Mr. Speaker, I move—

Mr. Speaker, I move—

Mr. Speaker, this Bill, now before us for the Third Reading, has remained unamended during the previous stages of the Bill as they were discussed in this House. The Bill retains the provisions of clause 2 to which we objected both at the Second Reading and in the Committee Stage. The retention of this clause makes the Bill unacceptable to us at this stage as well. The hon. the Minister and the Government have lost a golden opportunity to delegate meaningful authority to the Coloured Representative Council and the S.A. Indian Council in this measure and to recognize the factual position of the diversity of interests and desires in the various parts of the Republic. The Government has lost the opportunity of releasing to some extent the stranglehold of the Group Areas Act. This stranglehold not only applies to where we may live and with whom we may associate, but also to where individuals may trade. When I speak of “individuals” I speak of individuals of all races, all the separate communities which together constitute our South African nation. What necessitated this amending Bill? In terms of the Licences Act of 1962 trade licensing powers were vested in the Central Government. As has emerged during the discussion of this Bill, the Commission of Inquiry into Trade Licensing appointed in 1964 recommended that licensing powers should be decentralized to the provinces. That has been done. The provinces have their own ordinances. The hon. the Minister concedes that those ordinances are not uniform. It is understandable that that should be so, because each province has its own approach and its own problems to deal with. Each province has adopted ordinances that are applicable and appropriate to the diverse circumstances and local attitude in each of the provinces. Therefore each province should in so far as trade licensing is concerned be at liberty to do its own thing in its own way. However, this attitude and approach is not acceptable to this Government. They conflict with its political philosophy. Therefore, the hon. the Minister has come forward with this measure which we now have before us, the effect of which is to reimpose his discretion in regard to this now diversified control of licensing in regard to when permits should or should not be granted for trade purposes to persons who are disqualified to own or occupy property in proclaimed group areas. In this measure he ignores the provincial councils, the local authorities, the Coloured Representative Council and the Indian Council. There is not even an obligation on his part to consult them. This attitude makes a mockery of any professed intention of extending the powers of these bodies. Surely the decision to permit trade across the confines of the Group Areas Act should take into consideration the wishes of the relevant province or the relevant council or the relevant local authority? By introducing this measure, I believe that the hon. the Minister and the Government have lost an opportunity of delegating the power to grant permits in terms of the Group Areas Act for the purposes of trade licences, in White group areas, to the administrators of the provinces, in the case of Coloured group areas to the CRC and, in the case of the Indian group areas, to the Indian Council. If he had done this— and he has the power to do so under the Community Development Act; he has the power to delegate to officials the authority to issue permits—and placed the matter squarely in the hands of the administrators in the case of White group areas, the Chairman of the CRC in respect of Coloured group areas and the Chairman of the Indian Council in respect of Indian group areas, he would have been acting in the spirit of the statements that have been made by the hon. the Prime Minister —that he is seeking out the commissions and bodies to which representatives of the various communities should be appointed. The hon. the Minister and the Government have lost that opportunity by persisting with the measure as it is. No recognition is given to those people in those councils. Had he done what I have suggested, he would have indicated direction and the necessary adaptation; he would have indicated confidence in the various legislative and administrative bodies that are part of the government of this country. The reason for his failure to do so is obvious. The hon. the Minister wishes to retain and will retain under this Bill the discretionary power in his own hands. He indicated that he wanted that discretionary power so as to enforce uniformity. He wanted to use licensing as a lever to implement the compulsory aspects of the Group Areas Act and to compel the resettlement of traders no matter the extent of their vested interests and no matter the practical or adverse effect of this upon individuals.

This Bill before us is, therefore, not one that we can support. So we shall oppose the Third Reading.

Mr. Speaker, we have already in dealing with the Second Reading of this Bill, gone over very thoroughly the field which the hon. member for Green Point has now covered once again. There are perhaps just a few points which I should stress again. My department is not requesting new powers in terms of this Bill. The few bodies that are being brought in as a result of these unavoidable circumstances that have arisen, are not being brought in because my department so wishes. It is due to the circumstances prevailing. What is more, it is the recommendation of that commission which the hon. member for Green Point invoked that it should be seen to that the provisions of the Act be carried out in the proper way once again. This is being done here; we are carrying out the recommendations of that commission. The provinces are free to decide which specific licences will be necessary; they have done this, and they have done so in various ways. My department, too, has a responsibility in this regard. It cannot simply delegate its powers. It has a responsibility towards every licence-holder as a disqualified person in a group area. The day he is resettled, my department has to provide resettlement opportunities for him. We even have to go so far as to give him the same surface area. We even have to go so far as to subsidize his rent, as we are in fact doing in virtually all cases to enable them to become properly resettled. My department has that responsibility. The hon. member is creating the impression that this is simply an everyday matter. In the case of first allocations it is, in the first place, in respect of a small number of trades that could be practised and that are not covered by the original Act.

Mr. Speaker, I move—

Mr. Speaker, the Bill which has now come through to its Third Reading stage with two amendments having been accepted by the hon. the Minister in the Committee Stage, contains provisions which will deter landlords from harassing tenants by interfering with their peaceful enjoyment of their rights of tenancy. While this is welcomed—in fact some of the provisions of the Bill have been improved by amendments during the Committee Stage while certain further amendments are to be considered by the hon. the Minister in the Other Place—I believe that the proposed readjustment of the basis of determining rental is of such a drastic nature that it must outweigh those considerations which I have said are welcomed. We must realize that these changes in the determination of rental will drastically affect those thousands of tenants who are of necessity obliged to seek accommodation in rent-controlled premises.

The Bill as it is before us, will satisfy neither the landlord nor the tenant. It is as it were an interim measure linking rentals to escalating building costs and then imposing the burden of those escalating building costs on tenants. Above all the hon. the Minister has in this measure not done what one would have expected him to do, namely to try and find some way in which the tenant will not be loaded with this excessive burden. Although there have been suggestions in the Committee Stage on clause I as to how that could be done and how we could meet the problem, the hon. the Minister has not seen his way clear to accept those amendments. This is an extraordinary situation that that should have been the attitude of the hon. the Minister, because one wonders if he has really appreciated what this Bill will do as far as housing is concerned. While we have been debating this matter, we have had a report from the Department of Statistics which indicates that the number of new houses and flats which were planned in January this year, was the lowest for that month for the past five years. At the same time the strange position is that, and I quote from the report—

That is the situation. We must view this measure and with this additional load of rental, we must view it as to where the burden is to fall if this measure goes through in the form in which it is now before us. We have suggested to the hon. the Minister, but he has rejected it, that he could deal with this problem of the conflicting entitlement of landlords and tenants by using a method of tax incentives, not only to encourage buildings, but also to provide an added reasonable return to the owner of controlled dwellings. By that he could obviate them loading a further burden of increased rentals on the tenants, e.g. by allowing the landlord a better return through some tax incentives. The hon. the Minister, however, says that it does not really matter as the burden can be carried, that there is no need to worry as most of the people who are living in rent-controlled premises are wealthy. That is a fallacious argument and I want to …

That was never my argument.

No, it was really other people’s.

I am sorry, it was suggested by other hon. members. I beg the hon. the Minister’s pardon. It was said by others that that is so. That may be the case in certain instances, but I was staggered to see the number of pensioners in this country who require accommodation, accommodation which is rent-controlled and at low rentals.

I do not want to waste the time of the House with a lot of detail, but according to the last figures available, there were at the end of 1973 only 16 590 persons accommodated in old-age homes, State homes and in subsidized homes. At the same time the total number of White social pensioners, namely old-age pensioners, war veterans and disability pensioners, was 156 000. Many of them must somehow subsist in rent-controlled premises, either in homes or several of them in one flat, etc. If that is so, how can we now pass a Bill of this nature which must result in increased rentals far beyond the increase in the incomes of these pensioners? One knows that planning takes place to try to provide for these people, but housing for these people is not going to be supplied within a very short time. The hon. the Minister knows that in my own constituency there is the Green and Sea Point old-age home scheme, which has been on the stocks for years. The building of this home is to be commenced towards the end of this year. According to the last information given to me by the hon. the Minister the premises which are to be demolished to make place for this old-age home, will be vacated in September this year. But in the meantime the people who will not be able to move into that home must be protected so that they will not have this unnecessary burden placed upon them.

I believe that this new basis of valuation will place a burden on these people which they cannot possibly carry. It is no good enacting provisions, the remaining 20 clauses of this Bill, to protect tenants from harassment and from improper actions by landlords if the tenants, because of the increase in rent, are in any case not going to be able to afford to stay in those premises. This is going to happen in a vast number of cases. This Bill has much to commend it, but those portions of it which are commendable are completely outweighed by the Minister’s insistence on pursuing and going through with this new method of determining the valuation for rental purposes.

One feels that the hon. the Minister has attempted to sugar the pill—I am referring to clause 1 of the Bill—by wrapping around it all these other acceptable 20 clauses so that one will decide that it is worthwhile and that the Bill should be accepted. But the core of that pill is still far too bitter to be swallowed. I think it is necessary to reinterate that I do not think there is anybody in this House who would not like to see rent control go, but rent control cannot go while there is this continuing imbalance between supply and demand in so far as housing is concerned. The task of rent legislation, a task which is not tackled in this Bill, is to see that there is an equitable return for the landlord, but not to load the whole burden on the tenants, when there are extraneous factors such as inflationary building costs. At the same time one has to see to it that the rentals are reasonable although landlords cannot be expected to carry the whole burden of an indirect subsidy of tenants who are in controlled premises. That is why we have asked during this debate that the hon. the Minister should show some realism in dealing with this problem of supply and demand, to bring some new thinking to bear, instead of merely working on different formulae in determining rentals. We feel that he should bring in other factors to help him solve these problems, which will continue to exist as long as there is this imbalance. Because this Bill does not do that and because the core of the pill we are asked to swallow is far too bitter and will certainly not be something which will be welcomed by tenants, and because it does little to solve the problems of meeting the requirements of both landlord and tenant, we will oppose the Third Reading of this Bill.

Mr. Speaker, the legislation we are dealing with here, the legislation amending the Rents Act, is recognized by all parties as one of the most difficult types of legislation to deal with because it concerns problems that affect individuals. On the one hand, it affects the interests of investors in immovable property, and on the other, the interests of lessees dwelling in those buildings. I believe that this is among the most difficult types of legislation to formulate in such a way as to satisfy all parties. In my opinion, in his reply to the Second Reading debate the hon. the Minister stressed this very point. He said that it was virtually impossible to satisfy all interested parties by means of legislation of this kind. This situation to which I refer arises out of the conflict between the interests of the lessee and those of the lessor, a conflict that has come to the fore in various Acts through the years. Historically, we know that the rent control legislation came into operation shortly after the First World War. During that period there was a shortage of accommodation, and the ordinary law of supply and demand pushed up the rent for flats. War measures were implemented and eventually legislation was passed, the Tenants Protection (Temporary) Act (1920). That concept “temporary”, which was included in the name of the Bill at the lime, has become rather permanent because ever since then we have been struggling with the formulas necessary to strike a proper balance between the interests of both the lessee and the lessor. During the Second World War and subsequently, the process of industrialization took place, the migration to the cities and this aggravated the housing crisis even further. We then had to pass additional legislation. The existing Act is, in point of fact, basically an Act passed in 1950 and subsequently altered from time to time to adapt to circumstances as the Government concerned saw fit. Let us be clear about this. The Government cannot adopt the stand-point that it has to protect the interests of the lessee as against those of the lessor or vice versa. The Government has to find a formula that strikes a balance between the claims of both groups. The legislation we are dealing with today is, in my opinion, an effort to strike such a balance between a lessee and lessor. It is easy for members of the Opposition, who do not carry the responsibility of government, to level criticism from one side or another. As an example of this, in the Second Reading debate the hon. member for Durban Point championed the standpoint of the lessee here, while the hon. member for Walmer brought up the standpoint of the lessor. In fact, therefore, in dealing with this legislation they were running with the hare and hunting with the hounds. It is very easy for the Opposition to level criticism at this legislation. It is far more difficult for a governing party, carrying the responsibility for the implementation of the legislation, to find the formulas which, on the one hand, strike the balance to which I have referred, and at the same time state the matter so clearly and lucidly that the legislation may be implemented by those bodies to which its implementation is entrusted and by any person who wishes to make investments in this field. I might just refer in passing to the totally different situation prevailing in Germany today. I read somewhere last week that in Germany, between 200 000 and 300 000 flats are standing empty. They are now appealing to the Government to subsidize those flats. There the situation is just the opposite, viz. the lessor and not the lessee is requesting protection. According to what I read, the German government has turned down that idea. The aim of this legislation is, then, to arrive at a compromise between lessor and lessee. For the lessor, the return must always be sufficient to make the investment worthwhile, while for the lessee the rent must be attractive enough in relation to his income.

