Mr. Speaker, in the course of this debate certain obvious differences between the hon. members on that side and hon. members on this side have emerged. There have also been indications that some hon. members on that side and hon. members on this side agree to a certain extent on certain matters. There have also been indications—and I am aware of this—that certain hon. members on the opposite side would like to co-operate in regard to this matter. I shall return to this again at a later stage in my speech. I just find it necessary—and I shall return to this matter as well at a later stage in my argument—to refer hon. members to section 24 of the Constitution Act, in which a definition of the legislative power appears. In that section, which my friend, the hon. the leader of the Opposition, now has before him and is turning to, he will find the legislative power of South Africa is defined therein as consisting of the State President, the House of Assembly and the Senate. Many hon. members went astray in their arguments because they lost sight of section 24. The hon. member for Bloemfontein West referred to this.

One of the differences which emerged not only in this debate, but which has emerged in the course of 26 years whenever these matters were being discussed, concerns the question of whether the executive has the right in terms of an Act of Parliament and in terms of the defined procedure in that Act which was made by Parliament, to prohibit organizations and to take action against persons by restricting their freedom of movement, and by other means. I repeat that this is not a matter which has arisen only from this debate. Over the years it has been an issue, and a very serious issue, between hon. members opposite and ourselves. It has emerged innumerable times. There is not a single member on the opposite side who has not been conscious of this. The hon. members for Green Point and Mooi River have also been conscious of this at all times. We have argued this point, and I am simply placing this fact on record. On one occasion Senator Conradie and the late Senator Pilkington Jordan agreed with me, after we had debated this matter exhaustively, that the Government ought to have that power and that the Government should, under given circumstances, exercise that power, and hon. members will find this in the Hansards of the Other Place. Hon. members of this House have never wanted to concede this. I want to say this, in the full realization of my responsibility, and as a person who has for many years been intimately involved in these matters: In a country in South Africa’s position, having regard to the subversion which has repeatedly manifested itself, having regard to the actions of persons with which we have had to cope year in and year out in the past, having regard to South Africa’s situation, I see no possibility of South Africa being without these powers, or of a refusal to give the executive these powers. If one did this, one would be toying not only with the security of South Africa; one would be toying with the future of this country and of its people. Of that I am absolutely convinced, and I have the experience of years to which I can refer hon. members if it should be necessary.

However, I do not want to cover the same ground we have covered in the past. This also remains—and that is also how the hon. the Leader of the Opposition put it—the one difference, and I want to go further and even say, the principal difference, between us, and that is why there is no co-operation between the official Opposition and this side of the House. Hon. members want me to concede, and want to put a price on it, that the executive shall not have such powers or that these powers should be watered down to such an extent that it would render the actions of the executive powerless. I am not prepared to engage in horse-trading on such a matter.

A second difference between my hon. friend and myself emerged prominently in the debate. It was that I want an organ of Parliament—be it a Select Committee, be it a commission—to be given the right to investigate organizations and not, as the hon. member for Durban Point argued, to seek criminal offences among them. I shall subsequently deal in detail with the hon. member’s speech. I do not want to seek offences among them. There are no accused persons who have to be tried appearing before the commission. The hon. member for Green Point stated them quite correctly when he said that the terms of reference of the commission were those of a fact-finding mission.

What is involved is not a search for criminal charges. That is not the task of the commission. I have never considered this to be its terms of reference. It goes without saying, however, that if they were to discover an offence in the normal course of their duties it would, as in the case of any other individual or organization or whatever, be their duty to report it to the Police. But this is only when they happen to discover an offence. It is not, however, the task and duty of such a commission to seek offences. I have never expressed it in these terms. This has never been the case, nor will it be the case in future. The task of such a commission is to institute a fact-finding investigation to see what the internal workings of an organization looks like. In most cases, if not in all cases, the true objectives of such organizations as these are veiled by all kinds of fine slogans such as “Freedom” and “Democracy”. Surely hon. members know that this is the case. All that one wants from such a fact-finding commission, therefore, is that it should rip off the masks and by so doing cause the true features to emerge, as it did with the Christian Institute and the University Christian Movement. It merely ripped off the pious mask. And who knows it better than the hon. member for Pinelands? If doing so would not make me guilty of unparliamentary conduct, I should say that the mask bears a relative resemblance to the hon. member. The task of the commission is simply to remove the mask so that one can see precisely what the organization looks like.

If it is the standpoint of my hon. friend, the Leader of the Opposition, that one dare not instruct a Select Committee or a commission to investigate organizations, I want to tell him in advance that we unfortunately cannot co-operate. For co-operation such an attitude would constitute an unbridgeable gap. If he should say, however, that a Select Committee or a commission will have the right, and does have the right, to investigate organizations referred to the commission or the committee, then we would be able to co-operate. While I am dealing with this, I just want to say that there is no question of a witch-hunt here, of a commission which is able to investigate any person or organization simply because it feels like doing so. Surely this is a responsible commission which receives responsible terms of reference from responsible persons. If the hon. member wants to concede that such a body—whether a Select Committee or a commission—should have the right to investigate such an organization, then there is an opportunity to do so, and I shall go very far out of my way to accommodate him on every possible and impossible point in order to obtain his co-operation. That is my only objective, and I shall subsequently tell the hon. member why. I hope this is clear enough. I shall go so far as to say that even if they tell me that I have given in to the demands of the Opposition, I shall still take it, because the security of South Africa is more important to me than standpoint, position or person.

Hear, hear!

Consequently I am making this offer across the floor of this House to hon. members opposite on that basis.

A third difference emerged, and that was that there are hon. members on the opposite side of this House who do not, under any circumstances, want either a Select Committee or a commission. They want nothing of the kind. With them, of course, I cannot argue. I do not want to argue with them. We have nothing to say to one another—the hon. member for Houghton, her party and the hon. member for Von Brandis, who holds the same standpoint as the Progressive Party. I shall return to that again. I cannot, and do not want to argue with them.

There are hon. members who want a Select Committee and who are prepared to co-operate in a Select Committee. To those hon. members I want to say that I am prepared to accommodate them on that score, if it is possible. I am quite prepared to do so. To tell the truth, I originally came to this House to ask for a Select Committee. Therefore it is not a new idea or someone else’s idea; it is my own idea. I came to ask for a Select Committee, and if it is practical—I shall tell hon. members at a later stage for what reasons it is not practical now—then I am prepared to accept a Select Committee. I should very much like to have a Select Committee.

There are other members who are, on the other hand, prepared to co-operate in a commission, but I shall come to that again. Our problem—surely the hon. member for Von Brandis, who argues so piously here, is aware of this—is that we are in a different position to that of the British Parliament. The British Parliament is in session throughout the year, while South Africa’s Parliament is in session only during the first half of the year and then adjourns until the next year. Surely the hon. member is aware that our Standing Orders do not make provision for a Select Committee to be able to sit during the recess. I think this is a mistake, and I think we should face up to the fact that it is a mistake. I think we should rectify it. The time has arrived for our Standing Orders to be such—as far as I know the Senate have a similar arrangement—that a Select Committee should be able to continue its activities during the recess. To tell the truth, I think that a Select Committee would be able to work far more effectively during the recess than during a session when all the members are very busy with their normal parliamentary activities. If it were not for this the Schlebusch Commission would never have been a commission but would have remained a Select Committee. I want to tell the hon. members opposite that if they want to co-operate with me in amending the standing orders accordingly, we could do so tomorrow. I am quite prepared to do so, and if the hon. the Leader of the Opposition would comply with my requirements that organizations may be investigated, I am quite prepared, then, to refer this matter to a Select Committee. My only problem—I want to tell him about it now—is that we shall then have to devise some other means, for we cannot return to this House every time with a substantive motion that organization A, B, C, or D should be investigated. In the first place, this is not always feasible because of the time aspect, and secondly, if something should crop up during the recess, we would not have Parliament to go to. If it is an urgent case which one wants to have investigated, one is then unable to bring it to Parliament, because Parliament is not in session. If we are able to overcome those problems I am prepared to co-operate fully with hon. members.

Let us, for a few moments, consider the history of this matter, for we have to put the history in writing for the sake of the record. What is the history of this matter? Originally I came to this House and asked for a Select Committee. The hon. members on that side opposed this, and when they lost, they decided, quite correctly in my humble opinion, to go along with it regardless and accept representation on the Select Committee. Now I am being accused by the hon. member for Von Brandis and others of having violated the Select Committee by converting it into a commission. Surely that is not true; surely it was not I who did that. This Parliament did it; the hon. member for Von Brandis did it in common with me. [Interjections.] Now he is saying so; now he is admitting it, but he did not admit it when he attacked me.

I said it was a fact.

What are the facts? As a result of the hon. member for Von Brandis, and while I am speaking to him, let me say this: One of the crudest untruths I have ever heard in this Parliament I heard from the hon. member for Von Brandis. I am still coming to that. On Friday, 9 June 1972—hon. members will find it in the Minutes of the House of Assembly—the following occurred in this House—

1. (1) it has resolved that, in terms of Standing Order No. 173, the evidence taken by it shall not be made public; and
2. (2) it recommends that until such time as the inquiry has been completed, the necessary steps be taken to ensure that only the members of the commission will have access to the evidence taken until now and to the papers submitted to your Committee.

That was on the Friday. On Monday, 12 June 1972, I moved a formal motion in this House, which read as follows in the minutes—

1. (1) That, subject to the provisions of Standing Order No. 210 and notwithstanding the provisions of Standing Order No. 211, only members who were members of the Select Committee on Certain Organizations have access to the evidence taken by the Committee and the papers submitted to it; and
2. (2) that Mr. Speaker be authorized to publish such parts of the evidence taken by the Committee as he may deem fit.

Mr. Speaker, this was a motion which I moved in this House. The Minutes state that this motion was agreed to. This motion was agreed to without discussion. In other words, it was proposed in this House that the Committee be converted into a commission and it was proposed that only certain members would have access to the evidence. I quoted it here. Every member was as much an accessory to it as I.

But what do we find now? One of the detractors, a person who apparently received instructions to disparage this Bill, the hon. member for Pietermaritzburg South, reproached me because of this. He berated me across the floor of this House because of this, although he was as co-instrumental in this as any other member. What kind of hon. members are these who do things like this?

Mr. Speaker, I shall continue. This Committee was then converted into a commission, and the hon. members who are now protesting so vehemently that they do not want to touch a commission, why did they not rise to their feet here in Parliament and say that it was wrong that there should be a commission to investigate these things. Not a single one of them did so. My friend, the hon. the Leader of the Opposition did not do so, and not a single member opposite did so. Now they are reproaching me.

In any case, you will surely remember what an agitation has been carried on over the years against this Bill. Surely you remember how people were vilified. The hon. member for Mooi River referred to it. Surely he was not the only one who was vilified. It was just that the hon. member found it strange to be vilified. We have been vilified all these years—from 1948 until the present. We are immune to it by now! The hon. member for Mooi River need not make out a case for his having been vilified to such an extent now. He was not vilified to any worse extent than the hon. the Minister of Public Works. Good heavens, Mr. Speaker, he could never be vilified to the extent to which I have been over the years. But I pay no heed to it. I take it from whence it comes. There was this vilification and all these things were pointed out, but there was not a word from hon. members opposite to say that the commission was wrong. But what is more: My hon. friend will recall that it was found necessary during the course of that year to increase the number of members on the commission from nine to ten. Originally there were three Opposition members and six Government members on the commission, and because the number of members had to be increased to ten. I considered it fair that there should be an additional Opposition member. I telephoned the hon. member, for a recommendation had to be sent to the State President. I asked him whom he wanted me to recommend to the State President. He said I should recommend Mr. Etienne Malan and I did so in spite of the fact that Mr. Etienne Malan and I had never had much time for each other. But this did not matter to me, because it was the person whom that hon. member had the right to recommend to the State President. I did not make political capital out of this or play favourites with it. I would go so far as to say that even if he had recommended the hon. member for Bezuidenhout, I would still have gone to the State President to make the recommendation, but heaven knows I would have done so muttering all the way. Sir, I did not want to make political capital out of this matter. To me it was a matter of principle.

It would not have been necessary for you to go.

I am still coming to you. You must not become annoyed in advance now, for you are still going to become very annoyed. Sir, I say that for me it is a matter of principle. Why did hon. members not tell me at that time that it was wrong that the State President should appoint people to that commission?

I come now to hon. members who acted with responsibility in this connection. One of those hon. members is the hon. member for Mooi River. I do not agree with everything he said, just as I naturally do not agree with everything which the hon. member for Green Point said. But they acted with responsibility. But I want to refer to the hon. member for Mooi River. He said Hansard Manuscript, (page I.6)—

Clause 4(2) of this Bill makes provision for that. Then he went on to say—

Quite correct—

That is what I want to do, Sir. It is also the heart-felt desire of the hon. member for Mooi River, and if the hon. member for Mooi River wants to do this, it is not necessary for him to speak to me about it. Then I say to the hon. member for Mooi River: Speak to your own side, and if you can convince your own side of the necessity of what you are asking for, then you will get it. Make no mistake about it. The hon. member then went on to say—

I read in this—and if the hon. member thinks I am misinterpreting it, he must tell me—that the hon. member, just as I do, wants to have organizations investigated, and not necessarily on the basis of legislation before Parliament. If this is what he wants, there is no difference whatsoever between him and me. Then there can be complete co-operation between him and me. I repeat: The reason for converting the Select Committee into a Commission was because the rules of the House did not make provision for it. If the rules had made provision for it, it would at all times have remained a Select Committee. The Select Committee, as the hon. member himself visualizes it, must take the initiative in investigating organizations and other matters I repeat: If that is what he is seeking, he shall have my full co-operation in that regard.

To investigate for what purpose?

I shall explain it once again to my hon. friend. However, he knows very well for what purpose. To see whether that organization is what it pretends to be if there is a reasonable presumption that it is not what it pretends to be.

And afterwards?

