unlimited powers of levying taxation in the form of rates They have powers of raising loans which the provinces have never had. They will have more powers of raising money in order to finance their affairs than the provinces The provinces are going to be placed in the position where they will be told: “Here is X Rands for you, that is the money you will spend next year,” The provinces may come to the Minister of Finance and say: “Look here, we want R 500 million” and the Minister of Finance will say: “You cannot have R500 million. I am going to cut you down to a lesser amount.” The provinces will have to cut their suit according to the cloth provided by the Minister of Finance. It will not be by way of a direct appeal to the taxpayer who has to meet the cost. We know that the provinces in this country are geographically unevenly divided and that some provinces are referred to as the richer provinces and others as the poorer provinces. We know the size of the Cape Province as compared to the Transvaal. If we go into that we may land into other arguments. There should be some measure of fairer taxation, however.

When I was in the provincial council the Administrator invariably found himself in the embarrassing position when with either a small surplus or a shortage he would have to say: “This is my Budget. In order to finance the position of the provinces next year I am going to approach the Minister of Finance for X Rand in order to meet the commitments of the province.” It was embarrassing to him and embarrassing for the province. When the Borckenhagen Committee was appointed we thought that it was going to overcome this position. We did not expect that the taxation powers which the provinces had were going to be taken away from them. It is quite evident that the desire of the Government to retain powers within their hands is very strong. They do not want to allow any taxation powers in the hands of other government bodies. The result of this is that useful instruments are converted to nothing else but advisory boards. Our provincial councils will become something like the Coloured Representative Council. We vote certain moneys to them and they spend it. I do not think they will have the power to spend that money like we do, but they will eventually get those powers. We will reach a stage where Mr. Matanzima will have more powers than the provincial councils. We must face up to this problem. We have failed to tackle it. The Government by presenting this Bill, shows complete failure to deal with the provinces. The Government has failed hopelessly by taking away certain responsibilities of the provinces and saying that the Government will give them the money. When new Bantu states are created in this country and they operate on a council basis, the Government will be faced with the same decision, namely how should they be financed. Will these people be satisfied with the methods of dictation by this Parliament without any say? Next year Parliament will vote this money to the provinces, but we will not discuss it. We are not going to talk about the provincial budgets, because we will not have it in front of us. The Minister will say that the provincial administration of the Cape wants a certain amount of money and that amount will then be voted blindly. This is wrong. If Parliament votes money, it should be discussed. We should have the right to say that either too many schools are built or that not enough schools are built, etc. Therefore, hon. members can see how we are undermining the whole structure of provincial government. The Bill before us is creating advisory boards. The Government will have to give very serious consideration to what it is doing and, at the same time, to the future of the provincial councils.

One remembers the interim report of the Schumann Commission dealing with the removal of Coloured education from this sphere. In this regard I should like to quote from paragraph 6 on page 4 of the interim report of the Schumann Commission. Paragraph 6 reads as follows:

Under this new financial system we could have retained Coloured education under the jurisdiction of the provincial administrations. The provincial councils could have budgeted for their expenses and the Minister could have given them the money. But what happened in our haste to transfer Coloured education to the Central Government without reasoning? In paragraph 155 on page 119 of this report, the commission further reports as follows:

Here again a rush decision was made. We know now, on the basis of this Bill before us, that Coloured education could have been retained by the provincial administrations. The provincial administrations are losing control. We have the national educational system which they have to administer, but which are controlled nationally. We know what happened as far as national roads are concerned. All along the line the provinces have had their powers, functions and finances trimmed. And they are left with very little at the moment. One wonders what they are really going to do. Will they just go along as an advisory board, sitting there and advising the Administrator as to what the money should be spent on? I can imagine the Administrator getting up at the first session and saying: “Boys, I have R150 million. Over to you.” We will say on our side we want so much for schools. Somebody may stand up on the other side and say no, we do not want it for schools, we want it for roads. That is what you are going to get. I am putting it very crudely, but that is what is going to happen. I want to put this to the Minister. Over the years the other provinces have probably done the same. They have built up a considerable Loan Account which have to be repaid. The capital indebtedness of the Cape Province today, as at 31st March, 1971, is R232 136 456. I would like to know from the Minister how does the Cape repay that loan? Do they write it off? Because where does the Cape get the money from? Because the Government has turned off the tap. I hope he is not going to ask the Cape to take it from motor licences, to pay the interest and redemption on this loan. I want to know from the Minister whether he intends writing off that amount, or will he take it as a loan to the Central Government? Because the Cape cannot face that. With its limited budget now it will not be able to repay it. It has no money. The money has been cut off. The Government must tell us what they are going to do. The Government must tell us how they are going to finance the capital amount at the present moment. Because here we find that in the case of the Cape alone, notwithstanding the fact that they are only requesting R38 million from the Central Government, if you look at their budget you will find that the estimate is very much more. The commitments outstanding as at 31st March, 1972, is R103694000. This is in respect of commitments for building schools, hospitals and on other items. They have to find that money. They cannot find the money. It will have to come from the Central Government. We must hear from the Government how they are going to finance it, and how they will find the money. I want to ask the Government this. When we are asked in this House to vote this considerable amount of money, are we going to have the provincial budget in front of us, or are we just going to give them a blank cheque? Because we are responsible. This House is responsible for voting that money. They will advise the Administrator how to spend it later on, but this House is responsible to the taxpayer for how that money is going to be spent. The Minister will have to come to this House with a separate Budget from all the provinces. We will have to know from the Minister how they are going to spend this money. So more work will devolve on this House. We will have to examine all these budgets as we examine the Post Office Budget and the Railway Budget. It may be that we will have to have a Select Committee on Provincial Expenditure. We do not know. It is a lot of money. These are the aspects that this Minister and this Government will have to go into. You cannot turn the provincial councils into skeletons and then expect us just to sit back and vote the money. Something will have to be done. I think it is a foolish scheme we are going in for. I do not think enough thought has been given to it. They have looked at the financial aspect only, but they have not looked at the provincial aspect, the traditional aspect of the various provinces of this country. Those things are jealously guarded. The Transvalers have their traditions and we have them in the Cape, and the Free States have them and Natal has its traditions. We all have our feelings. We would not like to interfere with them. But those traditions will mean nothing. The provincial councils would become museums in which the members meet on an advisory basis, as the result of this Bill. I and other hon. members on this side will, consequently, vote against this Bill.

Sir, I do not believe it is necessary for me to react to the hon. member for Salt River, a member who advanced such foolish comparisons as the one between the Transkei, which has self-government, and the provinces. It is very clear to me—and I am saying this respectfully—that the hon. member does not know what this whole matter is about.

Sir, we are conducting the Second Reading debate on a very important Bill. Therefore, what is involved is the broad principles rather than minor details. I want to say at once that on the basis of principle there can be no objections whatsoever to this Bill. Up to now the United Party has failed dismally to substantiate their objections to it. In our particular political set-up it is essential to have good relations between the Central Government and the provinces, not only because it makes the essential co-operation more pleasant, but also because it is to the advantage of everybody. I want to say at once that up to now the relations between the Central Government and the provinces have always been very good. There are, nevertheless, disparities and uncertainties which arise from the present financial arrangements and which sometimes lead to concern on the part of the provinces and also to troublesome situations from time to time and from place to place. The formulas in terms of which subsidies have been paid to the provinces over the past 60 years, are ad hoc. They are unscientific and unsatisfactory, and in spite of endeavours which have been made so as to obtain more equity by means of periodic adjustments, it has never been possible to succeed in bringing about a sufficiently equitable state of affairs with equal treatment for all, mainly because of the inherent inequality in the means of the provinces,

A new formula has now been designed, calculated mainly at eliminating these shortcomings or at restricting them to a minimum and at the same time synchronizing the machinery between the two levels. This formula is, of course, a human creation, and as such it cannot lay claim to being perfect, but it promises to be the best attempt since 1910. This Bill, which seeks to implement the new arrangements, is a short measure and mainly affects two aspects. It restricts the sources of taxation of the province and it substitutes a new formula for the existing one. When one considers this, the first question which arises is this: Does it have a disadvantageous effect on the provinces or not? This is a perfectly natural reaction, on the one hand because a province is that place where each one of us realizes certain sentiments; on the other hand because it is an institution which performs important functions and as such is an important cog in the machine of State. Although the new formula is very complicated, it does not call for the knowledge of a statistician or of an actuary to ascertain at once that the formula is at least based on an economically sound principle and that it must ensure equity.

Therefore it is a foregone conclusion, as far as I am concerned, that under the new formula the provinces will be in a much better position than under the existing formula. In fact, this is precisely what the provinces themselves say. I want to quote to hon. members what the Administrator of the Cape Province recently said in the Budget speech he delivered in the Cape Provincial Council. I shall quote from Die Burger of 18th May, 1971. He said, inter alia, the following (translation)—

The objection of the United Party is directed mainly at the withdrawal of certain levying powers, i.e. in respect of personal and provincial income tax, which would affect the autonomy of the provinces. I shall come back to the question of the autonomy. From the nature of the case, we have within the framework of our political structure only two alternatives by means of which relations between the Government and the provinces can be improved. These are by increasing the taxation sources of the provinces or by increasing the subsidies. In other words, either by giving the provinces wider powers and functions or by strongly endorsing the principle that one financial control for the whole country is the inexorable demand made by healthy state finances. The United Party chooses the first alternative. They want more taxation sources for the provinces. Apart from the fact that such a step would to a large extent make inroads on the idea of unity, the striving after unity, as incorporated in our Constitution, I want to point out that the objections to and criticism of the present system are in fact directed in principle at the burden of taxation on the citizens which is unevenly distributed owing to the unequal carrying capacity of the provinces, which results in unequal services, and at the fact that the existing formula favours those provinces which derive the highest incomes firm their own sources.

Therefore it is clear that the allocation of even more sources to a province will not eliminate these shortcomings and that it will be possible to eliminate them only by having the provinces draw on one central source to a much larger extent, and on the basis of a more scientific formula which must ensure the desired equity with equal treatment for all. In addition, especially in a country like South Africa with its expanding economy, it is of national importance for development, also on the provincial level, to take place in a coordinated and balanced way within the national framework. We must not forget that every region or geographical area, be it a province or a region or a district or a local area, is a sub-national area which forms part of the whole, in other words, of the larger political, economic and social entity. This is precisely what the Department of Finance is doing now, i.e. producing a system which not only eliminates these shortcomings and weaknesses, but which, at the same time, takes into account the necessity of having development take place in harmony on all levels so that the national objectives may be achieved.

