Mr. Chairman, I rise on a point of personal explanation to clear up a misunderstanding that may have arisen as a result of an altercation between the hon. member for East London City and myself yesterday afternoon across the floor of the House. In his speech, the hon. member quoted me as having said in an earlier speech more or less the following—

By way of interjection I denied that I had said anything of the sort, a denial by which I still stand. Unfortunately, my interjected denial evoked interjections from all sides of the House and in the resultant noise I did not hear the hon. member continue, according to his Hansard, with the following words attributed to me—

I interjected a second and a third time that I had said nothing of the sort. After having perused the hon. member’s Hansard, I believe that my second and third denial may conceivably be construed in such a way that I also had denied having used words to the effect that those who took part in that war Should talk in softer tones of their part in it. This is not the case. I believe that these words are a fair reflection of what I had actually said in my earlier speech.

I wish to assure the Committee that it was not my intention or purpose to deny the second part of the statement attributed to me by the hon. member. Had his remarks been audible to me I would certainly not have reiterated my denial a second and a third time. My denial therefore referred to the first part of his remarks and not to the second part made after my first interjection. I wish to apologize for any embarrassment caused by this unfortunate misunderstanding.

Mr. Chairman, when the debate was adjourned last evening, the hon. member for Parys had for some ten minutes been dealing with the need for discipline in our Armed Forces. He had stressed the fact that they play a key role and that what was necessary was an esprit de corps as well as hitting power. He also said that they played a key role as far as race relations were concerned.

I hope that you will allow me today to pay tribute to a Citizen Force battalion which will be celebrating its 90th anniversary tomorrow. Its record shows that all the factors that are called for in the Defence Force have been present over the years as far as this Active Citizen Force unit is concerned. I refer to the Cape Town Highlanders who tomorrow, 24 April, will be celebrating their 90th anniversary. The year 1885 was the year in which this House first assembled in these buildings and the year in which the Cape railway first reached Kimberley. It was also in that year that the Cape Town Highlanders were recognized as a battalion. They have been a remarkable unit because they have epitomized not only a regard for the highest Scottish traditions but also a regiment that has been served faithfully by South Africans of both language groups. It has always been a puzzle to me how so many “Vans”—Van der Menves, Van Hoogstratens and so forth —have been able to serve with so many Murrays, McLachlans and McGregors in harmony in the fighting forces. I can only assume that the typical Scot in his kilt in the early days could not resist the pretty faces of the “Afrikaanse blommetjies” and equally, that the South African girls could not resist the appeal of the Scottish infantryman in his kilt. In saying this I do not suggest, as was suggested earlier, that anything should be looked for under the blanket!

I should like to quote a reference in the Cape Town Highlanders Record made by the editor, Mr. Orpen, who said—

I think too that this hon. House should listen to the words of Lt.-Gen. C. A. Fraser, General Officer Commanding the Joint Combat Forces in 1970, who wrote of this regiment—

On behalf of the Cape Town Highlanders I also want to pay tribute to the hon. Minister for the assistance he gave them in ensuring that they will continue to wear the traditional kilt on ceremonial occasions. The last Budget made provision for some R10 000, which they have already received, and this year I understand that they will be granted R6 000, for which they are deeply grateful.

I also want to pay tribute to the Navy for the part it has played in ensuring that our sporting regattas take place faultlessly and successfully in our off-shore waters. I want to refer particularly to the Cape-to-Rio Race which, has already been held on two occasions and which will again be held starting on 10 January of next year. All of us in this House are aware that without the sea there would have been no South, Africa. Some 25 000 ships pass our coastline each year of which more than 12 000 call in at our ports. On behalf of the sportsmen concerned I want to pay a great tribute to the Navy for having made the guard-ship available, and for making it available, to ensure that this ocean-racing classic which brings sportsmen from all over the world to our coast, the Cape-to-Rio Race, will continue. It is a tribute that cannot be overstressed.

I think it is only fitting that I should pay tribute to our new submariners in our naval force. Only recently members of the defence groups in this House had the honour of being escorted through the naval establishment at Simonstown. We realized there that here we have a new breed of South Africans, South Africans who have become the watchdog of our seas, who display an incredible heroism, an incredible dedication to their country. These are men who suffer incredible hardships and tremendous loneliness in the coastal patrols that they undertake. It is gratifying, Sir, to see that there is to be added to the fleet of submarines an additional number which will make them a more effective fighting force. For this we can only express our gratitude, and I hope that all South Africans will remember that these men are South Africans in the truest tradition.

Then I also want to make reference to Paratus, the journal of the forces to which I referred last year. This journal continues to play a tremendously important role in maintaining the esprit de corps of all South Africans in the forces. I want to express the hope that this journal will be distributed much more widely to all our universities, to the parents of our serving members, to our colleges and to our youth organizations. When one follows the articles in this journal, one really feels proud to be a South African and to be able to serve in the forces.

Sir, I come now to the question of civil defence. The vote this year has been increased from R561 000 to R713 000 approximately. I compliment the Minister on having made additional provision for further civilian defences. Sir, never before in the long and colourful history of our country has there been a more pressing and urgent need for our civilian defences to be maintained up to the hilt. When we reflect on the capitulation of the Portuguese in Mozambique and Angola, when we bear in mind the pressures upon the civilians living in the northern territories of Rhodesia, and when we learn of the anguish of those who were involved in the withdrawals from South Vietnam and Cambodia, then we may not and must not be found wanting in our own state of civilian preparedness. Sir, military aspects apart, there have been numerous occasions during recent years when the need for civilian preparedness has been only too manifest. We have experienced many national disasters such as earthquakes, floods, train and ship disasters, droughts, civil uprisings, agricultural pests such as locusts and foot and mouth disease, and still fresh in our memory is the recent disaster at Sasol. I believe, Sir, that it is necessary for all South Africans to appreciate what is implied in civil defence. I quote briefly the aims as set out in section 2(1) of the Civil Defence Act of 1966—

It then goes on to set out the Minister’s powers. Sir, I appeal to the hon. the Minister to give this House the fullest possible information in order that not only we tout all local authorities may increase their present state of preparedness. I realize that the responsibility for civil defence rests mainly on local authorities. It is mainly the responsibility of civilian authorities in liaison with those officers at defence headquarters to whom various tasks in this connection are assigned and, of course, in liaison with the South African Police. I believe that our local commando system must be closely integrated with civilian defence as well. But, Sir, I believe that the operative word in this case is preparedness. When one thinks of the national disasters that have taken place merely through a lapse in preparedness on the part of those responsible … [Time expired.]

Mr. Chairman, in the course of the debates on Defence Affairs that have been conducted this session, there were certain things that I found striking. I am sorry the hon. member for Houghton is not present this afternoon. During the Second Reading debate she blatantly insisted that expenditure on Defence should rather have been devoted to housing and the building of schools, as usual for the non-White section of the population. I should like to ask her the question whether this is her advice to Israel, too, because Israel is a case analagous to South Africa. I should like her to reply to that. The drift of a certain part of the speech by the hon. member for Yeoville was almost the same. He adopted the standpoint that by means of détente, we in South Africa should create a situation in which it would not be necessary to incur further Defence expenditure. It seems to me that these people suffer from a total lack of realism, because do they learn nothing from history? History teaches us time and again that in every era, on every continent, every civilization worth mentioning—and South Africa is the only civilization worth mentioning on the continent of Africa—has always been bolstered and supported by military power. This in spite of the fact that the National Party’s apartheid policy was not followed in those countries or in those civilizations. As I say, history repeatedly teaches us this lesson. But now they want to picture to themselves a Utopian situation, a situation in Africa in which the white lamb and the black and the red lion will live together in peace. To use the Prime Minister’s idiom, it is an idea too ridiculous to speculate about. I want to leave it at that.

Today I want to discuss a factor in the S.A. Defence Force which, until fairly recently, was probably very much neglected. I want to discuss the place of women in the S.A. Defence Force. This factor definitely deserves more attention. In his speech in this House yesterday the hon. the Minister referred to this in passing and I want to say here and now that I am grateful that he has taken upon himself the task of rectifying this situation. It has worried me for a long time that in countries like China and Russia with their teeming millions, women should be incorporated in their Defence Forces, whereas in South Africa, with its critical shortage of White manpower, literally nothing was done in this regard in the past. Israel, which, as I have already said, is an analagous case, apparently makes use of women in its Defence Force on a large scale. Already, through the centuries and throughout our entire history, South African women have proved that they are prepared to play and are capable of playing an active part in every phase of the evolution of South Africa. At the time when we were pioneers they were often, without having any choice in the matter, actively involved in military defence actions. I think that we could even say that on occasion their military involvement was possibly decisive in preventing the evolution of South Africa from being brought to a sudden and tragic end. Thereafter we had a period in which the women provided the men of South Africa with moral support only. Even in the darkest hours of our history the South African woman has been the one who has inspired the man to fight through to the end for what was his and for his cause. But there was little question of actual military involvement. During World War I, for the first time, women were actually incorporated in the Defence Force again. During this period they were employed exclusively as nurses. But only a small number of women—382—were employed in the Defence Force. During World War II the number of nurses rose to 4 000, while 21 000 women were employed permanently by the Defence Force in other capacities and 65 000 women in temporary capacities performed valuable replacement service in order to free men for active service. After the Second World War our nurses remained in uniform, whereas only a small number of women remained in the Defence Force in civil capacities as clerks and typists. Here again I want to address a special word of thanks to the hon. the Minister for his wise decision to involve women more actively in the S.A. Defence Force. It is necessary for this to be done now, before a war obliges us to take such a step. Owing to this wise step the place of the woman in the S.A. Defence Force is being decided and prepared in an orderly fashion. At the beginning of 1971 the first intake of women took place at the Civil Defence College at George. The aim of the course is the development of their leadership potential, and consequently they undergo a rigorous process of selection. In particular, they are taught to provide leadership and to organize in emergency situations, to drive and maintain vehicles and to be able to do everything in regard to fire prevention and firefighting and a great many other tasks as well. Consequently, her background training makes her eminently suitable to be considered for inclusion in the S.A. Defence Force. Those who do not join the S.A. Defence Force can, of course, play a particularly valuable role in times of emergency in the civil defence services of the communities they belong to. They can play a pioneering role in regard to civil defence—there need be no doubt about that —because they have the necessary training and background. The first course ended at the end of 1971 and was completed by 132 women. Nowadays, graduated and professional women are taken directly into the Defence Force and undergo a shortened orientation course of six weeks at the various centres where women are trained for the various sections of the Defence Force.

At this stage there are already 325 female officers and 571 female other ranks in the Defence Force. A conservative estimate—I say “conservative” because the standpoint is adopted that in conditions of active warfare, women must never move within sight of the enemy—has indicated that the South African Defence Force can employ 4 500 women very profitably in present circumstances, 312 of them in professional posts. These figures constitute a statistically significant percentage but it would not be advisable to mention the percentage. I should like to mention as a matter of interest the tasks performed by the women. In the capacity of officer they serve as administrative officers, supply officers, training officers, catering officers—who could do that better than a woman?—as signal officers, flight control officers and as tactical data operators and in nursing capacities. The other ranks serve as clerks, supply clerks, telecommunication operators, apprentice draughtswomen, information clerks, sport and physical training clerks, programmers, nurses and drivers of vehicles. I want to congratulate and thank the hon. the Minister and the Government once again for the fact that our daughters, too, are already being involved in semi-military activities at school in a cadet capacity. This can only have the effect of making them more useful to the S.A. Defence Force at an early stage and this, although we do not hope so, may be very necessary. I want to ask the hon. the Minister to continue along these lines.

It is my considered opinion that the South African woman, who is now being well trained and prepared for her task, will and can in the future, as in the far distant past, play a decisive role in the securing and defence of our fatherland, if necessary.

Mr. Chairman, the hon. member for Sasolburg made an interesting speech on the role the women of South Africa is at present playing in the South African Defence Force. Furthermore, he stretched in an interesting manner the role women played in the past, and he also indicated what he had in mind for the future. I shall not go so far as to say that there should be a national service system for women, but I think the hon. Minister may consider the possibility of a voluntary national service for carefully selected women in South Africa. I think women should play a much more important role in the defence of their country.

†The hon. member for Durban Point, the Opposition spokesman on defence, made what I would call three very valid points. He has said that it is necessary as an antidote for attacks on South Africa and criticism of South Africa that we should have an outward-moving foreign policy as opposed, obviously, to an isolationist policy. Then he said that he believes it is essential that South Africa should enjoy the loyalty of all people living within the borders of the Republic as opposed to separate loyalties—an argument which we have heard often enough in this House and on which I am not going to elaborate this afternoon. It is our standpoint that a common loyalty is better than separate, individual loyalties. Then, in the third leg of his argument he made the point that in order to discourage any possible aggression that military preparedness of the Defence Force is necessary as opposed to being caught napping.

This afternoon I want to deal briefly with the question of military preparedness. As I see the question of military prepared ness, it means in our particular case the existence of a standing army, navy and air force. By world standards our Defence Force is limited in numbers and is, admittedly, small, but it can be efficient, can be well-run and it can enjoy excellent conditions of service. I believe that the conditions of service in all three the arms of our Defence Force have improved over the last few years. The Republic is renowned for having resourceful and determined leaders and I believe that the top echelons of our Defence Force today show just the same resourceful and determined leadership as we have had in the past.

It is of course a necessity that our standing Defence Force should be adequately armed. For it to be adequately armed, we have to be able to get arms from overseas and we have to establish an armaments factory of our own which can provide us with arms for internal use. Thus then, the standing Defence Force, is the backbone of our Defence Force but it is also the basis for the training of our army in mobilization, the people in mobilization, the people who are undergoing national service. The national serviceman today is going to be the army of tomorrow. In the last war South Africa was caught unprepared for war because of many reasons, on which it is not necessary to elaborate. South Africa came on to a war-time basis at very short notice indeed. Today this is no longer the case. Our soldiers of the future have been trained for a number of years in national service. Therefore I say that national service is a mobilization of our nation in stages. What concerns me most is the way it is being operated. Young people are called up to do national service and they must be willing and enthusiastic participants in national service. They must not be sullen and they must not be reluctant to do the obligation of national service. For this to be the case, I think it is necessary, first of all, that they should be placed in the right unit where there talents can be employed most usefully. Then it is also necessary that they should be kept busy at all times during their national service because as we all know idle hands can lead to all types of things.

The devil finds work for idle hands.

That is right. They should be kept busy. Above all they must never be lacking a spirit of patriotic duty.

It is this particular point that I want to bring to the attention of the hon. the Minister. As a result of policies which have been pursued for a long period of time in South Africa, our young men when they are called up to do national service come from different backgrounds, from separate schools and from different religious and social environments. In fact, the first time that they come together as South Africans is when they are called upon to do national service at the age of 18, 19 or 20 years. They are thrown together in circumstances which constitute traumatic experiences for many of them. Others emerge from these experiences as enriched South Africans. It nevertheless is a fact that this is the first time that these young South Africans from both language groups come together and meet each other as South Africans. As I have said, it is a traumatic experience for many, because some of them fail the test and some of them come out of the national service programme as embittered South Africans, embittered towards South Africans of another language group. There are others who are enriched by this experience and these become broader-minded and more mature South Africans.

I maintain that this system is employed too late. The hon. the Minister has to give consideration to bringing South Africans together at an earlier stage than the national service stage. I am one of those who regret to a large extent the falling into disuse of the cadet system, I think that if further attention can be given—particularly during the high school years—to bringing South Africans together in preparation for the national service which they will have to do together at a later stage, it will be in the interest of all of us in South Africa. I think the period of getting to know each other should start at least at the beginning of high school. Nevertheless, the national service system is better late than never.

It is a necessary experience for every South African and that is why I particularly want to refer the hon. the Minister to the question of deferment for university students. I believe all South Africans should do their national service as soon as they leave school and before they go to university. What arguments are advanced in favour of deferment for university students? First of all, the argument is advanced that there is a shortage of doctors, engineers and other professional classes. I do not know whether that is altogether an argument that holds water, but I shall deal with it in a minute. A second argument that is used is that if you do not defer national service in respect of some of the students, you will have an enormous number of what is known as the “leadership group” in the January intake and not enough in the middle of the year. I believe that that is not a valid argument. If the Minister and the university authorities co-operate in this matter, there is no reason why there should not be two intakes of students so that a student can study for six months and be taken in in the July intake and that he can be given credit when he has completed his national service of, say, 12 months, 18 months or 24 months, for the six months he has studied. Co-operation by the universities is, I think, very important and I am not by any means satisfied that there is the co-operation that there should be between the universities in South Africa and the Defence Force. There are thousands of young people in our universities at the moment who would like to switch over to medicine or engineering who, because they did not get first-class passes or a couple of distinctions are considered by the university authorities as not suitable as engineers or doctors. My experience, at any rate, is that most of the general practitioners I have had anything to do with, have been people who had second-class passes at school. Yet they make the best general practitioners. However, the tendency seems to be that unless one gets a first-class pass with a couple of A’s, one is not considered a fit and proper person to become a doctor. There is another reason why I am against deferment for university students. I think the hon. the Minister would be doing the students concerned a favour if he were to insist that they should do their military service before going to university. The reason I want to advance for this argument is that, having done their military service, they would be more adult, mature and responsible people, they would be more worldly-wise and they would be far better South Africans than many of them are at universities at the moment. We would then probably not have the same difficulty and trouble that we have been experiencing at universities over a period of years.

There is another category of people who, I believe, must not be forgotten. I refer to the people who did not have the opportunity of doing their national service, people who were not involved in the national service scheme at all because of their age.

Somehow or other they must be brought in to play their part in the defence of South Africa. Reference has been made to the role of women and I support any suggestion whereby a limited national service scheme can be put into operation in terms of which women can be utilized at least in auxiliary military services and paramilitary services. I think there are also others in South Africa at the moment who have had experience of guerilla warfare on our borders and who have come to live in South Africa permanently. I would like the hon. the Minister to give some consideration to making use of their experience and talents, perhaps in a special battalion. There is a last category of people whom I would like to bring to the attention of the hon. the Minister. I refer to the children of immigrants. The stories one hears of the number of immigrants in South Africa who never register as South African citizens and whose children for some reason or other appear, according to the stories, to escape the net of military service, are alarming. I do not believe that that is in the interest of either our country or the children concerned. [Time expired.]

Mr. Chairman, it is a pleasure to hear the hon. member for Simonstown speaking, particularly because he comes up with positive ideas which one would like to support. What he had to say concerning the cadet system and the training of young men before they undergo their university training are decidedly things which one can support. This only emphasizes once again the very strange situation one finds in the United Party today. Yesterday, for example, we had the hon. member for Durban Point who endorses the defence expenditure. This, of course, is in glaring contrast to the standpoint of the hon. member for Hillbrow. That hon. member made a speech in which he spoke about 100 tractors instead of one tank, and it cannot reason away the fact that he does not agree with, but objects to, the expenditure of these funds on defence. This kind of public behaviour is reprehensible. In my opinion it can be described as political opportunism. We have also heard the standpoints of the Progressive Party and the Reform Party. The Progressive Party has not told us again in this debate how they feel about the amount being spent on defence. During the Second Reading debate, however, the hon. member for Johannesburg North and the hon. member for Houghton very clearly intimated that they did not agree with the expenditure of this sum.

Yesterday the hon. member for Rondebosch started an argument with us and was very angry because we were supposedly bringing politics into the Defence Force. However, what has the hon. member and his party done but made a political football of the Defence Force and dragged in the Defence Force by campaigning against the amount we want to spend on the defence of our country? I was given the impression that the hon. member was angry because in that lecture to which he referred, the policy of his party was put on a par with that of the United Party. I am being quite honest when I say that I, too, would have been a little angry if that had happened to my party’s policy! The objections—overt or covert—raised against this Defence budget by members of the Opposition parties really fill one with disapproval. And this from people who live in this country and who, we hope and trust, love their father-land. One is really dumbfounded that in these times they can be so naïve as to think that they will be spared when this country is taken over and controlled by Communism. Have hon. members not learned what has occurred in the world in the past? Do they not see what is going on in Vietnam or what has happened in Cambodia? And then they are the people who talk about realities and accuse us of not taking account of realities. In the meantime they live happily in a condition of security ensured by this Government’s defence policy in this country. They batten on the fat of our country and raise a hue and cry against armament while enjoying its fruits. I do not think they realize what they are doing. The armaments we are manufacturing are surely used by Black and Brown people, too, and are to their benefit as well. For example I call to mind the many employment opportunities created for these people in this way. Surely a Black and a Brown soldier fighting for our fatherland alongside the White soldier will be filled with gratitude for a good weapon in his hand. I do not think hon. members will complain about that. I want to ask whether hon. members are still opposed to this defence expenditure. I think we owe a debt of thanks to a Government and a Minister that, notwithstanding this unjustified opposition, continue to do what is in the best interests of South Africa and all its people. Over the years we have clearly seen in the White Papers on Defence that the hon. the Minister and his department are keeping pace with the requirements of the S.A. Defence Force. To reach the goal of full preparedness, ample provision has been made over the years for the best armament we can afford. Technologically we have kept abreast of the rest of the world. We can even say with pride that in some respects we are ahead of the world today.

All these things are very reassuring. However it is true that in the times we are living in today, dangerous times, the question of the extent to which South Africa is prepared for action, is a vital one and deserves closer examination. The question can certainly be asked whether, for example, we are able to deal with an aggressor and put him to flight. We are a small country with limited capabilities. In the same context one could probably ask whether we would be capable of stopping an attacker rapidly and effectively, particularly with a view to the great distances involved and our country’s extremely long borders. I realize that this will probably depend on the type of onslaught against South, Africa, viz. whether it is conventional, unconventional or both simultaneously. In the event of a simultaneous type of attack, very great demands will be made on our Defence Force since we should then have to cope simultaneously with both an onslaught from beyond our borders, and revolutionary warfare in the interior. As far as conventional attack is concerned, we have the good example of the so-called Yom Kippur war in the Middle East in October 1973. The facts are known to us, but in retrospect it is perhaps as well for us to dwell on them just for a moment and for us to consider whether there are certain lessons we could learn from them. After the event it was very clear to us that Israel had been caught entirely unprepared and that they had to pay for this very heavily in human life and material. We see that the Israelis possessed all the information concerning the imminent attack but that they simply failed to react to it. The principal reason for this is the fact that they interpreted it entirely incorrectly. They thought it was just another exercise of some kind taking place. This was owing to the fact that their information service was completely overloaded with details which they were gathering and which they failed to evaluate correctly in time. The sources of information had expanded rapidly through, the years, whereas the apparati to process it has not kept pace with this development. A further and vital reason is the complacency of the Israelis. To be specific, they believed that their air force and tank force were indestructible. They continued to believe it until the Russian antitank weapons and anti-aircraft missiles shot them to pieces.

What lessons can we learn from this? In the first place, we can say that the information gathered by our really outstanding sources of information must be evaluated as quickly as possible and thoroughly and submitted to those people in our Defence Force who must take the decision. In the second place, our people must never underestimate the enemy we are dealing with. It does not matter who it is; we must never disparage the enemy. At present we have entered the era of the counteractive weapons. Portable missiles are capable of shooting the best and fastest aircraft out of the air and can also make short work of the largest tanks. This fact is to the benefit of South Africa since basically our Defence Force is a defensive one. However, there is a further lesson to be learned. In the face of the imminent defeat of the Israelis, the role of the man behind the weapon, of the officer and the enlisted man was decisive. They were able to convert imminent defeat into victory even though the price was very high. [Time expired.]