We know that rent control is limited to certain buildings. Therefore it does not affect all buildings where accommodation is rented. This legislation is only applicable— as far as the striking of a balance between lessee and lessor in regard to a specific series of buildings is concerned—chiefly to those buildings constructed before May 1966. There are certain other buildings that have subsequently been placed under rent control, but this was done by way of special application. Consequently, the argument advanced by the hon. member for Green Point really falls a little flat as far as these aspects are concerned. Buildings that are being constructed now to provide accommodation may be constructed under existing circumstances, i.e. any rent may be asked for them. Therefore, the incentive to construct buildings and obtain a good rent, exists. There is no restriction on any entrepreneur to construct a building and obtain a paying rent for the dwelling units in a specific building. What this legislation envisages is to afford those who invested in blocks of flats or dwellings before 1966 a reasonable return on their money. If this were not done, it would mean that those who had invested in a building in respect of which the rent was limited in terms of outdated formulas, would not really get the same return on their investment as those who had, for example, invested in industry or in the stock exchange—not even the same as those who had invested their money in a bank or other financial institution and earned interest on their money.

The aim of this legislation is, therefore, to accommodate those people to a certain extent. This is one side of the picture. The other side of the picture is, of course, that the excessively high interest rates on mortgages on rent-controlled buildings are being removed and that this will afford the lessor a certain degree of relief. There are, largely, the two legs on which this legislation stands. On the one hand, the person who invested his money in a dwelling construction project 10, 15 or even 20 years ago is being afforded the opportunity to get a return on his money, in view of the fact that we are faced with a rate of inflation in our economy. On the other hand, the lessee is being protected in that the excessively high interest rates that are being charged on mortgages can now no longer count against him. In my opinion the step taken by the Government here is entirely in accordance with the concept of balance between lessor and lessee.

I cannot agree with the hon. member for Green Point when he states that we are going to impose an excessive burden on lessees by means of this specific legislation. May I point out that apart from this legislation, which in itself is of a social nature and will therefore have a social effect, the State, for its part, will also make a major contribution as far as the provision of subsidized housing is concerned. Here I am not referring only to the houses that are being constructed by the National Housing Commission or the housing schemes of municipalities or other bodies. I think that we can refer with pride to the good record of the Government in regard to the provision of funds for old-age homes throughout the country as well. Here in the Boland there is hardly a town that does not already have an old-age home that has been or is being constructed from funds made available for this purpose by the Government. The Government is aware of the needs of our elderly people and pensioners. I believe that the Government is doing its part in this regard by providing funds for the construction of old-age homes. The hon. member for Green Point, who is also a lawyer, knows that the valuation in terms of building costs is not the only factor to be taken into account. The Rent Board is and independent and semi-judicial body, and when the Rent Board sits, therefore, it is expected of it to utilize, inter alia, one or more of the prescribed factors. One of the factors is the calculation of the building costs by the quantity surveyor, less depreciation. Other factors are the municipal and divisional council valuations and a sworn building society valuation. The purpose for which the premises or land is used must also be taken into account. Another important factor is the rent value of controlled premises of a similar class, nature or situation in the area. This is a factor that usually leads to a tempering valuation being placed on buildings.

But it is now uncontrolled.

The determination of the value is done for the purposes of rent control. It has nothing to do with new buildings that have just been constructed and are not controlled. It deals specifically with buildings under rent control. All those factors I have mentioned, must be taken into account. The Rent Board is not obliged to take a single factor into account to the exclusion of everything else, whether it be the municipal valuation, the sworn valuation of a building society or the quantity surveyor’s calculation of what the cost of construction would be under existing circumstances. They are not bound to that; they need only take all or any of these factors into account and then reach a fair decision. My experience of Rent Boards is that it is far from always that they pass judgments that satisfy the lessor, precisely because they maintain a balance in these matters by taking into account the rents determined for other similar premises in their vicinity.

If we take all this into account, I think that the hon. the Minister has a balanced piece of legislation here, legislation that tries to make concessions on both sides and tries to eliminate existing areas of friction. I do not want to say that this is going to be the last word as far as rent control is concerned. This kind of legislation has to be adjusted from time to time, depending on prevailing circumstances. I believe that after a year or two we shall possibly have to adjust clauses such as clause 1 again, As hon. members know, the principle in accordance with which a Rent Board must act is that it must determine the value in terms of these factors I have mentioned, factors that all have a certain effect on each other, and then to work out a kind of average. For the rest it is merely a calculation. This, too, is what was stipulated in the Youngelson Case that has already been quoted in the debate on this piece of legislation in the House. I believe, therefore, that what we have here is a balanced piece of legislation. We should do well to let it go through In my opinion, because its implementation will be placed in the hands of experienced people on the Rent Boards and the Rent Control Board, it is very probable that they will reach fair decisions. In conclusion, may I just remark that if fair decisions are not reached or if the provision of this legislation are not properly implemented by the Rent Boards and the Rent Control Board, there is still, as a last resort, the Supreme Court, to which one can go on review, and this is something that has been done on a number of occasions in the past with far-reaching consequences for the interpretation of this specific Act I believe that all the necessary safety measures have been incorporated and that what we have here, therefore, is a balanced piece of legislation.

Mr. Speaker, it is not often that hon. members on the other side give the impression that there is a certain amount of agony in being in office. Yet, this was the impression one gained from listening to the hon. member who has just sat down and, indeed, it has largely been the impression that has been given by hon. members on that side of the House.

It is a sense of responsibility, not agony.

After 27 years of being in office to still say that there are “botsende belange”, to say that formulae have to be found and that one has to look for areas of compromise and go back to a war measure and update it from time to time and then to say: Well, in any case, we might come back in a year or two if this doesn’t work; this is the agony of being in office as a Government which has not got a positive policy. There need not be a compromise, there need not be a problem if the Government did not see this only in terms of restrictions. If this Government accepted its responsibility to bridge the gap and to provide accommodation for the lower and middle income groups in the cities …

We are doing that.

Mr. Speaker, the Government is not doing it and that is why this Bill is here before us. The Government is imposing certain statutory restrictions and for the rest it is passing the buck. It is not itself accepting financial responsibility for bridging the gap between a rental which a tenant can pay and the reasonable return which an owner can expect on his building. It has a negative approach and is indulging in negative tactics. That is why it has introduced this measure. That is also why this measure is not going to assist materially in the provision of more accommodation. As the hon. member for Green Point indicated, the problem is the provision of adequate accommodation. If there was a reasonable balance between supply and demand one would not require restrictive legislation of this nature. It is because the Government fails to give inducements, to provide incentives that one has this imbalance. This causes the Government to rely simply on restrictive legislation. I want to say to the hon. the Minister that I think he has been very reasonable in many of his decisions and attitudes in regard to the application of the Rents Act. Many hon. members have borne witness of this during the course of the debate on this Bill.

Frankly, I was disappointed in the hon. the Minister and the attitude he adopted during the debate on the various stages of this measure. I would have thought that he would have come to this House and made use of the occasion to announce a new deal for tenants and landlords, some really positive change in the Rents Act that would have got him away from the 27-year-old dilemma and the agony which the hon. member for Bellville apparently has to endure.

I see you have discovered a new word.

I believe that the hon. the Minister can still try before this debate is over to indicate a positive approach. The hon. the Minister must just indicate to this House that the Government has in mind accepting financial responsibility for bridging the gap between what the tenant can pay and what the landlord should reasonably receive on his investment. Until the hon. the Minister gives that indication he will continue to find himself in that dilemma and have continually to introduce amending legislation to try to patch up a situation in a way which never really overcomes the problem.

The amending Bill that is before us deals with three major areas relating to rent control. The first is in regard to the factors relating to the amount of the reasonable rental to be determined by the Rent Board; secondly, there is the prevention of the harassment of tenants by unscrupulous landlords; and thirdly, there is the granting of permission to the hon. the Minister to make conditions under which he may determine the decontrol of buildings which are at present under rent control. I want briefly to discuss the impact of this measure, should it be passed, under these three headings.

First of all, there is the question of the adjustment of reasonable rental which has been adjusted both, in relation to the adjustment of percentages and the adjustment of the basic value to which these percentages have been applied. I want to put this question to the hon. the Minister: Has he in advance determined the effect of this? Can he tell us whether as a result of this Bill which he has introduced into this House rentals are going to increase or decrease?

I did tell the House.

Are they going to increase?

I told the House what the position would be. Apparently the hon. member was not listening.

What is the percentage? Does the hon. the Minister believe that there should be a 20% increase? Would he accept that as reasonable? [Interjections.] No, Mr. Speaker, the Minister has dealt with it in generalities, but he has not indicated what his assessment is of the impact of this measure should it be passed. I want to give the hon. the Minister a couple of illustrations of the effect that it can and is going to have in a considerable number of blocks of flats, especially older blocks of flats which were built well before 1966. Sir, in a block of flats on which, there is no mortgage bond—and there are many older blocks of flats where this applies—the total impact of the increases of ½% in the interest rate, ½ on depreciation and maintenance and 2½% on the value of the land will be, as I think the Minister will agree, to push up the rental by 27%. That we can agree on; it is purely a question of arithmetic. Does the hon. the Minister believe that that is a reasonable increase to introduce into rentals for older buildings at this time? I hope the hon. the Minister will deal with this when he replies to the debate. I raise this because he is aware that in my constituency, where there are large numbers of older buildings, there was a rental increase last year of 38%, to which could well be added a further increase of 27%. I think the hon. the Minister should tell us whether he believes that that is reasonable and whether it is the Government’s attitude that an increase of 38% plus 27% is the kind of rental increase which pensioners and others should endure. The Minister should not have come to this House with percentages and an assessment of basic values unless he could determine in advance what impact this would have on rentals. Secondly, Mr. Speaker, the impact of increased percentages is in fact going to be greatest where the buildings are older and where the replacement value less depreciation is relatively low in relation to the value of the land. In old buildings where the replacement value less depreciation is relatively small in relation to the value of the land, the increase in rental is going to be greatest, and the increase in rental is going to be smallest where the buildings are relatively new, where they were built just prior to 1966 and where the replacement value of those buildings is relatively high in relation to the value of the land. The impact of this new formula of the Minister’s is going to load very, very severely the rentals in very old blocks of flats and it is not going to load nearly as severely the rentals in comparatively new blocks of flats. When one looks at the kind of people who occupy these two categories of flats, one will find that the older blocks of flats are generally occupied by the older people, by the pensioners, by people living on fixed incomes, and they are going to be the people who will be hardest hit by this. I want to show this to the hon. the Minister in terms of one or two figures. Let us take three examples, one of which, I gave during the course of the Committee Stage, where the value of the land constitutes 50% of the total value and the value of the building constitutes 50%. The total impact of the percentage increases in those circumstances will be 27,2%. Sir, if one takes a relatively new building, where the value of the building is 75% and the value of the land is only 25% of the total, in other words, where the proportion is three to one, then the impact of these increased percentages is going to be a rental increase of 19,4%, so, in the case of a relatively new building it will be 19,4%. But if one takes a very old building where the value of the building is only 25% and the value of the land is 75% of the total value—and there are dozens of examples of this in the Cape Town area; there are dozens of examples in the Green Point and Sea Point constituencies—the combined impact of these percentages will be a rental increase of 34,6%.