Afterwards a report will be presented to Parliament. I shall still come to the point concerning whether I kept my undertaking or not. Apart from that, the internal workings of that organization can be exposed so that everyone can see what it looks like. There is also an additional advantage, which the hon. member for Pretoria Central pointed out. It serves as a deterrent for people who want to initiate that kind of thing. It will deter them, for then they know that they can be investigated if they begin to play around with these dangerous subversive activities. My hon. friend knows that one cannot charge a person before he has committed a deed. He can ask the hon. member for Umhlatuzana. That hon. member will tell him. Certain steps have to be taken before one can charge a person. My standpoint—and I think it is also the standpoint of the hon. member for Mooi River, as I understand it—is that one should investigate an organization before it resorts to deeds. Once it has resorted to the commission of deeds, then it is a case for the Police, and they are quite capable of investigating it. In fact, they have done so very well indeed over the years, and shall continue to do so. That is not the point at issue.

The hon. member for Green Point, with reference to this commission, said the following Hansard Manuscript, (page AA.3)—

I know how that hon. member was vilified—in exactly the same way as other hon. members were. However, the hon. member said that it had done him no harm in Green Point. On the contrary, it enhanced his status in Green Point, precisely because he had had the courage of his convictions to say of Nusas what was said in the report. The same applies to the hon. member for Mooi River. After all, he was not chased out of his constituency. On the contrary, the hon. member knows that his standing is very high in his constituency, precisely because of the standpoint he has adopted. The hon. member for Green Point went on to say—

This was in fact the case. It was, in fact a fact-finding body, which had nothing to do with legislation whatsoever. The hon. member went further—

That gives the hon. member for Durban Point his reply. I quote further from the speech of the hon. member for Green Point. He said—

†Parliament did do the necessary, Mr. Speaker. In regard to Nusas, what are the facts? The fact is that this commission reported to Parliament and made certain recommendations. What were those recommendations? In spite of the fact that Nusas was as bad as it was, and in spite of the findings of the commission, the commission asked Parliament, and through Parliament the executive, not to ban Nusas. That was the recommendation made in regard to Nusas. That recommendation was accepted; Nusas was not banned.

*There was another aspect in respect of which the hon. member was wrong, and I just wanted to set this straight for the sake of the record. The hon. member referred to the interim report, and said (Hansard Manuscript 25/2, page AA.3)—

†It came to Parliament, but let me say for purposes of the record that it had to go to the State President first, because by then the hon. member was not part of a parliamentary commission or a committee; the hon. member was then part of a State President’s commission, and the report had to go to the State President in the first instance. Then the hon. member continued, and said the following: (Hansard Manuscript, 25/2, page BB.1)—

There again, unfortunately, the hon. member is not factually correct, because that is not what my friend, the hon. member for Green Point, recommended. The hon. member did not recommend, as he stated in his speech, “… that a permanent body should be established to continue the work entrusted to the commission, to do an investigation determined by Parliament for Parliament, and to be reported to Parliament …”, unless he accepts that when you report to the State President you in fact also report to Parliament. Allow me, Sir, for the purposes of the record to quote to you what the hon. member in reality recommended. I quote paragraph 12(d) of the first interim report—

The recommendation was that it should report to the State President, Sir, and not to Parliament, as the hon. member stated in his speech. I say that merely for the purposes of the record. I should also like to quote paragraph 12(e) of the first interim report. It reads as follows—

And that the hon. member will find in clause 4(2) of the Bill. The hon. member will also know that where the hon. the Leader of the Opposition and I differ is in regard to clause 4(2) of the Bill. The hon. member will also know that where the hon. the Leader of the Opposition and I differ is in regard to clause 4(1), and I have already dealt fully with that at the beginning of my speech.

I come back, Sir, to the hon. the Leader of the Opposition.

*The hon. the Leader of the Opposition said that it was not the task of Parliament to make investigations through a commission. I quote from his speech, (Hansard Manuscript, 23/2, page J.2)—

I differ with him materially in this regard. My entire argument is that the legislature does in fact have a duty in this regard, and I maintain that there are hon. members opposite who agree with me in this regard. The hon. the Leader of the Opposition went on to say the following (Hansard Manuscript, 23/2, page K.2)—

In other words, the hon. the Leader of the Opposition said they were not prepared to go along with this and to be of assistance. I, on my part say that hon. members can play a very good and a very useful role in this regard. I should like the assistance of hon. members in this regard. We received their assistance in regard to the four organizations which were investigated, and hon. members opposite even agreed that they did good work. I do not want to quote this again: I did so in my Second Reading speech. Why does that side now want to refrain from doing further good work in this regard? I reiterate, Mr. Speaker, that it is the task of Parliament. Now, hon. members opposite may say: “But surely the Police are there. They should do the investigating. ’’ That is absolutely true, Sir. The Police have done this well over the years, and I have no doubt at all that they will always be able to do this, but a parliamentary committee or commission has this advantage which the Police do not have: The Police cannot make a person give evidence under oath. They can investigate and they can take statements, but they cannot make a person testify under oath and question him. That procedure does not exist. But what is more: There is also the additional advantage that Parliament is informed, as Parliament was most satisfactorily—and I repeat most satisfactorily—informed by the various reports which were tabled here.

There is another point which I have to oppose. It was conveyed to me in civilized fashion by the hon. the Leader of the Opposition, and we also had it from the hon. member for Bezuidenhout. The hon. the Leader of the Opposition put it in this way (Hansard Manuscript, 23/2, page L.6)—

In the first place the word “salary” does not occur in the Bill. Surely my hon. friend knows as well as I do that in terms of the Commissions Act of 1947—an Act which was made by the United Party—Treasury regulations were made on the daily allowances to be paid to members of commissions. Surely there is a fixed tariff which is prescribed from time to time by the Treasury. It was necessary to make provision for this in the Bill because the proposed commission will not be established in terms of the provisions of the Commissions Act, but in terms of an Act of Parliament. That is why it was necessary to determine in the Bill that daily allowances will be paid to the members of the commission. Those daily allowances will be in accordance with the daily allowances received by members of the Schlebusch Commission while they were serving on the commission. They all received it.

The word in the Bill is “remuneration”.

It is no remuneration.

The Bill makes mention of remuneration.

Yes, but remuneration for expenses they have had to incur to enable them to attend the sittings of the commission. Let me deal with the hon. member for Bezuidenhout straight away. The hon. member cast suspicion on the commission by professing that its members would receive payment. When the hon. member cast suspicion on the commission in this way he also cast suspicion on the hon. members on his side who served on the commission, for future members of the commission will receive exactly the same allowances which they received. After all, the hon. member himself served on the Select Committee which was subsequently converted into the Commission on the Publications Board. I have never heard of the hon. member refusing to accept the allowances which were paid to him at the time.

I was referring to a salary.

If the hon. member was referring to a salary, he was talking through his neck, for there is nothing whatsoever in the Bill about a salary.

Then explain the Bill better. [Interjections.] Surely “remuneration” means “salary”. You are running away from the Bill now.

What did the hon. member actually say, he who is being so pious now. I am quoting from Hansard (Manuscript page DD.3, dated 23 February)—

But the hon. member himself, over and above his parliamentary salary, received special payment for work which he did for this Parliament, and he accepted that remuneration.

That was not payment; it was a daily allowance.

That was very wicked of you.

It was very wicked of him to accept it and now reproach others because they are also going to receive it. I readily concede that. Surely the hon. member knows that there is no other way of remunerating them than in terms of the specific Treasury circular. Although he knows this, he and other hon. members are casting suspicion on the commission. What I have to express myself opposed to on behalf of all the hon. members here—because it casts a reflection on each one of us—is that the hon. member, in his sickly attempts to sow suspicion, went on to say—

Hon. members will, in other words, be tempted to create work for themselves for that daily allowance. I reject that insinuation with contempt on behalf of every hon. member in this House, even on behalf of the PRP. The hon. member was not satisfied only with denigrating and casting suspicion on the commission in that way, but he also said (Hansard Manuscript, page DD. 1)—

I subsequently corrected that.

Yes, you corrected it, but only after I had had to point out to you twice that what you had told this House was untrue.

Then why are you raking it up again now?

Yes, I am coming to that. From whom did the hon. member hear, when he made that allegation, that this was the case?

Read what I said there.

I shall come to that. I asked him: “Waarom maak u nou so ’n bewering?” But the hon. member paid no head to it and carried out normally and said—

Then I interrupted him again and asked—

The hon. member then continued—

I am now asking the hon. member, the all knowing hon. member, the pious hon. member: what gave you that impression? How could you possibly have had that impression? After all, it is not stated anywhere in the Bill?

I corrected it. What are you doing now?

I want to know who is behind this agitation. The hon. member was one of the main agitators in this regard.

I am opposed to the Bill, 100% opposed to the Bill and will oppose it with all my might. What of it?

Because you are opposed to the Bill any argument is good enough, even if it is an untrue argument which you advance. I shall continue. Not only was this said by the hon. member there was another person who went out of his way to disparage the Bill. I have said that he cast suspicion on it in the crudest possible manner. I am now quoting what the hon. member for Von Brandis said (Hansard Manuscript, page R.5, dated 23 February)—

That is a figure of speech.

It is not. Are the enemies of South Africa going to agree with the hon. member that it is a figure of speech? Sir, such was the attempt made to cast suspicion on this commission. This was a statement which the hon. member made and there were immediate objections to it. However, the hon. member did not change it, nor did he say what the hon. member for Umhlatuzana is now saying: “It was a figure of speech.” The hon. member continued and said that it was true—

This is what he said after objections had been raised.

Mr. Speaker, on a point of order: I appeal to Standing Order No. 142 (1972 Edition), which provides—

You will allow me to say that my purpose in this case was to prove that the scope of clause 12 of the Bill as stated was exceptionally wide and that it was admissible within such a piece of legislation that those things could be done.

With that do you want to deny that you said it?

I admit that I said it.

Order! When an hon. member is allowed to furnish an explanation in this House, he may not be interrupted. After his explanation hon. members may react to it.

Mr. Speaker, my point of order was that I was misunderstood, either deliberately or accidentally. My purpose was simply to prove that clause 12 of the Bill had been exceptionally widely phrased. I then tried to prove how widely the clause had in reality been phrased by means of an image. I can give this House and you, Mr. Speaker, the assurance that I in no way meant it as an allegation against the State President or against this House or against any other person.

There is nothing in his Hansard of what the hon. member has now said. What is more: The hon. member not only said this, he went even further. [Interjections.] In his unbridled attempt to disparage members serving on the commission and to cast suspicion on the commission, the hon. member said of the commission—

Is that also “a figure of speech”? Does the hon. member want to try to rectify this with an explanation as well?

Hon. members come to this House and say these things in a very irresponsible manner, and when we hit back at them, one gets the reaction we have now had in this regard.

I come now to the other hon. member who had to disparage the Bill, the hon. member for Pietermaritzburg South. In the first place the stance adopted by this hon. member was that the commission was entirely unnecessary, that there need not be such a commission at all. I do not want to argue that point. What is more—and here I want to object on behalf of the hon. members for Mooi River and Green Point—the hon. member said the commission was a waste of time. I shall quote his words, but first just the following. The hon. member said (Hansard Manuscript, page W.2)—

I have already furnished the hon. member with the reply to that question. This House, the hon. member included, stated that this may not be done. If this House wishes to determine otherwise, I am entirely happy with such a resolution. I have no objection to it whatsoever. This was a resolution adopted by this House, including myself and the hon. member. The hon. member went on to say—

This is a charge against the members of his own party who served to the best of their ability on the committee. And then followed his coup de grâce, as far as he was concerned, to the Schlebusch Commission, and the hon. member said—

I think it was the hon. member for Houghton who first said something of this nature. The hon. member for Houghton said this, did she not? It is now a question of: Zo piepen de jongen, zo zingen de ouden. [Interjections.] In his attempt to cast suspicion on the commission, the hon. member went even further. I shall quote what he said—

I have already dealt with that. The hon. member went on to say—

Surely that is not true. The report in question was tabled on 28 May. The hon. member could have established that simply by asking the Clerk of the Papers in this building. The Christian Institute was declared an affected organization on 30 May, in other words two days later. Why did the hon. member then come here, while he knew what the facts were, and in his attempt to cast suspicion on the commission, state that the Christian Institute was declared an affected organization and consequently banned, before the report was tabled.

There is another aspect in regard to the Christian Institute which I want to raise. Hon. members opposite said that I did not play the game and that I ignored the report. However, I should like to quote from the report on the Christian Institute. The commission made certain findings in regard to the Christian Institute, and hon. members opposite made recommendations in regard to the Christian Institute. It was stated—

But the hon. member said that he received no information, and that he therefore knew nothing about it. They also stated—

That is, their funds—

†Finally, the commission reported as follows—

I submit that what the commission was telling the executive in this case was: “You have the Act; it is over to you to take action against the Christian Institute.” That is exactly what we did by naming it an affected organization.

*In their unbridled suspicion-mongering however, hon. members opposite advanced all kinds of arguments.

The hon. member took me to task. I expected the hon. member to do so and that other hon. members would also tell me that the minority report excluded the possibility of a commission such as this one with which I have come to Parliament. The hon. member’s argument ranged far and wide. He has, as I have, the minority report before him. Not a word is said about this in the minority report. The report was drawn up by people with intelligence. They defined the functions of the body which they recommended in general terms, but nowhere did they withdraw their recommendation and say that it should not be such a body as the one with which I have come to Parliament. Do hon. members want to tell me that, if this were the case, the hon. members for Green Point and Mooi River would not have told me at the Second Reading already—for then it would not have been necessary to debate the matter any further—that they were sorry, but that I was completely wrong, that they withdrew it unconditionally and that I was not entitled to go about it in this way? However, that did not happen. I do not want to cover all of the ground again, but I am prepared to argue this matter once again with hon. members in the Third Reading and in the Other Place.