Mr. Chairman, I do not intend following the hon. member for Verwoerdburg, who has endeavoured to make a responsible contribution to this debate. My time is limited. I wish to begin by thanking the Defence Force for making it possible for members of this House to attend the military tattoos which were held at the Goodwood Showgrounds as part of the Cape Town Festival. I also wish to thank them for the recent visit to Simonstown by the joint defence groups and for the visit to other arms of the service which are still to be visited. I sincerely appreciate these visits and I believe the Defence Force should be thanked for them. I also wish to thank the Armaments Board and Armscor for the briefing given to us in the Castle. We hope a closer liaison will come about between them and the Opposition as time passes.

In dealing with defence, I believe that I am correct in saying that South. Africa— although we think very differently about South Africa—as the world knows it is a geographic expression. I also believe that I am equally correct in saying that within that geographic unit which is South Africa, there are people of different ethnic and cultural backgrounds and people of different colours and at different stages of development. All these people are bound together by one economy. Thirdly, I believe that no one will contradict the fact that the circumstances of history and the expansionist policies of European powers during previous centuries have left us, this Parliament, consisting of Africans in every sense of the word, except our skin colour, in sole control of political power in geo-economic South Africa. I believe that in these facts lies the pertinence of the words with which the hon. the Minister of Defence begins his preface to the White Paper on Defence dated 25 March 1975—

I believe that these words are exceptionally pertinent in that total strategy includes and in fact demands the goodwill of all the people within the country, area or zone to be defended. We live in a rapidly changing world and on a continent on which the map of colonialism has rolled up with a snap so loud that it has aroused us from the euphoria of our own colonial and Commonwealth days. We now find ourselves in the age of détente, in a period of reassessment, a period of re-alignment. Where I say that in recent years Africa has not suffered us to be the workshop of the continent, it seems that in some instances this resistance is softening for the pragmatic reasons which are created by economic pressures and the gradual belief that we have no aggressive intentions on this continent. Man is a being born to believe and it is our belief that it is as much the duty of this hon. Minister and the Department of Defence, as it is that of any other hon. Minister, department or responsible member of this House, to prepare the mind of the country for the changes and adaptations which must inevitably be made to maintain peaceful co-existence and economic prosperity on this subcontinent. Much, has been done over the past few years to bring non-Whites into the overall defence of our common home. We welcome all this, and it was indeed a proud day for the Republic of South Africa when we saw troops of all colours taking part in the ceremony of the inauguration of our third State President. We now have a new development in the recently announced army for the Transkei, which we were initially told was to be of battalion strength. That matter was raised under the hon. the Prime Minister’s Vote and again under this Vote by the hon. member for Durban Point. We are grateful to the hon. the Minister that he has replied in some detail to the queries which were raised on this matter and that he has clarified the position to a large extent. We will, however, reserve the right, as an Opposition should, to ask further questions and to make positive suggestions and recommendations in regard to this particular matter in the future. Suffice it to say at this stage that it is extremely gratifying to hear that the homeland leaders and their people are ready and willing to stand by us in the total strategy of the defence of Southern Africa.

Talking about total strategy, one comes to the question of certain documents in connection with civic guidance which, were quoted backwards across the floor of this House yesterday. I do not wish to comment on these documents at all because I have not had the opportunity of reading or studying them. I do believe—and this side of the House believes—that the communist threat in the Indian Ocean, on the continent of Africa and also within our borders, is a very real one which we should endeavour to counteract with every means at our disposal. Although it has been said that the Kremlin is distinguished for its ignorance or that it has only one idea and that that is wrong, we have to accept that that one idea is world domination, and that even if they are wrong they have come a long way in the realization of that idea. Here, Mr. Chairman, I come back to the question of preparing the minds of the people. We have to prepare the minds of the people not only for the changes and adaptations which, must inevitably come in this country and in this world, but we also have to prepare the minds of the people for false prophets who can insidiously soften the minds of people for the final onslaught by Communism. In this connection, Sir, I wish to come briefly to the speech made yesterday afternoon just before the House adjourned by the hon. member for Parys …

I regret not having been able to complete it.

… in which by implication and by innuendo he accused the Opposition of upsetting and poisoning efforts at dialogue and negotiations in the direction of peace in Southern Africa. Sir, I wish to say categorically that every effort made by the Government in the direction of peaceful co-existence in Southern Africa—and this has been said by my leader and others on this side— receives the support of this side of the House. But I would like to point out to that hon. member that accusatory speeches such as his, which have a very serious effect on internal and inter-party relations, have as bad an effect on the morale of our forces and our people as the most insidious of subversive Communist propaganda. I leave the hon. member there, Sir. I think that is all that need be said about his speech. The defence of our country, the morale of our people, the morale of our Defence Force, is to us far too important than for us to indulge in making petty political points and attacking each other on grounds that are stupid. Sir, we are grateful on this side of the House that we are not in the position of other countries like Australia. I was shocked to note that that country, situated in the geographic position that it is in South East Asia, was told by its Senate Standing Committee on Foreign Affairs and Defence, that at this present time there is not a fully operational division capable of being exercised. I was shocked to notice that their budget had dropped from R233,9 million in 1971 to R182,5 million in 1974. Sir, it makes one feel secure when one knows that one’s country is prepared. By this one does not mean that it must be prepared in an aggressive sort of way—I think that should always be made very clear—but in the efforts to maintain peace there should be strength. Sir, we will continue to criticize and to question budgets in the future; we will continue to question the way in which money is spent. We will question the way in which certain things are provided for in the Budget, but that does not mean that we do not support the fact that our military presence must be a strong one and that it must be felt. [Time expired.]

Mr. Chairman, speaking after the hon. member for Albany, I want to say that I think it is clear to all of us that we all agree that a total strategy should be envisaged and enforced as if we are engaged in total war. From some of the speeches we have heard from the Opposition, I feel sure that in future we can expect to find a more united front when we consider matters of defence.

*When one speaks of R1000 million for defence, it is a large sum of money. But then it is also a very good idea that we bear in mind that the South African Government has a Department of Defence. Many other countries have a Department of War. We in South Africa have a Department of Defence, because we are primarily intent on defence. The R.S.A. does not have any aggressive aims; we are intent on defence and the fact that approximately R20 per capita is spent on defence underlines this fact, so that our friends in Africa can be sure of our intentions purely on the grounds of the appellation of this department. But when one speaks of defence, one must also take into consideration that war usually consists of four phases. There is the retreating phase, there is the defence phase, which then gradually changes into an attacking phase which, in turn, can change into an advancing phase. For each of these phases, provision must be made— provision for armaments, because the arms differ for each phase, and provision must also be made for training, because that differs as well. All these aspects cost money, and even if the country is primarily intent on defence, these other aspects cannot be neglected.

So it is also necessary that we pause at the type of training which is required for each particular phase. Each of the four phases has diversity of its own—a sort of morale of its own, a sort of motivation of its own and a sort of courage of its own. From my experience, I say that I think that our Defence Force is motivated in all aspects. We are a free people and we will remain a free people, and I am sure that our enemies will also take note of the fact that, although our intentions are of a defensive nature, we will not fall short in other spheres.

When we speak of human material in the Defence Force, we must remember that the primary groups here are the Citizen Force and the Commandos, the people who also take their places in civil life, who have to compete with other people in civil life and who are also obliged, above and beyond that, to render national service to the country, in the sense of military service. Therefore I think that we should give particular attention to the problems and the position in connection with the motivation of the Citizen Force and the Commandos.

As has been said, it is not only their time which these members of the Citizen Force and the Commandos sacrifice for the Defence Force. They also suffer the inconvenience of military training, sometimes under difficult circumstances, and for training purposes it should be that way. They also forfeit their personal liberty, which is peculiar to the military being, and they take part in nerve-destroying patrols and actions in which their brothers in civil life do not always participate and for which they do not have to make sacrifices either. Therefore, the sympathy of all of us is with the young men and women in our Citizen Force.

Therefore I should like to thank the hon. the Minister for the great relief which has been brought about to the pay structure of the Citizen Force. The salaries of members of the Citizen Force and of members of the Commandos have increased by 250% if my calculation is correct, over the last ten years, since 1965. We find now that a member of the Citizen Force receives a salary which is virtually equal to that of a member of the Permanent Force, except that the salary of a member of the Citizen Force is fixed at the lowest notch of the salary scale concerned. That is something very important in the eyes of the Citizen Force and the Commandos. It contributes to peace between the Citizen Force and the Permanent Force and it creates a new atmosphere of mutual respect. In principle, I can see no reason why the salaries of members of the Citizen Force, too, cannot be placed on the same salary scale so that these may increase gradually, because we must remember that there is no difference at all in the nature of the duties which they execute. All are subject to the Defence Act, to the M.D.C., as they call it.

The discipline which applies in the Citizen Force, is obviously of a different nature from that in the Permanent Force, because in the case of the Permanent Force, discipline can be applied throughout the year, while that is not the case in the Citizen Force, because the person only serves there for a short time. Therefore, the Citizen Force Officer understands the problems of the Citizen Force member far better than the Permanent Force Officer understands them, because the latter has not grown up in the same milieu. Once again, I want to compliment the hon. the Minister on the fact that the Citizen Force now has a Citizen Force Officer in the person of Gen. Webster who understands the Citizen Force and who understands the Citizen Force milieu. That is another step in the direction of tremendous progress in the set-up of our Citizen Force.

I should like to bring two problems to the attention of the hon. the Minister. The first is that the Citizen Force Commanding Officer works in his spare time because he has to do administrative work which is connected to the administration of his unit. If he comes across problems which he would like to solve, he finds that his time is limited and consequently it is virtually only on a Saturday morning that he can go and work in his office. So he comes in on a Saturday morning from his house or farm to work in his office. However, if a problem arises on a Saturday morning, there is no member of the Permanent Force whom he can ask for assistance to solve the problem. This difficulty which the Citizen Force officer experiences, can be solved in one of two ways. The first is that a Permanent Force adjutant be added to every Citizen Force unit. That, I think, is more or less the British system. As an alternative, it could be arranged that some liaison would be made possible on Saturdays so that the Citizen Force’s quartermasters and others may liaise with the members of the Permanent Force. These are the two solutions which I suggest.

The last point which I want to mention concerns another problem which causes some irritation. I refer to the fact that there is not always the necessary accommodation for members of the Citizen Force and the commandos. I know just as well as anyone else that accommodation in the Permanent Force, as in any other sphere of life, is a problem. However, we must give these people who really are our fighting soldiers a pride in their units. A soldier must be proud that these are his headquarters and that they are so well-appointed. That aspect is important to him. Perhaps I would be mistaken in saying that is more important to him than it is to the member of the Permanent Force, but to the member of the Citizen Force it is a matter of pride and prestige to belong to a unit. Pride in a unit is something which is very important and we must encourage it in the set-up of our Defence Force.

Mr. Chairman, South Africa spends more on Defence every year. An amount of R948 million is being spent on Defence in the present financial year. The question may therefore be asked why such a substantial amount should be spent on Defence and on armaments production. This question has already been asked by certain hon. members of the Opposition, inter alia, the hon. member for Johannesburg North. The answer is simple. South Africa does so because it has no alternative. The Republic has been built up by its inhabitants into the country maintaining the highest standard of living in Africa. It is also the country with probably the greatest diversity of races and peoples in the world. However, the Republic has a formula which has already proved itself to be one of the most successful formulae in the world and which holds out a promise of growing prosperity for the country and its inhabitants if South Africa can continue with it without improper foreign interference.

As an ally of the West, as a direct stumbling block to communism, and owing to its strategic position, the onslaught on South Africa, in the form of demonstrations, sanctions, isolation, boycotts and terrorism, has increased in intensity in recent years. Although in recent years South Africa has repeatedly confirmed that it harbours no aggressive intentions in regard to any country, people or group, and although it has repeatedly been stated that it does not desire territorial expansion, the onslaughts continue and we have no alternative but to defend steadfastly what is ours. Without a formidable capacity to retaliate, these words would be meaningless and consequently the expenditure on Defence is the price the country is forced to pay in the interests of the peace and security of its inhabitants. Owing to the tremendous technological development in this century, defence, and armaments in particular, are expensive today —expensive in manpower, expensive in money and expensive in time. The price of giving pause to would-be aggressors is high. Defence expenditure in South Africa is still relatively low today, as has already been proved by some of the hon. members on this side of the House who have already spoken, because it only represents 3,7% of our gross national product.

In contrast, the onslaught on South Africa has continued to grow in recent years, and indications are that the threat will continue in the future. It is therefore possible that in future, Defence will take a bigger slice of our income. However, the days are past when the question could be asked as to whether South Africa could afford to spend so much on a matter that did not contribute a great deal that was positive to the country’s growth and prosperity. The price of securing the survival and freedom of our country and its inhabitants is going to be high, but however high it may be, the alternative is so high that there is no country whose inhabitants could afford it. What is the alternative? It is destruction, suffering and loss of freedom. If we bear that in mind, no price is too high to pay for the continued existence of a peaceful country with prosperous inhabitants.

The hon. member for Pretoria West mentioned the daily rate of pay that has been adjusted for members of the Citizen Force and commandos, and I should like to support him wholeheartedly in that regard. As one who has been a member of a commando organization for many years, I should like to say that this is an adjustment that is going to prove very fruitful. Then, too, I should like to convey my sincere thanks to the hon. the Minister for this adjustment since it meets a longfelt need, since members of the Citizen Force and the commandos have been undergoing the same courses for a number of years and consequently there is no difference in training. In addition, it will contribute greatly towards the preparedness of the Defence Force, since it will serve as an encouragement for members to qualify themselves. The commandos perform an important role or task.

In the first place, there is the combating of insurgence and terrorism. That is the guarantee for domestic law and order. In the second place there is civil defence, alongside the local managements or authorities to, which this matter has been entrusted. I am grateful to note that in recent times local authorities in the Republic and South West Africa have made good progress as far as this matter is concerned. I note in the White Paper that of the 666 local managements or authorities identified for the purposes of civil defence. 554 have already appointed their heads of civil defence and, in general, have made satisfactory progress in regard to planning for emergencies. This progress applies, too, to areas outside the jurisdiction of local authorities where the planning, as indicated above, is co-ordinated under the guidance of the commandos.

I just want to say that I have noted in magazines that certain women’s organizations such as the Noodhulpliga and others are experiencing financial problems. These women’s organizations play a vital part in the organization of civil defence, and consequently I should like to know from the hon. the Minister whether it is in any way possible for them to receive financial aid from the State.

In conclusion, I should like to use this occasion to pay tribute to the members of the commandos throughout our country who have been serving voluntarily for years and are still serving in the interests of the security of our country. In spite of the fact that these men are people following various professions, they are prepared to sacrifice time to attend courses and bivouacs in order to qualify themselves. At the moment there are 30 000 such members in the commandos. This attests to true patriotism.

Mr. Chairman, the two hon. members who have just spoken made constructive speeches. This applies particularly to the hon. member for Pretoria West. I just want to give him the assurance that when he has been here a little longer, he will know that defence is always a matter of common interest, a matter concerning which there is always co-operation between the two sides of the House.

Quite right.

This has been so for many years. I only hope the hon. member will speak to his colleagues as well, because a few unpleasant things happened during this debate.

Firstly, I want to refer to the hon. member for Cradock who apologized this afternoon for having denied that he had said something. As far as I am concerned, he should have apologized for what he did say, rather than for the allegation he made. The hon. member said, and I quote from his Hansard—

I just want to remind the hon. member that when South Africa declared war, it was against two allies. Nazi Germany and Russia, were allies. They were the collective enemy. It was the time of gas ovens, of the annihilation of people. It was the time when violence was threatening to take over the world. Those who fought in that war sincerely believed themselves to be doing so in the spirit of and in the search for freedom. I am not prepared, none of us who devoted those years to that purpose, are prepared to hear it criticized by people who say, “We should not be proud of our service; we really should be ashamed of it.”

That I did not say.

The hon. member said we should not talk about it or make such a noise about it. It is not a question of less noise being made about it, but it is a matter of pride to us that we were prepared to serve our country when she called on us. That is what counts.

†We have heard much about my country right or wrong, but that was the issue. Those who served their country when the call came have no need to hide their heads in shame. I am not prepared to accept any lecture from that hon. member or from other hon. members on this subject.

There is another aspect that needs putting right which was raised by the hon. member for Cradock and by way of interjection by other hon. members. Let us lay the ghost once and for all that there is any difference of opinion between what the hon. member for Hillbrow and what I said. I want to quote from Hansard, col. 3725 and 3726 of 9 April 1975 the words of the hon. member for Hillbrow. I hope that we will hear no more of this nonsense thereafter. He said the following:

Why do you not read the previous column?

I have it all here. Why did that hon. member refuse to quote this when I challenged him? Why did he remain silent and misrepresent the spirit and the words of the hon. member for Hillbrow? I can quote the previous columns, but I am not going to devote my speech to quoting from Hansard. I fling the accusation back with contempt.

Let me come to some other matters. Firstly, there is a pleasant one. There have been a number of tributes paid to the Defence Force for various reasons. I would like to add mine for, perhaps, one small service which was performed but which impressed me particularly. I am talking about the part the Defence Force played at the farewell banquet to the ex-State President at Stellenbosch. I was most impressed by these young chaps who, with virtually no training, carried out, with military precision, an exercise that would have daunted many experienced commercial caterers. They carried it out not only with efficiency and with precision but in a cheerful spirit and in a way which I believe did nothing but make friends for the national servicemen and the Force itself. The way that some 700 guests were fed from, I understand four army kitchens was a tribute not only to the members of the Defence Force who participated.

I want to refer to two other matters briefly. I want to say to the hon. the Minister that he should not be so sensitive about criticism. The hon. the Minister is correct—I do not blame him—in defending his department but he must not provoke by over-reacting. He attacked me very strongly about my remarks in regard to the Tafelberg. All that I had suggested was that as we were spending a lot of money on repairs it might be better to buy a new ship. As a result he launched a violent attack on me. He asked: Why did I do it? Why did I throw this sort of thing into the debate? [Interjections.] The hon. the Minister should have heard himself. He said that this was the sort of thing I should not do. However, on the 15th of this month, last week, the hon. the Minister told me—

His own Armaments Board was considering the very matter. However, when I had the temerity to raise the matter in the House, the hon. the Minister saw fit to attack me and to say: You should not do this sort of thing. He also asked: What are you insinuating? What are you implying? No, Mr. Chairman, let us get some perspective. I raised a ligitimate query. The hon. the Minister gave us a figure of R31 million. If he had replaced this vessel a few years ago it would have cost less than half that figure.

Nonsense!

What does that hon. member know about it? We are entitled to raise these issues and we will continue to do so.

I also raised the question of Armscor. I want to say that I have since had an invitation from the president for a group of Opposition members to meet him and to discuss in private the matters I would otherwise have raised this afternoon. In view of this fact, I accept that invitation and I am not taking the matter any further. However, I must say that I was tempted to raise one or two little titbits.

Then why don’t you?

No, I do not want to; I am prepared to accept the invitation for the same reason advanced by the hon. the Minister. If we can obtain information that satisfies us, we do not want to raise these matters here in public in this House.

I want to plead for the establishment in Natal of a women’s civil defence college. [Time expired.]

Mr. Chairman, that member who has just resumed his seat sprang up here …

Hon. member!

The hon. member who has just resumed his seat sprang up here and yelped like a dog with his tail between his legs.

Order! The hon. member must withdraw the words “yelped like a dog’’.

I withdraw the words, Sir. It is very clear that the hon. member …

Are you an example of parliamentary courtesy?

It is very clear that the hon. member wanted to quote an extract from Hansard here in order to embarrass the hon. member for Cradock. However the hon. member for Durban Point did not quote what was said in the previous column by the hon. member for Hillbrow. The hon. member for Hillbrow said the following (Hansard, 9 April 1975, col. 3725)—

The hon. member for Hillbrow then went on to say what those members supposedly did while that matter was being discussed in this hon. House. [Interjections.] It will get the hon. member for Durban Point nowhere to be so sensitive. He is still busy with what I said at the beginning of my speech! It will get the hon. member nowhere to be so over-sensitive in regard to this matter. We on this side of the House have never attacked any hon. member on that side for having regarded it as his duty to go and fight for his country in the last war. We are very proud of what was achieved. We believe that they came back from that war as heroes, particularly the South African troops. The hon. member refers to the sensitivity of the hon. the Minister. He should be so proud of the fact that he fought that when the hon. member for Cradock makes a few statements here, well-founded statements, he should not be so sensitive as to kick up a fuss about it.

We have heard a great deal about this Budget in the last few days and a lot of criticism has been levelled at it. However, if it is seen as a whole and public opinion is gauged, then one fact stands out as plain as a pikestaff and that is that this National Party Government sees to the interests of South Africa and its people, and in particular the defence of this country. It is quite clear that the arguments we have heard from that side have the false note one hears when one bangs an empty tin. I shall come back to that. It is pointless for the hon. member for Durban Point to say that he hopes that that will be the end. That is not the end of the hon. member for Hillbrow, who gave us to understand here that South Africa should not spend that amount on defence. [Interjections.] This shows that that hon. member does not realize what the stability and peace in South Africa derives from and also that he does not realize that to be able to enjoy that peace, order and stability, it is necessary that large sums of money be spent on defence. I repeat that there are a number of members opposite who have said that they have no quarrel with us concerning the amount being set aside for defence. To those hon. members who have said that, I want to say: If tractors must be bought, I hope that one of those tractors will be used to drag the hon. member for Hillbrow through a cactus hedge so that he may be shaken out of his deep sleep.

Fortunately this Government knows its duty to South Africa and its population. We know that it is necessary to spend large sums of money to ensure peace, security and stability. I—and, I think, all the members on this side of the House, too— would be the last to raise any objection were the hon. the Minister of Defence to request double this amount for defence next year. I think it is time for every individual in South Africa—and that includes those members on the other side of the House and their supporters—to realize that it is time for us to be prepared to make personal sacrifices in a world which is largely hostile to South Africa, personal sacrifices in the interests of South Africa and its people. The time has come for us to ask ourselves: Is it not already time for us to sacrifice part of our personal freedom for the sake of this matter? Must we, as individual citizens, sit quietly and wait until attacks are made on our borders and on our towns and cities before we wake up? Or should we not rather take the decision even now that the slogan we should adopt should be that of the Scouts, viz. “Be prepared! ”

Our hon. Prime Minister has stated repeatedly that we should not regard his efforts to bring about détente as a weakness, but as strength. Strength is the motive behind those efforts. I do not want to speak from the point of view of preparedness to proceed to the attack, but from the point of view that we should be prepared to defend what we have built up in this country and what belongs to us—what we love—with all our might. We do not want to fight, we do not want to make war, but neither do we want other people to come here seeking for what they have not lost here. If we want to provide for that, we must see to it that we are in a state of readiness and that we are prepared, and we must be able to defend ourselves whenever it may be necessary.

A few days ago, in a bookstore in the city, I read the words “Because you do not know when the hour will come” and immediately decided to use them as the theme of my speech on the Defence Vote today. We may not sit back and relax. When I say we should be prepared to sacrifice part of our individual freedom, then I just want to remind you, Sir, what the Ukrainian poet, Taras Krafchenko, had to say; he uttered these words—

When we receive warnings issued by communists abroad stating that people are being trained for urban guerrilla warfare which we can expect within a few years; when we read in Dutch newspapers that the Pan African Congress states that a war could break out in South Africa at any time, which could take place at midnight at a specific selected time, and could develop into the form of urban warfare, then we should be asleep if we were not to reckon with those warnings and statements and decide that we should be prepared in every respect. Sir, I thank the hon. the Minister of Defence for everything that has already been done in our country to keep us prepared, but I request, and I insist on even stronger measures. When I ask this, Sir, then I have in mind in particular the civil population as such. Our defence force is battle-worthy; we are vigorous, but I feel that if anything can be done to place our civil population, too, on a footing of preparedness in all respects, this would contribute towards our being able to do what is necessary in every part of our country. In this regard I have in mind the women’s shooting clubs, for example, that are being established everywhere. I ask the hon. the Minister to put free pistols, free ammunition, free targets and other equipment at the disposal of these women. Sir, these women are very anxious to make use of that privilege. Although we use women to drive trucks and to act in other capacities in our army, there are many of them who would like to enter the field of actual active defence of South Africa. In my opinion it would be worthwhile for us to give attention to this matter and for those women, too, to be afforded the opportunity to do their duty in this regard. [Time expired.]