What is more, this system is not breaking away from the traditional approach. Like the old system, it takes into account the idea of unity as incorporated in the entire structure of our State, In other words, henceforth the provinces will have control over their own taxation sources, as they did in the past, supplemented from the Central Treasury, the only difference being that their own sources will be reduced and the subsidy from the Treasury increased in order to compensate them for any loss in that way. What makes this formula so acceptable and attractive, is the fact that it rests on healthy economic and scientific bases, that it takes into account the needs of the provinces, the carrying capacities of the provinces, the growth rate of the national income and the necessity for stability. Furthermore, it does not restrict the provinces in any respect whatsoever in regard to the proper execution of their functions. Henceforth the provinces will have greater security and be able to render the necessary services without concern. In addition, it will bring about a more equitable allocation of funds and greater equality. What more does one want?

From the speeches made by hon. members opposite, it is clear that their concern is not really the merits of the Bill. Their concern is something else. They are concerned about the autonomy of the provinces which are allegedly being affected. I disagree with them. I want to say at once that if I were to have to choose between the autonomy of the provinces and the national interest, the choice would not be a difficult one. One does not like to interfere with autonomy, be it that of a person or of a body or of an institution. By saying that the Government is interfering with the autonomy of the provinces, the impression is being created that something improper is being done. The impression is being created that the provinces are inviolable and that the Government is acting outside its powers. Such a concept rests on a complete misunderstanding of the entire structure of our State. Although the provinces are full and equal authorities in their own particular fields, they are not autonomous bodies to the extent which the Opposition wants them to be.

We have a system which has withstood the test of time. It is a system which, over the past 60 years, has proved to be the most suitable for our particular circumstances. i.e. the three-tiered system of government. From time to time there have, of course, been attacks on and criticism of this system, attacks which should much rather be seen as evidence of the vitality of our constitutional development. As we heard here this afternoon, this criticism had led to the appointment of several commissions of inquiry to investigate shortcomings in this system, shortcomings which could always be ironed out, and there had never been any profound reason for substituting or interfering with the system. Naturally, we are not married to this system, but one thing is sure, and that is that no people breaks easily with its past or with the structure of its State. When we look back today at the course of our development, we are grateful for the wise choice our ancestors made in 1910. They were faced with, two schools of thought. On the one hand there was the federal view which rested on the autonomy of participants, on the supremacy of the Constitution and on divided sovereignty. On the other hand there was the unitary system which rested on the indivisibility of governmental authority and the supremacy of Parliament. They had to choose between the federal system which, if it were to be taken to its full consequences, would have cast suspicion on all central authority, and the unitary system which in turn, if it were to be taken to its extreme consequences, would reject all forms of decentralization and would call for centralized control over everything from international policy to the sanitation problem of the smallest hamlet. Our fathers chose a unified form of government and adjusted it to our particular circumstances. For reasons of efficacy and because of practical considerations, it was laid down that the Central Government would perform part of its functions through non-central organs, i.e. the provincial councils and the local authorities. What better could one wish for in a country such as South Africa where we are faced with its vastness but also with people who were schooled to help themselves and to tackle matters on their own? The beauty of this system is contained in the very fact that it offers opportunities of participation to the people on every level, i.e. the powers the provincial councils have of passing ordinances, the powers the local authorities have of making regulations. In this way we have today a unified form of government and not a federation.

In the unified state, all authority is vested in Parliament, In fact, section 59 of the Constitution leaves nobody in any doubt as to the supremacy of Parliament. Government takes place from this one centre, with administrative and legislative decentralization in accordance with particular needs. In this way we have one governmental authority today which resolves what is proper for the peace, order and good government of the country as a whole: one governmental authority which is indivisible, but with the umbilical cord of authority which runs from above through the provinces to our cities and towns; one governmental authority which is exercised on all three tiers, i.e. the national, the provincial and the local; one governmental authority which asserts its authority in respect of its own republican functions, but which, at the same time ensures that its governmental task is exercised on all the other levels through the umbilical cord of authority in the form of delegation, empowering legislation and constitutional provisions; one governmental authority with complete vision over the whole of the territory of its State. In this way the governmental task in the Republic of South Africa is being carried out in all its regional nuances and local varieties.

This is a fine system, but unfortunately one which easily gives rise to misunderstanding. It gives rise to misunderstanding for the very reason that it has features which reminds one of a federal system. In this way our provincial councils have full legislatory status, derive their rights from the Constitution and have the right of levying taxes. This, together with the fact that the provinces have specific defined powers and functions that they have their own areas of jurisdiction and have attained an identity of their own, creates the idea in the minds of people of a kind of entrenched, inherent governmental authority. This is not so. There are not three forms of government. There is only one Government which operates and finds expression on three different levels. The generous measure of local authority which the provincial councils have, does not mean that they have inviolable, inherent sovereignity in their own areas. They are in fact full and equal authorities on a particular level, but they are always fed from above. Therefore they can never be sanctuaries on their own. Therefore there can be no talk whatsoever of interference, and even less may the provincial councils lay claim to autonomy in the true sense of the word.

What the provincial councils do have, is a statutory right to that part of the total national tax revenue which is necessary so as to enable them to fulfill their designated functions properly. Secondly, they have the freedom of using and spending the funds they receive as they think fit. Not one of these rights is being affected by this legislation. On the contrary. The provinces will retain their full autonomy in regard to the use of the funds at their disposal; they may use it without any interference from anyone whomsoever. In addition, they retain the right of levying taxes on those sources allocated to them and they are free to increase, decrease and even to abolish those taxes. But they do not have the autonomy of being able to lay claim to more or to specific taxation sources. The only thing to which they have a claim is adequate financial means, and the decision in respect of how that need is to be met, rests entirely with the Central Government. Nothing in the world prevents this Parliament from curtailing and even taking away the powers of provincial councils at its discretion. In fact, this is not the first time that taxation sources are being taken away from the provinces. In 1945 transfer duties, liquor licences and Native administration fees were taken away, and in 1957 company tax was taken away.

The United Party wants to make out, too, that the budgeting autonomy of provincial councils is being affected by this legislation. That argument, however, does not hold water. Surely adequate compensation is being made for any loss of taxation sources or income from their own resources. In fact, this is the first time in the history of provincial government that the Central Government is taking away taxation, sources from the provinces but is at the same time, as a quid pro quo, generously compensating them for that by means of increased subsidies. But this is not all. The Government is going even further and creating a reserve income fund as well as a rotating fund, which immediately gives greater flexibility to the financial arrangements. Therefore, on grounds of principle, there can be no objection to this legislation.

The question which arises is why the United Party is concerned about the autonomy of the provinces. Are they seeking greater internal autonomy? Are they seeking more elbow-room for themselves? Greater internal autonomy can be realized only in a system of double sovereignity which in essence amounts to a federation, I am asking myself whether this is what the United Party has in mind.

Mr. Speaker, it was quite apparent from the hon. member for Winburg’s speech that provincial government in South Africa is on the way out. Provincial government is going to be replaced by provincial administration. If there is any intelligence on the benches on the other side of the House, they will know what I mean by that. Provincial government is on the way out and provincial administration is on the way in. It has been said by my hon. colleagues on this side that what is intended is that the Government is going to make of the provincial councils merely another Government department. This never became more clear than while the hon. member for Winburg spoke, during the last 20 minutes. The hon. member for Winburg started by saying that there were ridiculous comparisons between the Transkei and the provinces, because the Transkei is self-governing. Has the hon. member gone into the question of the intention of the Constitution in which was embodies the whole attitude of unity yet at the same time accepting the differences which existed in the four provinces? This is why we had this very system developed at the time when Union was formed in 1909. This was further embodied in the Republican Constitution Act, only 12 years ago, and was accepted by this House then. Yet here the hon. member can talk as he did.

Hon. members on that side of the House and, in particular, the hon. members for Winburg and Witbank, have alleged that a new formula, based on scientific investigation, is now going to replace the old ad hoc system. They have alleged that the subsidy is now going to he fixed scientifically. I want to remind hon. members on that side of the House and, particularly, the hon. member for Winburg, who spoke after my hon. friend from South Coast, of what my hon. friend for South Coast said, namely that we must look to what is in the Bill, not to what is in the White Paper. Where in the Bill is there anything about a scientific formula for the fixing of this subsidy?

Read it.

An hon. member on that side says: “Read it.” I refer the hon. member to clause 1, which reads—

… such subsidy as the Minister of Finance may determine after consultation with the Administrator of the province concerned,

What is scientific about that? What is scientific about the Minister of Finance now taking the power to fix the subsidy after consultation with the Administrator, not even “with the agreement of” the Administrator? Line 25 of clause 1 reads—

What is scientific about this? Who is going to determine what the financial requirements of that province are? Is it going to be determined by means of a scientific formula?

Are you suggesting that it will be worked out by guesswork?

Exactly! That is what the Bill says. Unfortunately the hon. Minister for the Interior is not here now, but it is going to be exactly what that hon. Minister has had to do for the last ten years, namely go cap in hand—or hat in hand if he does not use a cap—to the Government and ask for something. The same is going to apply here. There is no scientific formula on which the subsidy is going to be based.

Is it going to be worked out by guesswork?

It must be guesswork and not even guesswork, because it is going to be decided arbitrarily by the Minister of Finance. The Administrator will merely be able to put forward his recommendation. It will not even be done “with the consent of” the Administrator. This is especially indicated in the proposed new section 6 (3), which reads—

And what is scientific about that? What is scientific about what “the Minister of Finance shall determine”? There is nothing in here which is scientific. Hon. members are sucking it out of their thumbs when they say it is going to be based on a scientific formula. We have this Bill to debate, nothing else. Those hon. members might have some inside information. They might have been given some prior information by the hon. the Minister of Finance of what formula is going to be used if such a formula exists at all. We, however, have to debate a Bill and what is printed in it.

This Bill as presented to this House today is another shocking example of the arrogance of this Nationalist Government. As was pointed out by my hon. friend from Parktown, the Budget was drawn and provision made for subsidies to the provinces before this Bill was ever presented to this House. In other words, that Government in its arrogance has already accepted that this Bill will be passed by this House.

Which government?

That Nationalist Government, if I must name it. It has already accepted that this House will pass this Bill. [Interjections.] I want to ask those noisy friends on the other side of the House: Are they prepared to abrogate their rights in this House? Are they prepared to abrogate their rights to the Cabinet? This is dictatorship. This is the Cabinet which arbitrarily decided before it even presented this Bill to Parliament that this Bill was going to be accepted and has already set in motion the implementation of the provisions of this Bill, which we are only now being asked to debate. This is arrogance in the extreme but typical of what we have come to expect from this Nationalist Government.

That point was made long ago.

It does not matter. It does not lose any strength by being repeated if it was made before. I do not believe that it was made before. This Bill is another step in the assumption of authoritarian status by this Nationalist Government. It is, as I have said before, the death knell of provincial government in South Africa and the beginning of the reduction of provincial administrations to the status of administrative bodies which will merely become another Government department.