You don’t take bond interest into account.

I am talking about older blocks of flats which are not mortgaged. There are very many of the older blocks on which there are no mortgage bonds. The hon. member must be very careful. This is the total impact of these percentage increases. In the case of the relatively new blocks of flats, there is going to be a very small increase in the rentals, but in the older blocks of flats, especially in the city areas where land values are high., there is going to be a dramatic increase in rentals. This is what is going to happen. The greatest impact is going to be on old blocks which are generally occupied by retired people with relatively low incomes who live on fixed incomes without the advantage of cost-of-living adjustments, and it will also apply particularly in areas where land values are high. Those are the two areas which are going to be badly hit, and the combination of these could, I believe, have a crippling effect on the lives of many old and retired people living in the densely populated areas of the cities of South Africa. I would be pleased if the hon. the Minister could produce figures this afternoon which would refute this. I think it would set at rest the uneasy minds of many, many thousands of older people living in these older blocks, retired people, who see that this is going to have a crippling effect on their standard of living and indeed on their mode of living. I hope the hon. the Minister, if he cannot give us figures to refute this, will say that he believes that the Rent Boards should use their discretionary powers to the utmost to protect the older tenants from this onslaught which is going to be made on their meagre living standards at the moment; and, further, that the Minister will give this House, before the Bill is put to the vote at Third Reading, the assurance that he will keep the effect of this Bill under constant review and that if our figures are correct, and this has the impact that we believe it will have, he will come back to this House and see that there is an adjustment made at the earliest possible opportunity. I do not believe that the older people living in constituencies like Sea Point can accept an increase of 38% last year and a further increase of something up to 34,6% should this Bill be enacted.

Secondly, in determining reasonable rental, the Minister simply locks this into the building cost index. He simply says that as the building cost index rises, so the rentals of people in rent-controlled flats will rise. That is the effect of saying that the dominant factor must be the replacement value less depreciation. As the building cost index rises, so the rentals must rise. As I pointed out earlier, largely because of the Government’s labour policy, the building cost index is rising faster than the cost-of-living index. The locking of rentals into this index is going to have an inflationary impact which will be felt particularly by the poorer and older people living in the urban areas.

That has always been the case. Why did you have a rise of 38% last year?

No, the Minister must explain why there was a rise of 38% last year; he did not give the explanation. What I am saying is that in addition to a rise of 38%, he now wants to add another rise of 34,6%. One cannot alter what has been done in the past. Or is the Minister saying that in fact there will be a considerable reduction in rentals? Is that what the hon. the Minister is saying?

No.

He is not saying that, so he agrees that there will be a further increase. What is happening is that the Minister now says that perhaps the biggest single component of household expenditure, which is rental, is now automatically going to be locked into the building cost index, which is moving ahead faster than the cost-of-living index. This is going to be highly inflationary. In fact, it is geared to inflation. There is no incentive whatsoever under this new system on the part of the building owner to try to retard the rate of increase in rentals. Nor has the hon. the Minister indicated any relief which he is prepared to give to people in the lower income groups when they are caught up in the new cost-of-living spiral which he is proposing in this measure. He must tell us what he intends to do. Is he just going to sit back and see these older people suffer, or is he going to accept the responsibility which this Government should accept and that is bridging the gap between what these people can afford to pay and a reasonable return on the investment of the building public?

Much of what has been said in this debate has concerned the plight, understandably so, of people in the lower-income groups, older people, pensioners and others. But it is undoubtedly a fact that certain owners are going to be hit by the reverse gearing of interest rates, where the interest rates on bonds are at the moment higher than the 8½% which the hon. the Minister now proposes should be used in calculating a reasonable rental. I want to make it quite clear that we in these benches have no sympathy whatsoever for the unscrupulous landlord or building owner who manipulates the provisions of the Act in order to create a situation where he can pass on heavy interest charges to tenants who should be protected under rent control. But I am concerned about the significant number of bona fide investors, people in the private sector who are assisting the Government by providing the capital in order to provide housing for the people whom this Government is not prepared to assist in the provision of accommodation. I am concerned about bona fide investors of this kind who will be quite satisfied to accept a return of 8½% but who as the Minister knows, because of high interest rates on bona fides mortage bonds which they have been required to take out in order to construct such a building, will find that the return on their money is considerably reduced below the figure of 8½% which the hon. the Minister finds reasonable. Where there is a bona fide investment in property which has a social plus factor—in other words, it is assisting in providing accommodation for certain categories of people—and where accommodation is provided especially for people of the lower-income group, retired people, pensioners and others, I think it is unfair for the Government to penalize the owner of that building instead of accepting responsibility itself. I believe that the Government is being unfair, that it is evading its responsibility; it is passing on a partial solution of a severe social problem to private enterprise rather than accepting some responsibility itself. Equally it would be quite wrong under the circumstances of today to require a tenant to pay more than he can reasonably afford considering his total income.

Because there is a social problem, I come back to the point which we in these benches have made before. It is the responsibility of the Government to bridge the gap between the rental on the one hand and the return on the other. This Minister owes it to the House and to the public to say that the Government sees it in this way. He can carry on saying that we have a dilemma, but he must assure us that he is going to get rid of this dilemma and that the Government is going to accept responsibility.

Do you suggest subsidies?

It is because of this that the Bill fails hopelessly. It fails to provide the protection, it fails to provide the return and it fails to provide the adequate accommodation which is necessary for these people in the cities. I say to the hon. the Minister that he should think positively. He should think in terms of providing more housing, more accommodation in the urban areas. He should think of positive incentives, financial and other incentives to encourage the private sector of the South African economy to provide this accommodation and to assist him with this problem. I want to ask the hon. the Minister, when he replies to this debate, to express the Government’s attitude in positive terms instead of relying solely on the negative, restrictive provisions of legislation such as this.

The second area was the area of the harassment of tenants Undoubtedly the Bill has gone some way to stop the unscrumpulous, callous landlord from harassing tenants who otherwise would be able to enjoy the tenancy of accommodation in a peaceful and happy way. There have been improvements. Penal sanctions have been increased. The hon. the Minister has indicated that he will not be prepared to accept the amendments of the hon. member for Houghton that the penal sanction should involve a gaol sentence. I hope the hon. the Minister will keep this under very close observation—he said that he would— and that he will report to the House in a year’s time to satisfy this House that he has not only kept it under observation, but that he is prepared to take the initiative himself if landlords are still trying to evade this provision of the Act.

The hon. member for Houghton has moved that included in breaches of the law should be the refusal to accept payment. I hope that the hon. the Minister will look at this again as he said he would and perhaps introduce a provision to this effect in the Other Place. This practice is becoming rife and there are more and more instances of companies, for example, outside of Cape Town, who require payment by tenants resident in Cape Town to be made in Johannesburg. The tenant then finds that after sending three or four registered letters they come back not accepted. In circumstances like these court actions ensue. The tenant is then required to enter into legal proceedings in order to get the case withdrawn. It is expensive and is also a form of harassment. I have on file a number of cases of where this has taken place only recently in Cape Town. I think the hon. the Minister should also consider in the Other Place whether provision should not be made that the place at which the payment has to be made should be readily available to the tenant. Such a provision could state that it must be in the magisterial district, within the city limits, where a person takes up residence. But I think for landlords to purchase blocks of flats in one city and then require tenants once again to go through the expensive procedure of sending postal orders, cheques or registered letters and then suffering the uncertainty as to whether their letters have been received, is a form of harassment. I I think the hon. the Minister would do well to examine this matter before the measure goes to the Other Place.

The final point I want to mention is the question of introducing conditional decontrol. In this respect the hon. the Minister has gone some way towards giving us assurances. I hope he will state in unambiguous terms that when he feels that he has to go in for conditional decontrol, he will ensure that there is protection for the existing rights of existing tenants. I believe that many tenants are terrified merely at the introduction of this measure, because it is going to make the decontrol of blocks of fiats either totally or partially easier than it was before. It is for this very reason that I believe the hon. the Minister must give a public undertaking that one of the important factors which he will take into account in thinking about conditions for decontrolling is the tenancy of existing tenants and that a period should elapse prior to any of those people losing their rights to occupy those premises. I also want to warn the hon. the Minister to be careful, in applying decontrol differentially within one block of flats, that he does not create additional tensions not only between the tenants and the landlord but between certain categories of tenants and other categories of tenants. Nothing could be worse than within one block of flats to have two sets of procedures operating. One set of tenants may feel aggrieved because they do not have control over flats they have started purchasing due to rent control, while the other set of tenants are fighting for the continuation of rent control because they do not want to lose their right to occupy those premises. I know it would be easy for the hon. the Minister to say that we can make a variety of exceptions. They might seem reasonable on many grounds, but I think the hon. the Minister is aware that there are blocks of flats where there is a differential interest between one group of tenants and another. It is going to be a very bad social problem if within a block of flats you are going to have competing groups of tenants with different vested interests in either having rent control or getting rid of rent control.

Finally, I want to warn the Minister as well not to play into the hands of landlords who indicate that they can get partial decontrol of buildings and use this as a form of harassment of tenants in order to get them to either start paying or to purchase individual flats. He is aware that it is a practice to invite, suggest to or even to coerce tenants into starting to buy flats because there is going to be an application for decontrol. I hope that the hon. the Minister, when he becomes aware that in advance of decontrol the owner has persuaded or coerced tenants into purchasing their flats, will use this as a negative factor and that he will not allow the possibility of decontrol to be used to get people to purchase flats and then have the landlord come along and say that since a number of people have purchased flats, he would now like the block to be decontrolled.

This Bill does assist in preventing a certain amount of harassment and it does regularize aspects of decontrol. In the main, in respect of the provision of accommodation, in seeing that there is a fair return on the investor’s money and at the same time that there is a reasonable rental which the tenant can pay, this Bill falls short of what is required. Perhaps it is not the fault of the Bill itself. Perhaps it is the fault of the Government, which is still wrestling with the dilemma with which it has been confronted already for the past 27 years, because it has been negative in its whole approach to this matter. The Government should have acknowledged this as a social problem and should have been prepared to solve it as such and not, merely pass it on to the private sector.

Mr. Speaker, the hon. member for Sea Point concluded with the issue of decontrol. I should like to add one thought for the hon. the Minister to consider. Very often when he receives applications for the decontrol of flats, they are found to come from so-called “owners” who are, in fact, not resident in those flats. Where a block of flats has been emptied of its legitimate tenants, such as some of those which have been emptied by South African Property Portfolio Managers, those flats are then sold, very often to absentee purchasers who buy them for holiday flats or for other purposes. An application is then submitted for decontrol of the building and it seems to be a simple and straightforward case. Here is a block of flats where there are no tenants left. There are only the owners who have bought their own flats, or mainly such “owners”. The fact is, however, that those owners are not living in the flats. They do not want decontrol for their own convenience. They want decontrol so that they can sub-let those flats as holiday flats at an uncontrolled price because once a building is decontrolled, its use is completely free of control. The flats can then be let for the purposes which, in some cases, were suggested as an inducement to have the flats bought. Let me mention Kangelani, which was before this Minister’s time, that famours building which is now called Golden Sands. There the purpose in selling the flats was their subsequent use as holiday flats. The purchasers were told not to worry, they would be able to let the flats as holiday flats at R100 per week. That is how the original owners obtained the prices they did. The eventual outcome involves a long story which I shall not go into. Some of the tenants were saved in that building and are still resident to this day. The basis for decontrol on the grounds of sale should, however, be very carefully investigated to find out who, in fact, is living in the flats. It will often be found not to be the holders of the shares which allegedly “sell” the flats.