The hon. member for Durban Point should not adopt too cocky an attitude here in this House when another hon. member is simply telling him the truth. To me, Sir, it is so strange that hon. members on the opposite side always and without fail link the Second World War and their participation in the Second World War to their outstanding and exclusive patriotism.

Who raised it here?

The hon. member may justify and support his participation and his support of the Second World War with all the motivations which his judgment renders possible, but the fact remains that I can mention a counter-argument to every one of the arguments which he can raise. But where does that bring us? I hope that I have heard of the patriotism implied in those hon. members’ participation in the Second World War for the last time today. It is just a lot of nonsense.

Sir, there is one word which is a key word in the whole history of mankind, and that word is “domination”. The word, the concept, “domination”, has played a mighty role in the past.

Why do you not say “baasskap”?

All religious wars waged, were waged because one religion was afraid of being dominated by another. All wars waged for economic reasons, were waged because one economy was afraid of being dominated by a stronger economy. All wars which resulted from border disputes, resulted from this fear. Millions, countless lives and untold grief and incalculable sums of money have been spent in escaping one thing, viz. domination. This is an instinctive desire in mankind, and throughout history, as history stratifies itself in waves, one always finds the Defence Force interwoven into the resistance of the people to domination. The ancient Portuguese and the ancient Spaniards said they had a religious mission; they had to conquer the world for Catholicism, but they followed with weapons in the wake of that mission. When that period, that wave in history, had passed, one found the major economic expansionist urge. The Cape was discovered in that time. Natives in colonial areas were wiped out indiscriminately by weapons according to the concept of the Old Testament. Weapons were always present. When the world started liberating itself, when the liberation movements began in 1776—the American War of Independence—it was weapons that brought about liberation, which sought to give those people release from military economic imperialism. That is also the position here today in Southern Africa. There is one sentiment which dominates all these debates on defence and national relations and that is the fear of domination. If approximately R1 000 million is voted for defence, it gladdens our hearts. Why? Because it enables us to escape eventual domination. Now we must accept it as a hard, real and cold fact that we are confronted by the position at this hour in Southern Africa, where we are dealing with raw power politics which do not root in manifestos of human rights. No, the people who are present in Mozambique, are present as a minority, but they are there because weapons are behind them, power politics. Our Defence Force has a difficult task today. I am sorry for our young men. We do not have a religious mission such as the ancient Portuguese and the ancient Spaniards had. We do not live in a time of mercantilism with its aims of economic profit and of conquest. We are not colonialists. We do not want to build colonial empires. Nor are we a mother country which has to be protected by a Defence Force or by colonial forces. No, we are confronted by raw power politics which are being practised here in Southern Africa at the moment, and what has happened in Angola and in Mozambique here on our borders and what is still going to happen, is an unfolding of power politics. We stand here with no other mission, with no other aim and with no other assignment than to defend what is ours. Sir, it is difficult for the young people. For a soldier who has to sit still while one deprives him of the heroic, the adventurous, for the soldier who has to sit and wait and not be used for some task or other, but only the task of maintaining and keeping, it is very difficult.

I want to conclude by saying that tremendously heavy demands indeed are being made on our Defence Force, as it is today, and on our young people, demands of self-control, because the Defence Force has been deprived of the heroic and is being provoked. One actually grinds one’s teeth because provocation is part of the onslaught on us. They lie to us; they try our courage and patience as part of the onslaught on our resistance and on the spirit of our young people. I want to take my hat off to our Defence Force—I think I do it on behalf of all of us—for the way in which our Defence Force and our young people serve as an inspiration to us in all these circumstances. In the times which lie ahead, ever greater demands will be made, but I do not doubt for a single moment that we shall ride this wave with flying colours, the wave on which history has carried us into Southern Africa, because our aim is pure and right, our organization in the Defence Force is effective, our projections in the fields of strategy and in whatever field, are correct, no matter from what side we look at them, and because this is the case, there is general unanimity when our hon. the Minister of Defence asks for almost R1 000 million. I repeat and confirm what was said by an hon. member who spoke before me, viz. that if twice as much is asked next year, he will also support that. I believe that the entire nation will do that. Our Defence Force has come up against a power in Southern Africa which has never before made its appearance in Southern Africa. It is a new task, a tremendously demanding task, but I think the Defence Force may rest assured that the entire nation is standing behind it in spirit as one man and with all the inherent and inner conviction and motivation which can be expected from a nation. [Time expired.]

Mr. Chairman, I want to congratulate the hon. member for Carletonville on his stirring plea for our Defence Force and our armaments set-up. To prove that he is correct in his statements, I want to quote from the same speech from which I quoted yesterday, namely the speech made by the American Secretary for Defence on 5 February this year—

It is astronomic to hear this from the mouth of someone who is the representative of the largest country in the Free World, to receive this testimonial from his mouth of the force which is being built up under the guidance of the militaristic imperialism of Russia. Therefore I cannot sufficiently endorse and support what the hon. member for Carletonville said. With this tremendous potential Russia is fighting by proxy in the Far East, in the Middle East and in Africa. Therefore the hon. member for Carletonville is correct when he says that in these days a voice should issue from our Parliament which is not a voice of division and a voice of despair, but a voice of support for the S.A. Defence Force and our armaments organization. This is necessary, not because we want something from others, but because we want to preserve our right to decide on our own destiny in our own way.

†I want to thank the hon. member for Cape Town Gardens for his contribution. I agree with his congratulatory remarks on the Cape Town Highlanders and I thank him for the kind remarks he made about my small share in promoting their interests. I shall deal with the other points which the hon. member raised at a later stage.

*The hon. member for Sasolburg referred to women in the S.A. Defence Force. I want to thank him for his splendid and well-prepared speech. In all three arms of the Defence Force, namely the Navy, the Air Force and the Army, a broad foundation has now been laid for the training of women in various directions, also as officers. This training is not confined to the Civil Defence College at George only, but is also taking place in the Air Force and the Navy. I hope that we will gradually extend this training so that we can involve increasing numbers of women in it. It is not practicable for us to introduce national service for women, otherwise I should have liked to have done so. But I do think that we should give women a part to play in the S.A. Defence Force on a larger scale, in that direction where they are able to replace manpower.

†The hon. member for Simonstown referred to the question of national service, the cadet system and the deferment of students’ training. I can promise him that we shall make a study of the points which he has made. His contribution was a positive contribution. I can tell him that we shall have a gradual implementation of the new cadet system as from 1 January 1976. At present we are in consultation with the Education Departments and officials and we hope to reinstitute an improved and better cadet system than exists at present. In the recess I shall also give my attention to certain of the other points which the hon. member raised because I think that some of them are worthwhile considering.

*I want to congratulate the hon. member for Verwoerdburg on his speech. He is one of our younger members, and he made a speech here which testified to study and preparation.

I also want to thank the hon. member for Albany for his positive contribution. The same applies to the hon. member for Pretoria West. All I can tell him is that we are unfortunately unable to post an adjutant to every Citizen Force unit because we will not, no matter how much we would like to do so, have the manpower for that purpose. Hon. members know that our instructors and our Permanent Force staff are working a great deal of overtime. We should also afford these people an opportunity though, when it is in any way possible, over the weekends for example, to be with their families. If we do not do this we shall lose them.

The hon. members for Ladybrand and Aliwal both advanced pleas for civil defence. I shall say more about that and about the women’s organizations in a moment. We are subsidizing auxiliary service organizations such as the Red Cross, the Noodhulpliga and the St. John Ambulance Brigade for specific tasks which they have to render. At present this is under review again. We also subsidize shooting clubs for women. If they are affiliated to the S.A. Shooting Union, they are subsidized with inexpensive ammunition. Further than this I really cannot go, in view of the other priorities which are most certainly more important.

On what basis is the allocation to the Noodhulpliga and the St. John Ambulance Brigade determined?

I have already furnished an exposition of this in Parliament. The St. John Ambulance Brigade, in exactly the same way as the Red Cross, owes certain obligations to the Surgeon-General. They also receive subsidies from other Government departments, such as the Department of Railways, and the Department of Mines, because they also have certain obligations to those departments. The Noodhulpliga, on the other hand, is being used only for civil defence. Nevertheless, we are re-examining the entire subsidy basis of those organizations. I hope to be able to give attention to this matter in the year which lies ahead.

I do not want to become involved here in an unnecessary debate on what these people or those did 40 years ago, for then we are finally going to end up with the year 1900. I just want to say that I am not accusing the official Opposition of being disloyal to the Defence Force. It would be wrong to say that. However, I do think that the hon. member for Hillbrow made an unfortunate speech He is, after all, a frontbencher. I think the hon. the Leader of the Opposition should call him to order. I shall tell you why. I shall read what the hon. member for Hillbrow said. He began by saying (Hansard, 9 April 1975, column 3725)—

That was his first statement. Then he went on to speak about the price of a packet of cigarettes, after which he said—

That was an absolutely irresponsible speech.

What is wrong with it?

The hon. member for Wynberg will not understand this very well, for Wynberg still does not understand why he is representing that constituency.

I understand it very well.

I say it was an unfortunate speech. This is not the spirit in which the hon. member for Durban Point, the hon. member for Green Point, the hon. member for Cape Town Gardens or the hon. member for Simonstown will speak, for they have a feeling for the necessity for a country like South Africa to be prepared in the military sphere as well, whether or not détente and relaxation of tension politics are being conducted, viewed in the light of the speech made by the hon. member for Carletonville and what I have just quoted here from the speech made by Mr. Schlesinger, the American Secretary for Defence.

No one said that it was not necessary.

Oh please, Sir, no one takes any notice of the hon. member for Wynberg, except himself.

I come now to the hon. member for Durban Point, and because he is angry with the hon. member for Hillbrow …

Just read the next part of the speech.

This is what the hon. member read, but he did not read the whole story. Because the hon. member is angry with the hon. member for Hillbrow now—and I think he has reason to be angry with him—the hon. member for Cradock has to suffer for it. The quarrel of the hon. member for Cradock was actually with the hon. member for Hillbrow, and not with the hon. member for Durban Point. The hon. member for Cradock quite rightly said: “I have great respect for the people who felt during the Second World War that they should take up arms.” He then went on to point out the consequences of the Second World War and surely what he said in this regard was true. Surely we have the position that the Western nations weakened one another and that as a result Russia became the power it is today. We are not apportioning blame to hon. members opposite; surely these are the facts. Therefore, I do not want to participate in the discussion on this basis. All I want to say is that an unanimous voice should be heard from this Parliament. With that I do not want to stifle criticism. The hon. member is quite entitled to criticize me in regard to details, and even as far as my approach is concerned. I said this to him yesterday as well. But the hon. member must make certain of the facts. He was angry with me because I had supposedly attacked him so vehemently in regard to the Tafelberg. No, I did not attack him. I simply told him that it was bad business to buy a ship for R31 million, whereas I can have one repaired for R6 million.

You did not put it so nicely!

The hon. member for Durban Point can take punishment. He does not need the protection of the hon. member for Green Point.

We may as well bring the “points” together.

What is more, the hon. member also referred to my reply in regard to the Armaments Board. I said that the matter in regard to the Armaments Board was being considered, and that I would take a decision at a later stage. The matter has been submitted to me in the meantime, and I have decided that we would proceed to renovate the Tafelberg, and not to purchase a new ship for R31 million. The money is not there. Does the hon. member want to add a further R31 million to this amount?

The hon. member raised another point to which I also have to reply. He said that the amounts shown in the White Paper were incorrect. In one respect he is correct, for the amount of R21 million was not included in the calculation in the White Paper because it is an annual and normal part of the total allocation, part of which is spent on Defence by the building departments. However, this is not part of the additional amount, but an overall annual amount which is normally given to the building departments, and from which a portion is allocated to us. This is the only difference, and is the only amount which was not included in the calculation. If the hon. member wishes, we could simply add it on.

The hon. member also referred to the utilization of national servicemen. He asked how they were being utilized. We are utilizing them, for example, as accountants. I have been informed that we are employing nine graduated national servicemen in the department as accountants. We are utilizing them for data-processing, which is an important task in the department. We are utilizing a further 862 of them for supplies administration. Therefore, we are using them wherever possible. I do not want to discuss all these matters in public. We are also using trained people in specified directions, for example for counter-insurgency tasks in the army. I do not want to discuss these matters in public, for it would be extremely irresponsible to do so. We are in fact using them, and if the hon. member wants to know how, then I can give him the details if he will promise me that it will not go any further.

I also want to thank the hon. members for Bloemfontein West, Verwoerdburg, Waterkloof, Worcester, Colesberg, Cradock, Umhlanga and Yeoville for their positive contributions. I want to reiterate that I hope the S.A. Defence Force and our armaments organization—although I admit that they are not perfect—will leave here with the feeling that the South African Parliament is determinedly behind them, that South Africa’s integrity and the integrity of its borders will be maintained with the support of this entire Parliament.

Let us consider the armaments organization, of which the hon. member for Durban Point has recently become rather critical. The armaments organization has helped to bring us so far that we have in effect neutralized to a large extent the arms embargo which has been applied against us for years. This is a statement which cannot be disputed. We have to a large extent neutralized the arms embargo and its effect. Secondly we have so effectively expanded our know-how in manufacturing arms ourselves, and this applies to the more sophisticated armaments such as the electronics industry as well, that we are entering an entirely new phase. This is one of the reasons for the increase in our Defence Force Budget. That is the reason for results such as the Impala II, and the new infantry combat vehicle which is at present in production. That is the reason for results which have made it possible for us, through another strategic industry, the optical industry, to make our own night vision equipment available soon. That is why we have progressed to such an extent that we have been able to do something which, outside France, has only been done in South Africa in respect of this type of submarine, namely the Daphné submarines. Apart from France there is only one country, ours, that has succeeded in doing what we are doing, and that is to undertake the major maintenance service of the Maria van Riebeeck and Emily Hothouse in Simonstown. This is an achievement of the greatest value to South Africa, and I think we should congratulate our navy very sincerely on this achievement. That is why we are able, despite our problems in regard to manpower, to continue with a modernizing programme, which will inevitably entail increased expenditure. I want to say today, after having listened to hon. members, that I consider it my duty to tell you that—whoever the Minister of Defence might be in future —if the world remains as it is today South Africa will have to keep on increasing its defence account, and whoever expects anything else, is living in a political fool’s paradise. While the hon. the Prime Minister concentrates on and toils to bring about détente and relaxation of tension, the economic strength of South Africa is on the one hand a weapon for him in those attempts. But let me say that a defence force which is effective and prepared is another weapon on his hand.

†This brings me to the hon. member for Yeoville who stated, inter alia, that expenditure on defence is inflationary. I quite agree with the hon. member. This is the usual statement that is made about defence expenditure. The point I wish to make, however, is that such a statement tends to be a generalization. It is essential that such expenditure be subjected to an analysis in depth before getting too dogmatic about it. I think that it is imperative to view it as an investment to safeguard the future of all the people in our country. As such it is perhaps tantamount to an investment in an insurance policy. No hon. member would say that premiums on an insurance policy are inflationary. Defence expenditure is a nation’s premium on its insurance policy. At the same time it is an investment which affords us a platform of strength from which to negotiate, as I have just stated. I think a proper analysis of defence expenditure will reveal the beneficial impact on our economy as a whole. I would like to point out as an example, that overall employment is stimulated to a large extent and I trust that the income from this is in any case channelled into even more productive areas. I would like to quote a few examples. Today in the Permanent Force we have apprentices. In the army there are 252 apprentices in training. In the air force there are 637 and in the navy 54. This gives us a total of 1 043. In Atlas there are 1 200 apprentices in training. This means that, at present, we have over 2 000 apprentices in training in different directions. All of these apprentices do not stay with the armed forces and with Atlas. There is a continuous flow into the private sector. In this field we are, therefore, actually activating and supporting private industry. At present we have national servicemen in technical musterings, a total of 2 239. These are apart from the apprentices. That is the reason why industrialists and businessmen are coming forward more and more to say: “We are proud of people who have done their national service and we are looking for them; we are crying out for them to put them into jobs in our businesses.” It is not as the hon. member for South Coast wanted to make out yesterday, namely that employers are not eager and anxious to take these people into their service.

A factor which is often overlooked is the investment made in respect of the training of people, especially in the technical fields. I think, however, that it is even more important to take due cognizance of the substantial contribution defence expenditure is making towards the establishment and promotion of industries in our country. In this regard I wish to quote a few figures. For example, the total expenditure on the acquisition of armaments during the years 1973-’74, 1974-’75 and 1975-’76 was R201 million, R334 million and R534 million respectively, of which R141 million was spent locally in 1973-’74, R143 million in 1974-’75 and R184 million in 1975-’76. That expenditure represented a very valuable contribution to the establishment and promotion of our own industries. Our engineering industry and our electronical industry especially benefited from the steps taken by our armaments industry. That is why I say that it is not always right to say in general that this expenditure is inflationary, because the contribution that this makes to the development of the engineering industry and the electronical industry is of the greatest importance.

*Sir, this brings me to another matter which was raised here, particularly by the hon. member for Simonstown when he referred to our ability to defend ourselves. The hon. member for Durban Point also referred to the question of corvettes, when he said that he hoped that the building of missile ships would not eliminate corvettes. To that I just want to say the following: Missile ships are being built. We cannot say anything further about that. The existing frigates are being modernized. This is going to cost us money, but they are being modernized rather than written off. Negotiations for the acquisition of two additional submarines are already far advanced. The Navy is making a projection of its requirements for the next decade, and this will be considered as funds become available. Included in that are two missile-carrying corvettes. In other words, we are looking to our maritime defence in the short, medium and long term.

Sir, I come now to the hon. member for East London City who said: “There are things under the blanket which need exposing.” I do not know what the hon. member meant by that. If the hon. member knows of things which need exposing, he is entirely welcome to do so. I have stated repeatedly in this House that, built into the Defence Force and the armaments organization is a system of internal audit with external control, a system of armaments control, which ought to to convince the country that there is the greatest possible measure of control over expenditure. I have called in the assistance of prominent businessmen, who serve on boards of directors. Prominent overseas visitors who were in South Africa only a few days ago, and who have a knowledge of military matters, told me that I could be proud of the top management and of the control which is built into the Defence Force and into the armaments organization. But the hon. member comes here and says: “There are things under the blanket which need exposing”.

You have not quoted all I said.

Sir, all I can say is that this was a very general statement. The hon. member then discussed the Budget, and said that he wanted to refer to item B, page 19. He said it dealt with commandos. He wanted to know why the commandos are now being neglected, as indicated by the reduction under that item. But that is not correct. There is a reduction under the item, but this reduction is attributable to the fact that the subsidy which we are paying for the building of shooting ranges for commandos, is decreasing because most of the work has already been completed. That is one of the reasons. Now I do not know whether this is one of the things under the blanket which require exposing. But I have very great appreciation for another part of the hon. member’s speech, namely where he advocated more commando headquarters, and that we should place commando headquarters in the same category as that of many Citizen Force units. Let me tell him that we are trying to do this. There is an agreement with the Administrators that they should allow local authorities to make contributions to commandos to enable them to build headquarters.

That was done years ago, but it is not working.

It is not my fault if it is not working. The hon. member should then approach the Provinces, and not me.

But you are in charge of it. [Interjections.]

O please, Sir, it is not necessary for the hon. member, who is still a young member, to display his ignorance in this way. [Interjections.] I am speaking to the hon. member for East London City now, and all I can tell him is that headquarters exist which were established with the aid of the provinces on the initiative of the commandos. I have opened such headquarters myself. How can it be true now that this is not working?

It is not happening in general.

One cannot do everything overnight. Rome was not built in a day. A few years ago the Administrators gave their consent to this and it is only now taking effect. In any case, many commandos already have headquarters.

And many do not.

I know, but there are 250 commandos. [Interjections.] Yes, there are examples in Natal of splendid headquarters for commandos. In one case, that of the Highway Commando, they built their headquarters themselves. They did not wait for other people to help them. [Interjections.] If the hon. member wishes to see this, he need only cross the border into Natal to see those headquarters.

Then the hon. members for Sasolburg, Cape Town Gardens and Worcester referred to the question of civil defence. I have discussed civil defence repeatedly, but this afternoon I just want to say this: In the first place, the Civil Defence Division, which exists in the Defence Force, is a co-ordinating body, and is there to give guidance and instruction. Fundamentally, however, civil defence is the responsibility of local authorities. We are trying to activate our local authorities to introduce civil defence measures, but some communities become so over-enthusiastic in regard to civil defence that they are even stockpiling food, preparing sandbags, and I do not know what else. But that is not civil defence. Civil defence is related to averting the consequences of disasters. Hon. members must give me a chance to discuss this matter, because some hon. members do not know what it is. On the other hand, there are local authorities and communities which are indifferent to and see no need at all for civil defence, with the result that if disasters should occur, such as the recent floods, it is the Defence Force which has to take a hand. Then we have to supply tents and lorries and bring in water supplies, and we have to make men available and sometimes we have to utilize the limited supplies which we have built up for mobilization purposes. We do so gladly, but then we also expect local authorities to play a part in their sphere, according to the established principles of civil defence. Before the end of the year we shall try to have a general plan accepted by all local authorities. Hon. members can help in their respective constituencies by going to their local authorities and asking them what they have already done in co-operation with auxiliary services to draw up a local civil defence plan—not to make war, but to counteract the consequences of disasters. This is what I want to emphasize, because some people think they should stockpile food and build sandbag shelters. However, that is not the intention.

The hon. member for Waterkloof advocated a greater involvement on the part of the people in the citizen force and the commandos. This can only happen if we can get parents so far as to motivate the 20% of the annual intake of national servicemen who are not motivated. Between 20% and 30% of them are not motivated at all. We cannot succeed in doing all this within a year. They have to be motivated in their homes as well.

The hon. member for Etosha referred to the question of counter-insurgency. I have also referred to that already. I shall discuss this matter with him as well, but at this stage I want to point out that the Army and other Government departments are playing their full part.

I think that I have with that, replied to most questions, except for one, which I still want to deal with.

What about a girls’ college in Natal?

According to an announcement I have made a girls’ college will be established in Bloemfontein as soon as the hon. the Minister of National Education has evacuated the buildings.

What about Natal?

The Free State takes precedence over Natal in this regard.

But when it comes to a war, Natal is first.

If the hon. member wishes, he can help me so that more commando headquarters on the pattern of those of Highway Commando are built.

I want to return to the speech made by the hon. member for Rondebosch. For a person who moves in intellectual circles, the hon. member did something strange. Late yesterday morning he made a hasty request to my department to obtain a copy of the instructional guide on civic guidance.

That was at 9.15.

Then the hon. member paged through it rapidly and strangely enough, came upon one particular chapter entitled “The Threat to Spiritual Preparedness with special reference to Subversion”. He then chose that chapter to launch his attack. He also made a few references to other chapters and complained that we were not summarizing the policy of his party correctly. Yet that hon. member is still investigating it himself. [Interjections.] Once the hon. member has the policy of his party clear in his mind, and sends it to us, we will add an appendage to this instructional guide. This chapter in the instructional guide is part of our attempt to make our young soldiers understand that they have an enemy and that there is a danger which they may have to deal with. At the same time it is also an attempt on our part to make them understand what the State, of which they are members, looks like. However, we do not tell them that they have to swallow everything. The instructional guide consists of articles which have been scientifically compiled.

By whom? By Sabra?

I am coming to that. That hon. member must not be over-hasty, for then he might swallow his Adam’s apple. These documents have been scientifically compiled, and they are intended to depict to our soldiers the dangers of subversion. Hon. members must bear in mind that the hon. member for Rondebosch made this the point of his attack.