But this was predictable. It was predictable because of the very philosophy of the Nationalist Government, the philosophy of nationalism which requires domination, complete and total domination, of all other groups and other persons. This Bill has been brought up mainly, I would almost say primarily, because this Government has been unable to dominate the Province of Natal, If there had not been a United Party Government in Natal today, a United Party Government which has existed since 1910 and the advent of Onion, we would not have had this Bill here today. The Government has been able to dominate the other provincial councils and it cannot tolerate any discussion or disagreement with it on matters of principle. That disagreement it is only getting from the Natal Provincial Administration.

The tail that wags the dog!

It is not a question of the tail that wags the dog. I must agree that I believe Natal does wag the whole of the Republic. We are very proud to be able to do just that.

It is apparent that this Government has become more and more intolerant of provincial and other local government bodies which have different opinions. Notwithstanding the findings of three commissions which we have had in the last ten years, the Government now comes with its own ideas which in fact are directly in conflict with the main provisions of these reports. It is another case where if the Government cannot dominate a body, the best thing is to eradicate that body. The Government has been asked about its intentions with the provincial councils. My hon. friend from Winburg dealt at quite some length with what its intentions are. It is apparent that amongst its intentions there is no intention that it should have any power at all. If the provincial council is to be made only an administrative body carrying out the instructions of the Government, let this Government say so openly now and not come in by the back door, as it is now doing, whittling away further powers. Let us stop calling the provincial councils elected bodies, because this Bill and the Government’s actions to date destroy the whole concept of “unity with diversity” which was embodied in our Union Constitution Act and was accepted and reaffirmed at the time of the introduction of the Republican Constitution Act. Let the Government tell us that it is abrogating what is contained in our Constitution Act, today, and that it now wishes to revert to a system of unitary government, which the hon. member for Winburg mentioned. He proudly said that his fore fathers had decided on a unitary system of government that would be administered at different levels. If that is the intention of the Government, let the Deputy Minister tell us so this afternoon so that the country and Natal in particular will know that this is what they can expect from this Nationalist Government, a unitary form of government and no three tiers. We have had statements by the hon. the Minister of the Interior and I think I should quote them now. Earlier in this session in this House the hon. the Minister of the Interior said (Hansard, column 2658)—

If this is an authoritative statement of Government policy, I think it should be spelled out clearly so that the people of South Africa will know it. The same hon. Minister, in column 2661, went further and said—

And, of course, I am glad to see the hon. the Minister of Community Development here, because we heard him say—

It is an integral part of the entire process. Sir, hut it is not government; it is an administration. It becomes part of the administration. Sir, this is of course only to be expected when one considers the basic philosophy of this Nationalist Party. It always has been one of centralization. It is the old story of the spider sitting in the centre of his web, sticking out his legs as far as they can go and grabbing everything that he can. This spider is sitting there and controlling everything from one central point, Pretoria. The hon. member for Winburg asked why we are opposing this. Surely, if the hon. member for Winburg had been in politics a little bit longer and had taken the trouble to find out what makes the United Party tick and what has kept the United Party going all this time, he would have known that this is because the policy of the United Party is one of decentralization, one of devolution of powers to the other two levels of government, which we accept as being levels of government and not merely levels of administration, always of course accepting that these lower levels of government would be under one federal umbrella, namely the Central Government. But I want to say that the power to tax people and institutions is basic to our thinking, and of course it is basic to the spirit of “unity with diversity’’ which is contained in our Constitution Act. If one cannot tax, then one becomes a stooge. If a body does not have the power to tax and not the power to administer its finances in the way it wishes to administer them, it is merely a stooge. It is a stooge of this higher body, whatever it might be, which actually passes the funds down. And how often have we heard Ministers on that side of the House saying that “he who pays the piper calls the tune?" That is exactly what this Government is trying to do today by introducing this legislation. They are creating stooges merely to carry out their dictates. As I pointed out earlier, the Government has taken the right to interfere, as it has done in clause I, and it is now using this method to control the provinces. I wonder whether the next step is not going to be to control the larger urban authorities. It is obvious that the recommendations of the reports have been thrown overboard. The Government is not prepared to accept them, I want to ask whether the Government is really going to throw overboard the recommendations and the representations with regard to local authorities as well? Is it going to take away their right to tax and their right to control their own finances from the larger local authorities, as they have done to the provinces?

Sir, we on this side of the House have made it quite clear that we are opposed to this legislation and we will vote against it.

Sir, I think if there is one fact which is fairly clear from this debate, it is that the Opposition were unable to put forward any really convincing arguments. For example, if one considers the speech made by the hon. member for Pietermaritzburg District, who has just sat down, one immediately comes to the conclusion that, as far as the Opposition is concerned, it is a case of a complete lack of seriousness, and that is something I should not like to say. But in his entire speech the hon. member said nothing which is substantiated by anything in this legislation or in this White Paper, a document which is in fact relevant, whether the hon. member accepts it or not. Sir, it is a pity that this should be the case, because hon. members opposite probably know the history of the finances of the provincial authorities better than I do. They know that over a period of 60 years various governments have tried to find a solution by means of various commissions of enquiry, and they know today that, in spite of the attempts made over that period of 60 years, it has not yet been possible to find a fairly reasonable or generally acceptable formula which could withstand the test of the years. For that reason I say it is a pity that, where the Government, in the light of the enquiries there have been, in the light of a further enquiry by a commission and in the light of an enquiry by the Department of Finance itself through the Treasury with its officials, is today again putting forward proposals which we on this side of this House do believe should work out, or which should in any case eliminate many of the problems—I would not say permanently—the Opposition is immediately rousing antagonism towards this new scheme. It is a pity, because it means that as far as the Opposition and its following in this country and in the provincial councils are concerned, this scheme starts with an immediate handicap, namely this opposition there is to it, while the Government is making an honest attempt in this regard. Sir, I do not maintain, and I do not think anybody on this side of this House would maintain, that this formula is establishing something perfect. After all, man cannot create something perfect. But this formula does have a certain feature which may make it a workable formula for the years ahead. It has the necessary flexibility and elasticity for further development, so that the necessary adjustments may be made within the framework of the formula as the need arises. These features, i.e. flexibility and elasticity, are incorporated in this formula.

Where is the formula?

That hon. member has already said he is not interested in the White Paper.

No, I never said that. I simply want to know where the formula is.

And if the hon. member is not interested I unfortunately cannot help him any further.

At this stage I want to point out certain other features of the formula. They can be seen in the White Paper. I do not want to repeat what is stated in the White Paper, but I just want to indicate these features. For example, there is simplification. This was one of the problems in the past. As has repeatedly been said here, the provincial administrations had to come cap in hand in the past. Now there is a system of simplification. Hon. members will find it in paragraphs 43 and 44 of the White Paper, for example. Provision has been made for adjustment, for amendments which may be necessary. It is set out in paragraphs 48 and 49. Furthermore, provision has been made for adjustment to extraordinary expansions, as set out in paragraph 39 of the White Paper. Provision is being made for greater adaptability to economic trends. This is to be found in paragraphs 3 and 46 of the White Paper. Similarly, provision is being made for an adjustment period in regard to expenditure. This is to be found in paragraph 52 of the White Paper and in schedule I. I can continue in this vein. For example, provision is being made for the improvement of relations and mutual recognition in respect of the Government and provincial authorities. This is to be found in paragraph 27 and paragraph 3 (c). Provision is also being made for greater stability and the elimination of the arbitrary element, which was a strong factor in the past where the provinces had to come cap in hand, as has been stated here. Provision is being made for the elimination, to a very large extent, of that arbitrary element. Calculations can now be made in advance in terms of the formula set out in the proposed handbook as well as in this White Paper. Administrators need no longer go to the Minister of Finance and beg for a kind donation of so many millions of rands. They can now go to him and state their requirements according to the formula set out in the handbook and according to which they function. Now the circumstances may perhaps be discussed, because consultation must take place. Provision is also being made for this consultation. Once this formula, as set out in the handbook, is finally in operation, the matter is settled as regards advance calculations for up to five years or longer, as I have indicated. Finally, there is the important provision for equal treatment of the provinces. I am referring here to paragraph 17. Apparently the hon. member for Parktown had certain misgivings in this regard. I shall come to them. He found it distressing that the financial arrangements of the provinces would have to be subordinate to the national interest. I think this is a fantastic statement by the hon. member for Parktown, a future Minister of Finance in this House if the wishes of that side of this House were to be fulfilled. If he were to become Minister of Finance, would he see his way clear to not making the provinces, subordinate to the general national welfare and interests as regards their administration and financing? I do not think he would see his way clear to doing that. If he saw his way clear to doing that, in other words, that the instrument which the Minister of Finance must have by means of which to control economic tendencies—whatever they may be—as far as possible, should be taken out of his hands, would he, as an imaginary Minister of Finance, allow it to be taken out of his bands to the extent that he pleaded here today? I do not think the hon. member for Parktown would see his way clear to doing that at all. It would appear that the major consideration among those hon. members is the question of budgetary scope. According to them this budgetary scope will now be curtailed by the abolition of the personal tax and the personal income tax which the provinces have had up to now. I want to say immediately that the application of the formula is not dependent on the abolition of these powers of taxation, although it may probably affect the practical effect to a very large extent. In theory it can only have the effect that the amount of the proceeds of personal tax and of personal income tax may in terms of the formula be subtracted from the subsidy in the same way as the income from other sources of taxation, whatever they may be, is subtracted today for the purposes of determining the subsidy. All this would mean, is that the provinces would themselves have to collect a certain amount, which would have to maintain a certain measure of equality according to certain principles. Then the subsidies would be reduced by a similar amount. Is this really so important if the other principles to which I have already made some reference and which are involved here, are accepted for example, the principle that that instrument should be completely and effectively, or at least as effectively as possible in the hands of the Minister of Finance? Is it really worth the trouble to have a dispute about that question in this House? In addition, if one considers the saving of staff which is going to result from this because we are eliminating cumbersome procedures and even a measure of inefficiency here, and if one also bears in mind that a principle, which, in my opinion, could never have worked out in the long run, is being done away with here —i.e. a principle which would work out in such a way that it would never cause friction between the provincial authority and the central authority—is it necessary for hon. members to oppose this measure? We have the position here that two hands are taking from the same source, are taking money from the same pocket. When these two hands take from the same source, as was also the case with the company tax, which has already been removed, these two hands must take notice of each other: otherwise things are going to go completely wrong. Surely the hon. member for Parktown would readily concede that. In other words, one hand should be stronger than the other and be able to say, “No. you may take only so much and no more”. That hand will have to be this Government. Once we have accepted this fact, what happens to the budgetary scope of the provinces about which such a fuss is made? hon. members would do well to reread paragraphs 36 to 42. Perfectly reasonable and adequate provision is being made to supplement the deficiency in budgetary scope being created here and create a more ideal state of affairs. I think the hon. member for Parktown will concede that. Reasonable alternative provision is being made for this.