I do not want to repeat the arguments of the Second Reading or Committee Stage. I shall simply associate myself with the remarks of the hon. member for Green Point and the hon. member for Sea Point in regard to the replacement value, the increase in percentage and the effect this will have on rentals.

What I do wish to refer to is an attack which makes it necessary for me to restate the attitude of this side of the House. I have been attacked publicly in the Press by two landlords on the grounds that we accused landlords of being unscrupulous, that we are driving them out of business and that we are making vicious or unfounded attacks on them. These letters have been published in the Press and therefore I think they must be answered. It should have been unnecessary for me to say that when the hon. member for Green Point and I referred to unscrupulous practices, both of us made it very clear that we excluded the majority of landlords and were referring to a minority. In fact the hon. member for Houghton interjected: “Yes, but they seem to control a lot of flats.” I myself emphasized this was a minority and paid tribute to the genuine decent landlords, who did not take advantage of loopholes. I want to make it very clear that we are not attacking landlords in general but that we have in fact specifically named certain cases. I have named South African Property Portfolio Managers and can add a few others with whom I have had trouble from tenants, such as Mr. Thackeray of Leith Properties and Mr. Willers. My knowledge of this practice is confined to these three and two or three other instances in the whole of Durban. I agree that a firm like S.A.P.P.M. controls a large group of buildings and therefore affects a lot of tenants. But, I have said, I want to make it quite clear that my attitude and the attitude of the hon. member for Green Point specifically excluded landlords in general and referred only to specific cases.

Perhaps it is necessary that I should refer to the two attacks that have been published in the Press. The one attack was by a Mr. Youngleson who wrote a very strongly-worded letter in which he attacked me personally in that he accused me of being slanderous and unfair to landlords. I think it is fair to point out that this Mr. Youngleson was the effective owner of King’s Hall where the hon. the Minister’s department did a very good job indeed, for which I am very grateful. As a result of the work of his department, the owners of this building, Mr. Youngleson’s company, went or were taken to court. The case was taken on appeal and eventually it went to the Appellate Division where the view of the regional Rent Board was upheld. It is in the case of buildings such as these that the Bill which is before us will help to close the loopholes which are left. It involved forcing tenants to take meals, putting some furniture in the flats and saying that it was an “accommodation establishment” because bed and breakfast were being supplied. For that reason they maintained that the building was no longer a controlled building. If I could have back some of the hours I spent trying to assist tenants in that building, I would be a very happy person. Therefore I can understand that Mr. Youngleson may not be a great admirer or a great friend of mine.

The other is a more serious case. I have specifically been accused of giving false information and I have, therefore, to deal with it. A Mr. F. J. Mitrie said: “We as the owners of the building mentioned (Ambassadors, which I mentioned in my speech) strongly object to this uninformed statement …” He went on to say: “For the benefit of your readers (including Mr. Vause Raw, who incidentally is so ill-in-formed that we have serious doubts as to his reading ability) we wish to make known the true facts in the matter.” Let us look at the “facts.” I quote—

He went on to say that it then stood derelict and vacant and then he explained how he, the great, noble developer, rescued it by saving it from demolition and then reconstructing it. What are the facts? I have been accused of giving wrong facts, but everyone of his facts is untrue. Ambassadors has never even been the subject of a hearing by the Slums Court and it has never been declared a slum. It has never even been considered as a slum, but Mr. Mitrie said that it was declared a slum, and that a demolition order was obtained from the Department of Community Development. The fact is that a company called Admir (Pty.) Ltd. applied for a demolition order on 14 April 1970. Then Mr. F. J. Mitrie of F. J. Mitrie (Pty.) Ltd., agents for Admir (Natal) (Pty.) Ltd., applied for that demolition order to be changed to a reconstruction order in April 1973. The application was received by the department on 10 July 1973. In other words, it is untrue that it was declared a slum; it is untrue that the department served a demolition order on the owners, and it is untrue that the department wanted the building demolished. It was as a result of the voluntary request of Mr. Metrie that the reconstruction permit was approved by the department after his application in July 1973. So there are three direct lies in the attempt to make out that I gave wrong information. Indeed, every single fact is completely accurate as I stated in this House. I raise this because the department is brought into disrepute by the allegation that it had the building declared a slum, that it demanded the demolition and that it was, therefore, responsible for the tenants being thrown out of that building. The contrary is true. The department gave every assistance to protect the tenants of that building. They helped to get alternative accommodation offered to the tenants and to give the tenants more time to find accommodation. Ultimately they agreed not to have the building demolished. I think it should go on record that not only did the department no act against the interests of the tenants, but it did everything in its power to help them. I think it is only fair that, when members of the public choose to attack members of Parliament for acting in the interests of the public and their constituents, the facts should be also stated loudly and clearly.

We have attacked what is wrong in this Bill. We have attacked the minority who victimize and maltreat tenants and we have sought to obtain protection for tenants as a whole. But because our recommendation and representations have not been accepted, we shall not be able to support the Third Reading.

Mr. Speaker, I do not propose to take up much time of the hon. House on this particular issue. For various reasons I was unable to put a point of view during the first two stages when this measure was under discussion, and therefore I should like to do so now. Not only do I have a very great personal interest in the subject matter of this particular Bill, but I believe it is true to say that in my constituency probably 99,5% of the constituents live in rentcontrolled premises or, at least, in rented premises. As far as our general views on this piece of legislation are concerned, these have been expressed by various members on this side and I do not propose to refer to that at all. I want to deal with only one specific issue, and that is the issue that is really dealt with in clause 12, namely the harassment of tenants. More particularly, I want to deal with the intimidatory activities we have seen in the past. More than two years ago I thought it necessary to draw attention to this particular issue. I did so at the time by way of a special debate. What we have in this measure before us is, I would imagine, largely a result of the investigation which the hon. the Minister had conducted prior and subsequent to that event. I imagine that those findings have now been embodied in this particular piece of legislation. When I raised this matter more than two years ago, it was of interest to me to see the reaction there was. The hon. the Minister was certainly sympathetic and said he would look into it. He was in fact considering what amendments could be made to the Rents Act. Certain landlords attacked me viciously as well, obviously in the same way as they have attacked the hon. member for Durban Point. I wonder whether there should not be legislation to protect parliamentarians against this kind of unwarranted abuse from the outside. In my case the then chairman of the Property Owners’ Association put it as follows at a public discussion of this matter. He said that I had exercised my parliamentary privilege when I made gross reflections on landlords and although he had no parliamentary privilege he certainly had the privilege of fair comment on matters of public interest. He then discussed the special debate that I had initiated in this House and referred to me in the following way—

That copy of their memorandum has just reached me after two years. Needless to say, I made no accusation at any time against landlords in general. Indeed, at the time I prefaced my remarks by saying this—

I think it is most regrettable that some of the landlords who seem to me to be protesting too much, should attack members like the hon. member for Durban Point and myself when they have obviously not taken the trouble to look at our Hansards. Quite clearly they have no idea of what we in fact said.

As far as I was concerned the major charge at the time was levelled at a gentleman, Mr. Wainer, who operates mainly in the Johannesburg area. It was of interest to me to study his reaction. He took no notice of what we said. He in fact boasted that no one could really touch him; he was cocking a snook at the Government. He said that by raising the matter all that we were doing was playing politics. As far as I can see he then went on in precisely the same way as he had done before, and because he had been allowed to get away with this others followed suit and tried to do exactly what he had been doing.

The situation that this legislation is intended to cope with has not changed radically over the last two years as far as I can see. From certain landlords we still have the behaviour that smacks of racketeering of the worst kind and we still have wicked exploitation of people who cannot fend for themselves. I regret to say that we still have certain modern Shylocks in South Africa whose greed knows no end. The number of court cases that we have had has not been a deterrent at all. These people are playing with vast sums of money and they are not interested in normal provisions such as we have had in the past. There is amongst the public and people who are tenants, a feeling of absolute helplessness. I am only hoping that the new provisions which the Minister has embodied in this legislation will help us cope with the serious situation that has arisen. To illustrate the sort of helplessness that you get from people, I want to quote from one letter. This gentleman who wrote to me, in fact wrote on behalf of the United Tenants’ Rights Association and he signs his name. I will not mention his name now because he indicates that he has sent the hon. the Minister an affidavit in which he makes certain accusations. The affidavit that I have is not signed so therefore I will not quote from it. I assume that this has reached the hon. the Minister; if so, he might wish to refer to it when he replies. Here there are certainly amazing allegations that are being made. This man contends that in the pursuit of helping people who are tenants in flats, he has handed over 100 sworn affidavits or statements to the Police, He says that each statement or affidavit deals specifically with an alleged wilful intimidation or harassment of tenants and was signed by them. He claims that although he has brought this to the notice of the Police and of all sorts of other people and of the hon. the Minister and his department, no action has been taken whatsoever. He makes, to my mind, some very far-reaching accusations against members of the Rent Board and talks about trips to California and all sorts of other things which I think certainly require immediate investigation. He ends up this document by saying—

Sir, I do not want to take this matter any further, except to say that this quite clearly is very serious, and I would imagine that the hon. the Minister will take steps to investigate it. Sir, there are all sorts of rumours going around as to what certain landlords are doing and the extent to which they are harassing and intimidating tenants. If one-tenth of the rumours are true, then I believe that the amendment moved by the hon. member for Houghton was certainly justified. If only a portion of them are true, then in any other society but our own these landlords would have been shot, and in our society I think they certainly deserve the strictest censure. Sir, we have welcomed that particular portion of the legislation because we are hoping that it will improve a situation that we have been very concerned about. I just want to say to the hon. the Minister that I think this is merely the end of one round in this war. I think this first round has been won handsomely by some of these landlords, because it took us nearly two years to introduce this legislation. I want to say to him, too, that already they are thinking of all sorts of other loopholes. Some of the loopholes have now been blocked by this legislation, but I am quite sure that already they are looking for other loopholes and that they are already operating in a different field. One of the things that they are doing, of course, is to use the Sectional Titles Act We know that people like Mr. Wainer and Mr. Mouton are buying up old buildings. Without doing anything to the buildings, they start making everybody’s life a misery because they keep on sending to the block of flats agents who are allegedly purchasers of these flats when in fact there is no intention whatsoever of really renovating the buildings. What they then do apparently is to ask these tenants to sign a deed of sale. The tenants pay a deposit; a higher rent very often follows, and then when they move out they are told to disappear and the so-called deed of sale is cancelled because there is a “roukoop” clause, and so the same process is repeated over and over again. I believe that this is one of the loopholes which follows from this Act. I am told that other devices are being used as well, and I think the hon. the Minister will have to look at this because many thousands of people are going to lose a lot of money. Sir, when it is put to these gentlemen they admit it. I have here a headline in the Property Mail, “Wainer admits: My deeds of sale against the law”. Here is a man who admits that what he is doing is against the law. I think we can legitimately ask what is being done about that sort of situation.

I have only one last comment. As I understand it, this Rents Act provides—and I have in mind the introduction of television —for only one television aerial to be sited on a block. As I understand it, you have a particular kind of aerial for black and white television and a totally different kind of aerial for colour television. It seems to me that this is an issue to which the Minister will have to give attention, because quite clearly if you have one kind of television aerial only, you will prevent some of your tenants from using the other kind of television. If you have an aerial for colour television only, you will force every tenant in that building to spend more than R1 000 to buy a colour set because, as I understand it, that kind of aerial will not be suitable for ordinary black and white sets. The point that follows from this is that in this Bill, as I see it, no provision is made for property owners of a rent-controlled building to be able to recoup the installation costs of TV aerials or their maintenance. One would imagine that in this particular case, if my information is correct, this is also a matter which the hon. the Minister would have to attend to.