The hon. member for Umhlatuzana attacked me on the Potgieter Report. Since I am referring to the Potgieter Report—I am afraid I may forget this—I want to say that members attacked me because it is stated in this Bill that I may, after consultation with the hon. the Leader of the Opposition, withhold parts of the report, or may withhold reports in their entirety. I fully concede this point; it was not recommended, but there was a precedent for it, i.e. the Potgieter Report. In my opinion there were portions of that report which were of such a sensitive nature that it was not in the interests of South Africa that it should be tabled. I went to the hon. the Leader of the Opposition and said to him: This is my problem; let the two of us—you with two of your people and I with two of my people—get together and consider the Potgieter Report. Like responsible adults we sat down around a conference table—he with the hon. member for Durban Point and the former hon. member for Durban North, and I, my hon. friend the hon. Minister of Defence and the late Mr. Peet Pelser—and with mutual consent we deleted certain portions from that report, and did South Africa a service. The judge wrote a good report, but, with all due respect to judges, they do not always have a feeling for what is sensitive and what is not sensitive, as seen from a political point of view. This was then written in here, but I want to say at once that if hon. members object to it, I am quite prepared to say “in consultation” with the hon. the Leader of the Opposition. To tell the truth, I am quite prepared to withdraw completely and to place the entire onus on the hon. Leader of the Opposition as far as this matter is concerned. I am prepared to omit it entirely, for I do not mind, and I said so during the Second Reading. But I do think it would be a sensible thing, in case something should slip through, if the hon. the Leader of the Opposition and I were to have to consider it coolly and calmly. I think this is extremely sensible, but if people do not want what is sensible, then we shall omit it.

I do not know precisely what point the hon. member for Umhlatuzana wanted to make in this regard, but he referred to the terms of reference of the Potgieter Commission and he quoted that the terms of reference of the Potgieter Commission had been to investigate—

The hon. member for Jeppe continued the argument along the lines that hon. member had laid down. Hon. members will recall that I asked the hon. member for Jeppe to read paragraph 6 of the Potgieter Report. He merely glanced at paragraph 6 and resumed his seat, because paragraph 6 gave him the answer. That is why I have to read paragraph 6 and after the hon. member for Umhlatuzana has read paragraph 6 he should read his speech again and see whether he did not do me an injustice. Paragraph 6 stated as follows—

These were not the terms of reference, this was stated in the “preamble”—

He did not have to inquire into these first-mentioned matters; they constituted the background against which he had to view his terms of reference. His terms of reference were these—

So he continues. When I told the hon. member that it was a question of the allocation of functions between various State departments, and problems which arose in regard to this, he did not want to believe me and then said what he said in this regard in his speech. The hon. member went further and said that it made nonsense of the standpoint adopted by the Minister of Community Development by way of an interjection, i.e. that where there were commissions of inquiry of that nature, what was at issue was something that had already happened, and he then mentioned this as an example of something which had not yet happened. The Potgieter Report did not establish the Bureau for State Security; it had already been established before the Potgieter Report appeared. It was precisely as a result of the fact that it had been established, and that problems had arisen as a result, that Mr. Justice Potgieter was appointed to inquire into this matter.

The hon. member for Durban Point said—I have already dealt with this in passing but I owe it to him to return to this more specifically—

†It was never my intention and is certainly not the intention of this Bill to ask members of Parliament to act as officers of the Police in order to seek a crime. I asked him the question—

He replied—

Why does the hon. member accuse me of not reporting to Parliament when each and every report of the commission was tabled in Parliament?

But executive action was taken before Parliament had decided.

No, I am coming back to that. It had nothing whatsoever to do with it, as I have been trying to explain to hon. members all along. When the Schlebusch Commission was appointed and they had to investigate these organizations, it was never said and it was not implicit in the instruction that they must pass legislation. It had nothing to do with legislation at all.

*Surely we have argued this matter repeatedly. The entire object of that exercise was to see what the internal workings of that organization looked like, as the hon. member himself once said. But it was never coupled to or associated with any legislation whatsoever. No, Sir, I came to this House because I received a report. As I have already said, I gave that report to the law advisers to turn into a Bill. They did so and it is before this House. What I envisage with it—and, in fact, the commission itself viewed this matter in this light when it stated in paragraph 11—

That is, apart from the four—

The commission foresaw that in addition to these organizations which they investigated, there might still be or might in future be other organizations which ought to be investigated. It was to give effect to this that I came here with this Bill. I have now explained my standpoint to hon. members. All that I want to do is to have those organizations investigated. It is all the same to me what kind of machinery is used, as long as that machinery is associated with Parliament, and if hon. members then want to co-operate with me—and I believe there are hon. members who want to do this—then I am open to an approach in that regard.

Question put: That the words “the Bill be” stand part of the Question,

Upon which the House divided:

Ayes—103: Albertyn, J. T.; Badenhorst, P. J.; Ballot, G. C.; Barnard, S. P.; Bodenstein, P.; Botha, G. F.; Botha, L. J.; Botha, M. C.; Botha, P. W.; Botha, S. P.; Botma, M. C.; Clase, P. J.; Coetsee, H. J.; De Beer, S. J.; De Jager, A. M. van A.; De Klerk, F. W.; De Villiers, D. J.; De Villiers, J. D.; De Wet, M. W.; Du Plessis, B. J.; Du Plessis, G. F. C.; Du Plessis, G. C.; Du Plessis, P. T. C.; Du Toit, J. P.; Engelbrecht, J. J.; Greeff, J. W.; Greyling, J. C.; Grobler, M. S. F.; Grobler, W. S. J.; Hartzenberg, F.; Hayward, S. A. S.; Hefer, W. J.; Herman, F.; Heunis, J. C.; Hoon, J. H.; Janson, J.; Koornhof, P. G. J.; Kotzé, G. J.; Kotzé, S. F.; Kotzé, W. D.; Krijnauw, P. H. J.; Kruger, J. T.; Langley, T.; Le Grange, L.; Le Roux, F. J.(Brakpan); Le Roux, F. J. (Hercules); Le Roux, Z. P.; Ligthelm, N. W.; Lloyd, J. J.; Louw, E.; Malan, G. F.; Malan, J. J.; Malan, W. C.; Marais, P. S.; Maree, G. de K.; McLachlan, R.; Meyer, P. H.; Morrison, G. de V.; Mulder, C. P.; Muller, H.; Nel, D. J. L.; Niemann, J. J.; Palm, P. D.; Potgieter, S. P.; Raubenheimer, A. J.: Reyneke, J. P. A.; Roux, P. C.; Schlebusch, A. L.; Schoeman, H.; Schoeman, J. C. B.; Simkin, C. H. W.; Smit, H. H.; Snyman, W. J.; Steyn, D. W.; Steyn, S. J. M.; Swanepoel, K. D.; Swiegers, J. G.; Terblanche, G. P. D.; Treurnicht, A. P.; Ungerer, J. H. B.; Uys, C.; Van den Berg, J. C.; Van der Merwe, H. D. K.; Van der Merwe, P. S.; Van der Merwe, S. W.; Van der Merwe, W. L.; Van der Spuy, S. J. H.; Van der Walt, A. T.; Van der Walt, H. J. D.; Van der Watt, L.; Van Rensburg, H. M. J.; Van Tonder, J. A.; Venter, A. A., Viljoen, P. J. van B.; Vlok, A. J.; Volker, V. A.; Vorster, B. J.; Vosloo, W. L.; Wentzell, J. J. G.

Tellers: J. M. Henning, N. F. Treurnicht, A. van Breda and C. V. van der Merwe.

Noes—30: Aronson, T.; Bartlett, G. S.; Basson, J. D. du P.; Baxter, D. D.; Bell, H. G. H.; Cadman, R. M.; Deacon, W. H. D.; De Villiers, I. F. A.; De Villiers, J. I.; Graaff, De V.; Hickman, T.; Hourquebie, R. G. L.; Hughes, T. G.; Kingwill, W. G.; McIntosh, G. B. D.; Miller, H.; Mills G. W.;, Murray, L. G.; Olivier, N. J. J.; Page, B. W. B.; Raw, W. V.; Van Coller, C. A.; Van den Heever, S. A.; Van Eck, H. J.; Van Hoogstraten, H. A.; Von Keyserlingk, C. C.; Wainwright, C. J. S.; Webber, W. T.

Tellers: E. L. Fisher and W. M. Sutton.

Question affirmed and amendment moved by Sir de Villiers Graaff dropped.

Question then put: That the word “now” stand part of the Question,

Upon which the House divided:

Ayes—102: Albertyn, J. T.; Badenhorst, P. J.; Ballot, G. C.; Barnard, S. P.; Bodenstein, P.; Botha, G. F.; Botha, L. J.; Botha, M. C.; Botha, P. W.; Botha, S. P.; Botma, M. C.; Clase, P. J.; Coetsee, H. J.; De Beer, S. J.; De Jager, A. M. van A.; De Klerk, F. W.; De Villiers, D. J.; De Villiers, J. D.; De Wet, M. W.; Du Plessis, B. J.; Du Plessis, G. F. C.; Du Plessis, G. C.; Du Plessis, P. T. C.; Du Toit, J. P.; Engelbrecht, J. J.; Greeff, J. W.; Greyling, J. C.; Grobler, M. S. F.; Grobler, W. S. J.; Hartzenberg, F.; Hayward, S. A. S.; Hefer, W. J.; Herman, F.; Heunis, J. C.; Hoon, J. H.; Janson, J.; Koornhof, P. G. J.; Kotzé, G. J.; Kotzé, W. D.; Krijnauw, P. H. J.; Kruger, J. T.; Langley, T.; Le Grange, L.; Le Roux, F. J. (Brakpan); Le Roux, F. J. (Hercules); Le Roux, Z. P.; Ligthelm, N. W.; Lloyd, J. J.; Louw, E.; Malan, G. F.; Malan, J. J.; Malan, W. C.; Marais, P. S.; Maree, G. de K.; McLachlan, R.; Meyer, P. H.; Morrison, G. de V.; Mulder, C. P.; Muller, H.; Nel, D. J. L.; Niemann, J. J.; Palm, P. D.; Potgieter, S. P.; Raubenheimer, A. J.; Reyneke, J. P. A.; Roux, P. C.; Schlebusch, A. L.; Schoeman, H.; Schoeman, J. C. B.; Simkin, C. H. W.; Smit, H. H.; Snyman, W. J.; Steyn, D. W.; Steyn, S. J. M.; Swanepoel, K. D.; Swiegers, J. G.; Terblanche, G. P. D.; Treurnicht, A. P.; Ungerer, J. H. B.; Uys, C.; Van den Berg, J. C.; Van der Merwe, H. D. K.; Van der Merwe, P. S.; Van der Merwe, S. W.; Van der Merwe, W. L.; Van der Spuy, S. J. H.; Van der Walt, A. T.; Van der Walt, H. J. D.; Van der Watt, L.; Van Rensburg, H. M. J.; Van Tonder, J. A.; Venter, A. A.; Viljoen, P. J. van B.; Vlok, A. J.; Volker, V. A.; Vorster, B. J.; Vosloo, W. L.; Wentzel, J. J. G.

Tellers: J. M. Henning, N. F. Treurnicht, A. van Breda and C. V. van der Merwe.

Noes—41: Aronson, T.; Bartlett, G. S.; Basson, J. D. du P.; Baxter, D. D.; Bell, H. G. H.; Boraine, A. L.; Cadman, R. M.; Deacon, W. H. D.; De Villiers, I. F. A.; De Villiers, J. I.; De Villiers, R. M.; Eglin, C. W.; Enthoven (’t Hooft), R. E.; Fisher, E. L.; Graaff, De V.; Hickman, T.; Hourquebie, R. G. L.; Hughes, T. G.; Kingwill, W. G.; McIntosh, G. B. D.; Miller, H.; Mills, G. W.; Murray, L. G.; Olivier, N. J. J.; Page, B. W. B.; Raw, W. V.; Schwarz, H. H.; Slabbert, F. van Z.; Sutton, W. M.; Suzman, H.; Van Coller, C. A.; Van den Heever, S. A.; Van Eck, H. J.; Van Hoogstraten, H. A.; Van Rensburg, H. E. J.; Von Keyserlingk, C. C.; Waddell, G. H.; Wainwright, C. J. S.; Webber, W. T.

Tellers: D. J. Dalling and R. J. Lorimer.

Question affirmed and amendment moved by Mrs. H. Suzman dropped.

Bill read a Second Time

Mr. Speaker, as the hon. member for Berea said—and I agree with him—this Bill did not come to this House as a result of the whim of a Minister or the whim of a department. Moreover, I think he was also correct when he quoted as an important reason for this Bill the unanimous findings of the Commission of Inquiry into Scientology. This commission, which completed its activities four years ago and published its findings, put forward the following view in paragraphs 14.9 and 14.11—

There are very thorough procedures which must be followed. The report continues—

This was the unanimous opinion of a commission appointed by the State President four years ago. That commission was under the chairmanship of a judge. There are hon. members who always want to hold up a judicial commission as the only type of commission which is truly unbiased. The Government first wanted to establish, however, whether a change would not come about. That is why the Government has been keeping this legislation in abeyance. We wanted to see whether a change would come about, and whether the report of the commission would not serve as a warning by which this movement would feel obliged to control itself. However, no change has come about. Indeed, the publications have increased in number. I want to point out that these publications are contaminating other publications, contaminating them to such an extent that the contamination has already manifested itself in some of our daily papers. Some of our daily papers have already been so foolish as to slate the proposed legislation, legislation which they know is essential for curbing the scandalous practices of these people. I am speaking of newspapers such as the Rand Daily Mail and The Cape Times, which, in my opinion, have cast an objectionable reflection on the attempts which this Government is making to help those people, people, who, in the words of an hon. member in this House, need the protection of all of us. In this case the Government was obliged to take action.

†Mr. Speaker, in the first instance I want to thank the hon. members of the official Opposition for their support of the Second Reading of this Bill. The hon. member for Rosettenville always takes a genuine interest in our psychiatric services and he spoke kindly of the services and of those people who, from day to day, dedicate themselves to serving and helping the mentally disordered. I believe that he showed an insight into the plight of these people and that he realized the necessity for protecting those people against malicious rumours and articles.