I really think that the general allegations made here of powers being whittled away do not hold water. They do not hold water once one has read these explanations in the White Paper. For example, when one sees that, on the recommendation of the Schumann Commission, the provincial authorities were granted more powers in respect of education three years ago and, for example, that vocational schools were placed under their supervision, it definitely does not look like powers being whittled away. When one looks at health, one sees that the provinces are not being ignored in respect of the new structure which is being established. Through their Administrators, they are getting representation on the new board being established. Furthermore, as the hon. member for Witbank indicated, we have the position that the provinces said that they did not want certain powers. This does not mean the Government has accepted that the powers would be transferred to them. However, the mere fact that the provinces did not see their way clear towards accepting this, indicates that they definitely did not feel that powers were being taken away from them here. We may look at roads as well. Where national roads are being taken away from the provinces, other provision is being made, for example the deproclamation of certain special and national roads back to the provinces. A few years ago the provinces at their own request allowed the control over their pension funds to be transferred to the Department of Social Welfare and Pensions, because they could not manage it themselves. All this indicates that the provinces do not have the feeling of being threatened which was mentioned here by members of the Opposition.

In the course of his speech the hon. member for Parktown pointed out that the recommendations of the Franzsen Commission had been accepted, and he also pointed out that it had not been the terms of reference of the Franzsen Commission. I do not know what the hon. member’s point is, because the responsibility for what is accepted and what is rejected rests upon this Government and nobody else. No matter what commission made recommendations, it remains the responsibility of this Government. This recommendation of the Franzsen Commission was in fact relevant to this matter. The hon. member for Parktown also referred to clause 1of the Bill, and he created the impression that he was dissatisfied with the fact that the Bill refers to “consultation” and not “approval of the Administrator”, Surely it is quite unthinkable that in regard to the consultation which takes place, the approval of the Administrators must first be obtained. This would mean that the Minister of Finance, no matter what the amount which must be paid out would be, would be placed completely in the hands of the Administrator and of the Executive Committee of that province. Surely this would be a state of affairs which could not be tolerated and which the hon. member for Parktown, if he were Minister of Finance, would not tolerate either. I think the hon. member will concede that. One can go so far as to consult in a spirit of goodwill and benevolence as far as legislation is concerned. If the approval is offered, it is all very well—but it cannot be written into an Act.

The hon. member went on to say that the provinces were now completely at the Minister’s mercy. I think I have already replied to this point. The position is that they now have something in hand which will enable them to say to the Minister: “You owe me this.” The hon. member feels unhappy because the formula has not been incorporated in the Bill. I think if the hon. member were to give the matter careful consideration, he would realize that it would not be realistic to try to incorporate this formula in the Bill. The formula must fulfill all the requirements of elasticity and flexibility. Adjustments will have to be made in future; snags which may arise must be ironed out in a practical way so as to come as close as possible to the ideal state of affairs. It would not be the right thing to incorporate it in the Bill now. It would mean that a state of rigidity would immediately be created again, which may very possibly put us back to where we were in the past. This must be avoided. The hon. member mentioned the question of sources of income of their own—I think I have dealt with that adequately. He said the Government would have all the power in its hands. I think that, when this system is fully in operation, the Government will have less power in its hands than it had in the past when the Government could decide more arbitrarily through its Minister of Finance. The hon. member also complained that the provinces would not know what income to expect before they had heard from the Minister. This is simply not in accordance with the facts of this matter.

The hon. member feared that the taxation remaining for the provinces would be increased. There is no need for this state of affairs to lead to increases in taxation, because the paying capacity of the provinces is calculated according to the average throughout South Africa. When a province finds that it is below that average, it will probably have to introduce increases in taxation. When it finds that it is above that weighted average, it may reduce certain taxes. These are the main points raised here by the hon. member for Parktown, on the basis of which he came to the conclusion that this Government was here giving expression to its hunger for power. He spoke about this “power-hungry Government”. I do not think the hon. member for Parktown could have meant it as seriously as he put it.

The hon. member for South Coast said this was a tragic day for his province. I should like to quote from the Budget Speech made by the Administrator of his own province very recently, on 11th May this year. I think it is illuminating, because normally an Administrator will surely adopt an attitude which he can justify to his Executive Committee. Any reasonable Administrator would adopt such an attitude. This is what he said in that Budget Speech (translation)—

This is exactly what I said to the hon. member a moment ago—

He continued, and this section of his speech is very interesting—

Apparently the Administrator of Natal is highly satisfied. I can quote further from this same speech to prove this. What is important, in the light of what the hon. member for South Coast said, is that consultation did take place. I would not say that approval was forthcoming at all times and everywhere, but consultation took place even before I occupied this post, and also after I had appeared on the scene. I personally attended some of those discussions where consultation took place. The provinces and local authorities were consulted and I personally attended some of those discussions. Consultation took place in such a way that one could not improve on it. The provinces and local authorities were given every opportunity to state their views. I would not say that agreement could always be reached in respect of each point, but co-operation was envisaged. I may tell you. Sir, that the White Paper before this House today, was amended six times, every time after further consultation with certain bodies. Therefore I do not think it can be alleged that there was inadequate consultation.

The hon. member for South Coast made a very strong point of it that if a body spends money, it should also be able to collect that money. What was the position and what is the position today? Approximately 50 per cent of the present revenue of the provinces will be retained for them. I by no means want to suggest that the principle mentioned by the hon. member for South Coast does not have much merit, but I want to say that in the administration of a country one can never allow oneself to be carried away by concepts, I almost want to say battle-cries, such as these, and that one can never allow them to cloud one’s vision of the other advantages and other considerations which come into the picture and to which I have referred here, to such an extent that one eventually achieves weaker results than one intended achieving. Economically we have moved very far away from where South Africa stood in the days when the hon. member for South Coast was Administrator of Natal and from the situation he had to handle at the time.

The hon. member for Salt River spoke more or less in the same vein as the other hon. members, to whom I have already replied to a large extent. He foresees that the provincial authorities will now become advisory boards and at the same time, or for this reason—I do not know-he wants this House to be granted the right to say whether there are too few or too many schools, and he even wants the budgets of the provinces to be inspected in this House so that it may decide whether too little or too much has been budgeted for. Well, if this is not a proposal aimed at breaking down the provincial authorities, I do not know what it is. The hon. member also put a question in regard to the financing of loans which had been raised. In this respect I just want to refer the hon. member to paragraph 11 of schedule I of the White Paper. There he will find the explanation he is seeking. As I have said, the hon. member for Pietermaritzburg District also spoke, and with that the debate was virtually concluded.

I want to conclude by sincerely thanking hon. members on this side of this House who supported me in this debate, for the insight and the understanding they revealed in regard to this fairly complicated subject.

Motion put and the House divided:

Ayes—101: Bodenstein, P.; Botha, G. F.; Botha, H. J.; Botha, L. J.; Botha, M. C.; Botha, P. W.; Botha. R. F.; Botha, S. P.; Botma, M. C.; Brandt, J. W.; Coetzee, B.; Coetzee, S. F.; Cruywagen, W. A.; De Wet, C.; De Wet, M. W.; Du Plessis, A. H.; Du Plessis, G. F. C.; Du Plessis, G, C.; Du Toil, J. P.; Engelbrecht, J. J.; Erasmus, A. S. D.; Gerdener, T. J. A.; Greyling, J. C.; Grobler, M. S. F.; Grobler, W. S. J.; Hartzenberg, F.; Hayward, S. A. S.; Henning, J. M.; Herman, F.; Hoon. I. H.; Horn, J. W. L.; Janson, T. N. H.; Jurgens, J. C.; Koornhof, P. G, J.; Kotzé, S. F.; Kotzé, W. D.; Kruger, J. T.; Langley, T.; Le Grange. L.; Le Roux, F. J.; Le Roux, J. P. C.; Loots, J. J.; Malan, G. F.; Malan, J. J.; Malan, W. C.; Marais, P. S.; Maree, G. de K.; McLachlan, R.; Meyer, P. H.; Morrison, G. de V.; Muller, H.;Muller, S. L.; Nel, D. J. L; Nel, J. A. F.; Otto, J. C.; Palm, P. D.; Pansegrouw, J. S.; Pelser, P. C.; Pienaar, L. A.; Pieterse, R. J. J.; Potgieter, J. E.; Potgieter, S. P.; Prinsloo, M. P.; Rall, J. J.; Rall. J. W.; Rall, M. J.; Reinecke, C. J.; Reyneke, J. P. A.; Rossouw, W. J, C.; Schlebusch, J. A.; Schoeman, B. J.; Schoeman, H,; Schoeman, J. C. B; Smit, H. H.; Swanepoel, J. W, F.; Swiegers, J. G.; Treurnicht, N. F.; Van Breda, A.; Van der Merwe, C. V.; Van der Merwe, H. D. K.; Van der Merwe, P. S.; Van der Merwe, S. W.; Van der Merwe, W. L.; Van der Spuy, S. J. H.; Van der Walt, H. J. D.; Van Staden, J. W.; Van Tonder, J. A.; Van Wyk, A. C.; van Zyl, J. J. B.; Venter, M. J. de la R.; Viljoen, M.; Viljoen, P. J, van B.; Visse, J. H.; Vorster. B. J.; Vorster, L. P. J.; Waring, F. W.; Wentzel, J. I. G.

Tellers: G. P. C. Bezuidenhout, P. C. Roux, G. P. van den Berg and H. J. van Wyk,

Noes—42: Basson, J. A. L.; Basson, J. D. du P.; Baxter, D. D.; Cillie. H. van Z.; Deacon, W. H. D.; De Villiers, I. F. A.; Emdin, S.; Fisher, E. L.; Fourie, A.; Graaff, De V.; Hickman, T.; Hourquebie, R. G. L.; Hughes, T. G.; Jacobs, G, F.; Kingwill, W G.; Malan, E. G,; Marais, D. J.; Miller, H.; Mitchell, D, E.; Mitchell, M. L.; Oldfield, G. N.; Oliver, G. D. G,; Pyper, P. A.; Raw, W. V.; Smith, W. J. B.; Stephens, J. J. M.; Steyn, S. J. M.; Streicher, D. M.; Sutton, W. M.; Taylor, C. D.; Timoney, H. M.; Van den Heever, S. A.; Van Eck, H. J.; Van Hoogstraten, H. A.; Von Keyserlingk, C. C.; Wainwright. C. J. S.; Webber, W. T.; Wiley, I. W. E.; Winchester, L. E. D.; Wood, L. F.

Tellers: A. Hopewell and J. O. N. Thompson.

Motion accordingly agreed to.

Bill read a Second Time.

Mr. Speaker, I move—

Sir, we are dealing here with a short but very important Bill, The jurists in our midst will immediately admit that we find ourselves in that sphere of the law which relates to the commission of a wrongful act, and they will also know right from the start that this is a sphere of our substantive law on which jurists sometimes differ rather sharply with one another. It is true that the subject of the Bill that was originally introduced in this House, is also one about which a great deal has been said and written and on which the Law Revision Committee did not reach unanimity either.