No.

Now I am asking what made the hon. member for Rondebosch turn so quickly to this lecture on subversion. First I want to tell this House how this lecture was compiled. This morning I asked my department to tell me how and by whom this lecture was compiled. The chapter “The Threat to Spiritual Preparedness with special reference to Subversion” was compiled by the Senior Staff Officer, Civic Guidance, Col. J. L. Pretorius, M.A. (Sociology) on the basis of interviews with military intelligence officers who can speak with authority on subversion, a number of theologians—inter alia, Dr. Murray Janson—and certain books and articles. The first is Twentieth Century Political Thought by J. Rouceck, Modern Revolutions by John Dunn and Indirect Strategy by A. Beauphre. I do not know whether the hon. member for Rondebosch knows who A. Beauphre is, but for his information I want to say that this person is perhaps the greatest expert in the field of revolutionary warfare in the world. I do not know of anyone who is a greater authority. He is a person whose name is mentioned with respect throughout Europe. In addition various articles by Mao Tse-Tung were used in compiling this lecture. In other words, this lecture is one which was compiled by a competent officer, who is highly developed and well qualified. He made use of handbooks which were written by persons such as Beauphre, John Dunn and other leading writers on this subject. He also conducted interviews with officers who have knowledge of this matter. On the basis of this knowledge he compiled his lecture. What did this young hon. member of Parliament, who says he is in favour of our creating in the S.A. Defence Force a South African spirit, and a sense of purpose and motivation, come here and do? He seized upon this to sow mistrust of these lectures among the national servicemen.

Mr. Chairman, may I ask a question?

No, the hon. member must resume his seat now. His punishment is being meted out to him, and he must remain seated now. I want to ask the hon. member what made him turn to this chapter so quickly.

But I may not speak.

I shall tell him why. It is because the Progressive Party, throughout its history, has been the intercessor of subversive element in South Africa.

That is a lie.

I say that because …

Mr. Chairman, on a point of order:

Is the hon. the Minister allowed to suggest that we are the centre of subversive activities? [Interjections.]

Order! The hon. the Minister may proceed.

Mr. Chairman, may the hon. member for Orange Grove say:“It is a lie?”

Order! The hon. member for Orange Grove must withdraw the word “lie”.

Mr. Chairman, on a point of order: Is the hon. the Minister allowed to insinuate that we intercede for the underminers in South Africa?

The hon. the Minister did not refer to those hon. members.

Mr. Chairman, I say that the Progressive Party …

Order! The hon. member for Orange Grove must first withdraw the word “lie”.

Mr. Chairman, I withdraw it with great reluctance.

Order The hon. member must withdraw it unconditionally.

Mr. Chairman, I withdraw it.

The hon. the Minister may proceed.

Mr. Chairman, is another hon. member allowed to confirm that it is in fact a lie?

Order! Did any hon. member do that? [Interjections.]

Mr. Chairman, I am saying deliberately that the Progressive Party of South Africa has up to now been an intercessor for the subversive elements in this country.

That is nonsense and untrue. …

This was the case at the universities and outside the universities. The Progressive Party took up the cudgels for everyone who found himself in trouble as a result of his subversive conduct. It is time South Africa took cognizance of the Progressive Party’s actions in respect of subversion in this country.

That is totally untrue.

Therefore I say that we shall continue to present this instructional guide to the youth, of South Africa, to prepare them against the communists and the underminers of the stability of this State,

Mr.Chairman, may I ask the hon. the Minister a question?

You may speak again in the Third Reading, but ask your question.

Is the hon. the Minister prepared to explain the policies of the Opposition parties just as comprehensively in that instructional guide?

As soon as the hon. member is clear in his own mind about his policy, he can give it to me and I shall have it inserted.

Votes agreed to.

Chairman directed to report progress and ask leave to sit again.

House Resumed:

Progress reported and leave granted to sit again.

Mr. Speaker, when this stage of the debate was being dealt with, on Monday, I made the point that there were two matters I wanted to deal with at this stage of the Bill. In introducing the first of these, I made the point that it is accepted by members on both sides of this House that it should be the aim to try to keep the cost of housing as low as possible, especially for the middle and lower income groups.

Order! Hon. members must not converse so loudly amongst themselves.

The bulk of housing for the middle and lower income groups comes from the larger house-building groups. One hesitates to mention names, but I think it is necessary for me to mention some names so that the hon. the Minister will understand what I am getting at. I refer to groups such as SchachatCullum, Van Agterberg, Mondorp, Gough Cooper and here in the Cape, Bellandia Homes. By far the bulk of the housing for the lower and middle income groups is provided by those groups together. There are of course other smaller house-builders who play a very important part. I do not wish to detract from the part they are playing in providing this housing. However, to be realistic one has to accept that the bulk of this housing is provided by these larger groups. These groups in the past used to build what is called “spec, housing” or speculative houses. That is to say, they would build and then look for a purchaser either during the course of construction or when the house was complete. All these groups are finding that this is a very precarious way of operating and very few of the speculative houses are constructed these days. All these bigger groups are now looking for firm contracts before they build. What they are offering to the public is what is called a “package deal”. They advertise, they find a man who wants a home and then they sell him a stand in a particular proclaimed township. Simultaneously with this sale of a stand they enter into a contract to build a particular type of house for a particular price. In the past the transfer duty on this type of transaction was paid only on the land, but in terms of a decision some while ago of the Witwatersrand Local Division it was held that transfer would have to be paid not on the stand alone, but on the total value to the purchaser, namely, the stand plus the building contract. Obviously that has added very considerably to the cost to the ultimate purchaser. It makes not the slightest difference to the building concern, because they do not pay more or less either way, but it does make a big difference to the ultimate home purchaser who has to pay transfer duties on the additional amount, which is usually by far the greater amount, namely the cost of the house.

In terms of clause 8 of this Bill, this type of transaction is being made even more difficult in the sense that it is made clear beyond doubt that the transfer duty which will have to be paid will be on the total “package,” to use the word commonly used. I can see no reason whatsoever for penalizing this type of transaction, because it is dearly in the interests of the home builder that he should have a firm contract rather than to speculate. It is clearly in the interests of the home purchaser that he should be able to pay transfer duty on the land only. After all, at the time that he takes transfer, which is on completion of the contract, there is nothing whatsoever on that stand; it is bare land. He is therefore taking transfer of bare land. Indeed, he must do that before the builder can go ahead with the building, because it is only when the purchaser has taken transfer of that stand that he is able to get from the building society and other sources the funds that are required to pay the home builder. Therefore, there is no question of taking transfer of a house. If that was the case there would be no problem because then transfer duty would have to be paid on land plus building. But here we have the situation where transfer is taken of a stand only, but, of course, a stand in respect of which there has already been a contract to build a house. I can see no reason why the purchaser in such circumstances should be penalized by having to pay the additional amount which can add at least R1 000 to the total price of the project to him, depending on the price of the house. In most cases it would be in the region of R1 000. I would ask the hon. the Minister to let us know what his attitude is towards this transaction and if he agrees with me that it is in the interests of both parties that in such cases transfer should be limited to the amount of the transfer duty on the land only, then I would ask him what steps he intends taking to deal with the situation. In addition to an amendment to clause 8, it may well be necessary to have an amendment to the Deeds Registries Act which deals with …

The sequence of transactions.

It is not so much a matter of sequence of transactions. I am now not dealing with the situation …

I know what you are dealing with; do not worry.

It is not so much a sequence of transactions; it is simply a transfer on a total package, in this case land and house, as against land only which is in fact what the purchaser is acquiring at the date on which he takes transfer.

The other matter that I want to deal with is the definition of “land” in the Bill and in the Act, because there is doubt as to whether it includes the sale of a unit under the Sectional Titles Act. Up to now there have been few transactions under this Act. It has in fact been regrettably slow in coming into operation for various reasons, but one hopes that in time there will be more and more of these transactions and more and more sales under the Sectional Titles Act. Therefore it is right that this Act, the Sale of Land on Instalments Act, should also include the sale of a unit under the Sectional Titles Act on instalments. I am aware that section 3(2) of the Sectional Titles Act states clearly—

It can therefore be argued, and it is argued, I think, by the hon. the Minister’s department, that the definition of “land” in the Sale of Land on Instalments Act includes the sale of a unit. That may be so. I think the argument could well be advanced and if it were tested in a court of law, it may well be held to be so. The point I wish to make is that this Act is intended for the benefit of purchasers who buy on instalments. It should be clear from this Act alone what it covers without having to refer to some other Act to find out whether in fact something else is covered under this Act or not. I do think that as we are now in the process of making amendments to this Act, this is one amendment that should be made, even if it is not absolutely necessary, for the sake of complete clarity. I would like to go so far as to suggest that the title of the Act should be amended to read “Sale of Land and Units on Instalments Act”. Then, Sir, a definition dealing specifically with units ought to be added, to make it clear that the Act deals with the sale of a unit under the Sectional Titles Act. I emphasize that whilst I accept that this may not be strictly necessary, I believe it will be in the interests of everyone if they can see clearly from one Act alone what is dealt with and what is not dealt with. It is not satisfactory to say that because the matter may be clear from some other Act, this is sufficient. I emphasize again that whilst dealings under the Sectional Titles Act are few at this stage, in time they will, so we hope, increase considerably and it is necessary that this matter be clarified in advance. Those, Mr. Speaker, are the two matters that I wish to bring to the attention of the hon. the Minister and of this House at this Stage of the debate.

Mr. Speaker, I rise to take part in this debate because I took part in the debate on the principal Act when it first came before this House in 1971. At that time we pointed out to the hon. the Minister who was then in charge of the Bill that there was no question that the Bill would, after it had been put into operation, have to come back to this House for further consideration because in practice many problems would arise in the interpretation and application of its provisions. When it is necessary to incorporate into statute law a most important aspect of our common law which has existed almost since time immemorial in the laws of countries and in the history of the development of the laws of mankind—and purchase and sale is one such aspect of common law— it is quite natural that problems will occur, no matter how well the draftsman endeavours to put into cold print the basis upon which he wants the law to operate. And so, Sir, we would not be surprised, as has been suggested, if in the course of time further amendments to this Act become necessary, even though it is amended by the provisions of this Bill, because the problems have largely arisen out of the practical operation of the Act.

The hon. the Minister is fortunate enough to be in possession of some very interesting views put forward by the Association of Law Societies who, I think, may well have been largely responsible for a number of the amendments which are proposed in the Bill before us. I have not had the privilege of seeing those suggestions, nor am I even aware of the contents of any communication between the Association of Law Societies and the hon. the Minister or his department, but I do know from articles which have been written in law journals and from practical experience that there have been a number of problems which have given great concern to the legal profession in the operation of this statute. For that reason, it is not surprising, as has been pointed out by previous speakers on this side of the House, that some very important practical difficulties have arisen, difficulties which require amendments such as those which are before us today. One does not regard the department or those who have been concerned with the administration of this Act as having been in any way unmindful of these additional viewpoints that have been expressed here; in fact, one could say that the hon. the Minister and this House are enjoying the benefits of experience on the part of the members who have spoken, because of their practical involvement in the various problems that have arisen. For that reason there has been a fair amount of discussion on this Bill, a Bill which we largely welcome, a Bill which we shall certainly not oppose, and a Bill which we commend because we find all the amendments to be of value. Nevertheless, in respect of some of the provisions, we shall move further amendments during the Committee Stage. We regard it as important, for instance, that there should be some remedy for the purchaser; that he should not be placed in the difficult position of having to go to court for an order for the performance of the conditions of a contract, without also having the remedy of being able to go to court to claim cancellation of the sale or the right to resile from a sale and to be refunded his money where there will be an inordinate delay in obtaining transfer or where the seller for some reason or other will be unable to give transfer. We also hope that the hon. the Minister will consider the question of the loss of the 2% subsidy to the purchaser where the finances are provided by a financial institution other than a building society. We also hope that he will consider the question of protection for the purchaser who pays the purchase price by instalments and who finds that the seller takes advantage of the situation by overbonding the property.

There is one other aspect to which I personally would like to draw the attention of the Minister, and that is the new provision in the proposed new section 10(2) that if in terms of a contract the seller is to transfer land to the purchaser against payment of the amounts referred to in section 4(1) (g), a banker’s guarantee furnished by the purchaser for payment of the said amount against transfer shall be deemed to be payment of such amounts. I hope the hon. the Minister will accept the suggestion that a building society guarantee shall also be deemed to be payment of such amounts. The charges payable under section 4(1)(g) would be all the charges for which the deed of sale makes provision. It would cover all charges arising out of the provisions of section 4, as well as charges payable by agreement, such as the costs of transfer; in other words, legal fees as well as transfer duty and stamp duty. All those charges would be covered by the provisions of section 4(1)(g). I do not think it would be reasonable to disturb a long-standing practice in this country in terms of which transfer costs are paid on the presentation of accounts, because the legal fraternity must make provision for the payment of transfer duty, which in many cases could entail the expenditure of a large amount of money. In a busy practice it could involve a considerable amount of money. Payment of stamp duty also has to be made before transfer takes place, so it is important in order virtually to assist the buyer to obtain transfer more readily, to avoid this embarrassment to the legal profession. The suggestion that I intend to place before the House in the form of an amendment will be to add after “mounts” the words “except in respect of legal fees, transfer duty and stamp duty.” That is an indication of some of the amendments which are necessary in order to enable a Bill of this nature to be fully operative and satisfactory in the interests of all parties. I would like to say that we must not be unmindful of the part which has been played by all those who have been associated with this question of the sale of land. The estate agents themselves have also made an important contribution to the advantage of the purchaser. Despite the fact that the estate agent is really there to promote the sale and to ensure that the sale takes place as quickly as possible—that is really where his duty would normally end—the estate agents in establishing their organizations have also established a fidelity fund of their own, something which is to be highly commended.

It is not necessary to labour the point.

Nevertheless it is important that it should be noted—with all the goodwill and with all courtesy in the world to the department which I think has played a highly commendable part in this whole problem—that the estate agents have made an important contribution in this particular field. I feel that we should not be unmindful of that, and further that we should not be unmindful of the importance of the point made by the hon. member for Musgrave in regard to the package deal. Of course the problem arises in regard to the interpretation of the Transfer Duty Act.

I shall reply to that in detail.

I just thought I would mention the matter again, because that is where the problem really lies. I am sure that that problem could possibly be eased. If carefully considered there could be some means of assisting in respect of a genuine deal of that nature, because it would enable the acceleration of home ownership which is such a vital necessity these days. I do feel that a Bill of this nature deserves our commendation but that it also requires a more careful and detailed study. The hon. the Minister appreciated this himself in that he adjourned the debate after he had made his Second Reading speech. I sincerely hope that when we come to the Committee Stage we will be able to deal with with these amendment on a level so objective that our sole consideration will be the interests of the purchaser as well as of all those others who play their part in ensuring that people can acquire home ownership.

Mr. Speaker, I think this piece of legislation is one of a series which we will deal with during this session and which relate to consumer protection. It is quite clear that this falls into the same category as the Trade Practices Bill, which we have already debated, and the Bill relating to monopolistic conditions which is already on the Order Paper. The concept is that the consumer should be protected. No-one has any quarrel with that. I have a slight quarrel with what was said by the hon. member for Jeppe, if I may point it out in all friendliness, who said that our sole purpose should be to protect the buyer. I think he is over-stating the case, and I think the equity of the situation is such that one must also look at the seller and not create a problem. Sir, I do not think he intended to overlook the seller; perhaps he got carried away in the emotion of the moment on that issue. Also, in so far as the hon. member for Musgrave is concerned, I agree with him that housing costs are increased as the result of the interpretation which has been placed upon the transfer of the stand as part of the so-called package deal. I have only one problem with his submission and that is that unfortunately it does not relate to this piece of legislation. Except for that I have no quarrel with him at all. In fact I agree with the submission he made. Unfortunately, I do not think one can amend this piece of legislation in order to give effect to what he has in mind.

Sir, I have one point which I would like to make right at the outset. In our desire to protect the purchaser, I do not think we should do anything which in fact increases the costs to him, unless such an act is absolutely essential in order to give him the necessary protection. I am a little concerned with some of the submissions which have been made during this debate and which will result in very substantial increases in costs in so far as the buyer is concerned. Sometimes we can overreach ourselves in regard to the degree to which contracts should contain documents and how matters of that kind should be approached. [Interjection.] The Minister has pointed out one example. I think there is another one which we have to be careful of, and that is the question relating to interest. One of the difficulties one has in the present economic circumstances is that the township owner is unable to raise money for the normal financing of his township activities at ordinary building society rates. I can tell the hon. the Minister that, in fact, there are township developers, big concerns including public companies, who have decided to go out of the business because of the problems relating to the fact that they cannot get the return of interest on the sale of a stand that they themselves have to pay in order to service it. It is illogical to tie everything to a building society rate. I think there is an overstressing of the building society rate, not only in the past legislation, but even in this piece of legislation. Let me give an example. If we refer to clause 6, which introduces a new section 7 we see in subsections (1)(e) and (2) references to the fact that the terms as to the rate of interest and the redemption must not be more onerous than the terms upon which at the time when transfer is taken, a loan secured by a first mortgage bond over land is granted by a building society. There is a dramatic difference, if I may point it out, between the loan and the rate at which and the conditions upon which it is granted by the building society and the availability of an actual bond to the people concerned. It is very easy to say that that is the rate of interest and those are the terms of a building society bond, but to get one is another story. It is with great respect that I point out that for example in a provision such as this you have to say “the rate of interest and the terms at which that particular man is able to obtain a bond” because he may not be able to obtain a bond and he may be very happy to take a bond under other conditions, in the same way I think subsection (2) overstresses the rates of a building society as opposed to the availability of mortgage finance to the ordinary individual. With respect, I think one must look at this very carefully because one may find oneself in a situation where one may well squeeze people out of this type of business by reason of one’s insistence upon linking schemes to rates of interest which to some extent are hypothetical because the money is not available.

There is also another matter to which I should like to draw attention. I do not want to draw attention to particular details, which I shall do during the Committee Stage. I refer to the question of the rights of a buyer who has not obtained transfer; in other words, the purchaser on deed of sale who is sought to be protected in terms of this piece of legislation. I venture to suggest that the rights which are created in terms of the Bill are akin to real rights in that a purchaser receives preference over ordinary creditors and receives the right to obtain transfer in certain circumstances when in normal circumstances he would not have obtained it. Even though again this is a matter which relates, in fact, to a possible amendment of the Deeds Registries Act, I think one must raise it here. Is there not a case to be made out for the registration of deeds of sale? If we create this kind of right which is akin to a real right, then the public should know about this type of right and the public should, in fact, be able to see whether there are rights of this kind in respect of a property. This is very close to, if it is not actually, a real right in the way in which we recognize ordinary real rights.

Let me give an example of how this provision can be abused. One may find a situation where a man could enter into a deed of sale and in fact obtain only a nominal deposit. If he goes insolvent, the person who has paid the deposit will then have obtained a real right to obtain transfer of the property even though the purchase price might be less than the real value of the property and the other creditors may be prejudiced. This is a very serious position, because while we are protecting the purchaser I think we have an equal obligation to protect creditors of the people concerned who are in this type of business. What worries me is that in our anxiety— I believe it is a correct anxiety—to protect purchasers we are in fact prejudicing creditors. There is another example of this. If one looks at the new section 11, as inserted by clause 8, which gives a purchaser the right to obtain transfer, one will find that subsection (3), for example, does not protect the creditor adequately. In these circumstances the purchaser has all the rights. He may in fact be a person who is a party to an abuse of the situation and yet the creditor is left out in the cold. Let me give the hon. the Minister another example. If a man comes along to a bank or a financial institution and, in order to obtain credit, presents his title deed as unmortgaged and presents his financial position, credit can be given to him. Yet, it may well be that as a result of a deed of sale which has been entered into the creditor, who is completely innocent and bona fide, will end up being prejudiced because the purchaser may be entitled to take transfer against payment of a comparatively small amount. It is this protection of the creditor which I think has been overlooked to some extent in this piece of legislation. I ask the hon. the Minister to apply his mind to this because I think it may be necessary to effect amendments to this piece of legislation in order to protect both the creditor and the purchaser.

I should also like to refer to the problem which is created by the right to make payment by means of a banker’s guarantee. I agree that it may not just be a banker’s guarantee, but also an insurance company guarantee or a building society guarantee. But what worries me is subsection (2) of the new section 10 which is inserted by clause 7. This subsection provides that the furnishing of a guarantee shall be deemed to be the payment of such an amount.

I am amending that.

Then I need not pursue that matter further. I think there is an additional problem in respect of the new section 6(4) which is inserted by clause 5. This subsection reads—

In terms of the new section 10(2) as inserted by clause 7, “payment” will be delivery of a guarantee which should bear interest as well until the date of actual payment.

It is not qualified; I shall amend that as well.

I am very please to hear that because it is a practical problem from the point of view of the township developer.

Then I should like to deal with the question of the limitation of the seller’s right to cede, which is referred to in the new-section 12(1A) as inserted by clause 9. I should like to suggest to the hon. the Minister that there is no prejudice if you have a cession which is incorporated in the original deed of sale. I shall tell hon. members why. If you have to get the purchaser’s consent in regard to a particular assignee after the transaction has been concluded, the purchaser need only say “no”. There is no question of him having to give his consent, which he may not unreasonably withhold, or something of that kind. He may, however, very seriously prejudice a seller or a developer who uses his need of sale in order to provide finance for his operation by just refusing point blank to agree to any form of cession. With the escalating costs of township development and the changes in provincial ordinances in relation to the provision of services, when they have to be provided, etc., this ability on the part of a township developer to raise money by means of a cession of deeds of sale is one of which he is being deprived by the provisions of the new section 12(1A) as inserted by clause 9. Let me give an example. What happens in the average and ordinary case is that no township developer cedes a deed of sale to a company of straw in order to escape his obligations. What he does is that he cedes it to a bank or a financial institution which is well able to fulfil any such obligations. However, the obligation need not be assumed by the new individual who takes over the deed of sale because the original township developer, the cedent, can in fact be left with the obligation he has in terms of the deed, of sale. It would merely mean a cession of rights. I would like to appeal to the hon. the Minister to reconsider proceeding with the proposed new section 12(1A) because I believe it creates a real problem and will again increase the costs to township developers in regard to this particular matter.

These are the only matters of principle I want to deal with during this stage of the debate. There are other amendments of a technical nature which I think should be effected, but I think that, as a whole, this is a piece of legislation to which there will be no objections in principle by anyone. However, I think the hon. the Minister may well consider referring this Bill to a Select Committee after Second Reading so that all these technicalities need not be debated in this House. The Select Committee can then iron out the technicalities. I think that the attendance in this House during this debate has demonstrated that this is not a matter with which members as a whole are particularly concerned, but that it concerns only a limited number of people who perhaps have relatively specialist knowledge. I think we could dispose of all these matters in a Select Committee quite expeditiously during the remainder of this session.

Mr. Speaker, after listening to the hon. members and the hon. member for Yeoville today, I say thank you for the Transvaal Provincial Council. I give thanks for that Council and for the knowledge which the hon. member could acquire there. We taught him something in the Transvaal. I am grateful to say that the legislation which is before this House at present, will be one of the greatest assets to the township developer. As a salesman, one has never had a leg to stand on from a business point of view. Things went as they did with Adam and Eve in Paradise. The township developer blamed the client who was buying or blamed the agent. The agent would say in turn that it was the buyer’s fault or that the problem has arisen here or there. It was the same with Adam and Eve as well.