*In my opinion the hon. member for Brentwood displayed a very balanced view of the various measures, the various procedures and safeguards in terms of which mentally retarded patients may be protected. The hon. member also displayed a balanced view of the co-ordination of disciplines laid down in terms of the Mental Health Act with a view to ensuring safe care for patients.

The hon. member for Pinelands and the hon. member for Parktown on the other hand, did not, in my opinion, listen attentively enough to my Second Reading speech.

†The hon. member for Pinelands, I believe, had no cogent reason really for opposing this Bill. He spoke about a direct act of censorship. I would like to know whether he condones the publication of malicious articles. Does he condone actions against people who cannot fend for themselves—and in false articles at that? Who then is responsible for them? Who must protect them if the State does not?

*The hon. member for Parktown slated the Bill at one stage by adopting the attitude that this was merely another Act which the Government wanted to place on the Statute Book. His objection was that this was merely another Act being placed on the Statute Book. He spoke about the freedom of the Press as well. However, I notice that he has placed an amendment in this regard on the Order Paper. So it seems that we shall be able to deal with his problems concerning the freedom of the Press once more at a later stage. If it is necessary to have Acts for the protection of children who cannot look after themselves, for the protection of prisoners who are in solitary confinement and who cannot fend for themselves, in what way is the protection of these people regulated? I wonder whether the hon. member can tell me this. It also seems to me there are hon. members who have difficulty in understanding what is meant by “reasonable steps”.

†I believe that the only real method to be followed in order to make really sure whether a rumour or a publication or an allegation is in fact true, is to contact the source of the information. What is wrong with contacting the secretary or the department or myself in writing or by telephone? I often receive telephone calls about things which are far less important than this.

The hon. member for Berea dealt quite extensively with the Victoria report, a report published in Australia which also deals with the scientology cult. I want to thank him for that. He made some quite startling revelations. At this stage, however, I want to point out that we are not embarking on a witch-hunt against the scientologists. Should they abide by the law and stick to the truth, they will have nothing to fear. However, should they persist in their vindictive behaviour against both the department and against people who cannot fend for themselves, by means of false articles, they must of course expect a reaction from the Government. Anybody genuinely interested in the plight of the mentally ill has some contribution to make in South Africa, but not by way of attacking and harassing the very people who are supposed to care for the undefended persons we are so concerned about. Even so, the Bill only lays down very simple conditions for anybody who wants to photograph or sketch an institution, or who wants to publish such photograph or sketch. A person who wants to do so must simply contact the secretary. It is very easy to obtain the right to do so. The secretary will not without a plausible reason withhold his consent when a reasonable request is lodged. Any bona fide request will be acceded to.

*Now, Mr. Speaker, I want to deal with the question of false information. The new section 66A(b) deals with people who knowingly disseminate false information. No one who deliberately disseminates false information, can expect indemnity from prosecution under this proposed legislation. That is deliberate false information. The hon. member for Houghton forgot the condition that a request may be lodged with the secretary if one simply wants to publish information. If the information which is published, is not deliberately false, and one can prove that one has taken reasonable steps to ensure that it is not false, one is not liable. She did not think of this. Throughout her tirade—if I may call it that—she merely emphasized the similarity between this provision and the one in the Prisons Act. However, apart from these negative comments, we have also had good contributions. I shall just mention the hon. members’ names here. I cannot discuss all their contributions. There was the hon. member for Fauresmith, the hon. member for Krugersdorp, the hon. member for Cradock, the hon. member for Umbilo and the hon. member for Green Point. All of them made good contributions, and I want to thank them for this. My department, its staff and the institution do not claim to be perfect. On the contrary, I regret having to say here today that in the economic climate in which we are living, we cannot continue with a large part of our building programme, while I myself know that we need these buildings very badly and that the need is urgent. Everyone knows what progress we have made, but also to what extent we are handicapped by buildings which are too old. But no matter how old the buildings are, the days of the lunatic asylum are over. They are gone forever. With the buildings available to us, with our limited facilities and with the devoted men and women who perform their tasks under very trying circumstances—in the thick of dirty attacks which they have to hear from day to day—success is nevertheless achieved in creating a virtually normal life for these people.

According to what some hon. members have said here—they regard these people as people who have been hidden away in a prison forever, as people whom we want to hide away forever. I just hope that the hon. members will take the trouble to show a constant interest in these people. Previously, hospitalization for people who were mentally disturbed, lasted months and even years. These days hospitalization is drastically reduced. The period is very much shorter on the average than it was in the past. Some of the patients are discharged at very short notice and are then taken up in the normal community. With simple treatment they can become part of our community and contribute their share quite productively. Previously this was not the case. In the first place this is due to the research and the work of the psychiatrists of our country, people who are so scandalously attacked by this movement, a movement which shamelessly persists day and night in its attack on psychiatry. The people who care for these patients—our psychiatrists, our nurses, our doctors, i.e. the whole team of dedicated people—return them to the circle of their fellow men, a circle which in previous years they were not allowed to enter for a long time. They are placed back amongst normal people and they are received as such.

The hon. member for Pinelands indicated what a delicate matter this was. He said that after every visit to an institution, one left the institution “heartbroken”. If this is the case, who but the State itself must care for these people?

Question put,

Upon which the House divided:

As fewer than 15 members (viz. Dr. A. L. Boraine, Messrs. D. J. Dalling, R. M. de Villiers, C. W. Eglin, R. E. Enthoven (’t Hooft), R. J. Lorimer, H. H. Schwarz, Dr. F. van Z. Slabbert and Messrs. H. E. J. van Rensburg and G. H. Waddell) appeared on one side,

Question declared agreed to.

Bill read a Second Time.

Mr. Speaker, I move—

Clause 1:

The financing of the development and extension by the South African Iron and Steel Industrial Corporation Limited—Iscor—of its existing and new production facilities takes place for the most part by means of loan funds for which Iscor has to compete both in the international and the local money and capital markets. To be able to compete successfully for funds on these markets, it is imperative that Iscor should improve its present assets/debts ratio. After consultations between Iscor’s general management, the Minister of Finance and myself, it was tentatively agreed that this could best be achieved by the issuing of further B-shares by Iscor to the State, for which purpose it is being proposed in this clause that the maximum authorized number of additional B-shares Iscor is allowed to issue be increased from 350 million to 497 million by amending section 7 of the existing Act as is being proposed in clause 1. This means that Iscor will be able to increase its total number of B-shares to 500 million with due regard to the original 3 million issued at its foundation in terms of section 7(1) of the Iscor Act.

Clause 2:

The present borrowing powers of Iscor require that, in terms of section 10bis of the Act, the approval of the State President be obtained in respect of loans raised by Iscor. In those cases where State guarantees of loans are essential or required, the approval of the Minister of Finance is also necessary in terms of the Act. The present prescribed loan procedure means that, apart from the fact that officials of the Department of Industries are constantly placed under pressure in completing the necessary loan documents for submission to the State President in executive council, the Ministers of Economic Affairs and of Finance and the offices of the Prime Minister and the State President first have to be involved in the approval of loans. It has often happened that one or more of these parties was away on official or private business and this resulted in the relevant documents having had to be forwarded to them for approval of urgent Iscor loans. Hon. members will be aware of the fact that it is not always possible to afford delays of this nature.

Competition for loan funds on the international money and capital markets is keen at present and changes in the short term as far as the availability of funds and loan conditions such as rates of interest are concerned, is nothing unusual. Consequently, it often happens that consideration and approval of documents by foreign bodies such as Government institutions, exchange committees and their legal representatives mean that last-minute changes have to be made to the documents at a stage where the processing thereof is already far advanced. This not only results in inconvenience and delays, but also hampers Iscor’s bargaining position to utilize improved conditions at short notice before the situation on the money market changes again or before a more favourable option on funds expires.

In view of the aforementioned altered circumstances which, as hon. members will appreciate, have been applying for a considerable time, it is being envisaged to amend section 10(1) of the Act as is proposed in clause 2(a) of the Bill by substituting the approval of the Minister of Economic Affairs for approval by the State President. Apart from the fact that this will shorten the procedure considerably, it also means that the Minister of Economic Affairs will have the same statutory powers as, for example, the Minister of Finance has in terms of section 16(1) of the Exchequer and Audit Act, 1975, the Minister of Posts and Telecommunications has in terms of section 18 of the Broadcasting Act, 1936, and section 6A of the Post Office Readjustment Act 1968.

Now you may make the decisions?

Yes. The Minister of Transport, in terms of section 1 of the Railways and Harbours Loans Act, 1973, and the Minister of Defence, in terms of section 6A of the Armaments Development and Production Act, 1968, also have such powers for the approval of loans raised by the relevant institutions under their control.

In terms of the amendment proposed in clause 2(b) of the Bill it is suggested that provision should also be made for the granting to Iscor of the specific power, in addition to the powers it has at present to purchase and sell its own debentures on the open market, to be able to purchase such debentures for subsequent reselling should it be necessary to support the market price thereof or to invest Iscor’s temporary surplus funds.

†Clause 3:

Section 11 of the existing Act contains the so-called temporary loan powers of Iscor. The original purpose of this section of the Act was to enable Iscor to make full use of facilities, such as bank overdrafts and short-term loan funds in cases where limited funds had to be obtained in the short term as a matter of urgency. However, these temporary borrowing powers to obtain bridging finance are in practice of limited use to Iscor as its powers in this regard are restricted by the present wording of section 11 of the Act in terms of which these powers may only be exercised by Iscor “in anticipation of the issue of any shares or debentures authorized to be issued under this Act” or “with the approval of the State President”. In clause 3, therefore, the amendment of section 11 of the Act is proposed to enable Iscor to make use freely of bridging finance facilities to an amount equal to three-quarters of the corporation’s issued capital. This provision will bring Iscor’s position into line with that of the Industrial Development Corporation as provided for in section 4(f) of the Industrial Development Act, 1940.

*Allow me to point out in this regard that I intend moving an amendment in the Committee Stage to delete “issued” and to substitute the word “paid up” as it is contained in the Act at present.

†Clause 4:

This contains an amendment to section 20 of the Act in order to rectify the designation of the portfolio of the Minister of Economic Affairs, who is at present responsible for the administration of the Act.

Clause 5 contains the short title.

Mr. Speaker, let me say at once that we, the official Opposition, will support the Second Reading of this Bill. The first clause of the Bill follows similar lines to the Bill introduced by the hon. the Minister in 1974, a Bill we also supported. However, I want to express at once my disappointment that the hon. the Minister of Economic Affairs has not seen fit to motivate this Bill thoroughly to the House. In the very last words of his speech he indicated that he thought that what he had said represented the contents of the Bill. I believe the hon. the Minister has explained the Bill, but has failed to motivate it. I believe it is important that South Africa should know that in this legislation we are dealing with a public corporation, Iscor—an economic giant. As such the corporation’s affairs have a ripple effect across the whole scope of our South African economic and industrial life. Particularly in view of the fact that we have Iscor’s annual report available, I would have hoped that the hon. the Minister, as his predecessor did in 1974, would have taken the public into his confidence and indicated what the future planning for Iscor is.

In 1974 his predecessor was good enough to tell us that in their overall programming for the ten year period 1974 to 1984 they envisage capital commitments of some R3 238 million. He indicated in detail that this expenditure was spread over (a) works—plant and machinery and housing; (b) mines—plant and machinery and housing; (c) home-ownership scheme; and (d) mineral and surface rights as appropriated to the Pretoria works, the Newcastle works and the Vanderbijlpark works. Since then, as we all know, Iscor also became interested in the Sishen-Saldanha project. I believe it is important that we should put on record the stature of Iscor in the economic life of our country because, after all, clause 1 of the Bill is seeking to increase its capital structure in B shares from some 350 000 000 to some 497 000 000 ordinary shares, making a total of 500 000 000 B ordinary shares if we take into account the original B subscription shares. As these ordinary shares are taken at R2,00 par, we are talking in total of some R1 000 million, money in which South Africans, as individual citizens, have a vested right because these shares are held on behalf of the country by the State President. I think therefore that we should know, if we study the 1975 annual report, that the total assets of Iscor were R2 238,387 million and that its total sales during the financial year ending 30 June 1975 were R601 860 000. Iron ore dispatched from the mines totalled 6 460 000 tons and the steel production in ingots was 4 350 000 tons. These are very significant figures. The salaries and wages for the year totalled R192 500 000. The labour strength of Iscor is 24 600 Whites and 25 100 non-Whites. We then come to the significant figure that during the last trading year while Iscor returned a net trading profit of R49 239 000 they showed an overall net loss of R35 874 000. I quote these figures from the annual report which is available to hon. members.

One may ask how such an excellent trading profit was reduced to such a sad overall net loss. The reason is that the finance charges which Iscor had to face up to were R8 7 865 000. This represents a debt ratio—i.e. the loan capital as a percentage of the total net assets of Iscor—of approximately 67%, a figure which in terms of the report itself is unrealistically high. If we look at the Iscor picture in this light, we realize that while Iscor is an economic giant and does affect our economic life, there is much to be hoped for in the way of profits. I want to correlate those figures with figures which a private enterprise steel corporation happened to make public and which appeared in The Argus last evening—

That is a private enterprise company which operates as a public company. This gives us food for thought. We immediately then turn to the pricing policy of Iscor and we find that during last year Iscor, which is a price controlled company—the power of price control being vested in the Minister of Economic Affairs and the Minister of Finance—was granted two price increases. The one in January 1975 was for 10,3%, on average, on its products and the one in June 1975 was for 15%, but the last-mentioned one hardly had an impact on the year’s trading. What gives me cause for concern—I had hoped that the hon. the Minister would make mention of it in today’s debate—is a headline article in the business section of The Cape Times of Monday, 23 February, in which we read—

They attribute this to a statement which they say the hon. the Minister made in Parliament. I merely read their words—

I believe that the article is unfair to the hon. the Minister because nearly at the end they say—

I know that the hon. the Minister has made it known to the House that the Government regards Iscor as such an important factor in our economic lives that it has resisted price increases in order to endeavour to halt the advancing flood of inflation. If we look at the taxpayer who has to bear the ultimate burden of finding increased capital requirements which largely are going to offset this worrying loss of approximately R37 million, then we ask ourselves whether we are certain that Iscor is being run entirely at its best and optimum level. We are concerned too to see in another article that it is reported that Iscor is now scaling down its loan issue from R20 million to R12 million. We know that as far as Iscor is concerned, it has to borrow money in the public capital market in South Africa and overseas. If it is to carry out the programme which is envisaged for it and which will ultimately enable Iscor to produce for South Africa a total of approximately 11 million tons annually by 1984, then the capital works must be expanded. However, the figure of approximately R3 500 million, which the hon. the Minister gave us as being the potential ultimate capital requirement in the year 1984, was given to the House before devaluation of the rand, before the whole world’s economic trend changed and before we had the incidence of high inflation in Great Britain. Therefore, if we take that figure and add a conservative 33% in order to arrive at the new figure of the finance which will be required over the next 10 years, then we find that the figure will be not less than approximately R4 000 million.