Prior to the Apportionment of Damages Act, 1956, having been passed, the position in our law was that if a plaintiff suffered damage as a result of his as well as the defendant’s joint negligence, the plaintiff’s claim could not succeed, even if his negligence had been slight in comparison with that of the defendant, as the law did not take any cognizance of the degrees of negligence. As time went by, the severity of this measure was tempered through the introduction of what is known to jurists as the “last opportunity rule”, in terms of which a plaintiff could still recover his damages—despite his negligence—if he could prove that the defendant had had the last opportunity to avoid damage.

When the Apportionment of Damages Act was placed on the Statute Book in 1956, provision was made for the court to reduce a plaintiff’s claim for damages having regard to the degree in which the plaintiff was at fault in relation to the damage, notwithstanding the fact that the other party had the last opportunity of avoiding the damage. In fact, the “last opportunity rule” was, as regards wrongdoers mutually, abolished in terms of this Act.

Over the years, however, two aspects in particular have remained a vexed point, namely the position of the man or woman married in community of property, and the position of a dependant who suffers damage as a result of the death of his breadwinner, and bound up with this, the position of the breadwinner who suffers damage as a result of expenses incurred in regard to injuries sustained by his dependant.

As regards the spouses married in community of property, the present position is that a spouse who is not to blame for causing damage and who wishes to recover damages because of personal injuries sustained through the fault of the other spouse and a third party, may recover the full amount of damages from the third party, and the court may not reduce the amount having regard to the degree in which the guilty spouse was at fault in relation to the damage. This is indeed an inequitable state of affairs, since the spouse guilty of contributory negligence is being favoured not only in so far as the third party has to bear the full damage alone, but also in so far as half the amount paid by the third party accrues to the guilty spouse owing to the existence of a joint estate. Jurists are agreed that a change is necessary in this respect, but differ on the nature of the amendment. There are people who are of the opinion that the amount of the damages awarded ought to be reduced by the court to such extent as the court may deem just and equitable having regard to the degree in which the guilty spouse was at fault in relation to the damage; in other words, that the court should apply the principle of apportionment as it is at present doing in terms of section 1 of the Act in respect of a claim between the joint wrongdoers themselves. Of course, marriages out of community of property do not, owing to the existence of separate estates, present any problems.

As regards the claim by dependants in the case of the death of the breadwinner— or in the case of the breadwinner, in respect of injuries sustained by the dependant— there is amongst jurists, Sir, a very sharp difference of opinion in regard to the principle being changed. There are those who are of the opinion—and the majority in the Law Revision Committee are of the same opinion—that the damages recoverable by any person as a result of any injury to or the death of another person, should be reduced by the court to such extent as the court may deem just and equitable having regard to the degree in which the deceased or injured person was at fault in relation to the incident; in other words, once again the same principle as the one applied in terms of section 1 of the Act between wrongdoers themselves. This also appears to be the principle that obtains in other countries, though apparently not without criticism.

On the other hand it is, as far as our law is concerned, established law that the action instituted by the dependants of a deceased breadwinner against a third party for damage which they suffered as the result of the death of the deceased, is a substantive right which the dependents have in relation to the third party, but it is based on a wrongful act committed in relation to the deceased. In terms of existing law a dependant may recover the full amount of damages from a third party because of the third party’s negligence or contributory negligence which caused the death of the dependant’s breadwinner.

Now, there is amongst jurists a school of thought in support of the views that it would be unfair to reduce, having regard to the fault of the breadwinner, the claim by a dependant who is blameless. Furthermore, I have already referred earlier in my speech to the fact that the last opportunity rule was abolished in terms of the 1956 legislation as far as claims between wrongdoers themselves are concerned. However, at present the position in our law is still that that rule holds good as far as claims by dependants are concerned. Jurists are agreed—fortunately without any difference of opinion—that it should also be abolished in this regard.

As we had to do with a Bill, Sir, in which thorny legal as well as social aspects cropped up, the Bill was referred to a Select Committee for inquiry and report during the second session of last year and once again after its first reading this year. I think it is fitting to express at this juncture, by your leave, Sir, my sincere thanks to the hon. member for Prinshof (Adv. J. T. Kruger), who acted as chairman of the committee, as well as to all the other members who served on the committee, for the attention they devoted to this Bill. They definitely had to deal with a difficult Bill and had to weigh up conflicting standpoints put forward by several jurists of repute before a decision could be reached. But this committee also had to consider the matter in the light of a great deal of evidence, mainly in writing, before it could arrive at a decision. I am particularly pleased that the committee paid attention to the social aspect of the envisaged amendment and was able to reconcile with one another, in the light of evidence submitted, legal principles as well as social factors in order to arrive at a unanimous decision. From a social point of view, this will probably be the most acceptable solution. In this regard I may mention that one of our well-known jurists and an author of books on law, i.e. Prof. McKerron, commented as follows on the idea of reducing claims by dependants—

What the Bill recommended by the Select Committee amounts to, Sir, is that the wife married in community of property, and the dependants, retain their right to claim the full amount of damages, as they have been able to do up to now, but that the third party, from whom damages are claimed, be granted a right to claim from the other spouse or the estate, as the case may be, a contribution in proportion to the degree in which such spouse or the deceased was at fault in relation to the incident which gave rise to the damage. This is being done in terms of paragraph (a) of clause 1 of the Bill read in conjunction with section 2 (6) (a) of the Act. For the sake of convenience I may mention that that section provides that if judgment is in any action given against any joint wrongdoer for the full amount of the damage suffered by the plaintiff, the said joint wrongdoer may recover from any other joint wrongdoer a contribution in respect of his responsibility for such damage up to such an amount as the court may deem just and equitable having regard to the degree in which that other joint wrongdoer was at fault in relation to the damage suffered. However, because of our law relating to community of property and the assessment of damages, it is necessary to protect damages awarded against a claim by a third party, and this is being done in terms of paragraph (b) of clause 1. What this amounts to, Sir, is that any amount which a spouse would recover as damages from a third party for injuries sustained by him or her, does not form part of the joint estate for the purpose of the recovery of an amount by the third party, It would appear that the third party recovers part of the amount he paid. Of course, in so far as the damages relate to an asset of the joint estate, any amount recovered will in fact form part of the joint estate; otherwise it could give rise to inequities. As far as claims by dependants are concerned, the position in our law is that the court, in assessing the damages it has to award for loss of support, must deduct the value of any benefit which the dependant would have acquired from the estate of the deceased. If the third party may now claim a contribution from the estate, it may in fact amount to a loss being suffered by the dependant in that in the assessment of the damages his claim may have been reduced and he may also have lost his inheritance, or a portion thereof. The second proviso in paragraph (b) seeks to prevent something of this nature.

The rest of the Bill is self-explanatory. However, I may mention that as regards the abolition of the last opportunity rule, in so far as it still obtains, section 2 (14) of the Apportionment of Damages Act, 1956, will regulate the position.

With this very clear exposition I hope and trust that not only the jurists in our ranks, but also all the other members understand the position precisely.

Mr. Speaker, as far as the members of that Select Committee are concerned, we on this side of the House, and I am sure I speak for everybody, accept the thanks of the hon. the Minister for the Bill that is before the House today. We reciprocate it and are delighted that the hon. the Minister has been prepared to introduce the very Bill which the Select Committee recommended, without any alterations. As the hon. the Minister has said, this is a very delicate matter even for lawyers to deal with amongst themselves, as an examination of the memoranda received by the Select Committee will indicate.

The question of contributory negligence, that is to say the sharing of blame and the sharing of damages proportionate to that blame, is a doctrine which was introduced into our law in 1956 by statute. It was something which had to be introduced by way of statute, because it was not part of our common law. The hon. the Minister has mentioned the two main anomalies that existed, namely that so far as the negligence of a wife married in community of property was concerned, a differentiation was made between her and someone who is married out of community of property. There could never be a contribution in respect of a wife married in community of property, while there could be in respect of a wife married out of community of property. There was never any difficulty in this regard. As the hon. the Minister quoted Professor McKerron, that was a matter of logic and abstract justice. It also seemed. I think, to everyone concerned that it was also a matter of equity that there should not be the differentiation between spouses married either in or out of community of property so far as their own negligence was concerned and so far as whether or not that should be taken into account in assessing the damages which she had suffered.

But so far as the widow and children were concerned when the breadwinner was killed, I think, there were two divergent views. There was the view put forward by the academic lawyers mostly, namely the logic and abstract justice thought, that it was illogical to have the rule for people who were injured and yet not have the rule for dependants of a person who was killed. If the person who was killed was say 50 per cent negligent then his dependants should only get 50 per cent of the damages which they had suffered. I think the view that this rule should not apply to dependants was based not upon anything else but law. The decision in the case of the Union Government v. Lee said that they, the dependants, were not in effect in any way to blame for this and should not therefore be dispossessed of their damages. I think the two divergent views were those expressed by the academicians and those expressed by others who said that the overwhelming number of cases in which breadwinners were killed and their dependants claimed damages for loss of support, came under the Motor Vehicle Insurance Act, that is to say, most of them were motor accidents covered by that Act. This was considered to be a social security measure. Therefore the dependants ought not to be deprived of that support. In other words, we in the Select Committee, thought that our job was not to determine what was the best thing to do so far as logic and abstract justice was concerned, but rather what is the best practical measure to have in order to have equity in these matters.

I think that the solution which we find in this Bill is a compromise between those two points of view. The fact of the matter is. in so far as it concerns dependants, that the Bill now protects the dependants. Even though the breadwinner was negligent and had brought about 50 per cent of the cause of his death through his negligence, nevertheless the dependants will now get their full amount. The insurance company or other third party will be able to claim the share apportioned to it in respect of the negligence on the part of the breadwinner, from the estate of the breadwinner. It seems to us that this would bring about an equity in the situation, because the dependant is always covered. If the estate is very small the third party will not be able to collect the full amount from the estate. Therefore the equity is that the dependants of the breadwinner are covered for their loss of support. If the estate is a large one then the insurance company or third party will be able to recover the share allotted to it by the court from that estate and the dependants will nevertheless be adequately covered. It meets both the situations, and the dependants will be covered whether it is a small estate or whether it is a large estate.

As I have said, this will not please everyone. For example it will not please those who are concerned with logic and abstract justice. However, it does seem to us that it is a workable solution, a compromise which will bring about what was originally intended when this Bill was introduced. We on this side of the House are pleased that the hon. the Minister has accepted the recommendations of the Select Committee and therefore we support this Bill completely.