Adam blamed Eve and she blamed him and in the end they blamed the snake who didn’t have a leg to stand on. That is actually what has happened here. By means of this legislation, we are being placed in a position where I can feel free to say to anyone, “Use the deed of sale, go forth, my son—what does it say in the Bible?— and buy yourself a vineyard.” There is not enough money in financial institutions in South Africa today to finance subdivision of land. I just want to mention a few figures briefly. 1 090 towns were frozen recently in the Transvaal—thank the Lord that they are now free of that. Suppose that there are 100 stands in a town and that they are R5 000 per plot. In that case, the capital invested in those plots would have amounted to R545 million. I can tell hon. members that that amount does not come from the building societies. One does not get this sort of financing from building societies. As the hon. member for Yeoville correctly stated, one cannot get a loan for township development at a building society. One will not be able to negotiate such a loan at 8½%, but will have to pay 12%, 13%, 14% or 15% according to the circumstances.

You must be careful of not paying 15%.

The hon. member and I know, “a little bit here and a little bit there and in the end we fix it up together”. This is an opportunity which the ordinary man is getting to acquire land. Gone are the days when a man thought he should buy a house for cash. He never became a home-owner. The first thing which I taught boys who were my pupils, was to become land-owners. When I became a township developer, I said that they should not buy a motor car, because if they were to buy a motor car on hire purchase, they would find that their asset was depreciating by 25% annually and that they would have to pay 17½%, and more for financing.

18,2.%

You are always better than I am when it comes to the adding side of anything. The hon. member is quite right. Then there is also petrol, repair expense, etc. The opposite of this is the Act which indemnifies the young man against rogues and people who contravene the Act. This legislation gives him an honest and fair chance to say, “Now I am going to buy myself a plot”. In many cases, one only has to pay 5% of the purchase price of a plot as a deposit. Then one pays 8½% interest in respect of that plot. The real growth of the value of a plot in a good area is between 5% and 7%.

In other words, in that case one pays only 1½% interest. Our dear Lord made all the land at once. Afterwards he multiplied the people so that they filled the earth. Therefore, land becomes more and more sought after every day and it will only be the man who has capital who will be able to buy land if this legislation is not placed on the Statute Book. Up to 90% of the business men of South Africa are honest. There are only 5% or 10% of the people who do not keep to the Act and are therefore not fair towards a buyer. It is those people who will be opposed by this legislation.

The hon. Opposition reminds me of someone who knows that a baby gets whooping cough, measles, etc., and that it has teething troubles. In that way the Opposition analysed this Bill and they did it very well. However, with changes here and changes there, hon. members are trying to give the baby its medicines at birth. They want to give the baby an injection against whooping cough, castor oil, etc., at the same time. They will kill the baby before its lungs are functioning properly. Leave this Bill and give it a chance first. Give us the opportunity to test this measure. In the Lord’s name, hon. members must not ask for the Bill to be referred to a Select Committee so that it may be delayed. This Bill must be placed on the Statute Book because it will stimulate business. The agent or salesman who is worth his salt can go to a buyer in all honesty and sincerity and tell him that he is indemnified by the National Party Government. Perhaps without even knowing it, these agents will be expounding National Party policy into the bargain! Therefore, this is a positive contribution. In 1967 I made a speech in Pretoria—one of many—on land and land ownership.

I said on that occasion, and meant it, that Jan Van Riebeeck came with 116 people and 300 years later we have this beautiful country, South Africa, with, its subdivisions, its buildings, etc. I said that it would take ten years for 3½ million people to be placed in the same situation. I said that the same utilization plan would have to come. I looked at Pretoria, Johannesburg, and their environs and saw that these had to be joined. At the moment there are 84 000 plots which have been subdivided. I want to say that from 1964 to 1970 more people in South Africa became land owners than was ever the case before. People had the opportunity to make the land of their fathers their own land. They did it through instalments.

The principal Act was not yet fully operative at the time. It was still only an idea then. Then we sold the plots already. [Interjections.] We know that there are problems which are being rectified by this amending Bill, but the principal Act gave everyone a chance to buy land. Let us go back to Germany. The hon. member for Yeoville will know what I am talking about. Why was an interest bank established? The interest bank was established in Germany to make the German mark available for buying land and buildings and to give inflation the deathblow.

Mr. Speaker, when we take off from the earth it is from land; when one lands, it is on firm ground; and when one is buried, it is in ground.

Order! I have to interrupt the debate now so as to enable the hon. the Minister of Justice to make an urgent and important statement.

Mr. Speaker, I should like to make the following statement to this House in respect of an incident which occurred this morning in the men’s hostel at the Katutura Compound in Windhoek, South West Africa.

For a long time information had been available to the effect that a large number of illegal natives were hiding in the Katutura compound and were propagating and inciting a strike, and molesting the legal inhabitants. This hostel accommodates 5 300 natives, the majority of whom are members of the Ovambo nation. Acting on this information the council of leaders of the camp discussed the matter on 20.4.1975, and it was decided that action should be taken against the illegal inhabitants. The council of leaders consists of Ovambos and Kavangos who live on the premises, and is elected from time to time by the inhabitants themselves.

On the morning of 23.4.1975 the compound manger, with the assistance of 32 municipal police, White and non-White, took up positions in front of the main gate of the compound to demand the documents of those leaving the compound. During the process a number of natives whose documents were in order congregated in large numbers outside the gates. At 7 a.m. a municipal lorry, which removes garbage from the compound every day, arrived at the gate. When the gate was opened to allow the lorry to pass through, a large number of natives stormed the gate and a large-scale stone-throwing from inside as well as outside the compound began. The officials at the gate all sought shelter in the office inside the compound. The S.A. Police were sent for, and Captain Nortje and three constables arrived at the compound. They were armed only with pistols. Immediately afterwards the stone-throwing inside as well as outside the compound recommenced and increased in intensity. Captain Nortje requested those who were outside the compound to go to work, but they paid no heed to this, whereupon he sent for further reinforcements. The stone-throwing increased in intensity to such an extent that Captain Nortje and his constables were also forced to seek shelter in the office. Immediately afterwards the natives outside the compound rushed at the offices and pelted the offices with stones. The officers then realized that their lives were in danger and shots were fired at the attackers, whereupon the latter fled. Immediately after this, at 7.30, the district commandant, Colonel Schadle, arrived with five officers and 25 men. After this, no further incidents occurred. It was subsequently found that one Ovambo had been shot and killed outright, while three had been seriously and seven lightly wounded. Members of the S.A. Police sustained only light injuries. A large-scale investigation and clearing-up operation was carried out, and up to now 295 natives have been detained, of whom 127 have been identified as stone-throwers and 168 as illegal inhabitants. Various municipal vehicles and one Police vehicle were damaged. The roof of the municipal offices was also damaged. The South African Police are patrolling the compound and the surrounding areas to preserve the peace and to reassure those who want to go to work and protect them against intimidation.

Mr. Chairman, I found it very pleasing to hear that it was Eve who said to Adam: “Buy yourself a vineyard.” I am very fond of a vineyard myself, and I am glad the hon. member for Langlaagte is also a lover of vineyards. It is gratifying to think that there are members from the Transvaal who also have vineyards. I am pleased to hear it.

The hon. member for Langlaagte said it was only after the Act, which we seek to change through an amendment today, had been approved that land was bought on instalments on a large scale. I cannot agree with the hon. member for Langlaagte. I can quote to him cases which I know of where the plots were purchased on instalments as long ago as in the years 1880-1883. This was done in the following manner: The purchaser obtained a full bond from the seller, which was never redeemed. The purchaser only paid interest on it. When the purchaser eventually died, the amount was recovered by his estate. That means that the purchaser himself never really paid off on the bond but only paid the interest for all those years. Of course, that was quite profitable, seeing that, according to the hon. member for Langlaagte, the value had doubled over and over again during the next 40 years or more. That means that the amount which was originally owed, was negligible compared with the value of the land when eventually paid off. I only mention this to point out to the hon. member that the sale of land on instalments is something which originated many years ago and that it did not need this legislation to promote it.

†Mr. Speaker, the hon. member for Yeoville dealt with quite a number of interesting matters. I agree with him wholeheartedly that this legislation does in fact create a real right for a purchaser by virtue of a deed of sale, whereas before a deed of sale did not give him a real right. But I cannot agree with the hon. member for Yeoville that because of the fact that this right which the purchaser now gets resembles a real right, there must be a means of registering deeds of sale. This is a very dangerous subject which the hon. member for Yeoville has touched upon, because if we were to start registering deeds of sale, I believe that we would eventually find that very few people would be prepared to take transfer of the land that they have purchased. They would say, “We are perfectly happy with the registered deed of sale in the Deeds Registry; by not taking transfer we are going to escape transfer duty and other fees that we would have to pay.” I cannot therefore agree with the hon. member for Yeoville on that point.

You have to pay transfer duty on the sale.

The hon. member says that you have to pay transfer duty on the sale. Sir, for the hon. member’s benefit, you pay transfer duty before you register transfer, and if you do not pay transfer duty within a period of six months from the date of sale, then you pay a penalty on the transfer duty. But do you know, Sir, what the penalty is? The penalty is 7½% per annum. At the present rate of inflation and with the present devaluation of currency, I do not believe that that is a penalty at all. I am not pleading that it should be increased; I am merely saying, as far as the argument of the hon. member for Yeoville is concerned, that I think my argument is better because I think the effect would be that everybody would be perfectly happy to have a registered deed of sale and would not bother to take transfer of the land and to have that transfer registered in the Deeds Registry.

To return to the principles of this Bill, a great deal has already been said about the protection of the purchaser. I agree that a purchaser who buys land on instalments should be protected. I know of any number of cases where purchasers who have purchased land on instalments have in fact not been able to get transfer eventually, or have been diddled out of the transaction. But, Sir, we are in a dilemma here. The dilemma is that we must not over-protect the purchaser, because if we over-protect the purchaser, the effect is going to be that we are going to hamper the seller to such, an extent that it is going to have a detrimental effect on the purchaser. That may perhaps sound a bit strange, but I think I can illustrate it by putting it this way: If we were to say, for instance, that we will not allow the title deeds of a property which has been sold to be pledged with a bank by the seller as security for an overdraft, then we are going to find that the seller will be unable to finance the development of that piece of land before he can give transfer to the purchaser. There is going to be an inordinate delay. In other words, by over-protecting the purchaser, we are now making it very difficult for the seller to carry out his obligations in terms of the deed of sale, namely to provide the necessary services. The same applies in the case of bonds. The question has already been raised of a seller mortgaging the property which he has sold on instalments for an amount greater than the balance of the purchase price which is still due and owing to him. This is a great difficulty. In fact, I have a note here saying that this question of mortgaging or pledging the title deeds as security for an overdraft, is something which in this sort of transaction is taking place more and more often. The man who writes to me says that in the last 26 years he has only come across cases of this nature within the last five or six months, and he believes that this sort of procedure is going to continue and that it will accelerate. His plea is that we should have something in this legislation to prevent these title deeds from being lodged with the bank as security for an overdraft, or to prevent these title deeds from being given as security for a mortgage bond. But I am afraid I cannot agree with the hon. gentleman who wrote to me, because if we are going to do that, we will find that as far as property development is concerned, it will come to a standstill. We must allow the property developer to borrow money in such a manner as he is able to for the purpose of developing the land, portion of which he has sold. I think a case can be made for a single erf or plot of land. I think a case can be made out for saying that where a seller sells a single plot of land which is incapable of subdivision, or which does not fit into the Sectional Titles Act, or which cannot be regarded as a section or a unit, we can protect the purchaser in such a way that this land cannot be mortgaged to such an extent that the purchaser eventually has nothing but a claim to transfer, which he can never get because the amount owing under that mortgage bond is far greater than the balance of the purchase price and he cannot pay off this amount. I think we will have to apply our minds very carefully to this aspect of the matter. It is not a simple one. I believe that the hon. the Minister probably saw this point—I am giving him credit for having seen it—and I think it will take quite a lot of very earnest consideration to see what can be done in order to try to protect the very small purchaser who buys a small piece of land in the way I have suggested. On the other hand, I do not think that we can protect the purchaser who buys from the developer, because the developer must be allowed to mortgage the land in order to provide ever funds are required in the way of development.

The other point I wish to raise relates to another aspect of this Bill. I believe one might say it is the principle of this Bill, namely that we are here trying to save the purchaser unnecessary costs. I think it is necessary that we should realize at the outset that there are certain costs that the purchaser can be relieved of. If we pass this piece of legislation we must, however remember that we cannot save the purchaser the cost of consulting his own attorney. I believe that after this Bill has amended the existing Act, any purchaser of land on instalments will willy-nilly have to consult his attorney before he signs a deed of sale, because unless he does that he is certainly not going to know what his rights are going to be and he will certainly not know what he is going in for. Therefore I believe that this aspect of the matter should be given wide publicity and prospective purchasers under the amended legislation should know that this legislation is not so designed that he can go into a transaction blindfolded, sign a deed of sale and then say that the hon. the Minister of Economic Affairs is looking after his interests. I think the hon. the Minister will agree with me that he will be unable to assist that purchaser in any way if he enters into an agreement which makes it impossible for the Minister to assist him. There is a principle in the Act which is being amended by this Bill which I believe tries to save a purchaser the cost of transfer. The way in which this is suggested is that there should be a direct transfer from the registered owner to the final purchaser. This is a principle which I think is embodied in the Act which is now being amended. I do not know whether it was acknowledged as a principle at the time, or whether it was merely a fortuitous principle which crept into the Act. However, the amending Bill now does away with that principle entirely since it provides that the intermediate transactions must be registered in the Deeds Office. It therefore does not obviate the costs attached to the registration of the intermediate transactions. The Bill also provides that the final transaction must follow the normal sequence of transfers in the Deeds Registry Office. In other (words, if a property was purchased from the original owner and was resold nine times after that, there would be ten separate transactions before the ultimate purchaser would be able to obtain transfer. I should like the hon. the Minister to tell me whether there was such an intention at the time because he did not mention it in his Second Reading speech. Was it, in fact, the intention to save the purchaser the costs of transfer in respect of the intermediate transactions so that the ultimate purchaser would only have to pay for one transaction, i.e. from the registered owner to himself? I do not believe the answer is “yes”. I believe it is “no”. I shall tell the House why I believe that.

Are you referring to clause 11 ?

Yes. I believe the answer is “no” because the Government decided at that time—I do not know whether it was the hon. the Minister’s predecessor or whether it was the Secretary for Inland Revenue—to look after itself. It adopted the attitude of “We do not mind whether you take transfer direct from the original registered owner if you are the ultimate purchaser and you escape paying transfer costs for nine different transactions, as long as you pay transfer duty to us in respect of each of those transactions.” I would say that in these times of high costs of housing and high costs generally for anybody who is starting a new life in a new home, I believe that the Government should show the way. I believe that the hon. the Minister of Economic Affairs can show the way very easily by saying that they are not going to ask for transfer duty on the intermediate transactions. If the hon. the Minister would agree to doing away with transfer duty on the intervening nine transactions, I am pretty certain that I shall be able to persuade the Chief Registrar of Deeds, and whoever else has an interest in this matter, to do away with the nine intervening transactions as being registered separately in the Deeds Office. I think we should have a leaf out of the book of the Receiver of Revenue to prove this earnestness on the part of the Government. I am not certain at all whether that is the intention, but I do hope that the hon. the Minister will give this matter a great deal of attention when he replies to the debate.

I also want to refer to a matter dealt with by the hon. member for Musgrave when he talked about the package deal. I think that quite possibly the reason for the decision of the Witwatersrand Local Division is the fact that the Transfer Duty Act makes allowance in certain sections for an irresistible conclusion. I am not going to read this to the hon. the Minister, but before he gives his reply to the Second Reading debate, I suggest that he should consult the Transfer Duty Act. He will find the following proviso to section 2(4) of the Transfer Duty Act, Act No. 40 of 1949:

Because it is improved property, transfer duty is payable upon it. Section 6 of the same Act, which deals with certain payments which shall be added to the consideration payable in respect of property, provides in subsection (1)(c) that there shall be added to the consideration for the purpose of arriving at the transfer duty:

This is another point to which the hon. the Minister should pay attention. Finally, I suggest that the hon. the Minister should have a look at section 8 of the same Act which deals with the valuation of the consideration which is payable. Section 8(b) makes the following provision:

If the hon. the Minister looks at these three provisions, I think he will come to the conclusion that it is really the Transfer Duty Act which is militating against the package deal to which the hon. member for Musgrave referred. I think the hon. the Minister can exclude this package deal—where the builder agrees to build provided you buy land from him—from the operation of the Transfer Duty Act by means of a small amendment to this Bill… I do not think that it is necessary to amend the Transfer Duty Act itself. I think it can be done by reference. I think the hon. the Minister is in a position to do that.

There is one other matter which I think we should take into consideration and that is the fact that, where we find there are a number of intermediate transactions as I mentioned a little earlier, where between the registered owner and the ultimate purchaser there are, let us say, 10 transactions, there is a method of getting over this difficulty. This method has been employed since the Act that we are now seeking to amend, was passed. It is a simple way of getting out of the difficulty if the parties should find difficulty in proceeding with all those intermediate transactions. In addition, this is quite a legitimate way of dealing with those difficulties. The method I refer to is to cancel all the intervening transactions and to negotiate a fresh transaction between the registered owner and the ultimate purchaser. The only difficulty about such a transaction is that the various rights of the parties must then be described in the new deed of sale. Nevertheless, it can be circumvented. This method also circumvents the payment of transfer duty on the separate transactions. I do not think for one moment that the hon. the Minister can be in earnest in requiring transfer duty to be paid on these intermediary transactions and I believe, if he looks at it from that point of view, he can still come to the assistance of purchasers by helping them to get over this additional payment.

Finally, there is the proposed new section 14(1), clause 11. This rather peculiar section deals with the question of a property that has been sold on the never-never in the case where, before the eventual purchaser can get transfer, the registered owner of the land becomes insolvent or, in the case of a company, goes into liquidation or the property is attached and sold in execution. The situation that existed before these amendments were introduced, was rather curious because it provided that in such a case the eventual purchaser would have a claim against the insolvent estate or against the property in the case of a sale in execution, for the portion of the purchased price paid by him plus interest calculated at 5 % per annum on the said portion in respect of the period from the conclusion of the contract to the date upon which the land is sold. That is how it read. As I say, that in itself was a rather curious provision. It has become more curious now by bringing in “the trustee or liquidator” and “deceased or insolvent estate”, by changing words here and there and by adding at the end of this subsection:

It is capable of a variety of interpretations, but I only want to deal with two. It refers to the 5% on the portion paid from the date on which the agreement was concluded to the date of sale by the trustee, by the liquidator or in execution. I have done the calculation and can tell hon. members that if we assume that the date of agreement was 1 January 1950 and the sale by the trustee or liquidator or in execution was on 1 February 1975, just over 25 years later, with a purchase price of R5 000 and with payments by the purchaser of R100 on 1 January 1950 and thereafter R25 per month, exclusive of interest, on the 1st day of every succeeding month, then by the time this sale took place he would have paid a deposit of R100 plus payments of R25 for 180 months. That would make his total payment R4 600. If I should interpret now what the interest is that should be paid, it would be interest of 5% per annum on R4 600 from 1st January 1950 to 1st February 1975. Let us say it is 25 years. The interest will be R5 750 and the total amount which the purchaser could then claim against the insolvent estate or against the deceased estate or the property sold in execution, will be R10 350. [Time expired.]

Mr. Speaker, it has been said by a writer in relation to the principal Act and this bill that it constitutes a socialistic inroad into the right of freedom of the individual to contract. I do not believe that, but it was an eminent writer who wrote this. He went on to say that however good a law may be, it always becomes the subject matter of litigation. I cannot criticize the Act, because I believe one is not allowed to criticize an existing Act in this House, but I can say just in passing that I do not believe that the existing Act should have been passed in the first instance. However, as it has been passed, we have now to try to make it into good law. I think the only good provision which has ever been passed in regard to contracts and contractual ability was that little paragraph in the General Law Amendment Act which stipulated that sales of land must be reduced to writing and signed by both the purchaser and the seller. I think it was only one simple clause and I doubt very much whether any litigation is likely to arise from that. I believe it is our function here today to see that we improve this Bill in such a way that the minimum amount of litigation arises from it. It should be our goal to see to it that the drafting of this measure is such that it is clear to the man in the street as far as it can possibly be made clear. The original Act was amended in a minor way one year after it was passed and I do sincerely hope that this Act will not have to be attended to again next year. It is important for us on this side. We have had a number of speakers on the Second Reading, but it surprises me that the Government has not found more members to speak on the very important provisions which are contained in this Bill. We are certainly determined to see that good law comes out of this particular Bill.

I am going to run very quickly through the provisions which will be dealt with in more detail during the Committee Stage just to give a preview to the hon. the Minister as to what we feel about certain clauses.

Clause 5 of the Bill which deals with section 6 of the Act has already been dealt with in part by the hon. member for Walmer, but I do want to suggest to the hon. the Minister that if the Bill is left as it is at the moment, it is going to cause some difficulty to both, sellers and purchasers. I say this because as it reads at the moment, it will inevitably result in sellers simply including in their contract a clause relating to interest in which is stipulated that the interest payable under the agreement will be the rate of interest prescribed by the Minister of Economic Affairs by regulation from time to time. I believe that this is going to cause uncertainty in the mind of the seller in regard to the interest he is going to receive, and uncertainty in the mind of the purchaser as regards the interest rate he will have to pay from time to time. I do not believe that this is a good provision. I feel that it can be improved upon by relating the interest that is included in the contract to the interest that is fixed by the hon. the Minister of Economic Affairs at the date of the conclusion of the contract. We also have certain other reservations in regard to this particular clause which were dealt with by the hon. member for Walmer. He suggested that the seller should be protected in relation to the bond which he himself holds over his own property. We will deal with this in the Committee Stage.

The second aspect of this Bill to which I want to refer is in regard to clause 8 which deals with section 11 of the principal Act. Subsection (2) of the proposed new section 11 washes out direct transfers. This has been dealt with by the hon. member for Wynberg, but I would take it just a little further in order to allow the hon. the Minister to consider certain amendments which we propose moving at the Committee Stage. I want to ask the hon. the Minister whether in his reply to this debate he will tell us why direct transfers are being done away with. From his Second Reading speech it appears that a complaint was lodged with him by the Association of Law Societies. I understand that the reason for the complaint was that the principal Act imposed a peremptory condition in regard to a direct transfer of land.

May I ask the hon. member a question?

Yes, certainly.

Is the hon. member asking for the intervening transfers to be deleted and that there be a direct transfer between the owner and the buyer irrespective of any intermediary to whom the property might have been sold?

Yes, Mr. Speaker. I am most definitely. The appropriate provision in the principal Act reads as follows—

I believe that the hon. the Minister will agree with me that that is obviously a peremptory condition. It imposes a considerable onus upon the seller and, of course, his attorneys and conveyancers, to ensure that transfer will be passed from the seller to the final correct purchaser. In terms of the amendment contained in this amending Bill, however, that difficulty has been eliminated. Subsection (1) of the proposed new section 11 reads as follows—

Therefore, it is not obligatory upon the purchaser to obtain transfer direct from the seller. This removes the difficulty experienced by the Law Society. What the Bill now does, however, is to include a condition in regard to direct transfers from the seller to the ultimate purchaser. I do not believe that there is any reason for this and I should like, in fact, to give the hon. the Minister three reasons why I think there should be direct transfer. The first one is that it saves costs.

It is not relevant to the objects of this Bill.

Why?

I shall tell you why.

Well, you might hear me out and then tell me later. First of all, it saves costs. Secondly, it is more speedy and will obviate many practical difficulties. Thirdly, I think that it also has the effect of minimizing the possibility of tripartite agreements being entered into and also the possibility of the cancellation of contracts and recontracting which is a very clumsy procedure.