Why 33%?

22% can be taken as a devaluation factor in order to account for the importation of foreign capital goods. The devaluation was at a rate of 17,9% and if that is translated into the cost of goods landed in this country, it automatically amounts to an effective devaluation of 22%. There are also the price rises overseas which will be far in excess of that through no fault of the hon. the Minister, his side or this side of the House. We are living in a time of escalation of prices throughout the world. When we take these figures into account we have to ask ourselves whether Iscor, in relation to the other public corporations, and the requirements of the Government itself, is re-examining its priorities. Sir, we all want Iscor to prosper.

The answer to your question is “yes”.

Thank you. We believe that in Iscor we have the economic sinews of war and the economic sinews of peace, so I am now, on behalf of the hon. the Minister, motivating this Bill as we see it. We are going to support the Bill because we believe that Iscor has such a stake in the economic welfare of this country that we have to do everything in our power to make possible its continued viability and to encourage its continued profitability in the future. But we do so with the reservation that we would ask this hon. Minister to take this opportunity, in the Third Reading of the Bill or else in his reply this afternoon, to give South Africa an indication of how Iscor intends to meet its continuing capital expenses. We are worried because the steel market which was so buoyant both here and overseas in 1974, when we increased Iscor’s B share capital to R350 million, has now changed.

In fact during last year, 1975, Iscor could not meet the total demand for its products in South Africa. The market then was 5 638 000 tons. That was in 1975. That was the total market potential which had to be catered for. At that time Iscor’s share of the market was 56,6%. Other suppliers, i.e. private enterprise, were 20,5%, and imported supplies were as high as 22,9%, steel imports during 1975 being 1 294 000 tons. So we will see that Iscor had a leeway to make up and was justified in its optimism in planning for the future. But during this current year the picture has changed drastically. Steel output in the USA, in Germany and in Britain is down. The demand for steel in Japan is down, and it may well be that our figures were based on somewhat optimistic highs, and not anticipating the troughs. Again I want to comment that Iscor may be accused of not being as patriotically South African as it could be. I want to refer to the question of our exporting scrap steel from South Africa, which could well be used by Iscor. I quote again from The Cape Times of Tuesday, October 14—

The article goes on to say that both the passenger liner S.A. Oranje, with its high-grade British steel, and the cargo liner S.A. Shipper over the weekend sailed to the Orient for demolition. We ask, Sir, why it is that we ourselves are not recycling this and other available steel. There are two answers, both of them economic. One is that Iscor is only prepared to pay R45 per ton for steel broken down, and the other is that the S.A. Railways charge the same high railway tariff for steel as they do for ordinary commodities, manufactured commodities, and the net result is that it is not economic for an industry to be created either in Durban or in Cape Town for the dismantling of ships, a steel scrapping industry. But in times of economic crisis and at a time when we may be facing increased military threats on our borders, I believe that Iscor should be considering, in collaboration with the Minister of Railways, the question of the recycling of our own steel.

I want to repeat that we on this side of the House believe that Iscor should be helped, and we believe that this Bill sets out to do three things, i.e. to increase its issued capital, to facilitate the task of the Minister in not having to go through the long procedure of consulting with the State President and obtaining his approval, and to give the Iscor board powers in respect of bridging finance, overdraft finance, up to three-quarters of its issued capital. But again we want to make one further appeal to the hon. the Minister, who has stated his genuine belief in private enterprise coming first. We are concerned at the potential intrusion or incursion of Iscor into private enterprise. I have taken the trouble to consult the report itself, which makes mention of the controlled and associated companies in the Iscor stable. They make a frightening list, Sir. They are Ipsa, held through Metkor, Tornado Enterprises, Cape Town Iron and Steel Works, Yskor Newcastle Grondbesit Beperk, Iscor Housing Utility Company, Iscor Estates (Pty.) Ltd., Vanderbijlpark Estate Company, Durban Navigation Collieries (Pty.) Ltd., Industrial Minerals Mining Corporation (Pty.) Ltd., Imcor Zinc (Pty.) Ltd., Ferrous Scrap Distributors (Pty.) Ltd., Heckett (S.A.) (Pty.) Ltd., Iscor Utility Stores (Pty.) Ltd.—not to be confused with Woolworths Utility Stores—Air Products (Pty.) Ltd., Vantin (Pty.) Ltd., Steel Sales Co. of Africa (Pty.) Ltd. and Metpro Developments (Pty.) Ltd., and then there are others in Rhodesia and in other parts of the world. I again want to record that we on this side of the House believe that while we have backed Iscor and will continue to back Iscor, the Minister, who alone has contact with Iscor because of the fact that it is a State corporation and is autonomous as far as the control of finances by this House is concerned, should look at the situation again and encourage Iscor to devote their total energies and drive and available funds to the manufacturing of steel products and increasing their output and leaving to private enterprise that which belongs to private enterprise. With these words, Sir, I have great pleasure, on behalf of this side of the House, in supporting the Bill.

Mr. Speaker, I listened attentively to the hon. member for Gardens and what he had to say about this Bill. In the first place one is grateful for the Opposition’s support of this Bill, but they acted once again as in the past by putting a lot of questions. They are concerned about the efficiency of Iscor; they say that the matter is not properly motivated; they ask why this Bill is before the House; they speak about efficiency and profitability, and then certain comparisons are drawn, for instance, with Union Steel. In the course of my speech I shall deal with a few of those aspects about which the hon. member is so concerned. Possibly it will remove his concern to a large extent. Sir, it is a privilege for me to give this Bill my wholehearted and unqualified support from this side of the House. If one asks oneself what this Bill contains, it amounts basically to one thing only, and that is that ways and channels are being created to find capital and loan capital and to make it easier to streamline the whole process of obtaining capital. And I think it is necessary, especially, as was emphasized by the hon. member for Gardens himself, in view of the need to extend our S.A. Iron and Steel Corporation, that there should be no snags, particularly in these days when it is difficult to obtain capital. Therefore we must not place any obstacles in the way of finding that capital.

This Bill, as the hon. member said, basically amounts to the fact the number of B shares may be increased from 350 million to 497 million, shares which may be taken up by the State President at a par value of R2 per share. These shares which are taken up are shares which belong to the citizenry of the State. Now I just want to say that I am proud to think that I as a citizen of this country am a shareholder in this important economic giant. I agree with the hon. member that it is an economic giant. I am proud of the fact that we can hold the shares in this economic giant. I know that the hon. member for Johannesburg North is a man who only sees things in terms of rands and cents. We know what his attitude was last year. He always wants to know what the profits are. Last year he asked many questions here, and he wanted to know what the return would be if these shares were taken up by the State. He wanted to know what return the State would receive from this. That is all he wanted to know. The dividend which the citizenry received, is steel at low prices, because the price of steel is controlled. In other words, the commodity which every person uses in his daily life is manufactured at a low price as a result of a controlled steel price in South Africa. If we do not give our support to the legislation today, we shall be doing the Republic of South Africa an injustice.

The steel giant of which we are speaking, is not merely a steel giant, but also a strategic giant, especially in the times in which we are living. Can one imagine what our position would have been if we did not have an Iscor? What would the position in South Africa have been in that case? Nor is it the Republic of South Africa alone which will rely on this industry in the future, but also the rest of Africa. They too, as in the past, are going to lean heavily on the industry. We know that even Western countries have benefited from the manufacture of steel by Iscor in the past. Therefore we are rightfully proud of our being able to have a share in this corporation.

In this attempt for détente in Africa, the Prime Minister told the African countries that we were prepared to share our knowledge and products with them. We realize what an important role steel can play in the future development of Black states in Africa. Therefore it is important that we do not place obstacles in the way of the corporation with regard to obtaining capital in the years which lie ahead.

In 1974 we had similar legislation in this House. It was asked then that the number of B shares be increased from 122 million to 350 million. At that time we had the same questions and misgivings as we have today. How efficient is Iscor? How profitable is Iscor? Is the State not investing too much capital in Iscor?

We know that the hon. member for Johannesburg North, to whom I have already referred, asks time and again what the return on one’s investments is. I want to tell him that the criterion we apply to Iscor, differs completely from his. We do not only want to know how profitable Iscor is. Money is not our god. We see Iscor in another light as well. We know what a guarantee the steel industry represents for the survival of all population groups in South Africa. To us this is much more important than the profit criterion which the hon. member for Johannesburg North applies.

We know that the steel consumer benefits from the low prices.

†The hon. member for Johannesburg North is a shareholder in quite a number of companies that consume large quantities of steel. So he too has had the benefit of the low priced steel. The State is subsidizing a lot of his companies, because they are large consumers of steel. In spite of having the benefit of the low priced steel he still moans and asks what the profit of the corporation is.

Companies that make profits pay tax.

The only thing the hon. member always wants to know is how profitable the corporation is.

However, we see this in a completely different light. [Interjections.] I know the hon. member made an interjection, but it is not necessary for me to listen to him. He is always singing the same tune. I know that tune only too well. It is always anti-South African. The hon. member is always plucking at the same string.

The hon. member for Cape Town Gardens emphasized that 95% of all metals which we use, contain steel. In this respect I agree with the hon. member. This emphasizes the necessity of placing this Bill on the Statute Book. The hon. member also asked, however, why we should make this capital available. Let us look for a moment at the expansion of the steel industry. The hon. member referred to the amount of R3 228 million which was mentioned a few years ago. At the moment extensions are under construction at the Newcastle works which will be completed before long. It is a project which will produce two million tons of liquid steel per year on completion. The Vanderbijlpark works are also nearing completion and will produce four million tons of liquid steel per year. The hon. member himself said that we should modernize our steel milling because we could not continue with outmoded equipment. The Pretoria milling works are also nearing completion and will soon be in operation. Fine progress is being made with the Sishen-Saldanha project. Recently we heard that the railway line from Saldanha had crossed the Orange River and was, as they say, on the “last lap” to Sishen. This is a grand achievement. Soon we shall be able to utilize the advantages of this project.

We also think of the new coal mines at Ellisras which are also nearing completion. The last thing is extensions to the dolomite quarries and the mine at Sishen. In addition to these there are the projects which will be completed within the next year or two. Perhaps it is necessary for us to take a brief look at these.

I want to refer specifically to the Vanderbijlpark works. Within the next few years a blast furnace will be added, as well as a form-coke plant and a sponge-iron plant. This is a completely new process. In addition a continuous slab-casting machine will be installed. There is also the extension of the hot-strip mill. Additional coal will have to be provided for coke. The cost of this will be approximately R775 million calculated at 1975 prices. This will result in an increase in the production of the Vanderbijlpark works alone from 4 million tons to 5,2 million tons per year. If one calculates the value of the increased production of 1,2 million per year for the years 1980 to 1983, then it will be worth R1 700 million to South Africa in terms of foreign exchange.

There is also long-term planning which we may analyse. If further extensions are made to the Vanderbijlpark works to the ultimate stage, 6,5 million tons of steel will be produced annually. The second phase of the extension of the mill at Newcastle is also in prospect. At the moment Newcastle does not produce flat products as yet, but this is, in fact, planned for the future. One thinks of the first phase of the Rosslyn works. This, in brief, is the extension programme envisaged by Iscor.

It is amazing to think that the capital at present invested by Iscor in production machinery which has not been in production for a single day, exceeds Iscor’s total fixed assets two and a half years ago. If one thinks of the enormous amount of capital which has been invested in Iscor as an industry and which is still unproductive, surely one cannot compare the profitability of such an industry with the profitability of old established industries and steel producers in South Africa. It is ludicrous to want to make such a comparison.

Speaking of profitability, the hon. member made a comparison, and asked why Iscor was not as profitable as Union Steel. Does the hon. member not know that the products of Union Steel are manufactured from scrap? In the past we have repeatedly said in this House that there are many companies which manufacture their products from scrap, inter alia, Scaw. You always want to compare Iscor with foreign steel producers but one simply cannot do this. The quality of the coke which we use in this country is very much lower than that which is available abroad. Within the next few years Iscor will produce virtually the same tonnage of steel in South Africa as is produced in the old Thyssen works in Duisburg. What an achievement this is! We cannot simply measure the profitability of Iscor in terms of that of other steel producers because those firms simply produce the bread-and-butter lines. Iscor, on the other hand, produces in the national interest of South Africa. When steel production is programmed, one cannot simply roll the producer’s one hundred or two hundred tons. When a special type of steel is being manufactured, a programme has to be drawn up, after all, and one may have to carry a special type of steel in stock for years before there is another demand for such steel, because one cannot, after all, change the process every second day. These are the reasons why one cannot readily compare Iscor with other steel works. Another very important point is that Iscor manufactures its steel from our own raw materials. Therefore, one cannot simply look at the matter of profitability.