Sir, as I have indicated, although this side of the House is opposed to the first principle embodied in this particular measure, we do welcome that portion of it which tries to contain the activities of some of these ruthless landlords.

Mr. Speaker, I think that we are now reaching the end of a Bill which, I believe, has quite rightly given rise to a very extensive discussion and which has been dealt with in detail. I think I can tell hon. members, including those opposite, and I think that they will accept it when I say this that from the outset I have entered this debate with the standpoint that I wanted to listen with an open mind to all the arguments raised by the Opposition. I think that in the course of our discussions the hon. members opposite have found this to be the case. I should also like to extend my sincere thanks for the contributions made by that side of the House, particularly in those instances where they have perhaps given me a better insight into their actual problems. I have already conveyed my appreciation of the contributions made by this side of the House.

Sir, at the start of my Second Reading speech I said that this was a difficult Act to administer, and in my reply to the Second Reading debate I made it very clear that there were aspects of this Bill which I was not happy about and about which I believe no one could be happy. This I spelt out very clearly. I tried to find answers to these things. Hon. members opposite know that I referred to this form of what is really nothing but discrimination between people in the same category on a specific date, even at a specific hour in 1966. On the one hand, one has people with a property to which a stigma attaches, because it is restricted by an Act, and on the other hand, an hour later, one has people in the same category to whom that stigma does not attach and who are not subject to those restrictions. This is a situation about which no reasonable person can easily be happy. Now there are three possible solutions. As I have indicated, if everyone were to be placed under rent control, we would drive people away from this industry and by so doing, do more harm than good. The second solution is to free everyone from rent control and say that the free market mechanism must take its course. But then we create the situation in which we do not strike the required balance, to which I shall refer later. I think that the hon. member for Sea Point was extremely unfair this afternoon, and he must expect me, too, to be unfair. This is in respect of the balance that must be struck. Consequently only a third possibility remains, namely that by means of legislation, an attempt be made to adopt reasonable measures by means of which the optimum degree of fairness towards both of the sides with conflicting interests can be reached. This is what I have tried to achieve and I fear that hon. members opposite have not been able to argue convincingly that I have not succeeded to a reasonable extent by means of the measure at present before the House. Consequently, I do not want to deal any further with the arguments that have been raised except to tell the hon. member for Hillbrow that the affidavit to which he referred, reached me a few days ago. That affidavit will receive the necessary attention. However, I do not want to say more about that at this juncture. An hon. member was kind enough to let me have a look at the document from which the hon. member for Hillbrow quoted extracts referring to Wainer, and I did in fact read it. It concerns the Sectional Titles Act and I accept that the Department of Justice, which administers that Act, will probably take cognizance of it.

I now want to refer to the hon. member for Sea Point. If my memory serves me, the hon. member was not present for the greater part of my reply.

That is correct.

If he was not here, then he was at least obliged to read my speech..

He did read it.

Oh, he did read it? Well and good, that improves my position. [Interjections.] He therefore knows what my difficulty and my questions were. He had the opportunity, this afternoon, to furnish a reply to the questions which I put to other hon. members opposite, too, to which I did not receive replies. The hon. member did not attempt to answer those questions either. On the contrary. The hon. member for Sea Point tried to ride on the back of political popularity among his voters, and in both directions, too. [Interjections.] He said that the lessor should be assured of a reasonable income and that the lessee should be assured of a rent that was within his means, irrespective of what his means might in fact be. In addition, the hon. member repeatedly pointed a warning finger at me and said: “I am warning the Minister; I am warning the Minister.” He only suggested one solution: The Government would have to pay in the difference. The hon. member for Carletonville asked him whether he was suggesting a subsidy, but he did not reply to that. He knows what my difficulty and my questions are, but he has not tried to reply to them. He knows what they are, because I stated what they were in my reply to the Second Reading Debate, and he read that, after all. I stated what the Government was doing and the amount of money that was being spent. Other hon. members quoted statistics to indicate how much money was being spent in various fields to assist people in respect of inexpensive housing. With reference to the amendment by the hon. member for Green Point I asked whether, if we took fiscal and other monetary steps, they would have to apply to everyone. I also asked whether there would have to be a means test. In addition, I want to know how one could ensure that the benefits of such measures would be transmitted to the lessee. Should one, then, have control? should one have rent control throughout on all properties? Is one only going to provide these benefits in respect of a certain group of lessees, namely those in recent controlled premises, or is one also going to provide these benefits to a different group of lessees who live in uncontrolled premises and who one would normally expect to pay more than the people in rent-controlled premises. Rent-controlled premises are not available at all times to all people in the lower income groups. The hon. member knows that these are my difficulties and that these are the questions I asked. However, the hon. member did not make the slightest effort to answer these questions. All he could do was to warn: “I warn the Minister. He also mentioned the example of 75% with regard to old buildings. This was the logic we had from the hon. warning member for Sea Point. As far as these old buildings are concerned, the position has been reached where 75% of the value represents the value of the land, while only 25% represents the value of the improvements on it. In the normal course, the position is that it is accepted that about one-third of the value of the property will be the value of the land and about two-thirds will be the value of the improvements. What will any normal thinking businessman do when such a position is reached? What will he do when this disproportion has been reached? He will want to realize the value of his land and replace the improvements on it by improvements that will be in proportion to the value of his land. That is what any normal thinking businessman would do.

Can he demolish the building?

He would have to ask my department for permission to demolish the building. I now want to ask the hon. member whether, if he were in my position, he would refuse to grant such permission if this position were reached?

It depends on the condition of the building.

Precisely. Now I have the warning hon. member exactly where I want him. That person must therefore let that building fall into disrepair at the expense of his lessees until the stage is reached at which I have to say that it may be demolished because the condition of that building is poor. That is the kind of argument we have had here. However, my department provides this man with a reasonable formula that enables him to make adjustments and corrections which again enable him to continue to provide a service to the community. That hon. member adopts the standpoint that if a man’s net rent income was R6 000 ten years ago, it would still have to be R6 000 today. I do not adopt that standpoint. In other words, there must be the necessary increases in the income of this man, too, just as is the case throughout the entire community, including pensioners. The purchasing power of our money is dropping. However, the hon. member has furnished no reply in this regard, except to say that the Government must intervene and put things right. The hon. member is aware of the questions I asked, because he read my speech; however, he did not mention how I should deal with the situation I put to him.

Mr. Speaker, when this debate was adjourned last night I was telling the hon. the Minister of certain trade practices which I believe to be undesirable and to which I believe he should pay attention. I specially mentioned certain hire-purchase practices and I believe that the hon. the Minister should consider it his duty when this Bill becomes law to use his new powers to protect hire-purchase customers from their own ignorance and from the sharp practices to which they have been exposed for so long. If the hon. the Minister and applied his mind previously, I believe he could have used other laws to curb these malpractices which have been going on, but undoubtedly in its wisdom, the Government decided not to take action. We sincerely hope that he will now take action in terms of the powers—which were mentioned by my hon. friend from Constantia as being those contained in provisions other than clauses 10, 11 and 12— which we are prepared to concede he should have. I also want to draw the attention of the hon. the Minister to another practice which I believe is one against which he should act in terms of the powers he will now receive. I refer to the Christmas hamper and stamp clubs. From the smile on the face of the hon. the Minister I can see that he must have been in touch with Mr. Roelofse who has, I understand, been conducting a particular inquiry into these organizations.

No, I am thinking of a Christmas present.

Oh, I see; the hon. the Minister is just thinking of a Christmas present. That is the whole point with these clubs. The way they operate is to appoint agents who sell stamps which are affixed to a card on a periodic basis, weekly or monthly. When the holder of that card submits his card to the firm concerned at Christmas time, he receives a Christmas hamper. Various malpractices have grown out of this practice. They invite participation from all sorts of people and they publish a catalogue which contains illustrations of various hampers. When the person receives his hamper he finds that it is nothing like the one he ordered, that is, if he receives his hamper at all. Recently there have been instances—I was involved in the investigation into one of these clubs—where people did not receive their hampers. Not all the threats in the world from me could even get them to supply the necessary hampers. We had the situation of an African woman in the Hammarsdale area being beaten up by people who had contributed faithfully during the months of the previous year but who had not received their hampers. The people blamed her but she did not even get her commission from the particular firm. I am glad to be able to say that only last week I was able to get a cheque from the company concerned due to the efforts of one of the local newspapers. I was able to hand this cheque to her and she has refunded the amounts to the persons concerned. Certain questions arise. Again I must say that the hon. the Minister and the Government are culpable in this respect because I believe they could have acted against these clubs before. These clubs receive deposits, but are they recognized as deposit-receiving institutions? Surely we could have stepped in on that point? Then there is the question of unclaimed money. These clubs do not maintain trust funds. I believe that, if these clubs are to be allowed to continue with their activities, they should be compelled to maintain trust funds in which all unclaimed amounts are placed. At the moment the unclaimed amounts become the cherry on the top when the profits are calculated. I believe these clubs should be compelled to account in some way for the unredeemed stamps.

I have given just two examples of malpractices which have arisen. Because of these, I believe the hon. the Minister must have the powers he asks for, except for those which are contained in clauses 10, 11 and 12 of the Bill. We have heard what three speakers on the other side of the House have had to say, but none of them has given any concrete examples of exactly what the intention of the Minister is in this regard. The only subject they did mention was advertising. The hon. member for Klerksdorp in particular devoted almost all his time to dealing with what he considered to be malpractices in advertising. The hon. the Minister must be aware that advertising is the lifeblood of commerce and industry today. We could call advertising the arteries of the business world not only in South, Africa but throughout the world. Commerce in particular depends upon selling and upon advertising to sell its products.

Let me give an example of this. Mr. Speaker, I am sure you will remember, as I do when I was a small boy, that there was only one brand of tea everyone bought and that was Mazawattee tea. That brand was sold mainly on the advertisement, which appeared in those days, of the little old lady with the big glasses who had with her a little pup and a little girl. Today that brand of tea is hardly sold because they stopped advertising it. Today one buys Five Roses, Joko, Three Trees or one of the other brands that are advertised. The hon. the Minister is asking for certain powers in connection with advertising. I want to say to him that we are prepared to give him those powers but I must also issue a warning: He must be careful how he applies these provisions because he can do commerce and industry in this country incalculable harm.

There is another aspect to this question of advertising. It has long been held in the law of South Africa that an advertisement does not constitute a binding contract but that it only constitutes an invitation to do business. Is it the hon. the Minister’s intention to upset that situation in the practice of law in our country? If we look at exactly what powers the hon. the Minister has asked for in this Bill regarding the prohibition of certain provisions in advertisements, we find that his asking for such powers could be construed as an attempt to upset the position as it exists today. Naturally, a person makes his advertisement as attractive as possible.

Surely you know that the one is a civil and the other a criminal aspect?

Granted there is a civil and a criminal aspect but I believe the same principle is involved.

No.

As I said, I believe every person makes his advertisement as attractive as possible to invite other people to come and do business. I have a couple of examples of such advertisements with me. The hon. member for Klerksdorp mentioned the example of the plots that were being sold at the seaside. That advertisement appeared with a glossy picture showing a lovely beach., a beautiful blue sea and, in addition, a shapely blonde. I want to ask the hon. the Minister if he thinks he should buy the blonde as well because she appears in the picture? Does the person who responds to the advertisement demand that he must get the blonde as well when he buys the plot? He does not do so. The point is that the advertisement is merely an invitation to do business. I have another example which arrived in my mail the other day. It comes from a local firm. I quote—

The rules are also printed in this advertisement. They state that—

Depicted on the facing page—

the company—

Now, here is a benefit which is being offered by way of an advertisement by a firm. I am in agreement with the hon. the Minister. This does not constitute grounds for a civil action. I do not believe that on the strength of this anybody could sue and claim R200 from the firm. However, in terms of the hon. the Minister’s Bill, this becomes an offence.