The third point that I want to raise here, is the proposed section 11(9) of the Act, clause 8 of the Bill. I want to put it that there is a serious difficulty that arises here. The Bill maintains that the purchaser will be entitled to sign on behalf of such intermediary or such predecessor all documents required in connection with payment of the transfer duty or the transfer. I believe that it means that the purchaser may sign documents in connection with the transfer of the land to himself. If that is so, I believe that it is a serious difficulty, because I do not believe that any purchaser would for instance be prepared to sign a Group Areas Act affidavit in regard to an intermediary. He does not know what the intermediary’s race group or classification is. If these rights are given to him, he will be entitled to sign the document, but I doubt whether he will be prepared to do it. The Registrar of Deeds will refuse to register transfers until either the conveyancer certifies in regard to the group of an intermediary, whom he probably does not even know, or a Group Areas Act affidavit is submitted to him. I hope that it is not irrelevant to this Act.

There is also another difficulty and that is that there is no provision made in this subsection (9) in regard to the recovery of transfer costs. It does not say anything about the recovery of transfer costs and it appears that although the ultimate purchaser may pay transfer duty, he can recover the transfer duty which he has paid out, but in order to get transfer, he has to pay for cost of transfer and there is no provision in this subsection to obtain the costs of transfer from the intermediary.

In regard to clause 10, which deals with section 13 of the Act, I believe that there is a portion of the existing subsection (1) of Section 13 which is not being dealt with in this amending Bill, but which I think can be traversed at this stage, because it is important. That is the question of the 30 days’ notice. It has been proved by experience, that a defaulter is frequently a regular defaulter. He gets notice of 30 days that he must pay; he pays but then he again falls into default. He gets another notice of 30 days; he pays and again he falls into default. The result is that the seller is always in difficulty. I believe that this could be improved upon by stipulating that if a defaulter is in default more than twice in one calendar year, then he is only entitled to receive seven days’ notice in order to give him an opportunity of paying his instalments.

Then in regard to the famous section 14 dealt with under clause 11 of this Bill, I would like to draw the hon. the Minister’s attention to subsection (2), to the following words in line 27, namely: “Does not so take transfer of the land”. I believe that there is no certainty here as to when transfer must be taken. In other words, it is left rather open as to when transfer must be taken and obviously, the purchaser has to be put in mora, and he will only be able to be put in mora, and I am sure that the courts would say so too, after a reasonable period. However, I believe it is better to have certainty here as to when he should take transfer. In regard to subclause (3) of section 14 I also feel that there is no provision there for the costs of transfer. If one looks at…

Is the hon. member referring to clauses or sections?

I am referring to clause 11, section 14(3), where it says—

There is no provision here for transfer costs whereas, in subsection (4) we find that there is, in line 16, on page 16, a reference to all other costs in connection with transfer. I do not believe that there is any reason, when transfer is taken, to differentiate between a person whose land is not subject to a mortgage bond and one whose land is bonded, by not allowing the latter to claim transfer costs. I think the hon. the Minister probably follows my point.

That just about covers all the matters I will probably want to deal with in the Committee Stage. I would like to repeat that we on this side support the Bill in general and that we believe that the changes we are going to suggest in the Committee Stage will be advantageous.

Mr. Speaker, I want to react at once to a remark made by the hon. member for East London City. I am referring to his remark concerning the participation of this side of the House in the discussion on this legislation. I think his remark was quite unnecessary. In this connection I must point out that it was suggested that this hon. member would probably be the last speaker on the other side of the House. However, I do not want to take the point any further.

I have been listening to the debates and I want to say in general that I appreciate the contributions made by hon. members in so far as they were intended to improve the legislation we are now considering. However, it is obvious that several hon. members are completely mistaken as to the purpose of this legislation. Many arguments have been raised by hon. members concerning aspects which could rightly and fruitfully be discussed in other debates. It is quite clear that hon. members on the other side are using this particular legislation to take a stand in respect of other legislation which is totally irrelevant to the discussion we are conducting at the moment.

You must give examples.

I shall give examples tonight. What is the essential purpose of this legislation? The purpose of this legislation is in the first place to regulate the relationship between contracting parties in respect of the purchase of land on instalments. The second objective is to protect the purchaser against possible exploitation by ingenuous sellers. These objectives form the essence of the legislation. However, the hon. members opposite have argued ad nauseam that one of the objectives of this legislation was to reduce the cost of the registration of transfer of a property from one owner to another. I challenge hon. members to point out this objective to me anywhere in this Bill. It may be—that I concede—a by-product of the legislation, but it is not explicitly provided for in the legislation. Nor is it an objective of this particular legislation. If hon. members want to argue— they may be able to do so quite rightly and to good effect—that we should change the Deeds Act to provide for direct transfer between a registered purchaser and an owner, they can argue about that particular aspect under the Vote concerned. What I want to mention here is that this aspect is not relevant to this specific legislation. It is totally irrelevant.

Business suspended at 6.30 p.m. and resumed at 8.20 p.m.

Sir, when business was suspended, I was pointing out, inter alia, that many of the aspects mentioned by hon. members in their speeches were quite interesting, but had nothing to do with the legislation we are considering at the moment. I think it may be a good thing for me to start with the hon. member for Musgrave who opened the debate today. He basically mentioned two aspects, one of which I suggest has absolutely no bearing on this legislation. The other one does have a bearing on it. He referred to the interpretation given to section 1 of the Transfer Duty Act by the Transvaal Division of the Supreme Court. It is very clear, Sir, that we are not concerned in this Bill with the obligation to pay transfer duty or not. The rates at which transfer duty is to be paid are a fiscal measure which is prescribed in this House in terms of the financial legislation every year. I think the hon. member is completely mistaken in arguing that in the case of what he calls packaged deals we should consider only the land value for the purposes of transfer duty.

†The hon. member said that previously the big housing companies—and he referred to some of them—used to build what he called spec, housing and that they then sold the plot together with the house. He said that more recently a different pattern had developed, namely the packaged deal where the plot is sold and the company then negotiates with the purchaser of the plot to build a house for him on the plot. He said that up to the time that the Transvaal Provincial Division ruled that duty was also payable on the cost of building the house, transfer duty had to be paid only on the purchase price of the plot. Sir, the Transfer Duty Act, section 6(1)(c), is most explicit in this particular regard. If you refer to the provisions of that section, you will find that the purchase price of the house is subject to transfer duty. But be that as it may, Sir, the point I would like to make in this regard is this: If the hon. member wishes to make representations that transfer duty should only be paid on the purchase price of the land and not on the contractual price for building the house, then he is free to do so, but the legislation before us does not in my opinion relate to that particular aspect.

I referred you to section 8.

Section 8 provides for specific circumstance, as I explained in my Second Reading speech. In this amending Bill I am now rectifying the omission in that section. Sir, I want to go further. The hon. member must guard against exaggeration. He said that as a result of the ruling of the court, a purchaser was now being burdened with additional costs amounting to R1 000 or more in most cases. Surely, Sir, that is not true. Hon. members on both sides of the House argued that this Bill was really trying to provide for the man who is unable to pay the full purchase price of a house in cash. It is absolute nonsense to say that as a result of the payment of transfer duties on the value of the house, the purchaser is being burdened with additional costs amounting to R1 000.

Of course it is so. You do not know what you are talking about.

Order!

Sir, the Transfer Duty Act was amended last session to lay down new rates in respect of transfer duties. What are the rates that are presently applicable? On a purchase price of R25 000 the transfer duty is R350. When does it become R1 000? On a purchase price of R50 000. Sir, I say that the hon. member should be careful not to indulge in complete exaggeration. Sir, in the cases in which this particular legislation is applicable, i.e. in the payment of the purchase price in instalments, surely the purchase price cannot be increased by R1 000 in terms of the point he made.

What about the transfer costs?

Sir, the hon. member referred to the Transfer Duty Act and not to transfer costs. I shall come to the transfer costs. I am dealing with the argument advanced by the hon. member for Musgrave. [Interjections.]

Order!

The hon. member for Musgrave confined himself to the effect of the fact that transfer duty is payable on the contractual price as well and he said that in most cases this increased the purchase price by R1 000. I am dealing with that. I shall come to the transfer costs.

The second point made by the hon. member was that the Bill should contain a provision to make this legislation applicable to sectional titiles as well. Sir, if you refer to the definition of land in the Act and in the Bill, you will find, amongst other things, that for the purpose of this legislation, “land” means land which is intended for residential purposes and that there is a restrictive application of the legislation. If we refer to section 3(2) of the Sectional Titles Act, we shall find that for the purposes of the Act, the section reads as follows—

In other words, we must be clear about the fact that not all sectional titles in terms of the Sectional Titles Act, relate to such land as is covered by the Act we are now considering and amending. For that reason, because in my opinion section 3(2) defines a sectional title as being, in the first place, land, and since, in the Bill that we are considering at the moment, land is defined as land for residential purposes, there is no doubt whatsoever about the fact that land held in terms of a sectional title deed and used for housing purposes is also covered by the provisions of this Act.

To a large extent the hon. member for Jeppe repeated the arguments used by other hon. members.

Yes, just to remind you of them.

I repeat, and this has now been confirmed, that the hon. member for Jeppe repeated arguments advanced by others, to most of which I have already replied. But I just want to say quite honestly that there are several aspects of the Act, as put by hon. members, including the hon. member for Jeppe, which we can discuss much more meaningfully in the Committee Stage. Consequently I do not intend to reply or to react to them at this stage, apart from saying that my own approach to the Act is that we have not reached finality in respect of the aspects which we want to regulate by means of the Bill which is before us and that any further amendment which may be an improvement will be considered by me. It may not be possible to give effect to it at this stage, but I undertake at least to investigate it. All we are trying to do in this legislation, and I want to repeat this, is to regulate the contractual obligations of people, and, secondly, to protect purchasers, but not at the expense of sellers. This is the essence and the principle of the Bill.

I come now to the hon. member for Yeoville, who replied, inter alia, to the arguments advanced by other hon. members on the other side, and at the same time advanced certain new ones. He said that he did not think the legislation was intended to protect a purchaser against increased costs. I think his view in this regard is correct. There is a general tendency to reduce costs. For this reason, for example, transfer duty has been reduced and for this reason transfer duty and stamp duty have been consolidated.

Order! Hon. members must not converse aloud among themselves.

However, the purpose of this legislation is not to reduce costs.

The second aspect to which the hon. member referred was the question of the interest rate which should apply. He quite rightly pointed out that township developers are often unable to borrow money at the same rate as that offered to purchasers by building societies to enable them to purchase property on instalments. That is true, but I must point out that this aspect is not really relevant. The existing Act already contains a provision to the effect that the maximum rate which is payable is the building society rate applicable at that time. The amendment proposed here has resulted from practical experience, because the fact that different rates are charged by building societies, different interest rates sometimes being charged by one and the same building society for different kinds of loans, made it impossible to determine exactly what the effect of this section was. For that reason the provision is now being inserted to the effect that the Minister may determine the interest rate from time to time.

In this regard I want to come at once to the hon. member for Johannesburg North. He is anxious to receive an assurance from me that we shall not use this section to prescribe a low or subsidized interest rate. I want to assure him immediately that this is not the intention at all. The only intention with the amendment is to have a uniform interest rate prescribed. This will be determined after investigation and will be related to average interest rates.

Will you also consider what the township developer himself has to pay?

That is very difficult. I must point out a very important consideration, namely that the developer is able to recover his cost of development, of which interest forms part, in other ways than by means of the interest rate. He can recover it by means of the price for which he sells his plots. In my opinion, therefore, he has another remedy to protect himself.

But that is a great burden on the purchaser.

Of course it is a great burden on the purchaser, but in another form. The burden is either in the form of an increased interest rate, which the hon. member advocates or, in the form of the increased selling price. However, I am not the one who increases the purchase price. The cost of development, of which the cost of capital forms an essential part, determines the selling price of plots.

The hon. member also says that since, with the provisions of the Act in respect of rights of the purchaser, we are really giving people a real right instead of a right to claim, as he put it, he thinks that we should proceed to register the deeds of sale so that people may be informed of them. I want to point out that the principle which applies here which is being inserted into the Act is not merely to give these people a real right. The provision does not create a real right. What it does do is that it confers on a buyer a certain preference in the case of insolvency. I want to say at once that this is no new concept, because it already exists in various Acts. I think the answer really lies in the fact that if we have to register contracts of purchase and sale, we may just as well use another form of registration of transfer as well. I want to ask the hon. member whether we cannot rather leave it at that for the moment. In any case, I cannot have the legislation relating to the Deeds Office amended because it lies outside my province. However, it is an interesting idea and I shall go into the matter to find out whether such a possibility exists.

The hon. member also spoke of the right of a seller to cede his contract. Although the relevant provision is now being replaced, I just want to point out that there is absolutely nothing to prevent the cession of a contract. Nor does he require anyone’s permission to cede his contract. I hope that the hon. member understands this legal principle. The right of cession has not been removed by the introduction of the amendment in respect of an intermediary in a transaction, but we have merely substituted a new provision for the particular provision as it used to read in the Act, and for obvious reasons, which I have already explained.

The hon. member for Wynberg and the hon. member for Musgrave discussed the question of transfer duty. I have already responded to that. Like the hon. member for Walmer, the hon. member for Wynberg also spoke of the question of the seller’s right to register a bond on the property and of the fact that the amount of the bond may often exceed the balance on the purchase price. I want to say at once that this is true, but we must remember, too, that on the one hand the possession of a deed of transfer really constitutes proof of a person’s real right. As far as this is concerned, we are not only dealing with the two parties who are involved in the contract of purchase and sale, but with a third person as well. Although I concede, and I want to repeat that, that this is one of the problems we are faced with, it is one which is difficult to handle. In respect of this particular aspect I want to say that it is quite clear that we have identified a problem. But it is equally clear that we have not offered a solution to the problem. I shall see in the recess whether it is possible to give attention to this problem. I hope that hon. members will be satisfied with this undertaking. I do not want to spend much more time on this.

The hon. member also spoke of the question of the registration of deeds having to follow the same sequence as the actions which give effect to the registration of deeds in terms of the Deeds Registries Act. I have already referred to the fact that the sequence in which deeds are to be registered is laid down by the Deeds Registries Act and that it would be very difficult for me—and I think he will concede this—to change the system of the Deeds Registries Act by means of this legislation.

Mr. Speaker, I should like to inquire from the hon. the Minister whether he agrees with me that it will in fact be possible to circumvent the Deeds Registries Act before this legislation comes into operation.

I have already explained that this is in fact the case. However, that was done by mistake and not deliberately. The purpose of the amendment is precisely to correct the mistake. I hope that has answered the hon. member’s question. I want to repeat that the whole system of deeds registration is the responsibility of another department, and hon. members are very welcome to make representations to that department. In fact, the hon. member knows that a new form of deeds registration has been and is still being investigated. All I want to say at this stage without expressing an opinion on this matter is that it is not relevant for the purposes of this Act, but that it is in fact relevant for the purposes of another Act.

The hon. member for East London City criticized the small number of contributions by Government speakers. He also referred to interest rates, to which I have already replied. Furthermore he referred to certain provisions of certain clauses. I shall debate these with him when we are dealing with this legislation in the Committee Stage. I think he accepts that those provisions do not affect the principles of he legislation and that it is not necessary, therefore, to react to them at this stage.

Several hon. members, including the hon. member for Johannesburg North, asked me not to prescribe an arbitrary interest rate. I have indicated what the basis and the procedure will be in fixing interest rates, and I take it that he is satisfied with that. The hon. member also asked why I was adding a new subsection (4) by means of clause 5(b). I want to explain to him at once that although a contract has to indicate the period within which a purchase price, together with interest and other charges, has to be Paid, a contract may also provide, inter lia, that interest will be payable even though the purchase price has already been paid. All we are doing here is to prohibit this.

The hon. member for Johannesburg North further referred to clause 6 and asked whether I should not insert a provision to prohibit the illegalities to which he referred and which may be contained in contracts until this legislation has been passed. I want to tell him at once that if he looks at the existing section 7 of the Act, he will find that that section provides that certain provisions in a contract shall be invalid. The proposed section 7(1) provides that as from a specific date, the inclusion of certain provisions in contracts will be prohibited. As I see it, therefore, no interim provisions in respect of invalid provisions are required in this particular case.

Then the hon. member further pointed out that the proposed new section 7(1)(e) and 7(2), as contained in clause 6, are supposed to provide for the circumstances under which building societies cannot grant a loan and where it is made available by the seller. In this particular case the provision is that the conditions may not be more or less onerous than those on which the building society would grant a loan. He said that there was an element of confusion in this particular regard, and I readily concede that. I shall see whether I am able to make a suitable amendment now, and if I cannot do so now, I undertake to see in the recess whether it will be possible to make an amendment.

Then the hon. member said that as far as clause 8 of the Bill was concerned, he felt that the word “and” at the end of paragraph (a) should be changed into “or”. In other words, he felt that it should be presented as an alternative. Section 11(1) of the Act provides for the circumvention of section 14 of the Deeds Registries Act. Paragraphs (a) and (b) of the proposed section 11(2) of the Act will have a cumulative effect. The purchaser must comply with the provisions of the contract and an intermediary must be insolvent or the creditors of the sequestrated owner of the land must have attached the land itself. I hope this satisfies him as to this provision.

The hon. member also referred quite rightly to the case of a purchaser who fails repeatedly to fulfil his obligations. This was referred to by other hon. members as well. It is quite true that in terms of the legislation a purchaser who has to make monthly payments may default every month and will then be entitled to receive a notice every month in terms of this provision. I concede that this may not be a practical arrangement and I shall see whether it is possible to insert a provision now or at a later stage to limit to a certain number or to a specified period the number of times a purchaser may default.

The hon. member for Walmer referred to certain aspects to which I have already replied. He asked whether I could not consider repealing section 72 of the Insolvency Act and fully incorporating the provisions of that Act in this legislation and providing that this is to be contained in the contract of purchase and sale. I hope I understood the hon. member correctly.

Yes.

I want to say at once that in the first place it is not customary to repeat all the provisions of an Act in another Act. Nor is it possible to remove them from the Insolvency Act, because they do not refer only to the purchase of land on instalments, but to other cases as well. What we are trying to do with this legislation is to achieve two objectives: Firstly, to set out the rights of the parties in the contracts and, secondly, to draw the purchaser’s attention to his statutory rights. At the moment I think that a reference in the contract to the provisions of section 72 of the Insolvency Act is sufficient. We must not be under the illusion that most contracts of purchase and sale are drawn up by legal practitioners to begin with, or that they are, in the second place, checked by them. I want to emphasize that although I believe that the present provision is sufficient, we must also realize that for some purchasers one could repeat all the legal provisions and they would not read them in any case. The hon. member for Wynberg said that we should tell people and give publicity to the fact that certain rights and powers have been conferred upon them, and that they should consult their legal advisers to ensure that these will be properly incorporated into their contracts. That, I believe, is the correct attitude.

Then the hon. member asked whether we could not insert into the contracts a copy of the plan or of the township conditions of new townships. Let me say at once that I do not want to argue about the merits of the case at this stage. The powers and responsibilities of provincial administrations include, in the first place, the stipulation of the conditions for the lay-out of townships and, in the second place, the protection of purchasers’ rights in respect of new townships. Some provinces already have provisions in their ordinances which cover aspects to which the hon. member referred. I want to confine myself—I hope the hon. member will accept this—to making an appeal to all provincial administrations, in so far as they are competent to do so in terms of the enabling legislation applicable to them, to adjust the provincial legislation to make provision there as well for certain aspects such as those referred to by the hon. member, but in general for the protection of purchasers. I personally think that it would be preferable for a prohibition to be imposed on the sale of a plot in a particular phase of the development of a township until the conditions of the other one have been complied with. This can in fact be done by provincial administrations. My views on this point are very specific and I shall consult my colleagues in the provincial administrations …

Are you listening, Lapa?

… and my future colleagues on this aspect in order to assist the hon. member in this particular regard.

The hon. member also requested that we should repeat the conditions for the establishment of townships in contracts of purchase and sale. The hon. member for Yeoville said that this would be expensive, but the hon. member for Walmer said that we could easily make photostats because these are very cheap at 5 cents a copy. However, the point is that this would serve no purpose, because we would have to go further than the hon. member is suggesting. It would mean that we would also have to repeat in contracts of purchase and sale all the title conditions of every deed of transfer relating to a plot which has already been transferred. The fact remains that in practice deeds of transfer contain the conditions of the township. These are repeated in the deed. All that is normally said in a contract of purchase and sale is that it is subject to the conditions referred to in the deed of transfer. I want to say at once that no purchaser is going to read through that deed or to ask for it. In other words, the evil, if it is such an evil, is much wider than the hon. member says. I really think that no case has been made out in this particular regard.

The hon. member also said that I should make representations to the hon. the Minister of Finance in regard to the subsidy of 2%.

That is very reasonable.

I do not know why the hon. member anticipated me in saying that it is reasonable. He seems to think that I am going to accuse him of being unreasonable. The fact remains that purchasers do not qualify for the 2% today, except in respect of obligations under a building society and also when the purchaser has a specific income and when the amount of the bond does not exceed a certain amount. It sounds very popular to say that we are going to give purchasers of land on instalments the 2% subsidy as well, as if it existed automatically in any case. II is not automatic. The point I should like to make is that apart from my own standpoint in regard to the subsidy, that is not the responsibility of this legislation, after all. The hon. member will have the opportunity of discussing the subsidy under the Community Development Vote, for this is the department which is responsible for it.

Mr. Speaker, I think I have replied in general to the main points raised by hon. members. I just want to conclude …

Mr. Speaker, I should like to ask the hon. the Minister what his interpretation is of the proposed new section 14(1) which is being inserted by clause 11 of the amending Bill. I want to know how the interest is going to be determined.

Mr. Speaker, I have said repeatedly tonight how I am going to determine the interest. I said this in reply to the hon. member for Johannesburg North, for example. [Interjections.] Yes, Sir, I did. More than that, I explained it ad nauseam in my Second Reading speech as well. I am quite prepared in the Committee Stage … [Interjections.] The hon. member must please let me finish. I am prepared to explain the position to the hon. member for the third time in the Committee Stage.

Then he will still not understand.

Mr. Speaker, may I ask the hon. the Minister a further question? I want to ask the hon. the Minister to explain to me how the interest of 5% is calculated, as set out in the proposed section 14(1) inserted by clause 11.

The interest is calculated at a rate of 5% on that part of the purchase price which has already been paid, as from the date on which it was paid. The hon. member knows that the intention with this 5% is merely that it should be an equalizing interest rate. It is designed more or less to ensure that the money the man has paid retains its original value. The hon. member knows that this is so. He used to be a mayor and they had a revolving fund to which the same principle was applicable.

I just want to thank the hon. member for Potgietersrus, the hon. member for Pretoria West and the hon. members for Klerksdorp and Langlaagte for the contributions they made. [Interjections.] I want to say at once that in my opinion the hon. members specifically succeeded in giving a proper analysis of the legislation in respect of its design, objectives and application. I want to tell the hon. member for Pretoria West that I have already had amendments placed on the Order Paper in my name, which I intend to move in the Committee Stage.

In conclusion I want to say that I shall make or accept amendments to clause 6. On page 8, in line 18, the word “upon” will be deleted. Secondly, on page 8, in line 19, after the comma, the words “apply in respect of” will be inserted. I want to explain here that the provision relates to the fact that “guarantee” means the payment of the purchase price and interest. All I am adding to that is for the purposes of the contract itself, i.e. so that the interest rate may be continuous until transport has been given. On page 8, in line 26, the word “upon” will be deleted. In line 27, after the comma, the words “apply in respect of” will be inserted. As far as clause 7 is concerned, the words “for the purpose of performing the contract” will be inserted after the word “transfer” in line 49. On page 14, in line 24, after “be”, the words “by written notice” will be inserted, and in line 25, after “known”, the words “or by notice in the Gazette, if such address is not known”, will be inserted, in accordance with the request made by the hon. member for Pretoria West. This is to notify the person.