The State is accused of contributing too much capital towards the development of Iscor. Let us take a brief look at this. The statement that the State contributes too much capital towards the development of Iscor, has been taken completely out of context. If we take the period from 1 June 1967 to today, we see that the State’s share capital has increased to an amount of R295 million. What was the loan capital over the same period? It was R1 640 million. In other words, financing from 1967 up to the present time totals R1 935 million, and of this the State’s contribution is only 15%. Is it therefore correct to make the statement that the State contributes too much? If we look at a projection which has been made with regard to the use of steel in the future, we see that for the year 1975-’76 1,7 million tons of profile products and 2,8 million tons of flat products will be required. For the year 1979-’80 2,3 million tons of profile products and 3,9 million tons of flat products will be required. For the year 1984-’85 when the extensions I have mentioned ought to be in full production, the demand will be 3,1 million tons as far as profile products are concerned and 5,9 million tons as far as flat products are concerned. In other words, this emphasizes that the management of Iscor was correct in the past when it started planning for a higher steel production. The cost of Iscor’s extensions since 1970 amounts to R2 800 million, of which Iscor itself provided 70%. If these extensions had not been tackled, can hon. members imagine the difficult position in which we would have found ourselves in these times of inflation? Can hon. members imagine in what a situation the State would have found itself if Iscor had not made provision for these extensions? If we had had to import this steel, it would have cost the State R750 million annually. The Sishen-Saldanha project ought to bring in approximately R200 million per annum. In other words, on an investment of R2 800 million, the State ought to save approximately R950 million annually in foreign exchange.

Iscor proudly provides employment to approximately 52 000 people today—approximately 50% Whites and 50% non-Whites. This is an achievement. Employment opportunities were created not only for Whites, but also for non-Whites, who already comprise 50% of the workers. The project at Saldanha will aid the development of the whole North-western Cape and will create employment opportunities for Coloureds. Over the years Iscor has trained 3 500 apprentices and learner technicians and I say today, fully convinced in my own mind, that these are of the best artisans, because the training facilities which these people are afforded—and I know what I am talking about—are not inferior, but only the best. Today not only Iscor, but also the rest of South Africa, is benefiting from this. Iscor is doing all these things, and today, in spite of the increase in steel prices which Iscor was allowed last year—and I think this may well have been a little more—its price is from 28% to 35% lower than the domestic prices in Europe and the USA.

We can enter the future with confidence only if we make the necessary provision for this industrial and strategic giant to proceed with further extensions. It was my privilege—my bench-mate is not here—to meet two people from the top management of the First National Bank of America during our recent parliamentary visit to Atlanta. When they heard that we came from South Africa, one said, “You know, we have just negotiated a loan with Iscor in South Africa”. I asked him, “Why South Africa? You speak of the third world, you are sceptical about certain aspects of our policy; why do you not invest that large amount of capital you lent Iscor, in the development of the Black states?” I told them they were doing it for one reason only, viz. that they were earning good and guaranteed interest on their money. This is really so. If they have that confidence in Iscor in South Africa, how much more confidence do we have in giving our full support to this Bill.

Mr. Speaker, I have listened with interest to the hon. member for Vanderbijlpark, who has voiced some criticism of the stance that we took last year. I shall reply to that in the course of my speech, and I hope the hon. member will manage to keep his cool because I would like to start off by repeating that we in these benches have the greatest respect for the management of Iscor and the greatest respect for the contribution which Iscor has made to the economic development of South Africa. Having said that, we have certain reservations about this Bill, which I hope the hon. the Minister is going to reply to. Let me start by saying straight off that we support the Second Reading of this Bill, although we do have a certain number of questions which we would like to put to the hon. the Minister.

While we have mentioned the respect in which we hold Iscor and its performance, I think that if one looks at the performance and the record of Iscor, as displayed in their annual reports over the last two to three years, there are certain trends developing within the corporation which I think give rise to concern. I hope the hon. the Minister will, either in his reply to the Second Reading or in the Third Reading, give us some further information. It is actually quite interesting that the people who have motivated this Bill have been the hon. member for Vanderbijlpark and the hon. member for Cape Town Gardens.

The hon. the Minister has so far been noticeable only by his silence in pointing out why Iscor requires the money. Iscor is a public corporation, public money is involved, and as hon. members will realize if they have taken the trouble to look at the Bill, it is a very large sum of money indeed. Because it is a public company and because public money is involved, it is of importance to all the taxpayers in this country. Two years ago the Government requested an increase in the authorized capital of Iscor, and subsequently it has been increased. It is important to realize that what they are saying is that the taxpayers must pay the bill for Iscor in proportion to the tax they pay and not on the basis, proportionally, to the amount of steel they consume. Because the hon. member for Vanderbijlpark may get excited later on, I thought it worth while to look up what the hon. the Minister’s predecessor said in this debate on 6 September 1974 [Hansard, col. 2396]. He said—

This is the only opportunity this House will be given to ask the hon. the Minister for the reasons for a further increase in the authorized capital of Iscor. In effect that is the essence of this Bill. All this Bill is about, is set out in clause 1, though there are certain amendments which we will propose to the House later. The hon. the Minister is asking this House, without giving any reasons, to increase the authorized capital from 350 million B shares of R2 each to 497 million, an increase of 147 million shares, or R294 million. I would have thought that is was worthwhile to attempt to give an explanation to this House of why this money was required, an explanation which goes further than to talk only of the gearing ratio of Iscor, something to which I would like to return later. If you look at the annual report of 30 June of last year, what in effect the Government can do now is that they can put a further R670 million in Iscor’s capital without coming back to this House. If the hon. the Minister would care to look at the matter, he will notice that at 30 June 1975 the number of shares outstanding was 161,8 million. It is stated in the annual report that 161,8 million shares have been issued, and now he asks for that to be increased to 497 million shares.

I had to come back to Parliament to get the money before I could take up the shares.

If I can quote the hon. the Minister’s predecessor: “Once the capital has been provided, this House has got no right.”

But it has not been provided; it must be voted by Parliament.

May I point out to the hon. the Minister that they have not been back to this House whilst I have been here despite the fact that there have been increases in the capital of Iscor in terms of what they are asking here. Since June 1973 the capital of Iscor has risen from 81,8 million shares to 161,88 million shares, an increase of roughly R160 million. The only reason I mention these figures is to get the matter into context, because these are very high figures. We on these benches feel that the taxpayer is therefore entitled to ask whether the best policy is in fact being imposed on Iscor by the Government. Because that is what it is—an imposition of a policy on Iscor. The argument has always been put forward by the Government that to keep the price of steel artificially low in our country, brings manifold benefits which outweigh the anomaly of the burden placed indirectly on the taxpaying body in general as opposed to the consumers of steel in particular. There is a further argument to that, a fair argument, and that is that they have forced Iscor to produce the whole spectrum of steel products, something which clearly acts to the disadvantage of Iscor. The hon. the Minister’s predecessor had this to say in Hansard, col. 2400, on 6 September 1974 in regard to this matter and in reply to a question from the hon. member for Von Brandis—

That is fair enough in so far as it goes, but what the public would want to know is whether that remains the position, and I would like to elaborate on this a bit further in so far as this particular Minister is concerned. We must not forget that they already had to contribute R160 million in share capital in the two years to 1975 and the hon. the Minister now comes with clause 1, which envisages a further R670 million of equity capital which is, in a sense, going into Iscor. The public would like to know, in the light of those facts, if Iscor is increasing its capital in order to keep the price of steel down, and at the same time the Government coming to the general taxpayer to get the money to take up the capital, is not in fact indulging in a mirror game. Of course we realize that a rise in the price of steel will cause costs to rise, but is the taxpayer not already paying out of another source? If it is not so, it will be a temporary delay before the market catches up and of course, in the interim, to keep the price artificially low will create distortion. It is interesting that the managing director of Iscor had this to say in an interview to Volkshandel in February this year—

In his most recent report to the shareholders the chairman of the corporation said—

What we want to know and what the general public wants to know is: Have there been negotiations with Iscor, and is the policy which has previously been applied going to be significantly altered? I hope the hon. the Minister will reply to that.

Furthermore, the chairman of Iscor had these two further things to say in this connection in the annual report—

Then he went on and said this, something which is interesting—

There is a graph, which the hon. members can look at. Then he said—

It is fair enough to keep the price of steel down, and this is clearly done at the expense of the general taxpayer, but what the public would like to know in the light of the statement by the managing director of Iscor and the statement by the chairman of the corporation is the answer by the Minister to the following questions: What would be the increased revenue to Iscor of charging the going rate, i.e. prevailing world market prices for its products as opposed to what it receives now? If they get the answer to that question, the general public will be in a position to judge which is the better alternative from their point of view: either to keep the price of steel artificially low and pay through the budget or out of the general taxpayers money, or whether it will be better for them to let the price of steel go up and to pay directly for the consumption of the product.

I want to come back now to the disturbing trends which I mentioned at the beginning, trends which are disclosed in the annual reports of Iscor, both last year’s and that of the year before, but more particularly in the annual report for 1975. The loss in 1975 has been clearly explained by the hon. member for Cape Town Gardens. It has been set out for all to see. The other trends which do give rise to concern, and which are in Iscor’s annual report—I quite accept that we are living in an inflationary time and that Iscor is in an expansionary phase—have not yet been explained. I should therefore like the hon. the Minister to comment on the trends which are actually specifically mentioned in some cases in Iscor’s annual report. If one looks at the interest cost per rand ton of steel sold, one notices that in 1972 it was R3,24, in 1973 it was R6,90, in 1974 it was R 16,46 and in 1975 it was R26,26. If one looks further, at the total stocks per ton of steel sold, one finds that they were more or less steady over the period 1972-’74 at approximately R50. In 1974, as I said, they were R50,80, but in 1975 they shot up to R77,2Q. Furthermore, if one looks at the capital employed per ton of steel sold—that is one way of measuring a company—one finds that in 1972 this was R251, in 1973 it rose marginally to R252, in 1974 it rose to R372 and in 1975 it rose as high as R504. The hon. the Minister also mentioned the gearing ratio of Iscor in his Second Reading speech. He will know, of course, that that has risen from 0,4 in 1972 to 0,8 in 1973, to 1,5 in 1974 and to 1,9 in 1975.

Clause 1 visualizes an increase, ultimately, when all the money has been put up, of some R670 million. In reply to a question we put to him on 20 February, a question which, to a certain extent, has already been referred to by the hon. member for Cape Town Gardens, the hon. the Minister said—this is germane to this issue—that public corporations under his control had been requested repeatedly in writing to reduce expenditure drastically and to avoid salary increases. Based on Iscor’s expenditure for last year, some R830 million, it appears that, in terms of the programme as it is now displayed, we still have to obtain some R2 400 million. I hope the hon. the Minister will tell us, firstly, by how much that figure, in rand, has been increased as a result of the devaluation, which was described by his colleague as an act of strength and, secondly, to what extent he has succeeded in quantifying cuts in so far as Iscor is concerned. Further, the public will want to know from the hon. the Minister whether it has been a genuine cut or a postponement that has been made to the programme.

The hon. member for Vanderbijlpark mentioned the Sishen-Saldanha scheme. This is obviously a very important project. It is extremely important for Iscor and it is extremely important for our country. The last estimate given to me by the hon. the Minister—and he said he would give another one when his Vote came up—was some R603 million. I should like to return to the interview given by the managing director of Iscor in this connection. He was asked how satisfied he was with the development of the Sishen-Saldanha project. In his reply he said that there was no reason to fear that the construction activities would not be finished in time and that Iscor should be able to start with the export of iron ore during the second half of 1976. He was also asked to what extent the Sishen-Saldanha railway line would open up the possibilities of development in the north-western Cape and what potential it would hold for the future. To this he replied that the S. A. Railways and Iscor had been busy with planning to determine which side-lines—side-lines: that is worth remembering—the S.A. Railways should build to link up with the Iscor system so that mass transport for other interested bodies could also be handled by it. The managing director of Iscor added that, if all the possibilities were fully exploited, this railway network could result in the Republic earning in the future—if everything went well—up to R1 00Q million in foreign currency at today’s prices.

Mr. Speaker, we all hope that that will in fact transpire, but the managing director, in answer to a further question, said the obtaining of contracts by Iscor was no longer an act of faith and that the corporation had succeeded in obtaining enough, actually too many, contracts for the sale of iron ore. He further said that the corporation had attained its basic export target of 15 million tons of ore per annum.

What is interesting about that, is that the current going price per ton of premium quality iron ore on the world markets is something of the order of 15 dollars per ton. So, one could say that, in relation to the figure of R1 000 million, and allowing Iscor a further advantage, the contracts mentioned by the managing director would bring in somewhere between R180 million and R225 million per annum in foreign exchange. Naturally, if one takes the relevant figure away from the figure of R1 000 million, one still has to account for some R775 million to R820 million per annum. There are considerable sums of the general taxpayer’s money involved, as I have already said.

Mr. Speaker, I now want to refer to clause 2 of the Bill. We take the point that the hon. the Minister has made, and I should like to say that we do not in any way want to prevent Iscor from being able to conduct normal business practice, which was the reason put forward by the hon. the Minister for some of the changes brought about by clause 2 and clause 3. However, the sums involved are really very large, and we have therefore proposed the amendments standing in my name on the Order Paper. These amendments are, to some extent, self-explanatory. As regards our amendment to clause 2, an amendment we shall motivate, we are clearly concerned about the aggregate of the financial requirements for South Africa corporations mainly public, but to some extent private. We are concerned about the very large sums of money which have been bandied about, to parts of which we have already been committed, and about the necessity to raise this money either internally or externally or both. When one looks at the actual figures relating to Iscor, I believe the reasons for our amendments will be more or less self-explanatory to the hon. the Minister.

If one takes the aggregate of the finance which is going to be required for all the new projects that have been mentioned as being on the programme for the next decade, and the necessity and the desirability to obtain money from overseas for the financing of the proposed projects—whichever way one looks at it, money from overseas will be required—it seems to us that granting the hon. the Minister and Iscor the absolute freedom to decide over such large amounts of money without the concurrence of the hon. the Minister of Finance, will clearly amount to missing out on an element of co-ordination which one would have thought was desirable, even if it tends to be of a formal nature. Let us be under no misapprehension about the sum of money involved, particularly in the light of clause 3. Iscor’s balance sheets indicate the following fixed loans: 1971, R138,6 million; 1972, R175,1 million; 1973, R439,7 million; 1974, R814,8 million; and last year, 1975, R128,7 million. That is in relation to a taxpayer’s interest of approximately R663 million, if one includes the reserves.