Which clause?

It is a trade coupon in terms of the definition of “sell”. Clause 10 states … [Interjections.] I will come to clause 11—

And when one looks at the definition of “sell” it includes an advertisement, this piece of paper—

Now, let us look at the definition of “trade coupon”—

Such person will receive a benefit of R200 by this means. Let us go on to clause 11. I know the exceptions. Clause 11 states inter alia—

The provisions of section 10 shall not be so construed as to prohibit …

I think that the hon. the Minister is now referring to paragraph (b). [Interjections.] Which one is he referring to? Which one does the hon. the Minister want me to look at? [Interjections.] Very well, let us look at paragraph (c)(i)—

There is no proportion whatsoever to the price of the goods. When it comes to the provisions of clause 11, the exceptions, in every case I can give the hon. the Minister an example which is not covered. I want to ask the hon. the Minister a question across the floor of the House. In my supermarket I conduct a competition once a year. We have a grand birthday promotion in which we give things away. One year we sold 1 500 pairs of panties at one cent per time.

What were they doing before that?

Together with this promotion there is a system whereby every customer who passes through the check-out receives a ticket with a number on it. That ticket entitles that person to come back on a Saturday morning to play Pick-a-Box, a competition in which we give away 20 prizes. I want the hon. the Minister to tell me which of the exceptions under clause 11 will cover me in that instance?

I shall reply to that.

I am not covered by paragraph (a) because it is not a commission. I am not covered by paragraph (b) because it is not a discount as such. I am not covered by paragraph (c) because it bears no proportion whatsoever to the price paid. So it goes. Let me say this to the hon. the Minister. I am one of thousands of supermarket owners who do the same thing every day. I am only one of these. Is the hon. the Minister going to prosecute all of us? Is he going to prosecute every advertiser on Springbok Radio? What actually happens? Take the Surf Show, “Pick-a-Box” or any other show. People are invited to go to the SABC office. When they arrive there they are issued with a ticket. That ticket is drawn out of a drum and then they are entitled to participate in the competition. When we look at the definition of “trade coupon” we find that it includes the words—

Every one of those competitions must be outlawed immediately these provisions have become law. I think the hon. the Minister does not know what he is doing. Sir, here is another advertisement by a firm whose name I will not mention—

Then on page 2—

Sir, this will be outlawed by this Bill when it is passed and I want to ask the hon. the Minister whether he is really serious when he asks us to pass a Bill which reads that the Minister may prohibit the giving of any benefit to a customer. Sir, how can he in all seriousness ask us to pass a Bill like this? I cannot accept that this sort of benefit is to the detriment of the public of South Africa. The hon. member for Paarl, who is unfortunately not here at the moment, made the point yesterday that traders only offer advantages for their own benefit; that there is no benefit for the consumer. Sir, it is statements of this kind which do the harm that is done, particularly to the supermarket business in this country. They are made by uninformed people who make these irresponsible statements without ascertaining the facts. What are the facts? In exactly the same way as advertising is the lifeblood of commerce and industry in this country, I believe that the trade gimmicks, if you want to call them that, of giving the customer some benefit, of having loss leaders, of offering prizes in a competition, are absolutely essential to the businesses of South Africa today, particularly in the field of supermarkets. I believe that it is due to those gimmicks that the cost of living in South Africa has been kept within a reasonable limit, because the supermarkets today are working on a far lower percentage mark-up, a far lower percentage profit, than they have ever worked on before. Why, Sir? Because of the volume of business which they do. These systems which are used—the prizes which are offered and the loss leaders—are used with the object of increasing turnover. Sir, one business that I know of was in the situation up to a couple of years ago that because it had a small turnover, it had to mark its goods up between 25% and 30%. With the increased turnover which resulted from the use of these gimmicks, from these loss leaders, from these benefits which have been given to the public, that business is today marking up no more than 15%. It is claimed by some of the larger supermarkets that they have no mark-up at all, that they in fact sell a lot of their products at cost price, and that all they work on is their cash discount of 2½%, and in some cases 5%. I know, Sir, that this can happen because I have used it, too, in certain instances, but unfortunately I am not big enough to have such a small mark-up and still make a living. One of the national firms, a world-wide concern, which gives away thousands upon thousands of rand every year in prizes, in special offers and in discounts, made a profit a few years ago —I have not been able to get the latest figures—of R7 million. When we went into this to discover what exactly this R7 million represented, we found that it represented 0,05% of the firm’s turnover, which means that its net mark-up was 0,05%. Sir, nobody can expect it to be less than that. If that firm had not spent the thousands of rand that it did on advertising, on giving away prizes, on making special offers, on reducing its prices, it would never have been able to exist on that low percentage of profit. I hope that this debate, not only now but in the later stages, will once and for all give the lie to the story that traders, when they give prizes or benefits, are doing so only to catch the customer. I do not believe that is true. It is done to catch one’s opposition because it is a fact today that the supermarket which gives the better prizes, the better reductions, the one that does the better advertising, is the supermarket which is doing the turnover, and that is the supermarket, Sir, which is making the profit.

Now I want to deal with another aspect. In the African areas of South Africa a practice has grown up whereby a national concern—and I think in this case I must name it; it is the manufacturers of Surf, the washing powder—has a number of travelling vans which go around to various African communities where they put on a cinema show in the daylight, in the open air, and they put on a show of the programme that we know on the radio as “Pick-a-Box”. The African people from miles around gather around this truck and they have a wonderful afternoon’s entertainment with a number of their people competing in “Pick-a-Box” and winning prizes. Straight away this firm is in trouble because it is giving prizes and advertising one of its products, whether it is Surf or any other product. But at the end of the show what invariably happens is that vouchers are given out to those Africans present, and those people have come to expect this. This voucher reads: “Go to your nearest supermarket and buy a packet of Surf and you can have 5 cents off the price”. Sir, we collect thousands of these and we cash them with the firm concerned, which refunds to us the amount of money we should have collected but which we have not collected in view of these vouchers. Now. Sir, this is a trade coupon. I want to ask the hon. the Minister what is wrong with this practice, and if there is nothing wrong with it, where is the exception in clause 11? I do not see any exception in clause 11 which is going to allow this firm to continue with that sort of advertising, and I want to say now that if they are forced to stop that sort of advertising, it is only going to do the Black people of South Africa a disservice, because it is the volume of turnover which allows their product to be sold at the low price at which it is sold today. Sir, turnover is the important thing in commerce today and turnover can only be achieved by advertising.

I believe that the hon. the Minister is right in thinking he must take action against certain unsavoury trade practices. I believe he needs our support to do this, and he will get our support. However, I cannot in all seriousness support a Bill which provides that “subject to the provisions of section 16 the Minister may … prohibit the giving or supply of any benefit, or impose in respect thereof such conditions as he may think fit”. I believe that 99% of the benefits which are given today to the consumer public, particularly those which are more apparent to the public, are to the advantage of the public and are keeping the cost of living down. They have had a detriment effect on the small trader. The small trader, the small grocer, is disappearing in this country, but whether this is a good thing or a bad thing is not a matter for discussion under this Bill. I believe, however, that from the point of view of the consumer, the housewife of South Africa, these benefits are to her advantage. I support the amendment of the hon. member for Constantia.

Mr. Speaker, the only reply I am able to furnish at this stage to the argument advanced by the hon. member for Pietermaritzburg South is the following quotation concerning the clarity and the correctness with which Acts are drafted—

That is the only reply I want to make to the argument advanced by the hon. member for Pietermaritzburg South.

I should like to support the legislation. I think it is very good legislation because by its nature it protects the consumer against exploitation, malpractices and deception. I believe that all hon. members support this aim of the legislation. However, the legislation also goes further. It also envisages the protection of the trader. The traders are protected in terms of clauses 18, 20 and 21 in that, in terms of those provisions, they will be able to advance certain defences. After the expiry of a period of two years, no claims or charges may be laid against them. They are also exempted from claims in regard to advertisements they have published, provided, of course, those advertisements comply with the requirements set in the legislation. The legislation goes even further, because it even protects the professional advertiser. In terms of clause 18, the professional advertiser advertising the dealer’s goods cannot be caught in the trap of malpractices as regards advertisements and consequently he, too, enjoys the protection of this legislation. The manufacturers, suppliers and sellers of goods are protected under clause 15, too, so that if malpractices occur which disturb the relations between suppliers and sellers, the necessary protection exists. Clause 10 incorporates the principle that the supplier of the trade coupon is also protected.

The hon. member for Klerksdorp dealt with the advertising industry in great detail. We have just heard that advertising is the life-blood of any industry and we fully endorse that, but we have never yet heard that the life-blood of an industry is based on malpractices. When one reads it in good faith, one finds that basically, this legislation is designed to eliminate malpractices.

The Bill also places advisory machinery at the Minister’s disposal in the form of an advisory committee. I agree with the hon. members who have argued in favour of great care and prudence being exercised in the composition of this committee. However, we shall also have to bear in mind that in his Second Reading speech, the hon. the Minister said that he would invite interested parties to nominate persons from whom he could constitute the committee. The legislation also provides for the appointment of inspectors and exceptional preventative powers are afforded the Secretary.

There are two aspects of the advisory machinery. The first is that it protects the trader, the seller, against possible victimization. The second aspect of this is that it creates the possibility of the identification of malpractices. I now come to the argument advanced by hon. members on the other side of the House in regard to the omission of those sections of the Bill dealing with trade coupons, namely clauses 10, 11 and 12. Vague statements have been made to the effect that this would be outstanding legislation as long as clauses 10, 11 and 12 were excluded, but not one hon. member opposite has thus far succeeded in furnishing us with any example or any motivation to indicate why these clauses supposedly weaken the legislation. Hon. members opposite were very vague about this whole matter. In the one instance, the hon. member for Walmer said. “The provisions of the Trade Coupons Act are in conflict with the provisions of the Bill, and as such the inclusion of those provisions cannot be accepted.” Only a few minutes later, however, the same hon. member said that these clauses “have been reintroduced in this Bill with some slight differences”. In the one case there is a serious conflict and in the next there are only minor differences. However the hon. member did not succeed in indicating what these minor differences were. The hon. member went back 40 years and hauled old skeletons out of the cupboard. But that is not relevant. What was argued 40 years ago in connection with Act No. 18 of 1935 is entirely irrelevant, because situations then were totally different to those prevailing today.

Hon. members opposite are simply unable to read the Bill in good faith. The question of what is wrong with giving something away for nothing has also been asked and hon. members have argued about this at great length. However I want to make the statement that nothing is being given away free. I want to mention two examples in this regard. In one way or another, anything that is given away free is recovered from other consumers. I my self know of a case where a trade coupon was issued involving eight tokens. This practice can be calculated very precisely by means of statistics. One of these eight tokens was withdrawn from the trade for a long period to allow the turnover to reach a specific level before that withheld token was reintroduced into the trade coupon campaign. This, therefore, is a malpractice because it is recovered in one way or another. At some stage it is worked into the price again. The hon. member for Walmer referred to court verdicts and law reports in regard to, inter alia, a matter concerning soap, in which a trade coupon offered a car as a prize. I want to make the statement that this is a malpractice and therefore this is another of the reasons why these three clauses should remain in the legislation. When a car is dangled before people as a carrot to induce them to buy a packet of soap, there is no relation between the price of the item and the price of the car. The quality of the item that is offered for sale bears no relation to this. In other words, a person is no longer buying the item because of its quality, but because the carrot that is dangled before him is a car. The manufacturer therefore has no motivation to maintain the quality of his product. The second instance I want to mention is the fact that the issue of supply and demand is now being neutralized, because the product is no longer being purchased owing to the demand for it, but owing to the fact that there is a car to be won by the purchaser. In my opinion this is a malpractice. It also constitutes unfair advertisement because the advertisement no longer concerns the quality of and demand for the product, but the fact that a car is at stake. Here we are dealing with malpractices, and for that reason the clauses in this legislation should be retained. These trade coupons are basically a form of advertisement, and as such are also liable to malpractices. By its nature, therefore, control of trade coupons belongs in this legislation. The same malpractices that can arise with regard to advertisements can also arise with regard to trade coupons. The third argument is that the measurements being adopted here directly protect the consumer. The same measures are adopted in the case of advertisements. Consequently these measures, too, belong in this legislation.