Mr. Speaker, I would like to ask the hon. the Minister a question. If a buyer qualifies for a 2% subsidy but he cannot get a building society bond when he buys under the terms of this amendment, would the hon. the Minister not be prepared to recommend that that buyer who qualifies under normal circumstances if he can get a bond, should qualify under this Bill as well if he buys on an instalment basis?

My honest reply is that the whole question of a subsidy is not something which belongs under this legislation or under my department. The hon. member can raise this again in the Committee Stage, but I should say it could be done much more appropriately under the Vote of my colleague, the hon. the Minister of Community Development. In order to silence the hon. member I am prepared to add the words “building society guarantee” to the words “banker’s guarantee” in the section concerned.

Motion agreed to.

Bill read a Second Time.

Mr. Chairman, I want to bring one or two matters to the notice of the hon. the Minister in relation to this clause. Firstly, it says in (b) that, in appointing members to the council—

The first point I would like to draw to the attention of the hon. the Minister is that we are dealing here with doctors who are divided in their support of the Medical Schemes Act. There are some who are not co-operating with the Medical Schemes Act and others who are willing to do so. Mr. Chairman, before I go on, I must first wait for the discussion which is going on in front of the hon. the Minister of Health and which is obstructing my view of him, to end.

Order!

I would like to know what the feeling of the hon. the Minister is when he makes the appointments to this council. I would like to know whether he would appoint people who have already expressed themselves as being unwilling to co-operate with the scheme. In other words, will he consider appointing doctors who have contracted out to serve on this council? That is the first question I wanted to ask.

Secondly, in paragraph (vi) we have a provision for the appointment of a person with special knowledge of medical schemes established under agreements published or deemed to have been published under section 48 of the Industrial Conciliation Act, 1956.

As far as I know, the Industrial Conciliation Act medical schemes are excluded from the provisions of this Act. Can the hon. the Minister tell me any reason whatsoever why we should have representation for the Industrial Conciliation Act representatives on this council? If he is going to include members who represent the Industrial Conciliation Act, he will have to do the same in regard to the Railways. The hon. the Minister knows quite well that the Railways have been excluded from this. Why is he at this stage, while he is amending the Bill, including a member to be appointed to represent the Medical Schemes under the Industrial Conciliation Act and leaving out the Railways? Could the hon. the Minister please answer those two questions for us?

Mr. Chairman, as far as this question is concerned, I have already appointed in the Remuneration Commission in the past, medical practitioners that have contracted out. So, it is not an absolute principle that you exclude these people when having to appoint people on the council. As far as the people under the Industrial Conciliation Act are concerned, I think that it has also been accepted in the previous Act that as these people—taking into account that they have only been excluded in terms of an arrangement between two Ministers—represent a very big number of people on medical schemes, they should have representation in this instance. As far as I am concerned, they can make a very good contribution. That does not exclude the possibility of any representative under the benefit schemes, but at the moment there is nobody under the benefit schemes or, rather, from the Railways Sick Fund people.

Mr. Chairman, we are amending an Act now and when one does that, one wants to exclude previous provisions or bring in other changes. One of the changes that I think ought to have been considered was the exclusion of representation of members under the Industrial Conciliation Act. If you are going to bring them in, then you cannot exclude representation from the S.A Railways Sick Fund. One must either include them both or one must exclude them both. You cannot include one and leave the other out. It is immaterial of what the hon. the Minister’s arrangements have been. We are here dealing, as the hon. the Minister has said, with a large group of people and if we want them to come into the scheme, and if we want them to learn about this scheme —I will advise the hon. the Minister how to go about this later on—then we should also do the same as far as the Railways are concerned.

Mr. Chairman. I doubt it if the hon. member quite understood me. Actually the members of the Sick Fund of the Railway are under a benefit scheme and they have their representation. The Industrial Conciliation Act people do not have representation specifically. So you cannot take one specific benefit scheme and then include them, because they are part and parcel of all the benefit schemes.

Mr. Chairman, I do not want to argue too long about this matter, but as far as I know—and I know that the hon. the Minister knows this as well— the Railways have excluded themselves entirely from the scheme. Nobody on this body which we are electing now will have any say whatsoever in the running of the Railway Sick Fund. The hon. the Minister knows that this excludes them absolutely, and permanently as far as I know. The hon. the Minister obviously does not know that this is the case, that although they are a benefit society, they have asked to be excluded. The then hon. the Minister, Mr. Schoeman, insisted that they be excluded. I sat on the Select Committee at that time.

That is a benefit scheme.

He wanted the Railways to be excluded and if you exclude them, why include the other? Not only is there a new Minister of Transport. The hon. the Minister of Health is a new Minister himself and he should know that we cannot have chalk for one and cheese for the other. One must either exclude both or bring them both in.

Mr. Chairman, it seems to me as though the hon. member for Rosettenville has got hold of the wrong end of the stick. The Railways Sick Fund is a sick fund, while this legislation deals with the determination of tariffs. Under the Railways Sick Fund—as the hon. member knows—there are no specific tariffs. This involves a sick fund and doctors are paid per capita. Under the Industrial Conciliation Act, they are paid according to a certain tariff for a certain job. This is the real difference. The Railway Sick Fund is a completely different matter.

Clause agreed to.

Clause 10:

Mr. Chairman, this clause is indeed an important one in view of the fact that it amends section 18 of the principal Act which gives the registrar or the council the right to cancel or suspend medical schemes. As I indicated during the Second Reading debate, such cancellation or suspension can have very serious effects, particularly on groups of persons who are unable to join any other scheme. I referred particularly to the position of widows. According to the latest report of the Department of Health, there are almost 14 000 widows and nearly 31 000 pensioners who are members of these schemes. If the scheme to which these members belong is suspended or cancelled and they are unable to join another scheme, they will then not be able to enjoy the benefits which they previously enjoyed and in most cases they will not be able to take other employment so as to enable them to become members of another scheme in terms of the provisions of one of the other clauses of this Bill. In terms of the principal Act, the registrar shall cancel the registration of a scheme on receiving proof to his satisfaction that the scheme has ceased to operate or if the registrar and the scheme are agreed that the scheme was registered by the State in circumstances not amounting to fraud, and then there is a proviso in terms of which this may be altered. The proposed new subsection (2) provides that the registrar may cancel or suspend the registration of a scheme if after investigation he is of the opinion that the registration of that scheme should be cancelled or suspended. In the first place I want to put it to the hon. the Minister that the suspension or cancellation of a scheme should only be resorted to with the greatest degree of circumspection because the effect of suspending or cancelling such a scheme would be to deprive the members of benefits. In terms of the proposed new subsection, the registrar may cancel or suspend a scheme merely after an investigation. It is not stated that the registrar must obtain the approval of the council or that he must consult the council before cancelling or suspending the scheme. It will be entirely within the discretion of the registrar to cancel or suspend a scheme. I think this considerably widens the provisions of section 18 of the principal Act, and I should be grateful if the hon. the Minister could give us some clarity as to the nature of the investigations that will have to be undertaken by the registrar before he exercises his power to suspend or cancel the registration, evidently without the approval of the council. The second portion of this new clause deals with the position where a scheme that persists in violating any provisions of the Act may result in the registrar then applying to the council for the cancellation or suspension of the registration of such scheme. Now, this is a provision which obviously is connected with a later clause, clause 18, which lays down what is virtually a code of ethics as far as medical schemes are concerned. The provisions of that clause also lay down, in regard to penalties, that every registered medical scheme under the Act, after an inquiry has been held by the council and the scheme has been found guilty of an act or omission contemplated in subsection (1), shall be liale to one or other of the following penalties, viz. a caution or reprimand or reprimand and caution, suspension for a specified period of its registration, or cancellation of its registration. As I see the situation, it would appear that there is ample provision in the second portion of this clause, taken in conjunction with clause 27 and with the penalties that might be imposed by the council, to cancel the registration of schemes which persistently violate any of the provisions of the Act, or if their conduct is deemed by the council to be of such a nature that the registration might be cancelled. However, the first portion of this clause is the one which I believe this Committee requires greater clarity on in view of the consequences if a scheme should be cancelled by the registrar after investigation without any provision that such investigation should at least include consultation with or have the approval of the council.

Mr. Chairman, I think it is only right for me to reply to the hon. member who has just sat down because he put this problem during the Second Reading debate. He expressed his concern in regard to widows, pensioners and similar people who might be affected by the cancellation of schemes. Now, I appreciate his concern, but I must tell him that as far as clause 10(a) is concerned it is not true that it is entirely within the powers of the registrar to decide, because the council must eventually approve what the registrar recommends. It is true that it is not a new principle, but the principle is being extended whereby the registration of a medical scheme can be cancelled. This principle is being extended. I must tell him that although to a certain extent I share his concern, the council for medical schemes is well aware of the vulnerable position in which some of these pensioners and other people concerned in this respect might be placed, and this situation is definitely something which I will give attention to. I think he has broached a subject here to which we must give attention. The main function of the council is to concern itself with the fact that schemes should be run on a sound financial basis. That is very important. They have ways and means of ensuring that many of these mistakes can be rectified. After all, there can be consultation; there can be a warning and there can be suspended cancellation, etc. Eventually the council will have to act. I can assure the hon. member that as far as the central council is concerned, I have made provision for a person with a knowledge of business and business ethics to sit on the council in future. As far as that is concerned. I think we will then be better able to advise these medical schemes how to run their businesses so as to see that their various members are in a better position. Steps will therefore be taken to ensure that they do not find themselves in these dire circumstances. I shall, however, put this matter before the council and let them investigate it to see whether we cannot create machinery to ensure that such persons can be accommodated. That was one of the main things that he had at the back of his mind in bringing up this subject. The hon. member also mentioned the problem that some doctors and dentists put endorsements on their accounts as far as receipts are concerned and so on. However, we shall come back to that later on. I must tell the hon. member that as far as that is concerned, it is for the council finally to decide. The hon. member was concerned about members whose position might be affected if the financial affairs of medical schemes were not in order or if the schemes did not apply sound business principles. I want to assure him that I shall have the position thoroughly investigated and I shall also ask the council to investigate the possibility of creating machinery in order to obviate such occurrences.

Mr. Chairman, I rise merely to say that the undertaking of the hon. the Minister to have a further look at and an investigation into this aspect is much appreciated.

Clause agreed to.

Clause 14:

Mr. Chairman, in the reply of the hon. the Minister to the Second Reading debate he referred specifically to an aspect of this clause. I wish to make a few remarks in connection with this clause which, seeks to amend section 20 of the principal Act the marginal note of which reads:“Matters for which a registered medical scheme shall provide.” The section lists eight headings under which certain aspects of medical assistance shall be provided through the medical schemes. It refers among others to minimum benefits, to dependants, to continuation of membership after retirement, to widows, and to transfers from one scheme to another. Clause 14 entails a lengthy and fairly complex addition to the original section and to the amendment which was brought about by Act 95 of 1969. The amendment mainly embodies the terms, I believe, of the Friendly Societies Act.

In the light of the comments of the hon. the Minister when he replied to me during the Second Reading debate, the indications are that this clause makes provision in a small way for the assistance which we on this side of the House are seeking in regard to the Bill as a whole, namely that there should be State aid as far as possible to assist hard-luck cases. I know that the principle of the Bill has been accepted at Second Reading and I do not propose to enlarge upon that aspect. I merely want to say that this goes a little way to meet the requests of the Opposition and also the request of the original commission. I must refer to that because in the report of the commission it is stated quite clearly—

I think that the hon. the Minister in his remarks to the hon. member for Umbilo indicated that the State, the Minister as such, will be controlling the council to a certain extent.

Let me say once again for the benefit of some of our hon. colleagues on the opposite side that this is not a suggestion on our part that we want a welfare service or free medical services. In his reply to my request, the hon. the Minister referred to the new section 20B(5) as inserted by clause 15 of this Bill. It is a reasonably short subsection and I propose to refer to it briefly. I quote the new section 20B(5)—

1. (a) make donations …
2. (b) grant loans to any of its members or make ex gratia payments on behalf of its members in order to assist such members to meet commitments in regard to any matters specified …

I want to appeal to the hon. the Minister on the question of the granting of loans. He should do so on the following basis. If the interest charged by medical schemes is on an economic and not sub-economic basis, some sort of subsidy should be provided by the State as far as the interest charged to people who are forced to ask for loans because they have had a limitation of their benefits or because they have had excessive expense is concerned. There are always precedents, and I want to mention a precedent for the consideration of the hon. the Minister. I refer to a Press Release indicating an improved loan scheme for the housing of farm labourers. I think that such a step is to be commended but I also believe that sick people are also entitled to improved loans. According to the statement on the improved loan schemes for farmers, assistance has been increased. The Department of Agricultural Economics and Marketing will contribute four-fifths of the interest by way of a subsidy so that the farmer will be called upon to pay only one percent. My suggestion to the hon. the Minister, if the State is not prepared to subsidize these people directly, is that the hon. the Minister give serious consideration to ensuring that if it is not an ex gratia payment but a loan which the medical aid scheme offers to a person in distress, the interest on the loan be the very minimum. I believe it is only fair to ask that for people who suffer from health disabilities.

To sum up, I want to ask the hon. the Minister to try to ensure that the rules provide for such loans to be on a sub-economic repayment basis as far as interest is concerned. I also believe that he should make absolutely certain that all medical aid schemes comply with this provision, viz. that they grant loans. The proposed new section 20B(5) provides that a registered scheme may grant loans “if its rules so provide”. I suggest that every medical aid scheme should be forced to provide such means within the rules of that scheme.

Mr. Chairman, I think the first and foremost principle that we must consider is that provision is made for ex gratia payments and loans. The second principle to be considered is whether these loans should be on a differential basis since it all depends on what the person’s specific financial position is. Medical schemes can decide in terms of their regulations how they are going to apply their interest rates. It is perhaps a matter which should be investigated. Nevertheless I must tell hon. members that farmers and agricultural people as such are very fortunate these days. They are among the persons who are often helped by the State. I do not want to compare their case with this case as their circumstances are completely different. I do not want to compare farmers with people who are in need or in trouble as far as medical or health care is concerned. As far as the State is concerned ample provision is made for these people because they can go to the district surgeons or to the provincial hospitals which aid these people if they are really in need and in straitened financial circumstances. Nevertheless, it is a point to ponder on for the medical schemes as such has been said, it is something on which they will have to decide. I think, however, that it is going to depend on the specific type of case and on the merits of the case.

Mr. Chairman, I would like to thank the hon. the Minister for his explanation and I trust that he will see that this matter is gone into carefully. I realize, Sir, you would rule me out of order if I were to deal with the inadequacies of the present situation with regard to the services supplied by full-time district surgeons in city areas, but this is a case where people, because they are unable to get these services, require some form of assistance under the medical aid scheme. That is the object of my raising this matter with the hon. the Minister.

Clause agreed to.

Clause 23:

Mr. Chairman, clause 23 deals with the Remuneration Commission. This is probably one of the most important aspects of this Bill. Almost all the dissatisfaction between the doctors and the medical aid schemes has revolved around the Remuneration Commission. Subsection (2)(a) on page 52 of the Bill reads as follows: Subject to the provisions of subsection (6), the Commission shall consist of … a judge, or a person practising as an advocate, of the Supreme Court, who shall be the chairman thereof …

There is a big jump between a judge and a practising advocate of the Supreme Court. The advocate is in no way defined in this Bill. He may be a newly appointed man, a man who has just been admitted to the Bar. Is the hon. the Minister seriously going to consider appointing an advocate as chairman of the Remuneration Commission while he may have no experience whatsoever in this type of work or in any similar type of work. It would be equivalent to taking a doctor who has not even done his internship and asking him to perform a major operation and expecting good results. Therefore I want to move the amendment standing in my name on the Order Paper, as follows—

This amendment is fair enough. It gives the advocate standing and it gives the members of the commission confidence in the chairman, and I am certain that he would get good results and co-operation from the commission. Without this, one may immediately get queries, and dissatisfaction particularly from the Medical Association. They are going to say: “Here we have a young fellow who has just qualified and yet he is going to determine through his commission what we are to be paid.” I do not like that at all and I am sure the hon. the Minister himself does not. This may be an omission. I ask him please to accept this amendment. It will put a lot of fears to rest. The Medical Association particularly are very perturbed at the possibility of him appointing just such a man.

Mr. Chairman, I respect what the hon. member for Rosettenville said, but if he reads the clause in its entirety, he will most probably see the matter in a different light. It is not a case of the hon. the Minister being able to drag in a young advocate and appoint him as chairman of the Remuneration Commission. After all, the subsection provides that it may be a judge “or” an advocate. The fact that it may be a judge “or” an advocate, really implies that in the case where a judge is not available and a certain case must come before the commission immediately, the Minister may, in that case, appoint an advocate. It will not be just any advocate either. If the hon. member reads the clause, he will see that the advocate is to be appointed by the Minister in consultation with the Minister of Justice. Surely the hon. the Minister of Health will not approach the hon. the Minister of Justice with the request, “Colleague, is there an advocate who is at a loose end and to whom I can give a small job?” [Interjection.] That is certainly not the attitude which the hon. the Minister will adopt. Surely the Minister will ask the Minister of Justice whether there is an advocate with the necessary experience to do the job. However, to prescribe that it must be a person with at least 10 years’ experience, is something to which I cannot agree.

Mr. Chairman, I must agree with the hon. member for Brentwood, but I do feel nontheless that the arguments of the hon. member for Rosettenville have merit as well.

†To a certain extent I agree with him that we might not be able to get experienced people. We want to have experienced people. They have to decide on monetary matters. You cannot equate such a situation with the medical profession, because doctors are concerned with the lives of people. That is why we have a provision that a medical practitioner must be at least 4 years qualified before he can issue a mental S2 certificate. This is perhaps a point in question.

In respect of the Abortion and Sterilization Bill we did the same.

Yes, that is so, but that has to do with the lives of people and experience counts a lot in that regard. Experience does count a lot everywhere, although many young people do not want to acknowledge it. However, an amendment of this nature would restrict the possibility of finding a suitable person from the outset. If you have a good advocate of seven or eight years’ standing, he would be quite capable of doing this job. It is not so easy to find a suitable person within three months. Hon. members must take into account that I have to adhere to a time limit in this regard. Hon. members must also keep in mind that I must make this appointment in consultation with the Minister of Justice, who does not have many people available. I therefore feel that hon. members must be more fair in this respect. Let us, at the start, be a little flexible as far as this matter is concerned. I am not going to try to get newly-qualified advocates for this purpose and will be led by my colleague, the Minister of Justice.

That is your whole trouble.

Because it will be in consultation with me there is no danger. We might have a man of five, six, eight, nine or 9½ years experience who may be most suitable for this job. We have at least 28 of these supplementary health services and I want to ask the hon. member not to expect me to accept this amendment at this stage. He can safely leave this matter in my own hands and in that of the hon. the Minister of Justice. In a year or two’s time, when we have had a little more experience, we can then decide better in regard to this matter. I do ask that hon. member not to tie my hands at the start, because I want to see how this system is going to work.

Mr. Chairman, the hon. the Minister has given no reasons at all why he should not accept my amendment. He himself suggested that a man of seven or eight years experience would be fair. I do not want to go on an auction sale with the hon. the Minister and argue with him whether it should be a man of 10, eight or seven years’ experience, but will settle with him if he says seven years. I will accept seven years if the hon. the Minister would. The hon. the Minister now says that he is going to make the appointment in consultation with the hon. the Minister of Justice. In reply to the hon. member for Brentwood, I would say that he does not seem to realize that the very fact that the hon. the Minister has added the words “or a person practising as an advocate” after the word “judge” means that he does not have sufficient judges for this purpose. It is almost certain that if he cannot obtain the services of a retired judge—although it does not refer to a retired judge—he will have to employ an advocate. I do not want a newly qualified advocate even if it is after consultation with the Minister of Justice. I do not want that.

Very well, I shall accept five years. [Interjections.]

Order! This is not an auction; there must be an amendment.

Mr. Chairman, with the leave of the Committee I should like to withdraw my original amendment. Having done that, I should now like to move as an amendment to this clause—

of not fewer than five years’ standing.

Amendment agreed to.

Clause, as amended, agreed to.

Clause 24:

Mr. Chairman, in my Second Reading Speech I made it very clear that it is not the object of this legislation to control the medical profession. In the new section 32(2) which is being inserted in the principal Act by clause 24(a), it appears as though an obligation is being imposed upon a medical practitioner to submit his second account directly to a scheme. I feel this may be somewhat contrary to the objects of the principal Act. One also has to take into consideration that there is no need for a medical scheme to pay an account after a period of, say, four months if the account is not submitted at the end of the fourth month. For that reason I want to move the amendment standing in my name on the Order Paper, as follows—

I feel that this will protect the medical practitioner and will enable him to conduct negotiations with the medical scheme and that it will also leave scope for negotiations between the medical practitioners and the medical schemes. I also think this will be more in line with the spirit of the Act.

Amendment agreed to.

Clause, as amended, agreed to.

House Resumed:

Report Stage taken without debate.

Mr. Speaker, I move—

Mr. Speaker, I do not want to keep the House for any length of time. I should like to clear up one or two matters which have been raised by hon. members on the other side of the House.

When I appealed to the House and to the hon. the Minister to consider bringing into being a voluntary national health scheme, it was not my intention, and it has never been my intention, either to encourage a welfare state in this country or to ask for a national health service. The impression I gained was that one or two hon. members on the other side of the House did think that we on this side of the House were trying to suggest that the Government should introduce a national health service in this country. That is something with which we on this side of the House will have nothing to do. What we are asking for is a voluntary contributory medical aid scheme for the whole of the Republic. We want all those people who want to contribute to medical aid schemes to have the opportunity of doing so. At the moment there are many thousands of people who are denied this privilege. The hon. member for Umbilo this evening pointed out one group specifically towards whom the hon. the Minister himself was sympathetic and said he was going to take steps to see what he can do about it. I would like to tell the hon. the Minister that this medical aid schemes Bill, we have at the moment before us, can be a first-class basis for bringing into being a voluntary medical aid scheme at the opportune time and, which I hope will be soon. It should be a medical aid scheme whereby the contributor, the employer of the contributor and the Government, i.e. the State, can each put their share into the pool. Each one of these three groups must be prepared to share the cost of it. It is a reasonable request and there are many hon. members on that side of the House who would like to see it done. The costs of treating illness today are becoming astronomic. The ordinary man in the street could not possibly pay the full amount. Even when he belongs to a medical aid scheme or any other benefit society, the ordinary man in the street often finds that he cannot pay the excesses he is responsible for. I would like to ask the hon. the Minister again this evening to consider this once more and to see whether or not he could bring this about as soon as possible.

Mr. Chairman, the hon. member for Houghton supported the introduction of this amendment Bill to the Medical Schemes Act, 1967, on behalf of these benches during the Second Reading. The fact that there are over 30 pages of amendments to the Medical Schemes Act, clearly indicates the defects that exist in the present Act.

There are three groups of people who are directly concerned with the Medical Schemes Act. The first, obviously, the one who ought to receive the major priority, is the patient himself. It is well-known that many members of medical aid societies have expressed their dissatisfaction and their disillusionment with the present system. Contributions have been rising steadily and continuously. We would most warmly support the proposal that has been made by the hon. member for Rosettenville. To us it seems completely reasonable and long overdue. We welcome many of the clauses of this amending Bill before us. It brings considerable improvement to the present situation. Approximately 80% of all White people in South Africa are affected by this Bill. This again suggests just how important this legislation is. More and more Coloured, and Indian people particularly, as well as African people—although these to a lesser degree—are beginning to join these schemes. Once again this indicates that so many people of South Africa are directly affected. Their health and their concern are very much at stake in this Bill. The other group of people who are directly concerned under this Bill are, of course, the doctors themselves. In the Second Reading debate the hon. member for Houghton and indeed many other hon. members indicated that the members of the medical profession have been more than a little unhappy, and rightly so, up to this point. The mere fact that approximately 2 000 doctors have contracted out of medical schemes gives point to their dissatisfaction. The findings of the Remuneration Commission have been totally unacceptable to the majority of the members of the medical profession. Sir, all the details were spelt out in the Second Reading debate, so there is no need for me to enlarge on that, or indeed to repeat what has already been said.