Mr. Speaker, after the clear exposition of this Bill given by the hon. the Minister as well as the hon. member for Durban North, I am merely entering this debate in order to convey my thanks to the members of the Select Committee, who assisted me in this matter, for the time they devoted to this very interesting and difficult task. I should also like to thank the secretariat for the work they did for us. Then I also want to thank the official of the Department of Justice who assisted us. By the leave of the House I should like to mention the name of that specific person. He is Mr. Parsons who, apart from the official duties which he performed very thoroughly, also proved to be a particularly great help to us with his incisive legal knowledge which he manifested especially in replying to our questions. Furthermore, I want to thank everybody who submitted memoranda, and in particular we want to thank Professor McKerron for giving evidence before us in person. He afforded us the opportunity of realizing how vast his learning really is. We also want to express a word of thanks to the various Bars which submitted memoranda to us. We appreciate that the Bars are comprised of people practising the legal profession, and that in their memoranda it was possible for them to indicate clearly to us what the problems are with which one has to contend daily in the courts. Their memoranda were most helpful to us.

This legislation represents a milestone in our history. In fact, it has given the Apportionment of Damages Act of 1956 a completeness which it did not have before. It has also brought to an end the so-called last opportunity rule, which, as an anachronism, was still lurking in the legislation relating to the apportionment of damages. That outdated rule has now been removed completely from our system of law. We as the Select Committee tried not to violate in any way the legal principles laid down by our courts, but we made provision for an apportionment of damages to be introduced in cases where previously no such apportionment took place. However, we also tried to protect the dependants of the deceased in cases where estates are not large enough to pay out the full apportionment of damages. I want to express the modest hope that this Bill will in fact contribute to cases of this nature being dealt with more smoothly and effectively in the courts. In conclusion I want to express my thanks to the hon. the Minister, who afforded us the opportunity of participating in such an interesting Select Committee.

Motion put and agreed to.

Bill read a Second Time.

Mr. Speaker, I now move—

That the Bill be now read a Second Time.

This Bill is something quite new to the South African scene. It is the fruit of the labours of a Select Committee of this House under the chairmanship of Mr. Jan Visse, the Deputy Speaker, who succeeded Senator G. J. G. van den Heever as chairman in 1969. The Committee’s Bill was laid upon the Table by me on 10th March, 1971. Basically this Bill is the Committee’s Bill, to which the necessary and desirable amendments have been made without interfering with the principles. There is really only one predominant principle in the draft Bill, viz. that it will in future be possible to confer ownership in a section of a building, as well as joint ownership in the land on which it stands, something which has hitherto not been possible in our country. The recommendations of the Committee were unanimous and for that reason I should like to assume that we as House will also be unanimous in dealing with this matter.

In view of the newness of this development and the expected unanimity in regard to it in this House I shall probably be permitted to follow the unusual procedure today of not only being the proposer of this Bill, but also its chief critic. This Bill brings us to an era in the development of our country where we are no longer able to look only horizontally to see the boundaries of our farm or the beacons of our plot. In future we shall also have to lean back and direct our gaze vertically upwards to the top of the 25th story to be able to see the boundaries of our little flat. There were the good old days when the boundary between my neighbour and myself consisted of six strands of barbed wire, which were generally accepted as the best guarantee of good neighbourliness. However, this Bill contains a provision which states that the boundaries between my neighbour and myself will in future be the median line of the dividing floor, the dividing wall or the dividing ceiling “as the case may be”.

These words “as the case may be" cause me to shudder a little. It is almost as if I get the feeling that one day the wall, the ceiling or the floor, “as the case may be” may perhaps not be there any more. If my neighbour above me, next to me or below me, “as the case may be” begins to hammer on the ceiling, the wall or the floor, “as the case may be”, I will have no means of knowing whether he is Still doing whatever it is he is doing to his half of the ceiling, wall or floor, “as the case may be”. I will only find peace of mind when he stops his hammering, or alternatively when I know that something must be done when I see his chisel’s point coming through on my side of the ceiling, wall or floor “as the case may be”.

In my day my neighbour could only ride across my land in terms of a proper servitude of right of way, but this Bill makes it possible for him to come straight at me and bowl me over in “our” passage. And then we had the good old practice of loading up next to one another on the road without laying claim to one another's means of transport. But I foresee that under this new dispensation it will now be possible for my neighbour, when he and I arrive at “our” lift almost simultaneously, to pretend that he did not see me and quite calmly proceed to go off in my “undivided share in the common” lift, leaving me behind. And it may just so happen that a person in one of the localities where we are troubled with subsidences ultimately becomes the owner of an “undivided share” in a sink-hole! I do not subsequently want to be reproached with not having pointed out the dangers of the principle contained in the Bill.

Mr. Speaker, other countries already have enactments of this nature contemplated in the Bill. The Committee considered them. I do not want to go into that. For some considerable time now schemes have existed in the larger cities of our country in terms of which the public may “purchase” flats—and I am using the word “purchase” in quotation marks. The method by means of which this is done is to purchase shares in a company that owns a block of flats, to the value of the separate flat in question. Such shareholding then entitles the purchaser to occupy the specific flat. Seen from the point of view of the individual flat-owner, there are several disadvantages attached to the system, such as the fact that he cannot obtain a registered deed of transfer and consequently cannot register a mortgage bond against it. It also appears that all kinds of restrictions are placed on the transfer of the right of occupation; for example, the company has the first option when shares are sold and if a company does not exercise its option, the owner may only sell his shares at whatever price he is able to obtain, but only to a purchaser approved by the company. This system lends itself to abuse.

In 1956 the hon. member for Pinetown, Mr. Hopewell, introduced a Bill in this House to make provision for the registration of title deeds to portions of buildings. That Bill was again introduced in 1957, and referred to a Select Committee for enquiry and report before the Second Reading. The Committee reported that it appeared that the methods contemplated by the proposed legislation would introduce a revolutionary procedure in our system of land registration, and since it would in fact have far-reaching consequences for this system, the Committee came to the conclusion that the legislation should not be proceeded with at that stage. However, the Committee added that it appeared from evidence that certain undesirable characteristics were part and parcel of the system of “selling” flats by means of shares, and recommended inter alia, that the provisions of the Companies Act be investigated with a view to the regulation of this system and the prevention of its abuse.

Quite a good deal of investigation (including a study of the legislation of other countries), was then instituted into this matter. In 1964 as well a motion by the hon. member for Parktown (Mr. Emdin) appeared on the Order Paper of this House to the effect that consideration should be given to appointing a commission to investigate the desirability and practicability of making provision for ownership in flats. The motion was, after discussion, withdrawn in the light of the fact that the matter was already under consideration.

During the same year a Bill was published in the Gazette for general information and comment. Bills were subsequently introduced in 1965, 1968, 1969 and 1970, which were referred to Select Committees for enquiry and report. In 1968 the Committee reported that it appeared from evidence that many members of the public had already “purchased” flats by purchasing shares in companies and that there was a serious danger that they could suffer heavy financial losses if it were not made possible for them to obtain legal title to such properties. In 1969 and 1970 Select Committees went further into this matter and came to the conclusion that legislation was necessary. As hon. members know a commission of enquiry, consisting of members of the Select Committee, was appointed during the recess after the second session last year, to complete the investigation, and I have already said that we have the fruit of their labours before us today.

Now, Sir, I think that I shall best be able to serve this House today by indicating firstly to what type of structure the Bill applies, and secondly how the system will function. As far as the type of structure is concerned, the Bill applies only to construction work of a permanent nature which is or may be divided into two or more sections. It can therefore, apart from flats, also apply to semi-detached houses standing on one consolidated piece of land, but it cannot apply to anything along the lines of what are known as cluster- houses, which are separate entities on a common property. If I may bring a well- known place like Acacia Park into the picture and may accept for the purposes of the example that all the houses are standing on one consolidated property, it will not be possible to obtain ownership in individual houses and joint ownership in the common property.

As far as the functioning of the system it concerned, I can briefly summarize the position as follows: Any person who is the registered owner of land which is situated within the area of jurisdiction of a local authority—and who is known as the developer—applies to his local authority for approval of a scheme in terms of which a building or buildings is or are divided or is going to be or are going to be divided into two or more sections. It could be that the building has already been constructed or is still going to be constructed, Together with his application, he must submit a sectional plan and such other documents as may be necessary. The sectional plan indicates the building or buildings and the land included in the scheme as having been divided into two or more sections and into common property.

Once the local authority has considered and approved of the scheme, the developer may apply to the Registrar of Deeds for the opening of a sectional title register in respect of the land or buildings in question and for the registration of a sectional plan. Together with his application he submits certain prescribed documents, including certificates of registered sectional title or sectional title deeds in the prescribed form in respect of every section in the building, which are made out in favour of the developer. When the Registrar opens the sectional title register, which is in the form of a main file and as many sub files as there are sections, he shall close the entry in the relevant land register of the land and make a suitable note therein to the effect that a sectional title register has been opened in respect of the land and buildings. The Registrar then registers the land and buildings by signing and issuing to the developer the sectional title deed in respect of every section and his undivided share in the common property which has been submitted to him. That will then be the first title in respect of a section.

When the developer then sells a section, the right of ownership therein is transferred by way of a note or endorsement by the Registrar on the sectional title deed. However, before he registers transfer of a unit, a conveyancer’s certificate must be produced to the Registrar in which certain information is contained. As soon as some person other than the developer then becomes an owner of a unit, a body corporate is deemed to have been established for the relevant building, which consists of developer and the owner of the section, and every person who subsequently becomes an owner of a section in that building is a member of that body corporate. The body corporate has certain duties and powers. For example, the body corporate shall insure the building against fire and other risks. He shall properly maintain the common property and keep it in a state of good and serviceable repair, and so on. To help it to exercise its functions, the body corporate has the power to establish a fund to make provision for administrative expenses, for the payment of rates and taxes, and so on. It is obvious however, that where one has a large building which consists of many owners who comprise the body corporate, it is not always very practicable for them to meet to carry out the ordinary duties of administration. That is why, Sir, provision is also being made in the Bill to the effect that the duties and powers of the body corporate may be exercised through trustees. As hon. members will see from the schedule to the Bill there shall be not more than seven trustees, and of course a minimum of two, who shall be elected at each annual general meeting of the owners. In addition the control and management of the building is exercised in terms of specific rules. That, then, Sir, is in broad outline how the system functions.