I should like to quote an example to indicate why provisions of this nature should be incorporated in the legislation. I shall not name names. The case I want to mention concerns an advertisement for a radar warning unit. The unit can be purchased and installed in a motor vehicle so that the driver may be warned when he approaches a radar speed trap. I now want to quote an extract in order to indicate how this unit is advertised (translation)—

If that is not the greatest possible deception, then I do not know. If there is no radar trap, how is this “Snooper” going to assist the conscientious driver to maintain the legal speed?

Mr. Speaker, I do not propose to elaborate on what the hon. member for Wonderboom has said, except to say that he started off by going through the clauses from his point of view, while we on these benches certainly want to go through the clauses from our point of view. The process is going to be quite different from what we have as yet heard either from the right or the left of us. In his Second Reading speech, the hon. the Minister said that the purpose of this legislation was to make it possible for the Government to act against practices of this kind—meaning undesirable practices. He said that it was desirable for the Govern ment to have the necessary legal powers at its disposal. He also said that the Bill now before this House was the result of protracted negotiations conducted with interested organizations in an attempt to formulate a Bill which would afford the consumer public the necessary protection without, however, putting unnecessary burdens on the private sector. We would agree that that is an extremely laudable aim and we have no difficulty in supporting it. One must, however, remember the caveat, i.e. the word's “an attempt”. We on these benches agree with the motivation behind this piece of legislation, i.e. to provide protection for the members of the consumer public against false or misleading information in regard to either the properties or the price of products which are on offer now or will in future be on offer. A business must, of course, conduct itself in a reasonable and fair way and to the benefit and not the detriment of the consumer public. That is clearly in the interests of business itself, as well as being in the interests of the general public. It naturally follows that where a minority acts in such a way as to negate that principle, there should be appropriate machinery both to protect the public and to punish the transgressors. With that, too, we have no quarrel.

However, the facts of the matter are that this Bill is drafted in such a way that it raises fundamental issues. I am not referring to the re-enactment of the Trade Coupons Act with which two of the speakers to the right of me were certainly obsessed, or to the affairs of Colgate Palmolive. Up to now the party to the right of me has been totally concerned with clause 10. 11, 12 and 24. As for the rest, the principal spokesman of the United Party, had the following to say, and I refer to his Hansard:

Then he went on to say:

Then finally he said if it had not been for the trade coupons provisions in this Bill, the Bill would have been a timeous and advisable measure. That is really rather fascinating because in the other clauses this Bill as it is drafted affects the following fundamental areas which are of concern to every businessman and every individual in South Africa. What is proposed here is a totally unwarranted interference with those things. These provisions concern the rule of law, the rights of individuals, the powers of the Minister to discriminate, the powers that are given to the Secretary for Commerce and they also contain an unreasonable provision in regard to the responsibility of executives of a company or a corporation in the management of their business. It is our view that the culprits are those who indulge in the sort of business malpractices which were mentioned by the hon. the Minister, and that they constitute a small proportion, a small number of the entrepreneurs or of the management class in the corporate enterprises within our country. The legislation as it is drafted …

I have said that.

I am drawing a distinction between this party and the party on my right at the moment. I shall come back to the hon. the Minister in a minute. The legislation as it is drafted at the moment will or could interfere in a totally unjustifiable way with those who conduct business which in any way falls within the purview of this Bill. Where this fails is that in an attempt to draft it in such a way as to catch a small number of wrongdoers on a very small portion of the spectrum, anybody who is engaged in the activities covered by this Bill is brought within the ambit of the provisions of this Bill. As such, as we intend to demonstrate, it is bad law. It is a ham-handed attempt to punish an extraordinarily small number since at the same time it exposes the whole gamut of people engaged in this business to its power. It is simply another example of over-kill which I hope to show to the hon. the Minister. As such we on these benches can neither accept, nor support this measure.

Before I go on to demonstrate in detail to the hon. the Minister where we find this particular legislation objectionable, I should like to move the following amendment—

1. (a) it gives unreasonably wide powers to the Minister and to the Secretary for Commerce which could lead to unjustifiable interference with legitimate business practice; and
2. (b) it runs counter to the rule of law and undermines the rights of individuals.”.

I want to refer to the particular clauses of the Bill in order to draw to the attention of the hon. the Minister what we find offensive. I should like to repeat to the hon. the Minister that we are not objecting to the small number of culprits or miscreants who will be affected by this Bill, but we are simply looking at how the legislation as it is drafted at the moment will affect anybody in a particular business, the vast majority of whom behave in a fair and reasonable manner. To start with clause 2, I want to say to the hon. the Minister that this is one of the few clauses which we consider to be an improvement on the previous draft Bill which was submitted during the last session. We are not going to quibble over this clause in view of the assurance given here that it remains within the discretion of the Minister to decide who the particular representatives are going to be who will serve on his Trade Practices Advisory Committee. We are in favour of the fact that the majority of the representatives will now broadly speaking represent the private sector. We assume that, as the hon. the Minister has indicated, that committee will be as broadly representative as possible of the various skills. We are also pleased to see that it is now essential for the Minister to get the recommendation of this committee before he can take formal steps. Having given recognition to the importance of the private sector’s representation on this Trade Practices Advisory Committee by stating that only three of its members shall be in the employ of the State, will the hon. the Minister in respect of clause 3(2), which states that “the quorum for and the procedure at any meeting of the committee shall be determined by the Minister”, be prepared to give us an assurance that as far as the determination of a quorum is concerned, never less than half the members present shall represent the private sector?

It is in clauses 5, 6 and 7 that we come to our fundamental objection to this Bill as drafted. Clause 5 simply deals with the delegation of powers by the secretary. Clause 6 gives the secretary the right to demand information from any person, but it does not qualify in any basic sense or in one particularly important sense, the type of information which may be required. It simply states that any person is under a legal obligation to produce that information. In this regard we would like to raise with the hon. the Minister the question of legal privilege, which is something to which we will return with regard to clause 7. In terms of clause 7, the inspectors, who may simply be appointed by the secretary, have extremely wide and far-ranging powers granted to them. They may enter any place they choose to at any time. They may inspect any document and they may seize and retain any article as they see fit. As the clause reads now, there are no qualifications at all. Here again I would like to raise the question of legal privilege such as exists between a lawyer and a client. Is such a legal privilege to be included? I hope the hon. the Minister will answer this question in his reply. The legal privilege is the one fundamental principle of law in South Africa which has not yet been broached. In terms of subsection (6) of the same clause these inspectors, having entered a place of their own choice, having inspected the goods and having seized goods, again with no qualification, are entirely exonerated from any liability. The State and the inspectors are not liable for any damages suffered as a result of the exercise of their power. There is no reason in our opinion why anyone should bear damages suffered without redress if that person is subsequently found to be not guilty of an offence. As the Bill stands, that is the situation.

There is the power of appeal.

The provision goes further: An inspector will not even be held responsible in the event of malice, negligence or a deliberate act which causes damage. There is no qualification whatsoever in respect of the powers of these inspectors. If that is not an infringement of the basic rule of law then, Mr. Speaker, I do not know what is.

Let us go on to clause 8. This clause states—

with certain exceptions. We on these benches are not at all happy with those qualifications. No information of any kind whatsoever should be disclosed other than that which may be required in terms of this Bill. Why is there the qualification in relation to the non-disclosure by any person of information in respect of any business? An inspector may come across information of a personal or other nature which has nothing to do with the business. He is not in any sense precluded from subsequently disclosing that information.

Now you are splitting hairs.

Let us look now at the provisions of clause 11(e). This paragraph deals with the supply or giving to a purchaser of any goods of a document or token entitling the holder thereof to receive a sum of money or goods. The intention here appears to be to permit a manufacturer of goods to make available other goods produced by him at a reduced price or at no cost by way of granting a discount in respect of another purchase. That appears to be the intention of the provision. If our interpretation is correct, will the hon. the Minister tell us why the exclusion refers only to goods produced exclusively by that manufacturer? When the hon. the Minister replies to this debate, will he tell us whether he is prepared to extend those provisions to cover a parent and subsidiary situation. In commercial activity it is appropriate to consider groups rather than individual companies.

When we come to the end of clause 11 —and this touches on what was said by the hon. member for Pietermaritzburg South —would the hon. the Minister be prepared to add a further exception to provide that these provisions shall not be so construed as to prohibit charitable, educational and ecclesiastical institutions which employ devices very similar to trade coupons for fund-raising purposes? The hon. the Minister would have no difficulty in making such provision and enforcing it so that such institutions would not be affected.

We have another fundamental objection in regard to clause 12(2). This provision appears in the Bill in a number of places. It states—

There is no problem up to there, but then it goes on to say—

Can the hon. the Minister give us examples to justify the granting to him of the power or the ability to discriminate between areas, businesses or persons? We would have thought that the thrust of this provision would be directed at the actual trade practice of making misleading statements. In the law as it stands, if two businesses follow the same misleading practices, the Minister has the power to prohibit one but not the other. I hope that the hon. the Minister will agree with us that that is the case.

Let me say to the hon. the Minister that we welcome clause 14 subject to the solution or satisfaction of the objection that we have just raised which recurs in subsection (2) of this clause. We think that the disclosure of the minimum amount of information in an advertisement is a very good thing. This is something which is overdue in South Africa. There is however our residual objection in relation to subsection (2) in this connection.

As far as clause 16 is concerned, I should like the hon. the Minister to consider the provisions of clause 16(l)(a)(ii). This subparagraph states—

What we would like to ask the hon. the Minister is whether he will consider making provision for a minimum, period as a practical measure. The period that we have in mind is four weeks, so that people will have that period in which to lodge their objections or to make representations.

Clause 16(3) provides that after consideration of any recommendation referred to in subsection (2), the Minister may publish the notice in question in the Gazette We have already mentioned that the Minister can only take the formal steps after a recommendation. If that is in fact so— and this deals with the provisional notice referred to in earlier clauses—would the Minister be prepared to consider amending that clause to read that he will either publish a final notice or that he will publish a notice withdrawing the provisional notice, because that would cover both and remove any uncertainty? When we come to clauses 17 and 18, in conjunction with the other powers given to the Minister and to the secretary, may we just express our concern that the range of these powers, particularly in the relation to provisional notices, may well in extreme circumstances put a small company out of business. These powers could at least during that period cause severe financial damage to such a business. Sir, in general we on these benches find the procedures very far-reaching. Very wide powers of discretion are given to the Minister or to the secretary, and the exercise of these powers could have a very serious effect upon the conduct or the profitability of a business, and therefore we would strongly recommend—and we intend to propose an amendment to this effect—that there should be some provision for an appeal to the courts, which is not contained in this legislation.

Clause 22 deals with the vexed and thorny problem of the liability of executives, managers or employees for certain acts of commission or omission. Sir, we find this particular clause extremely difficult to accept because it is very far-reaching. Commercial reality in large businesses really dictates that if a person joins a large corporation he normally has to fill in a form which covers a number of things. The form may say, for example, that he cannot deal in the shares of that company without advising the board and that he accepts various other conditions. If in that form the management has expressly forbidden certain things, then I would like to say to the hon. the Minister that the inference should be that the management had taken every reasonable step, unless the contrary is proved, whereas this clause places the onus of proof on the management.