We have no trouble with clause 2(b) but in relation to clause 3—and we shall motivate this further in the Committee Stage—I just want to make the point that for the hon. the Minister to talk about overdrafts leaves us doubting whether the board should simply be given the right to operate an overdraft over and above the loans already mentioned, of roughly R25Q million. The hon. member for Gardens mentioned the fact that Iscor has had to scale down an issue—if this article is correct—from R20 million to R12 million. If this is indeed an overdraft, one is talking of roughly three-quarters of R325 million, which is R244 million.

That concludes our view of this Bill. As I have said, we are going to support it. I have also stated we are surprised that with such large sums of money involved, the only two people who have attempted to motivate the Bill have been the hon. member for Cape Town Gardens and the hon. member for Vanderbijlpark, who showed his normal, natural enthusiasm for a corporation operating in his constituency.

Mr. Speaker, the hon. member for Johannesburg North might be a good businessman, but I do not think he knows the soul of South Africa and its people. I do not think he knows our history since the early days when we suffered because we were linked to foreign economies and had to be slaves while other people made the money. Therefore, I think it would be a wise step if the hon. member were to make a study of South Africa’s economic history from the First World War to 1948. Then he can have a look at the achievements after 1948. I am not going to try and reply to his technical arguments. The hon. the Minister will deal with those aspects and reply to them. However, what worries me of the hon. member for Johannesburg North, is his suspicion-mongering. He alleges that there is not, nor can there be, sufficient control over the money which this Parliament appropriates for Iscor in the form of B shares. He does this in spite of the fact that the hon. the Minister told him by way of an interjection that he is, after all, required to come to Parliament to ask for the money. He does this in spite of the fact that we receive the Iscor reports, and in spite of the fact that he also has the right to discuss this matter under the Economic Affairs Vote. What he wants to do, seems very much like suspicion-mongering to me. He is trying to imply that when the money is voted, the directors of Iscor and the general management closet themselves in a dark room and maladminister the money. I think he made a scandalous accusation.

Secondly I want to repeat—the hon. member for Vanderbijlpark also emphasized this—that Iscor was not established on a profit-making basis. For that reason I am grateful that the hon. member for Cape Town Gardens adopted a positive standpoint in 1974, and again today. I want to praise him in spite of the fact that we have often crossed swords. What the hon. member said this afternoon, he did not say simply to gain somebody’s good friendship, because he only repeated what he said two years ago. I would like to quote what he said at the time, because I think he adopted a very sound standpoint on clause 1. I quote [Hansard, Vol. 50, Col.2387]—

I think this is a positive contribution, and I think we ought to praise him for that. However, I need not quote only the hon. member for Cape Town Gardens to prove how wrong the hon. member for Johannesburg North is. Here I have an article from the Sunday Times of 23 November 1975. The headline reads: “Is Iscor’s Picture Right?” And who said this? Not the hon. the Minister; not the hon. member for Cape Town Gardens! It was said by Mr. Fred Zoellner, a person who is involved in this industry. The hon. member for Johannesburg North should listen to this. He should take this item of news home. Mr. Zoellner said—

I emphasize “the most efficient”. He continued—

Once again an excellent testimonial from a person who knows what he is talking about. He went on to say—

Mr. Zoellner then said the following—

This is the point which the hon. member for Vanderbijlpark also made. Enormous amounts were spent on equipment which still has to come into production. Mr. Zoellner went on to say—

The hon. member for Johannesburg North should really make a study of the economic history of this country and its people since the First World War, first to see why Iscor appeared on the scene and what its achievements have been.

The hon. member also thought fit to quote quite extensively from an interview which was granted to Volkshandel by the managing director, Mr. Coetzee. Because this was such an important interview, it is a pity the hon. member did not quote more of Mr. Coetzee’s answers, because in his speech he had quite a lot to say about how Iscor ventures into the sphere of the private sector, to his mind to the disadvantage of the private sector. He also had quite a lot to say about Iscor’s participation in the development of the Sishen-Saldanha scheme. Therefore I find it a pity that he did not quote other parts of this interview as well. I should like to do this. The first point which was made—this was an important point—was that South Africa’s steel production, compared with the steel production of other countries, is phenomenal. Mr. Coetzee was asked in the interview—

The answer he gave to that, was—

The figure might not be important, but the point I want to make is that the steel industry in South Africa is healthy. Iscor’s operations are healthy—otherwise it would not have been able to perform so well in comparison with world standards.

The hon. member could also have quoted another point. He could have quoted—the hon. member for Cape Town Gardens merely mentioned this—that the total assets of Iscor of R1 750 million in the previous financial year rose to R2 238 million in the present financial year. What is important, is that the gross sales value of its products increased during the same period from R444 million to R601 million. This is an achievement. Even if the hon. member for Johannesburg North was concerned about technical aspects, he should nevertheless have attested here that Iscor was financially and economically healthy, and that Iscor meets the purpose for which it was established. During the past financial year far more steel was produced than in the previous year. The trading profits and other income was R36 million more than in the previous year. Its net loss due to high financing costs was R87 million. This was also mentioned briefly by the hon. member for Cape Town Gardens. For that reason we can say that, as the industry results indicate, Iscor was not responsible for the loss. Therefore, I should like to ask the hon. member for Johannesburg North to stop insinuating that Iscor’s financial, technical and other policies are unsound.

If we were to look ahead, if we were to look at South Africa’s needs and production requirements in the year 2000, I think no one could deny that an organization such as Iscor would have to play an important and fundamental part in this development, just as it played a dynamic part in the economic development of South Africa in the past. Together with the hon. member for Vanderbijlpark and the hon. member for Cape Town Gardens, I am also proud to be able to say that I, as a citizen of the country, am also a shareholder of this mighty organization. This organization received an instruction from the people of South Africa, firstly, to ensure that South Africa should have some of the cheapest steel in the world—and so it does—and, secondly, to produce as much steel as possible so that we did not have to import unnecessarily and pay exorbitant prices for it. The hon. member for Johannesburg North asked the question, with the insinuation which it entailed, whether the money which is again being given to Iscor and has been given in the past, was being spent effectively. The previous Minister of Economic Affairs furnished all the answers to that question in 1974, because the hon. member put the same question in 1974 as well. At the time he received a detailed reply, and I should like to quote that reply to him again, because seemingly he did not hear or did not listen when the reply was being furnished. The hon. member is set on profitmaking. Someone earlier on this afternoon said to him by means of an interjection: “If money is your god, would you like to see Iscor make enormous profits.’’ The people of South Africa have not made money their god.

So you do not want Iscor to make a profit?

A profit is being made, but profit is not the primary requirement for building a happy and healthy nation. The previous Minister in 1974 said: “I agree that profit is important …

[Inaudible.]

When the hon. member for Yeoville has finished speaking, I shall continue. I want to conclude by simply quoting what the former hon. Minister said—

With this quotation of the former Minister, I conclude.

Mr. Speaker, the hon. member for Worcester devoted most of his time to the speech made by the hon. member for Johannesburg North. He did not want to discuss in full the affairs of Iscor in this House, nor did he make a single suggestion for the improvement of Iscor’s affairs. During the next few years Iscor will be spending thousands of rands. One would have expected the hon. member to be interested in these matters, but he takes no interest in matters of this kind. In the light of all the very extensive expansions Iscor is undertaking, I thought the hon. member would surely have been much more interested. He concluded his speech with a reference to profits. He said the profits were not really important. I want to tell him that profits are very important indeed. Does the hon. member realize that if an organization wants to borrow money, its balance sheet is inspected? They want to know what its profits have been. Does the hon. member realize that if he were to apply for credit, the creditors would want to see his balance sheets? Even so, the hon. member maintains that profits are not important. Does he know whose money he is playing with? He is playing with the money of the taxpayers of South Africa. This being the case, how could profits not be important? It seems to me that hon. member should rather return to the teaching profession.

†Mr. Speaker, I am convinced that the hon. member for Johannesburg North did not read the Bill at all. He is under the impression that, because we are today increasing the share capital, it means that we are actually physically voting the money today.

Nonsense.

He was obviously talking through his neck. I should like to say for the benefit of the hon. member that, if the hon. the Minister wants to obtain the physical additional share capital, he must come to Parliament so that Parliament can vote the required amount.

He has to do it in the budget.

But the hon. member was under the impression that we were physically voting the money in terms of this Bill. It is obvious that he has not read the Bill properly.

He has read it, but he does not understand it.

I must tell the hon. the Minister that I was very disappointed with his introductory speech. The Bill makes it very easy for Iscor to borrow more money and to expand. This Bill actually increases the Minister’s status. I would have thought the hon. the Minister would have been very proud to sketch the achievements of Iscor. I would have thought that he would have been able to give us a review of Iscor’s affairs. However, the hon. the Minister missed the ball completely. He did not tell us anything about the aims of Iscor through the years. The hon. member for Cape Town Gardens actually stated the case which the hon. the Minister should have stated.

†The hon. member for Vanderbijlpark took exception to the hon. member for Cape Town Gardens for asking legitimate questions. Would the hon. member like to see Iscor match private enterprise and make profits? Surely the hon. member for Vanderbijl will concede that if Iscor makes profits, or even greater profits, it has to expand and develop far faster on the basis of internal profits made. The other reason why the hon. member for Cape Town Gardens is correct in raising the matter is that Iscor receives a lot of taxpayers’ money. The money is in the form of share capital. This is trust funds entrusted to Iscor, and it is the duty of all hon. members of this House to ensure that they know how that money is spent. It is the public duty of each and every member on both sides of this House. I must say that I notice that hon. members on that side of the House do not concern themselves at all with how that expenditure takes place. I think that is a rotten state of affairs.

*Sir, I have listened carefully to the speakers up to now and I have come to the conclusion that only one speaker really handled the matter objectively, and that was the hon. member for Cape Town Gardens.

You seem to have written out your speech last night.

The hon. member for Gardens stated the case of Iscor and he stated the case of private enterprise. The Minister says my speech was written out last night, but how could I have known the hon. the Minister would make such a poor speech today? The problem of the hon. the Minister and the problem of Iscor are that they do not encourage private initiative. They should give much greater encouragement to private initiative.

†We are today creating further machinery for Iscor to spend more money. Iscor is planning to spend millions of rands, and yet we are being denied the legitimate information that we are entitled to in connection with Iscor. The expenditure may be justified to the last cent, but we are not given the opportunity of examining the position in depth. Taxpayers’ money is being spent as though it is going out of fashion, and we are being kept in the dark completely. It is all very well, Sir, to become the last of the great spenders, but then that organization must not be allowed to become the last of the great losers. Losses in the last two years total approximately R73 million. In all fairness, those losses may be fully justified, but because we are not allowed information about it we do not know whether those losses are justified or not. I would like to appeal to the hon. the Minister to take us into his confidence in this regard.

This is a most important Bill because Iscor has vast ramifications right throughout our economy, and that is why without any hesitation we accept the Bill on this side of the House. The hon. member for Cape Town Gardens indicated that. Iscor is asking for substantial extra financing to be created through extra share capital. Iscor provides a very valuable service on the one hand, and on the other hand it cuts directly across private enterprise. It is often very difficult for us to assess the value of Iscor, because we are not allowed to go into the affairs of Iscor in depth. I would, however, like to say this in all fairness to the hon. the Minister, that during the course of last year I could not get certain questions on the Order Paper. I raised the matter with the Minister in the debate and the Minister very kindly allowed me to refer the questions to his department. His department answered those questions fully. They told me I could make full use of those answers, with the exception of one portion of a question which I was not to make public. Now I want to make an appeal to the hon. the Minister, in view of the fact that he allowed this procedure. Why could those questions not come on the Order Paper in the first place? I want to appeal to the hon. the Minister to do something about allowing us to get questions on to the Order Paper in that fashion. I want to make one last plea in that regard and I want to say to the hon. the Minister that I know there are certain matters which are most confidential and I know there are certain matters which he would not like to air in public, but he can rely on our discretion and ask us not to put those question which embarrass the hon. the Minister in his dealings with a foreign country.

This Bill aims at increasing the capital of Iscor and with the raising of loans. It is obvious that thousands of million rand are going to be spent by Iscor over the next decade. In view of the substantial amounts of money which are going to be spent by Iscor, I wonder if the hon. the Minister would mind having a hard, long and close look at Iscor and at the affairs of Iscor. When he is having that long, hard look, one would like him to decide what Iscor should handle and what possibly could be handled by private enterprise. There are two alternatives. The one is to float off certain of the subsidiary companies of Iscor on to the Stock Exchange whilst the other is to sell some of the shares of the subsidiary companies of Iscor. Either of these alternatives will ensure that Iscor’s liquidity will increase and that it will be given a fresh financial injection. I should like to ask the hon. the Minister that when he has that long, hard look, which I think he is going to have, he should distinguish between the very urgent and the less urgent priorities. I believe that in the stage we are in at present, the very urgent priorities obviously must be proceeded with whilst the less urgent priorities must be kept back to a certain extent in view of the capital requirements of commerce and industry and Government departments such as Defence. I hope that when the hon. the Minister has this look at Iscor, he will go out of his way to try to promote the interests of private enterprise in addition to promoting the interests of Iscor. I believe that Iscor, in view of the large capital requirements it has, should try to obtain as much as possible of its capital overseas by way of foreign loans. I believe that if Iscor were to compete with private enterprise on the local market, one would find that there is too much competition for too little money.