But that still does not bring me to the end. I want to refer here to an important provision, viz. clause 39. This clause is aimed, Sir, at protecting tenants in rent- controlled buildings against possible eviction by purchasers who want the relevant section for occupation by themselves or a parent or child, and which eviction from such a rent-controlled section would otherwise not be possible if it were not for this Bill. As far as persons are concerned who are living in a section which is sold and to which the Rents Act, 1950, does not apply, they are of course in the same position as the lessee of a house which is not subject to rent control. In the same way as occupants of such a house may at any time receive notice to move as a result of the fact that the house has been sold, so this will of course also affect occupants of flats which are sold in terms of this Bill. But now I want to issue a warning in no uncertain terms: Those who sec in this Bill an opportunity which may be exploited to enrich themselves in an unfair manner, must know that I shall not hesitate to return to Parliament to undo any irregularity with retrospective effect, and I believe I shall have the support of the official Opposition in this. This Bill is intended to meet certain basic requirements of the public. No one will be able to object to any fair and justified business methods, but I shall not tolerate exploitation or swindling of the public. If need be I shall consider requesting my colleague, the hon. the Minister of Community Development, to extend the provisions regarding rent control which are now applicable to buildings constructed up to and including 1966 to include as well the at present uncontrolled places, if that should be necessary. I also want to make an appeal to the public not simply to sign any document placed before them. In the same way as one, when one purchases a house, or when a house is offered to him for purchase, gives the transaction sober thought, so I accept that every potential purchaser of a section of a building, or when a flat is offered to him, will do the same when he considers purchasing a section. If there is any doubt in the mind of a person in regard to any offers made to him, and whether he should react to them, it would probably be advisable for him to obtain legal advice on what he should do.

Now, Sir, since we are dealing here with legislation which will result in a new sphere of ownership. I want to say that I can foresee that we will probably have to return to Parliament in future to make adjustments as problems arise in practice, and also to comply with any requirements which may appear to be necessary. However, I think that we are dealing here with a piece of legislation which will meet the immediate contemplated purpose.

In conclusion, Mr. Speaker, I should like to express my sincere gratitude to Mr. Jan Visser and the members of the Select Committee for the valuable work they did. They had a difficult task. I should also like to thank all members who previously served on Select Committees. It is indeed an achievement that this Committee came to us with a unanimous proposal. But I should also like to thank two persons in my department in particular. Firstly I want to thank Mr. Conradie, the Chief Law Adviser, for the untiring zeal he displayed in preparing occasional draft legislation in regard to this matter. It is through his great sacrifice that it is possible for us to deal with the Bill at this early stage. Then I also want to thank Mr. Parsons, the Deputy Secretary of the legislative division of my Department. If we bear in mind the fact that the Department of Justice only took over the Deeds Office on the 1st day of April, 1970, and that Mr. Parsons had to become conversant with a mass of documents starting from the beginning, then it is clear that many hours of overtime work had to be devoted to this. For that I want to convey to him my sincere gratitude.

It is an old cliché that everything comes to him who waits. We waited for a considerable period of time for this Bill. The history of the Bill has been a long one as the hon. the Minister has indicated. My colleague, the hon. member for Pinetown, first introduced his Bill in 1956 and I moved a private member's motion in 1964. Since 1964 I know I have sat on four Select Committees and on one commission. It has taken the Government 15 years since the hon. member for Pinetown first introduced his private motion to bring this Bill before the House, I must be fair to the hon. the Minister of Justice. As he rightly said, he only took over this Bill in April last year and he has wasted no time in bringing it to finality. He immediately appointed a Select Committee. When the Select Committee could not complete its work, he converted it into a commission and today we are dealing with the Bill. We are grateful to the hon. the Minister for having moved expeditiously with regard to this matter. They usually say justice moves very slowly, but it apparently moves a lot faster than “landbou”.

One wonders why the Government took so long to bring the concept of sectional title before the House; even taking into account the problems we know the Deeds Office is experiencing. After all there is nothing new in this concept with which we are dealing today. It actually goes back to the days before Christ when the traders of North Africa established sectional title in the buildings they erected around the oases of the desert. They were communal buildings, the sections of which were individually owned. It goes back to the early days of France and their walled cities. Grenoble was a town in France which was practically entirely built up on the basis of sectional title. The little shops we all know on the Ponte Vecchio in Italy work on the same principle exactly in that it is one long row of shops each individually owned. I am sure the hon. the Minister knows that the Inns of Court in London are on exactly the same basis, namely the basis of sectional title. These are all illustrations of the basic principle of sectional title which has developed over the years; a group of people each owning part of a single building. Sectional title today operates in practically every country in the world, in the Argentine, Australia, Belgium, Bulgaria, Spain, Poland, France, Germany, Israel, the United States and practically any country one might wish to mention. Now, in 1971, we have sectional title in South Africa. The only thing I can say is that I am grateful that sectional title seems to have beaten television.

I believe there are four fundamental reasons why we should have sectional title; firstly, it will help to speed up the provision of urgently needed living units by the more rapid turnover of development capital; secondly, it will give security of tenure to those who are now tenants. Those of us who are unfortunate enough to be tenants from time to time will know that in regard to uncontrolled flats, for example, one’s security of tenure is always in jeopardy. One is in the hands of one’s landlord who increases one’s rental, it seems, quite freely. Thirdly, it will also provide a hedge against inflation through ownership. Today a man who hires a flat, sees the value of his money eroding. If he owns it, the compensation will take place in the enhanced value of his own property. Fourthly, it will provide a tax saving presently enjoyed only by home-owners. We have the strange situation in this country where a man can buy a property for x amount of money and the rental value of that house is not taxable in his hands, but on the other hand, if he takes that amount of money and invests it, he pays tax on the return he gets, but the rent he pays for his flat is not deducted. So, this will help the home-owner, by buying his own sectional title flat, to save something in tax. Because of these four reasons, there has been a general acceptance of the principle by the public.

The Bill also lays to rest once and for all a misconception which the hon. the Minister has dealt with, namely that by the acquisition of shares in a company, a person owns his own flat. This is not the case and it never has been the case. As the hon. the Minister said, all a person owning shares in a company has, is a right to occupy a particular flat. He has little, if any, protection for his investment. As far back as 1957 the then Minister of Lands, Mr. Paul Sauer, called owning a flat through share holding a racket. In 1964 he went further when he said—(volume 10, column 3728 of Hansard)

Today we come to the end of that era. In terms of the Bill, any person who occupies a flat through ownership of shares, can require the company to put that flat building under sectional title and demand transfer of the flat to his name. There is now complete protection for all those people who bought flats on the so-called basis of “own your own flat through the acquisition of shares”.

Because of the great demand for flats, the public, and, in many cases, the press, seem to believe that sectional title only applies to flats. Of course, this is not the case at all. Sectional title can apply to office blocks, factory buildings, maisonettes, semi-detached buildings, duplexes and what has come to be known as cluster housing. This again will be a very important factor for a number of people. Professional firms who in the past have had to hire offices in the city and who had been subject to the enormous increases in rental, will now as a group, be able to have their own building of which each one will own a section. People who want to have shops together will be able to operate on the same principle. Therefore, in every facet of building which is occupied by a number of people, sectional title can be applied. In each case each person will be able to own his own section.

The application of sectional title is very wide indeed. It applies not only to existing buildings, but it also applies to buildings to be erected when they are completed. Its fundamental purpose is to give legal and complete title to a unit, that is, a section together with the common property, for example a flat, an office a maisonette plus an undivided share in the land and in the appurtenances. Therefore, the owner will be able to sell his unit if he so wishes. He will be able to mortgage it if he wants to. He will be able to let it and he will be able to will it to his heirs. In addition the unit owner will have an undivided share in the land on which the building stands and irrevocably attached to his section, ownership in a proportionate share of the common property, that is the passages, the lifts, the gardens or what have you. The proportionate share is based on the ratio that the floor area of a section bears to the floor area of all the sections. This is the way in which the unit proportion is calculated. Rates and taxes and the costs of running and maintaining the building will be shared proportionately by unit owners on this proportionate basis.

I am glad that the hon. the Minister has highlighted the fact that tenants are going to be protected because we have had innumerable approaches from people who are worried about the fact that they may be evicted. It is quite clear that no tenant in a rent-controlled building is in the slightest danger whatsoever of being evicted from that building even in terms of section 21 (1) (c) of the Rents Act, to which the hon. the Minister referred. In terms of that section, the lessor may evict a tenant if he wants the flat for himself or his child, but that provision does not apply in this case. The public must know that if they buy a flat they will not be able to take occupation by evicting the existing tenant They will have to wait until that tenant leaves the building. Only then will they be able to take occupation. We know that landlords are going around and telling tenants that unless they are going to buy their flats they will be evicted. I hope that it will very soon become public knowledge that in any controlled building the tenant has nothing to fear and that the landlords are wasting their time by going to tenants and saying: “You either buy the flat or you must go”. The landlords cannot touch the tenant in such a case.

As far as uncontrolled flats are concerned tenants are as in all circumstances subject to the terms of their leases. The hon. the Minister has said that if cases of unfair treatment are brought to his notice, he will deal with the matter. I believe that that is not within the ambit of this Bill. As the hon. the Minister has said, that rightly belongs with the Minister of Community Development.

The hon. the Minister set out the procedure to be followed in order to obtain sectional title. It really is a very simple procedure. The plans are prepared; they are approved by a local authority: they are then registered, with the Registrar of Deeds and you can obtain your sectional title. Much has been made in the Press of the fact that you will not be able to obtain sectional title throughout many parts of South Africa because the Bill provides that sectional title will only be applicable where there is a local authority. It is true that there will be certain portions of South Africa where one will not be able to have sectional title, but they will be minimal because the term “local authority” does not mean only municipalities. It is much wider and in most areas of South Africa the provisions of this Bill will apply. Once the Registrar has opened his sectional title register and has issued to each flat owner his certificate of sectional title, the owner has complete ownership of the unit. He owns that flat in the same way as he would own any house he has purchased. The evidence that he has purchased the flat is contained in his sectional title.

The hon. the Minister spoke about the good old days when there was a reasonable amount of breathing space between neighbours. He mentioned hammering on walls, ceilings and floors. Quite a lot has been written about this, and people have said: “What is the point of having sectional title when you will not have undisturbed occupancy? If you have a noisy neighbour you will not be able to get rid of him. If you have a noisy neighbour living in a house, at least he is some distance from you, and if you are a tenant In a flat, at least you can move, but what happens when you have bought a flat?’’ I think I can reassure the hon. the Minister that there is really no problem in this regard. The position is quite simple. The Bill provides that all holders constitute a corporate body. They appoint not less than three and not more than seven of their members to be trustees, who in effect will control the building. Of course, what will happen in practice is that these trustees will hand the building over to a firm of estate agents to take care of it, as happens today. The duties of the owners are laid down very carefully in clause 32. In terms of this clause an owner shall maintain his section in a good state of repair. Much has been said about the fact that one section may become completely dilapidated and that it may then detract from the appearance of the whole building. This is not the case. Each owner is placed under an obligation in terms of this Bill to maintain his section in a proper state of repair. Further, Sir, he must use and enjoy the common property in a manner that will not interfere with the enjoyment thereof by other tenants.

That is also the common law position.