Sir, as I have said, if and when this Bill comes to the Committee Stage we will be proposing a number of amendments. This Bill, in a very direct way, affects the rights of an individual both under the law and to conduct a business without interference when he is doing it in a fair and ethical way. Because the powers granted in this Bill go far beyond what is required—obviously the reply from that side of the House will be that there is no intention to use these powers—we on these benches can neither accept nor support this Bill.

Mr. Speaker, there are many things which the hon. member for Johannesburg North said and dealt with with which we agree. Some of them I will deal with in the course of what I want to say, but I want to point out in the first place that the history of our particular law in South Africa shows a continuous trend of protective action towards those who for a variety of reasons have been unable to fend for themselves. This is why in the earliest of times protection was afforded already to minors, to women acting under their husbands’ influence, and generally to persons suffering from some incapacity. With the development of commerce, it became necessary to protect the ordinary individual against misrepresentation, against concealment, against defective goods, etc. With modern advertising techniques the problem has become more serious, since even the most sophisticated consumer is often taken in by skilfully prepared sales patter, prepared by trained psychologists, and by the sharp practices of cunning operators. Exploitation of the consumer is not unique to any one particular country but flourishes particularly where there are undeveloped and inadequately educated people. The days of buying land for a handful of beads might seem to be past, but even highly intelligent people are often taken in by deceitful techniques. But in having this approach we need to be careful that in seeking to protect the consumer, we do not inhibit competition nor stifle initiative, nor tilt the scale too far against the producer or the seller, and that all that legislation should in fact do is to level the scale to let all operate on an equal footing. Now, there has been quite a lot of legislation for the protection of consumers which has not been mentioned in the course of this debate, such matters as the Hire Purchase Act, the Limitation and Disclosure of Finance Charges Act, the price control legislation, the monopolies legislation, etc. In this particular piece of legislation before us we are really dealing with three things: Firstly, to protect the people against deceitful advertisements; secondly to deal with certain undesirable trade practices and, thirdly, to re-enact the trade coupons legislation. I think the legislation in fact is incorrectly named the Trade Practices Bill, and would be more correct if called a Consumers’ Protection Bill, because I think this is really the function which it seeks to fulfil. I should like to deal individually with all three broad principles, and I should like to deal, firstly, with trade coupons because the people even to my right—and I want to make it quite clear, to my right—have been mainly preoccupied with trade coupons.

Sir, the prohibition against trade coupons is not a new principle, but is a re-enactment of the 1935 legislation, in some respects wider and in others more elastic than the former legislation. There can be two views in respect of trade coupons. If we take, for example, the best known trade coupon, the trading stamp, it is to be found in many countries of the world. But what is interesting is that in the countries where trade coupons are permitted, they initially started off with a tremendous volume of use and then gradually became less and less attractive, and in the main the result has been that it is the cash price and the quality of the goods that form the real attraction. It is only when trade coupons are an added attraction, as for example in some countries where petrol of the same quality and price is sold, that they become of value because then there is something to be obtained in addition to price and value. A trade coupon is, in fact, merely a form of advertisement and one needs to ask what sort of advertisement or incentive is the most desirable. Is an advertisement in the visual form of a pamphlet, newspaper, film, etc., the most desirable form of advertisement? Is it perhaps more desirable to have sound advertisements for example in radio, or advertisements by cash discount with coupons offering a discount if bought? Is it perhaps more desirable to get a discount at the point of sale or by the collection of coupons? Is it, in fact, more desirable to advertise by means of samples so as to encourage people to buy once they have tried the product, or is it better to do so by means of incentives in order to get them to buy a particular product by associating it with another product? The present legislation has as its aim to permit discounts, to allow tokens in order to get discounts and to receive associated products. In that one agrees with the legislation. However, I think it fails to allow the tokens to be given in advance in order to obtain a discount and it also fails to allow for tokens in order to get associated products in a reasonable fashion. I shall deal with that in some detail in a moment.

May I point out some of the problems? In terms of clause 11(b) of the Bill, an offer to give a discount is permitted, but clause 11(c) permits the supply or the giving of tokens only to purchasers or users of services and not to prospective purchasers or the public at large. This is what appears to prevent the giving of tokens in advance of a purchase in order to obtain a discount. This is one of the clauses which require amendment.

I may say that when the Bill was originally read a First Time last year, I prepared some 30-odd amendments when I was involved with the party on my right, and I still intend moving those amendments.

No, the party in front of you.

I say the party on my right, politically and otherwise.

But we are far ahead of you.

What I do hope, if they are so far ahead of me, is that they will still support the amendments which I drafted at the time, copies of which they retained. This is one of them. [Interjections.] Let us see what happens when they move the amendments; let us see whether they plagiarize the amendments as well as everything else.

On a point of order, Mr. Speaker, is it in order for the hon. member to refer to this side of the House as plagiarists?

Order! The hon. member for Yeoville must withdraw that allegation.

Mr. Speaker, if you instruct me to do so, I withdraw it. The words which I used … [Interjections.] May I say which words I used? They were not the words which the hon. member ascribed to me. What I said was that we shall wait to see whether they will plagiarize the amendments, and if you think that is wrong, I shall withdraw it.

You also said: “As they do everything else”.

As they do everything else. That is correct.

Mr. Speaker, I still maintain that he referred to this side of the House as being plagiarists.

Order! I think the hon. member should withdraw that word.

Mr. Speaker, I withdraw the word “plagiarize”, as instructed. I shall wait to see whether they will move my amendments in their names. [Interjections.]

In terms of clause 11(e) tokens are permitted in order to receive either money or goods, provided the goods have been produced or manufactured by particular producers or manufacturers and provided the goods are of the same kind as those purchased and are substantially of the same material. This overlooks the fact that different companies within the same group might manufacture not only different articles but different parts of one and the same article. It also ignores companies which import, assemble or distribute but do not manufacture or produce. This again appears to require amendment.

The definitions contained in clause 1, as indicated by the hon. member for Constantia, apply to the provisions of clauses 10 to 12. For this reason, and for this reason alone, the official Opposition seeks to reject the Second Reading of this Bill. I want to say here and now that to my mind those are not adequate reasons to reject the Second Reading of the Bill.

You did not listen, Harry.

I not only listened, I read your amendment. There are a number of problems concerning the definitions. I shall refer to them later. The peculiar problems relating to trade coupons, however, apply to the terms “benefit”, “trade coupon” and “sell”. The first two create no serious problem, but the word “sell” creates a problem as it includes in its definition the term “advertise”. This means that in terms of clause 10(a) a trade coupon may not be given in connection with an advertisement as defined. The argument is that this prevents the giving away of samples, as the hon. member for Walmer has said. It prevents radio shows in the form of advertisements in which prizes are given away. That is the argument which was advanced by the official Opposition. In my view the argument that this prevents the giving away of samples, is incorrect. It arises by virtue of a failure to distinguish adequately between a benefit as defined in clause l(ii), which may be prohibited by the hon. Minister in terms of clause 12 and a trade coupon as defined in clause l(xiv) which is subject to absolute provisions pursuant to clause 10, unless exempted in terms of clause 11. A “trade coupon” is anything that entitles the holder to receive a benefit or to participate in a competition for a benefit. It is not the benefit itself. To give a sample therefore, is not to give something which entitles you to receive a benefit or to compete for it. It is a benefit in itself. However, to give a token to get a free sample would in fact be prevented. For example to participate in a radio programme without tokens and to receive a prize in a game of skill, will not be a trade coupon and will not be prohibited. However, to receive a token in such a programme which entitles the participant to receive a benefit or to compete for a benefit, would be a trade coupon. Competitions on the radio or on television, when it comes, which involve a degree of skill and which do not involve the handing over of something, to enter or compete, are not hit by these provisions. I believe that in respect of giving tokens to enable people to enter or to receive this, I believe that there should be an amendment.

There should also be amendments in order to allow consumers to purchase goods at a discount and to get tokens in respect of them and there should be tokens to allow them to send for samples. There should also be tokens to allow them participation in competitions as advertising activity without payment by an entrant. I believe that all this can be achieved by amendments and does not in itself justify the rejection of this entire Bill. There are other, however, matters which I believe justify the rejection of this Bill and those are infringements on the rule of law. To that end, I too want to move an amendment:

I want to motivate this by saying that one can observe all three principles contained in this legislation without infringing the rule of law. If there are to be inroads, into the accepted principles of the law of contract, the fundamental rights should, however, continue to be observed.

Let me examine the inroads into the rule of law. Firstly, clause 6. This enables the Secretary to get any information relating to any business. There is no protection against self-incrimination while we believe that there should be no obligation to incriminate and protection should, therefore, be incorporated here. Secondly, in terms of clause 7, the inspectors can, without notice or even a suspicion of an offence and without a specific warrant, enter, seize and open. There should, surely, be a warrant for a specific business which is to be examined and for specific offences which are to be investigated. Businessmen should not have their businesses ruined by the seizure of goods for offences which may never be proved. On top of it all, there is no compensation for damages, even if innocent or even if the inspector has acted negligently. The hon. the Minister will recollect the debate which has recently taken place in this House on the Criminal Procedure Amendment Bill. The provisions in regard to search and seizure in this piece of legislation are more Draconian in many respects.

The third instance is that the hon. Minister is being given power to discriminate between businesses and even persons, in terms of clause 12(2) and clause 17(3) for example. One cannot have one law for one person and another law for another person or one law for one business and another law for another business. Law should apply to all and should not differentiate between person and person. The fourth is a form of censorship, which I believe is unnecessary, and which is introduced in terms of clause 14 on which. I will enlarge upon shortly. The fifth instance is that in some cases decisions may be made without giving the effected persons a hearing and certainly with no right to cross-examine or to give and lead evidence. For example, under clause 17 there is to be no hearing at all while there is no right to cross-examine in terms of clause 16. The sixth point in regard to the breach of the rule of law is that there is no right of appeal, against ministerial decisions to a court of law. Clause 16 should, in our opinion, be amended to allow for this. The seventh point is that there is a presumption of guilt against the owner of a business in respect of the actions of his employees and he cannot rebut this by proving that he gave instructions to his employees not to carry out the said actions. Here we already have seven infringements of the rule of law which are unnecessary and unwarranted and which should be removed from this legislation if it is to be passed.

I now want to deal with prohibition against advertisements which are misleading or false. I want to make special reference to clauses 9 and 13. The common law already provides civil remedies for misrepresentation and penalizes such misrepresentations if it is made with knowledge of a falsity or is a fraud. There can be no objection to legislation against false advertisements. The intention, no doubt, is to achieve clarity about the law and also to enable members of the public to obtain relief from the criminal courts without expense. I want to make a number of points here. Firstly, it is not entirely clear from the provisions of clause 21(1) whether it is the intention to create a new civil remedy as well. In our view this should not be the case and we shall move an amendment accordingly. For a reason which is very difficult to understand the clause on page 16 of the Bill has the following provision—

1. (a) is conferred upon him by this Act;
   or
2. (b) is conferred upon him by any provision of any other law, if such waiver will derogate from any provision of this Act;

One cannot waive the provisions of the criminal law. Presumably then, there must be a reason why a waiver is included here. I think we need to be told whether, in fact, the hon. the Minister has in mind that there should be civil remedies flowing from this particular provision.

The second aspect to which I should like to refer is the fact that a major advertising medium is the radio. In due course, I have no doubt, television will also become one. It is therefore surprising that these media are not expressly mentioned in the definition of “advertisement”, in clause 1(i). Although these media are referred to in broad terms in clause 1(i)(c), we feel that they should be expressly mentioned.

Thirdly, in our modern business world there is not only fraud to induce sales and services. There is also fraud in respect of leasing and hiring. These provisions are not included in the reference to “consumers” in clause 1(v), nor under the term “sell” in clause 1(xi). We believe that these media should be included.