Order! I hope the hon. member is not going to repeat those arguments.

Sir, that is exactly what I have just said; there is no need for me to repeat the arguments which were advanced in the Second Reading debate. I thought I should say that myself before you call me to order. Sir, the letter to which my hon. friends to the left are referring in this instance is a very important letter from Dr. Glauber in the South African Medical Journal. That letter makes very good reference to the sort of changes which are required in terms of the Remuneration Commission.

Mr. Speaker, we welcome very especially the appointment of the Anomalies Committee. We would urge upon the hon. the Minister to see that this committee gets to work as soon as possible in order that the anomalies which do exist can be dealt with. Sir, obviously the smooth administration of this measure is going to be the best possible way of attracting back into the medical schemes the hundreds of doctors who have contracted out. Once this legislation has been passed, a great deal of work will remain to be done. Sir, we in these benches have pleasure in supporting the Third Reading of this Bill.

Sir, I should like to thank hon. members opposite for supporting the Third Reading of this Bill. This is a Bill on which we have been working for a period of one year and in regard to which we had to have frequent consultations and discussions with various interested groups. It was not always an easy thing to reconcile the conflicting interests. Hon. members referred to the dissatisfaction prevailing in the medical hierarchy with the medical schemes and so on. Sir, this Act has been on the Statute Book for approximately seven to eight years. During this time we have discovered certain deficiencies in the Act, which I referred to earlier last year. We decided to try to eliminate these deficiencies one by one in the light of the experience we gained. Since we are dealing here with medical schemes we should bear in mind that we originally introduced this legislation to regulate medical schemes in such a manner that they should eventually involve an increasing number of our people, so as to make certain by means of a method of medical assurance, that they need have no concern for the day when illness occurs and when financial problems arise as a result.

†The hon. member for Pinelands referred to the various races and to the existing dissatisfaction. Sir, I am not going to go into the various reasons for this dissatisfaction. I think we have managed to reach at least some sort of agreement with many of these various interest groups. The very fact that this is such a voluminous Bill should convince the hon. member that we have at least done our best to see whether we cannot iron out the present difficulties. I think we have succeeded 99% in doing so. We still have certain differences with regard to the question of contracting in and contracting out of the schemes, but nevertheless I believe that with the attitude of reasonableness that we have on both sides, we will be able to solve these problems as well. Sir, the hon. member for Rosettenville dealt with the question of a voluntary medical aid scheme. In this connection I must say that there are moves afoot to extend the whole area of medical aid schemes. We want to expand the medical aid schemes, but we want to do so on a voluntary basis. At this juncture we cannot introduce a national scheme. We cannot get the various medical schemes together immediately, but there are moves afoot to get more and more medical schemes involving all the people of South Africa. But as the hon. member points out, we already have at least 80% of the White people involved in these schemes.

*Also as far as the poor and needy patients are concerned, it is a fact that the Government takes care of our people who are in need.

There was a transitional period during which we have made mistakes. Misunderstandings were defined to the point where one was unable to concede on a principle and if the medical profession wishes to retain its full autonomy and wishes to have its right as a profession to charge whatever fee it likes, it must accept that there will never be any agreement.

This Government and we, as a Parliament, have an obligation to reduce the average medical expenses and those in respect of health services for our people, and for that reason the medical profession should sacrifice some autonomy and should be prepared to sacrifice, contractually, some of that autonomy by charging a standard fee. Then someone must not come along and tell me that the service he renders to a wealthy person is worth so much more than the service he renders to the poor person, because this is not according to the highest traditions of the medical profession. If we do not want to be socialistic now and would still like to maintain the relationship between the patient and the medical practitioner, I believe it is a matter of give and take.

†I have often referred to this “give and take” philosophy which is part and parcel of the philosophy of our times, and even the medical profession must be prepared to sacrifice a little of its autonomy because of the bigger prospects and the bigger interests and the bigger principles that are involved as far as the public at large are concerned.

*Therefore I just want to say that I have listened very carefully to all the ideas which have been expressed here and that I have taken cognizance of them, but that I am unable to consider a national contributory scheme at this stage. We are still in a stage in which we are developing and in view of the existing facilities we have today to ensure our people of medical services, I think we are sufficiently protected so that there is no one who cannot be certain of the best medical service available in South Africa.

Motion agreed to.

Bill read a Third Time.

Mr. Speaker, I move—

In pursuing its objects in connection with the development and financing of industrial development in South Africa, as envisaged in section 3 of the Act in terms of which the Industrial Development Corporation was established i.e. Act No. 22 of 1940, and especially in the field of import and export finance and of obtaining credit and loans abroad, a wide range of financing activities, which have to be undertaken by the corporation from day to day, arises.

In the light of prevailing fiscal conditions and for strategic and practical reasons, either the corporation or its wholly owned subsidiaries often act as principals or as channels for obtaining foreign loans and credits as well as for investing and utilizing such funds to encourage and to finance industrial development in the Republic. In this financing role played by the corporation and its wholly owned subsidiaries and especially in the field of import and export financing, the corporation or its wholly owned subsidiaries are often required to provide guarantees or indemnities in respect of financing facilities made available to the corporation or such a wholly owned subsidiary of the corporation. In addition to this, cases also occur of certain concerns insisting on such guarantees and indemnities being backed by State guarantees and State indemnities in order to improve or put beyond any doubt the credit worthiness and negotiating position of the corporation or its wholly owned subsidiary concerned.

The amendments to the Act embodied in this Bill, arise from two problems which are being experienced in this process, and they are, firstly, the limited powers of the Minister of Economic Affairs in the present Act as far as surety is concerned; and, secondly, the lack of any statutory power for the corporation or the Minister to provide indemnities or indemnifications.

As far as the provision of guarantees is concerned, the corporation and the Minister of Economic Affairs already have the power to issue guarantees in terms of the provisions of sections 4(e) and 5bis(1)(b) of the Act, respectively, in order to enable the corporation to take up loans. The powers of the Minister, however, are limited to guarantees which do not exceed a total amount of R30 million, jointly or separately, in respect of loan funds taken up abroad.

Hon. members will agree with me that when these powers were originally granted, a limit of R30 million probably was a realistic one, but that it is no longer a realistic figure in terms of the present-day value of money and the proportions which the financing of important projects may assume. In fact, guarantees for the total amount have already been issued, and additional provision will have to be made now as a matter of necessity if the efficient operation of the corporation is not to be curbed. Under the circumstances clause 2 of the Bill consequently seeks to raise this limit to R200 million.

†In this connection I may remind the House that the hon. the Minister of Finance had to approach Parliament last year with a similar request to raise the limit of State guarantees in respect of loans by certain concerns in terms of the Finance Act, 1966, from R50 million to R300 million. Section 9 of the Finance Act, 1974, gave effect to this amendment.

The second problem to which I have referred arises from the fact that, although the corporation and the Minister are empowered by the existing Act to issue guarantees within the limits stipulated by section 5bis of the Act, the relative powers do not include the power to issue indemnities.

As indemnities are often preferred and required in present day circumstances as security by certain concerns, it is considered necessary that the corporation and the Minister should have the power to issue surety for loans in the form of indemnities by the corporation backed by counter-indemnities by the South African Government as provided for in clauses 1 and 2(c) of the Bill.

Mr. Speaker, in essence these are the principles involved in this Bill.

Mr. Speaker, in moving the Second Reading of the Bill, the hon. the Minister is seeking to amend the original Act No. 22 of 1940 which brought into being the Industrial Development Corporation as it is now known. I feel that we on this side of the House cannot let this opportunity go by without restating the fundamental philosophy which underlies our beliefs concerning the activities of the Industrial Development Corporation. I believe that we should go back to the original Bill which was enacted in 1940 and take one look at the intentions as expressed by the then hon. the Minister of Economic Affairs, Mr. Stuttaford, when he stated what has remained our fundamental philosophy. In Hansard, 1940, volume 38, col. 3940 we read—

Further on in his speech he said—

In col. 3941 we read—

The hon. the Minister’s predecessor has stated quite clearly too that it is the belief of that side of the House that the State should interfere as little as possible in private enterprise. We who have watched the growth of this giant corporation, have constantly reiterated our belief that it is our function to ensure that the Industrial Development Corporation of South Africa should confine itself to its original aims as set out in the Act. However, I want to say immediately to the hon. the Minister that we realize that the case is justified that he has made out for the necessity for the corporation in these modern times either to borrow money itself or to allow its wholly-owned subsidiaries to borrow money overseas for specific purposes in order to advance our tremendous industrial development. If I look at the annual report of the corporation which provides for schemes for the financing of export capacity and for the financing of export capital goods as well as for import financing, I want to say immediately that we on this side of the House are going to support the hon. the Minister in the passing of this Bill. We realize that the corporation and its wholly owned subsidiaries today have to raise funds overseas either for import/export finance or for international loans. Before the necessary credits can be obtained, overseas, the banks and overseas financiers want to know what comeback they have if the Industrial Development Corporation were to fail and they are looking not only for guarantees but also for indemnities. To the extent that they have the right to do so —we believe it is a logical right—we support the objects of the Bill.

We realize too that the corporation can only fall back on the Government itself. Section 4 of the Act provides for the powers of the corporation “to guarantee any undertaking given in relation to the financing of any company or the performance of any contract by any company”. I realize that guarantees are not as strong as indemnities and what the hon. the Minister is seeking is the authority to have indemnification as well as guarantees and we support that proposal.

In terms of section 5bis which is proposed to be amended by clause 2 the Minister can at the moment assist the corporation, but he may not go beyond a loan of R30 million unless Parliament by means of a resolution of both Houses gives the necessary approval. R30 million in 1940 and R30 milion today does not have exactly the same value. The hon. the Minister is now seeking authority to have the R30 million increased to R200 million. This is only realistic and again we support that.

We understand too that the corporation will look in the final instance to the Government to back its guarantees with, indemnities. If we have regard to the tremendous industrial development which confronts this country, if we have regard to our possibilities in the future and to the tremendous necessity for creating further job opportunities in South Africa, we can go along with, the Government. However, we want to stress our belief that the hon. the Minister should give us undertakings that the funds raised will be for the purposes stated and will not merely be channelled into ideological developments in the border areas. However much they may be necessary, we believe that the border areas can well look after themselves and we ask the hon. the Minister to be extremely parsimonious in his usage of any funds for purposes of development unless he has the intention that once these developments have taken place and have come to fruition, he will then consider offering the shares back again to the public, so that the moneys of the Industrial Development Corporation can be used to increase its turnover and be re-invested in opportunities for further development. With these words, I wish to indicate that we as the official Opposition will support the Bill.

Mr. Speaker, I have listened with great interest to what the hon. member for Cape Town Gardens had to say. In regard to two major points, which I hope to come back to, we are in full agreement with him. This is a short Bill which seeks to amend the provisions of the Industrial Development Act of 1940 in so far as four aspects are concerned, but it is not without importance, if only because it seeks to give the hon. the Minister the power, or to permit the Industrial Development Corporation of South Africa, to raise the level of loan finance that may be raised by the corporation or indeed by its subsidiaries from R30 million to R200 million. That is an increase of R170 million and that is not without importance in our view. The hon. the Minister mentioned two points, the first of which is in regard to the indemnities, which I will come back to. Secondly, he also made a perfectly valid point in relation to the scope or size of developments. He pointed out that the range or level of finance which is now required is clearly not the same as it was in 1940 and certainly, therefore, there is an element of common sense in raising the limit.

I would also like to comment, before I come back to these points, on two other aspects. This proposed legislation widens the net in the sense of allowing this amount to be borrowed not only by the corporation itself, but also by wholly-owned subsidiaries of that corporation. We would regard that as a change of convenience and in line with normal business practice, but certainly not a change of substance. As such, we have absolutely no objection to it, nor to the similar change contemplated to section 5bis (1)(b)(i) of the principal Act.

There is, of course, another consequential amendment in the sense that this power is simply passed on to the Government. Clause 1 seeks to amend or widen the powers granted to the Industrial Corporation of South Africa in some important respects. Previously section 4(e) of the Act read: “to guarantee any undertaking given in relation to the financing of any company or the performance of any contract by any company.”

The proposal before us now extends that to cover the indemnification of “any company or person in respect of the costs attaching to suits, or in respect of any loss —and I emphasize the words “any loss”, because I would like to seek clarification from the hon. the Minister in this regard— or damage, arising from (i) the financing by such company or other person of any other company or other person; or (ii) the entering into any contract by such company or other person.” I would like to suggest to the hon. the Minister that, unless he can convince us in these benches to the contrary, these are very broad powers as they are now stated, unless we have misunderstood the meaning of the words. I would like the hon. the Minister to give an answer in this connection when he comes to reply to some questions that we have in relation to this particular wording, so that at least we will have more clarification as to what he has in mind. In the first instance we would like to ask the hon. the Minister whether the Industrial Development Corporation is in the habit of entering into contracts with an individual or person as opposed to a company and whether it does so frequently or infrequently. Personally, we would not have thought that the IDC would enter into contracts with parties other than companies except on very rare occasions. I hope the hon. the Minister will correct me if I am wrong, or give us an explanation. The reason why we put this question is that the wording “or other person” is introduced after “company” in this Bill.

There is a second question we want to put to the hon. the Minister. As we understand it, it may very well be that the IDC may be called upon to give an indemnity on behalf of another company in which it is interested, such as to a foreign or overseas party or to a third party with which it is about to enter into a contract. The indemnity is, as we have said, against the costs attaching to suits or in respect of any loss— this is what worries us—or damage arising from the entering into any contract by such company or other person. A guarantee is usually limited to a fixed sum of money, whereas an indemnity as we understand it is related to performance. In that sense it is not in the first instance related either to price, to value or to a fixed sum of money. Let me take an example in order to get our own minds clear. Say a subsidiary of the IDC is about to enter into a contract with a French, German or American supplier to supply equipment to the value of R15 million, to choose a figure at random. It may well be reasonable for that foreign supplier to ask the IDC for an indemnity against the failure of that company in which it is interested or which may even be a subsidiary of the IDC, to fulfil its obligations. However, as we understand it, the wording goes even further than that. It indemnifies the foreign supplier against any loss from entering into any contract with such a company. If we understand it correctly that is surely going very far as it amounts to underwriting the foreign supplier so that in effect he is in a position of no risk. He cannot lose money on the contract unless we have misunderstood the wording. All we in these benches can say is that the practical experience of business— and this is a somewhat similar case or even an analogous case—is that, if one enters into a contract with another business entity on the basis of cost-plus, it is hardly a spur to his efficiency to produce or perform at the lowest cost. I hope that, when the hon. the Minister has a chance, he will give us further clarification on this point.

I would now like to come back to the question of allowing the Minister, which is what is asked for in this Bill, subject to certain conditions to which I will refer, to guarantee a further R170 million of loan finance to be raised by the IDC for itself without the necessity of coming back, as is provided for in the present Act, to ask for a resolution of both. Houses authorizing the raising of the limit. This is a very important matter in view of the very large increase from R30 million to R200 million sought by the Minister. I would have thought that both this House and the Other Place would want to consider very carefully the safeguards in the legislation which are still there, or to put it another way, the restraints on the conditions placed both upon the Minister and more particularly On the Industrial Development Corporation itself. I think it would be fair to say that this has an added relevance at the present time when the level of expenditure of the Government, both directly and through the public corporations, has become an issue with which we should all be concerned from two points of view, namely the expenditure in the aggregate, because it has been proven over the years without doubt to be inflationary and less productive and, secondly, because it is making greater and greater incursions into the spheres of the private sector. The Industrial Development Corporation and its development is, of course, germane to this particular issue. I do not think that it could be denied that the Government, directly or indirectly, is playing a greater and greater role in our mixed economy. I would like to emphasize that I accept that we live in a mixed economy and that the Government certainly does have a role to play. But the role of public corporations and indeed of vehicles such as the IDC, in a number of cases as the hon. member for Cape Town Gardens has mentioned, has moved far beyond the role that they were originally intended to play in the economic development of the country. This is neither healthy nor desirable since the public sector is neither as efficient nor as flexible as the private sector. Nor does the public sector operate within the same framework of the disciplines imposed by the necessity to make a reasonable profit and by the presence of shareholders. No one is going to deny, as I have said, that it is desirable for the State and its public vehicle or corporations such as Iscor, Escom and the IDC to play this part, but—here again I must agree with the hon. member for Cape Town Gardens—they should not become involved directly or indirectly, with spheres of activities where the private sector can or would undertake to provide the finance and accept the risks involved in the business. I hope that the hon. the Minister will give us an assurance in this regard. I will come back to it at the end of my speech. Because if the Government, Iscor, Escom, Meteor or the Industrial Development Corporation does not so refrain but instead simply continues to encroach on the private sector, then whatever it may say about being the champion of capitalism and free enterprise, its participation in effect amounts to a form of nationalization or socialism.

The example of the Industrial Development Corporation and of the legislation before us is a case in point, because we can only assume that the hon. the Minister has come to this House and asked for the limit on loan finance to be raised from R30 million to R200 million because it is the intention in the immediate or near future to raise, if not the whole of that additional R170 million, then certainly a significant portion of it, otherwise it would be slightly unusual to come with such a request in this Bill. I want to come back to the constraints which are in the present legislation and which, indeed, remain under the current legislation, and that is that the hon. the Minister of Economic Affairs can only authorize or permit the raising of this very substantial additional amount of money with, in the first place, the concurrence of the Minister of Finance. That is a very reasonable constraint upon his freedom of action. With the concurrence of the hon. the Minister of Finance, he may guarantee the raising of such loans subject, firstly, to the provisions of section 4(f) which states, inter alia—

This is also not an unreasonable restriction in terms of normal business practice. There is, however, a further restriction which is set out in terms of section 5bis(a) and 5bis(b). Section 5bis(a) states that any such loans must be—

That is the first restriction. The hon. the Minister has not mentioned any such purpose in seeking this amendment so we must assume that it falls under the second category in 5bis(b) which is—

In considering whether or not to support the request of the hon. the Minister to be given this permission, we must also then bear in mind the objects of the corporation. As the hon. the Minister will know, these are set out in section 3 of the principal Act. To this we only have to add the caveat or rider that as we understand it it was never the intention that the IDC should manage or conduct business enterprises where the private sector was able and willing to do so. There is an inference of confirmation of this in section 5(c) of the principal Act, which states—

Two points are worthy of note in this respect. Firstly, the stress is laid on assistance to others and this is reinforced by the emphasis given to restricting the size of the IDC’s commitment as far as is practicable. We take this to mean that where private enterprise is both willing and able to initiate the enterprise, the IDC should have no role or part to play, as inferred in the provision I have just quoted. We hope that the hon. the Minister will clarify this point because we feel that the corporation should actually be barred from doing so.

There is another aspect I should like to deal with. In circumstances where the IDC does feel itself obliged to participate even under the restrictions imposed upon it in terms of section 5 of the principal Act which are designed to keep its investment to the minimum, there is still the important aspect of time. The question which needs to be asked in relation to the IDC is whether it intends to play a part permanently in so far as its participation will permit it to do so or whether it is intended that the corporation will only hold an investment in a temporary sense from which it can move on as and when circumstances commit it to other enterprises. I should like here to return to what was said by the hon. member for Cape Town Gardens. I want to go a little further in relation to what was said by the then Minister of Commerce and Industries in 1940 when this corporation was established as to what its future role would be. It is, of course, a matter for the record that this legislation was initiated by a United Party Government and agreed to by the Nationalist Party. The Minister of Commerce and Industries at the time said the following. This has already been partly quoted by the hon. member for Cape Town Gardnes, but I should like to go a little further than he did. The Minister had this to say on 28 March 1940 (Hansard, Volume 38, column 3941)—

It seems to be abundantly clear from that that the role of the Industrial Development Corporation was to nurse industries through the pains of birth where the private sector was not prepared to do so and once these were successfully established, to dispose of their interest and to move on to invest the proceeds in new and different ventures in the same sort of category, where the private sector at that point in time was for one reason or another either unable or unwilling to do so. Indeed, this was explicitly recognized by the present chairman of the Industrial Development Corporation of South Africa in his statement for the year ended 30 June 1974, when he said—

This is a similar theme, Mr. Speaker, but there is one significant difference. The chairman of the IDC speaks of the objective of the IDC as being to maintain its level of repayments at a high rate to finance new developments, but there is one notable omission in that statement by the chairman of the IDC, and that is that there is no mention of the sale of any equity interests. As I understand this statement of the chairman of the IDC, these can therefore be retained indefinitely or at least disposed of at leisure by the IDC. That, Mr. Speaker, is quite a different kettle of fish, because it certainly holds out the possibility of the corporation retaining a substantial and increasing stake in the control and management of our economy, where it is both unnecessary and undesirable. Sir, the hon. the Minister will be well aware of the facts of life, in the sense that an equity interest of quite modest proportions, when held by the IDC, will have or may have a weight or influence quite disproportionate to it in the conduct of the affairs of the company involved.

I should like to refer to an interesting table which may be found on page 24 of the latest report of the Industrial Development Corporation. This table sets out the total number of applications approved, and the amounts involved, since 1 October 1940. The total number of applications approved is 1 636, and the amount of money involved is near enough R1,4 billion. When one looks at the balance sheet as at 30 June 1974 one finds that it shows assets and liabilities of some R620 million. Now we of course appreciate the fact that the corporation’s profit after tax of some R15½ million, or a return of just over 2½% above the line in relation to its investment, cannot be compared with that of other corporations simply because of the role the Industrial Development Corporation is playing. What I think is of interest, and I hope the hon. the Minister will comment on this, is to look at the break-down of that amount, of the R1,4 billion which has been invested since 1940. If one looks at the table one finds that R403 million has been invested in metal, engineering and machinery works. An amount of R252 million has been spent on petroleum, chemical and related products. This is not at all surprising because it includes the amount spent on the development of Sasol. They have also invested an amount of R199 million in what they describe as “transport and miscellaneous”. What is also interesting is that an amount of R279 million has been invested in construction and property. There is a number of other items but I am confining myself to the larger ones. An amount of between R62 million and R63 million has been spent on the processing of stone, clay and earthenware. We can, of course, understand that at some point of time it was considered to be in the public interest for the IDC to invest in some of these categories or other categories, but I think it would be difficult to describe some of these industries as infant or struggling industries in our country or to say that the private sector was without competence or experience if the potential risks and rewards were acceptable. We are left with the suspicion that the rationale behind part of these investments ran counter to the explicit instruction contained in section 5(a) of the principal Act and which remains unchanged. I hope the hon. the Minister will confirm that this provision remains in force. Section 5(a) reads as follows—

Those are very strong words.

We have now dealt with this Bill and we hope that the hon. the Minister will give the following assurances in regard to his request to increase the amount of loan finance which may be raised by the corporation or its wholly-owned subsidiaries by R170 million. The first assurance is that the IDC will only invest in spheres where the private sector is both unable and unwilling to invest. The second assurance we want is that where it does invest the IDC will within a reasonable period after the profitability of the enterprise has been established, and similarly the security for the repayment of any outstanding loans, take steps to dispose of any equity interest held by them through the medium of a public quotation or to the other partners in the venture or to other parties. If the hon. the Minister does not give these assurances, all of us will know the road on which we are travelling and let us hear no more about the sanctity of private enterprise from the Government

Mr. Speaker, there is a similarity between clause 2(c) of the Bill which we are discussing and section 16(2)(c) of an Act which was passed during last session, namely the Bantu Laws Amendment Act, Act No. 70 of 1974.