Yes, that is correct. He has to behave himself. He must not use or allow his section to be used in a manner that will cause a nuisance to others. Therefore he will not be allowed to go around with his hammer. If he does not comply with these sections of the Act, the remedy will be a simple one. He will simply have to go to court, and the court will tell the neighbour to behave himself, to put away his hammer and to stop knocking on the walls, the ceilings and the floors. If he does not listen to the court, the remedy is still very simple. He will be put in gaol for contempt of court. After that I think he will behave himself. If he still does not behave himself, he can be put back in gaol again. The public must understand that their occupation of their flats, buildings or offices in terms of the sectional titles legislation will be one which is completely peaceful. The suggestions which have appeared in the Press that a person is not going to get peaceful occupation are absolute nonsense.

The unit owners have further obligations. They have to pay their share of the rates and taxes and they have to pay their share of the maintenance. They have to pay their share of cleaning, the running of lifts, the common lighting and, furthermore, they have to see that the gardens are taken care of. In effect you will have a communal effort while there is individual ownership. The Bill has very carefully provided that that which is common and in the interests of everybody shall be properly taken care of.

Then there is another question which is asked very often. What happens in the event of the building being destroyed or in the event of its having to be pulled down. The provisions of the Bill say what must be done. If there are any real troubles, application can be made to court for an administrator to deal with the matter.

On behalf of this side of the House, I would like to offer our thanks to the ex-Cape Town Registrar of Deeds, Mr. Birch, who was responsible for a lot of the original drafting in this Bill. Then I would like to thank Senator Van den Heever, who was the Chairman of the first Select Committee. I would also like to thank the hon. member for Gezina, who was the Chairman of the latter Select Committees and also of the commission. He guided the commission in a manner which enabled us to complete our work. I would also like to add my word of thanks to Adv. Conradie and to Mr. Parsons, who helped us with this matter. Then I would also like to thank Mr. Vosloo, the Chief Registrar of Deeds. We have had a great deal of assistance from a great number of people, including Sapoa’s Mr. Browne, who still does not agree with some of the clauses in our Bill, but who has given us very valuable assistance. I particularly want to thank my colleagues on the Select Committees and on the commission for their work.

We on this side of the House welcome this Bill and naturally we support it fully. We believe it is a step forward which is of the greatest importance to all the sectors of the community. We are of the opinion that it will do much to provide sorely needed residential accommodation for all income levels. We also believe that it will provide security of tenure to a great number of people. We believe, that sectional titles will be welcomed by the public. We are certainly going to strike snags, I am quite sure of that, despite of this being a very excellent Bill, but I am convinced that these snags will be minor and that the benefits of this Bill to our country will be great indeed.

Mr. Speaker, when I act in other capacities in this House I often use the phrase that I have already heard an argument and that new arguments should now be advanced. That is why I am not now going to discuss the contents of this legislation, since it has already been done very well by the hon. the Minister of Justice and the hon. member for Parktown. However, I just want to return to the hon. member for Parktown. He said: “Everything comes to him who waits”. He then asked why we had to wait so long for this. I want to tell him that there is an Afrikaans saying which goes: “All good things come in their own good time”, and hon. members have it before them today. I am sorry he laid the blame for this on the Government, particularly in view of the fact that we co-operated so well. I have the report of the Select Committee of 1957 before me and it struck me that the name of the hon. member for Parktown does not appear as one of the members of the Committee. The hon. member for Pinetown, Mr. Hopewell, if I may mention his name, Mr. Cope and Mr. Trollip, who subsequently became Minister, were members of the Committee. Therefore, the credit is not entirely his. There were others as well who tried before him to get this Bill passed. But the report which was submitted to the House in 1957 was a unanimous report to the effect that the matter should not be proceeded with, and I should just like to quote the following—

The Government acted on that, but times have changed, and we change with the times, thus it became desirable for a new Select Committee to be appointed to go into this matter, and that was consequently done.

I have said that the hon. the Minister has already elucidated the Bill in its finest details here, and I am not going to do so again. My only reason for rising was to thank the members of the Select Committee, of which I was the Chairman, for the wholehearted support they gave me in that Committee. I became member of the Committee in 1968 when it was already functioning. At the time Mr. Van den Heever, my predecessor, was also in the position in which I am today, and was acting as Chairman and under circumstances which I do not want to mention here, he resigned his position, and I then had the honour of serving as Chairman of the Select Committee. The failure to present a report sooner is due to the fact that at the end of that Session we requested that we be reappointed the next year, in 1969, as a Select Committee to go into the matter further. We dealt with bulky memoranda and a wealth of evidence, hon. members know that the evidence given was complicated and that we were not able to complete our task that year. In 1970 we were re-appointed, but that was during the first session of this Parliament, in the second half of the year. It was a short session and we were quite unable to give our attention to the work of this Select Committee. Consequently we requested the hon. the Minister to re-appoint us as a Commission. The hon. the Minister complied with that request and that Commission completed its work in one and a half days’ time. I was surprised to read in one of the magazines, the name of which I do not want to mention now, that the Commission of Jan Hendrik Visse and his members disposed of this important Bill in one and a half days’ time. They did not of course know how much work the Select Committee members, not in the Committee but beforehand, devoted to this Bill, and for that I want to convey to them my special gratitude. I also want to thank the Senior Law Adviser, advocate Conradie, S.A., for drafting this Bill. He converted important amendments as proposed by us into statutory form. Then, too, I cannot omit to thank Mr. Vosloo, the Chief Registrar of Deeds for the Republic. I conducted various interviews with him in his office. He was always opposed to the Bill, not so much because the Bill could not be implemented, but because he did not have the necessary staff with which to do so. After much discussion we arrived at the method which is being followed today, as set out in clause 24. I wanted to mention here that the legal profession did not agree with the endorsement of the first deed which is issued. I do not agree with it either, and I am myself an attorney. I ought really to protect our interests, but I feel that the interests of the public should be given priority to those of the legal profession. I think that the legal profession, when the regulations are drafted, may direct the necessary pleas to the Minister for the fees, for that is all there is at issue here …

Order! Could the hon. member now return to the Bill.

Sir, provision is being made in the Bill for the promulgation of regulations, and I am therefore still dealing with the Bill, but I shall not elaborate any further on this. The public interest comes first, and that is why we must proceed with this Bill. We have heard how many people have already been prejudiced in that they acquired shares in companies and were unable to obtain a deed of transfer or a sectional title.

Sir, I should also like to convey my gratitude to Mr. Parsons, who acted as the departmental adviser in regard to this Bill. I owe him a sincere vote of thanks. I told the Minister what I thought of Mr. Parsons as far as his work is concerned.

Sir, I should just like to refer again to clause 39 of the Bill, which was mentioned here by the hon. member for Parktown and by the hon. the Minister, and the question of the protection lessees are being afforded in terms of the Rents Act. This morning again I had a case of a lessee who has for years, under the protection of the Rents Act, been paying R190 per month, and who has now received notice from the owner of the block of flats in which he is living to the effect that the flat must be purchased for R37 000 otherwise he will have to vacate the flat because the owner is able to find other purchasers. In addition he would still have to pay R60 per month towards administration costs. I am pleased that the hon. the Minister and the hon. member for Park- town emphasized here that tenants enjoy full protection under this Bill. Once again I want to make an appeal to the public not to purchase flats before this measure comes into operation. The passing of the Bill does not mean that the Bill comes into operation immediately. There are still many difficulties with regard to it, and it will probably take another few years before the measure comes into operation, and people would do well to wait a few years before purchasing flats.

I am pleased that the Bill is at last before us and I just want to say, since the hon. the Minister told us here of the case of a lessee or owner in a block of flats who disturbs your rest by hammering on the floor just above you with a chisel, that we have now made it possible, with the passing of the Apportionment of Damages Amendment Bill to recover partially any damages caused by the person above.

Sir, this legislation provides machinery for the individual ownership of building units, not only a flat unit, hut all building units: office blocks, shops, factories and so forth. It is, however, in the field of housing that I believe that it can play a very important part and my remarks this evening will be directed especially to that aspect of the Bill. I believe in fact that this Bill is an important step forward in South Africa’s housing history. This side of the House is entitled to take much of the credit for this legislation and I compliment the hon. the Minister for acknowledging the initiative of the hon. members of Pinetown and Parktown especially, in this regard. The important aspect of this Bill as far as housing is concerned, is that it will put flat ownership within the reach of a greater section of the community. I believe it will do this for one reason especially, namely that provided there is the necessary amendment to the Building Societies Act, building societies will, we trust, be prepared to grant bonds to buyers of flat units. It has been a common practice, especially in Durban and Johannesburg, for buyers, and I used the term “buyers” in a very loose sense, of flats to purchase shares in a company which owns the block. In this way they do not own the individual flat, but the shareholding only entitles them to live in a particular flat. Building societies have not been prepared, quite rightly, to advance loans to the purchaser of shares who becomes the occupier of a flat. But under this Bill it will, we trust, be possible for building societies to grant bonds to purchasers of flats who will in this way be able to obtain the finance which they are at the moment only able to get …

Order! Is the hon. member not going beyond the scope of this Bill?

I think not, Mr. Speaker, but in any event, this is all I have to say on this aspect of it. They will now be able to get a title deed which will form a security of tenure on which they will be able to obtain a bond. I think this is particularly important if we have regard to the fact that more and more persons are going to have to live in flats in the future. In fact, it has been estimated that by 1980, and this is only nine years away, there will be more flats for Whites in South Africa than houses.

In the past people have tended to think of flats as temporary abodes for transient people. Flats are, however, becoming more and more a permanent form of housing for a greater number of persons. I believe that under the provisions of this Bill the type of flat development will improve so that it will provide a better type of permanent accommodation for a greater number of persons. I want to emphasize that it will still be possible, despite this Bill, to buy shares in a company owning a block which will give the right of occupation. I emphasize this because there are a large number of schemes of this sort, in Durban particularly. Many of these schemes are successful. The purchasers of shares are quite satisfied with the way they operate. The Select Committee has evidence that this is being abused in certain centres, but it is working very well in Durban particularly. There are many people there who feel they would prefer to continue with this system rather than to convert to sectional titles. I think it is important that the public should know that those people who prefer the present system will be able to continue with it once this Bill is put into operation.

Reference has been made to the Rents Act, but I do not wish to elaborate on it. Full protection is given by this Bill to tenants of rent controlled flats. I want merely in closing to point out that this Bill is the best possible legislation which the Select Committee, after very long deliberation, was able to produce. It is in many ways, I believe, better legislation than the corresponding legislation in other countries, where this procedure has existed for a number of years. There is no doubt, however, that this is a complicated field. It was impossible for the Select Committee to deal with every detail.

I am pleased that the hon. the Minister has emphasized in his Second Reading speech that he envisages that amendments would be necessary and that the Government will be willing to introduce promptly such amendments as may become necessary. I think this is important and I think that the public will be reassured to know that necessary amendments will be introduced promptly. Mr. Speaker, with these few words, I repeat that on this side of the House we are very pleased to support this legislation.

Motion put and agreed to.