Unfortunately it is hard-earned taxpayers’ money which we are giving to Iscor by way of share capital. What is more, the taxpayer has no say whatever as to how this money is spent. We are giving it a blank cheque in the same way as we gave it a blank cheque in the past. If the hon. the Minister reflects very deeply on this situation, I am sure that this state of affairs will worry him. I am sure that the hon. the Minister does not really want us to give it a blank cheque. I think that if the hon. the Minister reflects very deeply on the matter, he will come to the conclusion that he would want the taxpayers to have a say in the spending of their money. The best way the taxpayers could be given a say in the spending of their money would be if the hon. the Minister agreed to the appointment of a Select Committee of this House to go into the affairs of Iscor. All the hon. members of this House can then have the affairs of Iscor absolutely at their finger-tips, which I believe is essential. Especially in view of the disastrous financial results over the last two years, during which, as I have mentioned, the losses were approximately R73 million, I believe the hon. the Minister will be very wise if he allows a Select Committee of this House to preside over the affairs of Iscor. Reading the reports without in-depth information, one cannot possibly satisfy oneself that Iscor is actually being run efficiently or well administered. Tremendous losses are being incurred, and the taxpayer is entitled to have the assurance that members of Parliament know how this money is being spent.

Some of the funds required are to be authorized by way either of share capital or of loans and it is obvious that a portion of these funds will be needed for the semis plant at Saldanha, which the hon. the Minister told us will cost R1 300 million. According to page 18 of the latest annual report, Iscor’s foreign partners will have a shareholding of 49% in that semis plant while Iscor itself will hold 51% of the shares. I wonder if the hon. the Minister could indicate to me whether that is correct. Has it been decided finally that Iscor will hold 51% of the shares in the semis plant while foreign partners will hold 49%. I should like to have an indication from the hon. the Minister. That is what it says in the report.

I shall reply to you; get on with your speech.

The report makes it very clear that the deal has been finalized. I therefore presume that there must have been a shareholders’ agreement signed and if I may, I should like to refer the hon. the Minister, for his convenience, to page 18 of the report. However, when I put the following question to the hon. the Minister on Friday, 6 February 1976 (Questions and Replies, page 102)—

The shareholding has either been finalized or it has not.

Which report are you referring to?

I am referring to the latest report, page 18. The heading is “Semis Works, Saldanha Bay”. The only thing that is in dispute between the parties is the actual number of tons they are going to utilize. However, according to this report it is obvious that the agreement has been reached. If the hon. the Minister feels that he does not want to display the names of the partners because it will, for some or other reason, embarrass him politically or otherwise, then he must say so. The answer to my question on the Order Paper was totally incorrect in view of what I quoted on page 18 of the report. I would like to hear from the hon. the Minister whether the agreement has in fact been signed and whether he could disclose who the parties are. If, for some or other reason, the hon. the Minister finds that he cannot disclose who the partners are, then he must tell us whether the question he answered on 6 February 1976 was answered correctly or not.

I was most impressed to see, from another reply that I got from the hon. the Minister, that we are going to earn something like R350 million a year for approximately 20 years through the semis works at Saldanha Bay. This means that we will be earning R7 000 million over the next 20 years. This is a most impressive figure by any standard.

I would like to ask the hon. the Minister whether he is going to put out a part of the 51% of the shares which Iscor hold in the semis undertaking to the public by way of floatation or private placing. I wonder whether the hon. the Minister would give us some idea of how he intends financing this particular project.

Mr. Speaker, I should first like to make a number of specific remarks. I want to start with the hon. member for Johannesburg North. I want to tell him that he should declare his interests every time he gets up in this House. When advocating higher steel prices, he is really advocating a higher income for himself. That is the first point I want to make. Secondly, the hon. member is either being ignorant or misleading us, because he says that, in terms of clause 2 of the Bill in which I ask for Iscor’s capital to be increased, it means that, if this is approved, I shall never have to come back to this House again.

It is only the Estimates.

I am not speaking to the hon. member for Yeoville. He may rather leave the Chamber, as he did a moment ago.

Do not get so excited.

The hon. member knows that I have to come back to Parliament for the appropriation of funds. He also knows that this is included in the budget proposals. He knows that this legislation merely authorizes the present maximum number of additional B shares to be increased and extended. In spite of that however he says that if this legislation is approved we will not be seen again and will never come back to this Parliament again. Surely, this is not true. I am asking myself: Why does he say this? I want to talk to the hon. member about the steel price of Iscor and the profitableness of Iscor, to which reference was made by the hon. member. I think I can best do this on the basis of comparative figures of another company with which the hon. member is familiar, i.e. Highveld Steel. I have the information in this regard available to furnish to the House.

†It remains a fact that Highveld Steel and others concentrate on a narrow selected range of products, resulting in a very low utilization of capital. The hon. member should know this. He also knows that his company as well as other companies are picking the eyes out of the market whilst Iscor, because of national interests, is in terms of its Act charged to provide a full range whether it is profitable or not. Why question this if he knows what the facts are?

I want to take it further. It is quite obvious that, in these circumstances, the lower capitalization must result in less disruption of production in other companies while, in Iscor’s case, it must be much more. The hon. member also knows that if one makes this comparison, one is really comparing the incomparable. I am referring to Union Steel. The hon. member for Cape Town Gardens may not know this, but profitability had increased after Iscor had taken over Union Steel as a subsidiary company. He should have looked that up in the records of the company. Highveld Steel, a company very often used for comparing the effectiveness of Iscor, does not derive all its income from steel products. In fact, it derives a very large proportion of its income from the production of vanadium. However, the company’s records do not indicate what proportion of its income is derived from the sale of steel and how much from the sale of other products. Comparisons are onerous, and I think this one is particularly so because there are no real bases for comparison in this particular field.

Let us have a look at Iscor’s position in relation to Highveld Steel and then judge the effectiveness of both. The interest paid by Highveld Steel for the six months’ period up to December 1975 amounted to R1 730 million as opposed to R2 382 million for the corresponding period in 1974, a reduction of R652 million. Let us compare this with Iscor’s performance so that in order at least to get an equitable comparison and a true and correct result. In the same period interest paid by Iscor increased by R3 million to R46 million. [Interjections.]

Let us take this a little further. Let us look at the basis of calculation of profits and depreciation. One finds that Highveld Steel does not provide for increased replacement costs of fixed assets as a charge against production account. Iscor, however, does this. The point I am trying to make, in all fairness to this institution, is that one cannot judge it by way of comparison with other companies. The charge to this corporation is completely different to the charge one normally has in private companies. The incentives are different. I would like to take it in more detail.

*The hon. member for Johannesburg North wants to move an amendment because, as he said, he believes that the co-ordination of the overall spending and the overall borrowing of the public as well as the private sector should be co-ordinated. For that reason he suggests that the Bill be amended so that only I can grant approval, with the consent of the Minister of Finance, when it comes to normal loans for Iscor. He says that otherwise there would be no co-ordination. The hon. member obviously does not know the laws of Parliament. Surely, these matters are being governed by legislation. I want to refer the hon. member to the Currency and Exchanges Act, 1933. I also want to refer him to the regulations promulgated in terms of this Act, regulations which render the amendment of the hon. member completely unnecessary. I refer specifically to regulation 2(1), which reads as follows—

I want to quote regulation 16(1)—

In other words, the safeguard he wants, is already contained in the Act and the coordination he wants, is already part of the set-up within government departments. Therefore, there is no need for what he is asking for here. The hon. member for Cape Town Gardens asked me whether I was satisfied that Iscor was working at maximum production level. In general terms I think this is proved by the real facts. Since 1960 up to the present Iscor’s labour productivity increased by 48%. Planning for the following five years indicates that as new units commence production Iscor’s production is going to increase even further by between 40% and 50%. It is important to mention that Iscor was in a position to achieve this notwithstanding a labour turnover of 21 % in its artisan staff and 25% in its White operators. This one fact alone will enable the hon. member to ascertain that we have no reason to have any complaints in this regard.

The questions that have been asked, give rise to certain matters of principle, which I should like to deal with. The first of these is: In view of the extent of the overall loan requirements of the public sector and also the private sectors, whether, as far as Iscor is concerned, consideration should again be given to its capital programme. I want to say immediately that because Iscor is a State corporation, and because the State has already undertaken to ensure that it meets its obligations in respect of public spending, also in terms of its own undertakings, this automatically applies to Iscor as well. This means that Iscor will have to adopt its priority programmes to the general requirements of the country and that we, in respect of Iscor’s activities and also the activities of other State corporations, as well as the State’s own requirements, will have to ensure that there will be proper priority allocations of the spending of available capital and loans. I want to give hon. members that assurance. In the short term this will mean that Iscor, if it could continue with its programmes, will not be able to achieve its proposed steel production presented to us as projected figures. I am afraid this is the price we shall have to pay for what should be our responsibility in this regard. As far as Iscor’s development programme is concerned, Iscor is already committed to the following projects.: The first is the steel factory at Newcastle with an annual capacity of 2 million tons of liquid steel; the second is the extensions to the Vanderbijlpark Works with an annual capacity of 2 million tons of liquid steel, which is increased to 4 million tons of liquid steel; the provision of a new heavy-mills complex at the Pretoria Works; the Saldanha-Sishen ore export scheme, which hon. members referred to; the new coal mine at Ellisras and, in the sixth place, the extensions at the Sishen ore mine, the coal mine, dolomite quarries, in order to bring the provision of raw material into line with the increased steel manufacturing capacity. Iscor is already contractually and financially committed to these projects. I can do nothing about this.

You must grin and bear it.

Yes, that is correct. However, I have arranged with Iscor and the Minister of Finance that we shall proceed with comprehensive minimum plan and with the additional costs included in this comprehensive minimum plan over and above the contractual obligations of the projects which I referred to a moment ago. The first step in the long term plan which should ultimately render us independent of imports, is the following projects which are being planned for construction at the Vanderbijlpark Works, and which have to be completed by 1980—

Additional coal mine capacity will also be required to provide the above-mentioned blast furnace with coke. These amounts—I am referring now to the comprehensive minimum plan which is going to serve as an addition to the existing contractual obligations—will amount to approximately R775 million, based on the price levels of June 1975, and will increase the capacity of the Vanderbijlpark Works, to 5,2 million tons of liquid steel per annum. I do not want to refer to the long-term plans at this stage, because, in view of the financial disciplines which I referred to, it is essential that we confine ourselves to these extensions.

The second aspect which I think is important, is the question put to me concerning the efficiency and management of Iscor. It is no use saying that we have the highest respect for Iscor as an institution and for its management abilities ad then start derogating Iscor by means of direct attacks or insinuations. Hon. members will be interested to know that notwithstanding continuous investigations within Iscor itself, in respect of its efficiency and effectiveness, investigations which normally take place and are conducted by its own technical staff in order to find other and improved methods to increase its productivity or production, Iscor decided last year, in co-operation with myself, to appoint a team of experts to advise it over a wide spectrum of matters which are of real importance to Iscor.

The accusation has been made that I did not motivate the legislation, because I did not introduce a “Vote discussion” under the legislation. From Iscor’s reports and the reasons furnished in this House last year, hon. members know what the amounts are in respect of which Iscor is committed. As a matter of fact, these were quoted here by hon. members. Why should we repeat this to hon. members now? After all, hon. members know what the basis of the legislation is. Surely, the basis of the legislation is two-fold: To enable Iscor to finance the programmes, of which all hon. members are aware and, in the second place, as a result of the high-loan obligations of Iscor a disequilibrium exists between the capital/loan ratio and the capital structure to such an extent—and hon. members know this—that its loan capital constitutes 70% of its total capital, while its own capital amounts to 30%. This explains the increase in the rates of interest per one ton of steel, to which reference was made by the hon. member for Johannesburg North.

What is the essential principle of this legislation? In the first place, to increase the share capital portion of Iscor’s capital structure and to do this by increasing its shares, its authorized share capital. Why do hon. members then suggest that they are not informed about Iscor’s activities? To me this is quite inexplicable. In the second place, the legislation simply deals with the procedure which has to be followed in the acquisition and raising of loans for Iscor. In the third place, the legislation creates the opportunity for Iscor to acquire short-term financing, bridging facilities, without this being linked with particular issues. There is nothing sinister about this. But having said all this, I have to do two things in all fairness. I have to tell hon. members that all of us sitting here have reason to be proud of what this corporation has achieved for our country. If I have to judge the activities of this corporation, I have to apply the following norm: Whether what it is doing can be measured and defended in the national interest. This is what Iscor’s foundation Act expects from it, and this is what it is doing. If we have to measure this, we have to measure it as a result. I think hon. members will agree with me that, if we were to consider Iscor’s position, financially and otherwise, we should also consider its objectives and the method it applies in order to achieve such objectives. If we do this, there is no reason why Iscor should be condemned here or elsewhere. What I have tried to indicate is that in spite of the lack of confidence in its capital structure, Iscor’s achievements can be tested against its production. Let us just consider the following. Iscor has developed its production units so rapidly that the value of its fixed operating assets has more than doubled within 2½ years.

In this regard one should particularly bear in mind the fact that the value of its fixed operating assets 2½years ago was the result of more than 40 years’ development. In the second place, we have to bear in mind that the value of its operating equipment which is at present under construction and which has not yet produced any revenue—as I have indicated a moment ago—is considerably more than the total value of its fixed operating assets of 2½ years ago. When one considers its interest-bearing loans over the same period, we shall see that they increased three-fold. In all fairness, we should bear in mind that Iscor’s assets have been financed by means of loan capital to the extent which I have indicated and that, within a period of eight years, it was increased from nil to 70% of its capital. If we bear in mind that the industry we are discussing is a primary steel producer, and that it is an accepted fact throughout the world that maximum production is achieved only after six years’ operating status, I say without any doubt that—especially in reply to the hon. members for Johannesburg North and Walmer—Iscor is unable to make a profit in its present stage of development, unless we do something else, viz. to increase the price of steel drastically. Hon. members can advocate this if they want to, but then they must get up and say so. They should tell me whether I should effect a drastic change in the price policy which is being followed in the case of Iscor. If the reply is in the affirmative, hon. members should not attack me when prices are increased.

A moment ago I referred to labour productivity, but in view of the debate we have conducted here, I also want to refer to some other problems. As I have said, Iscor is undertaking a major development programme at present. As a result of inflation and devaluation, Iscor is at present experiencing an enormous escalation in costs. Two factors which I referred to, together with the diminishing availability of overseas long-term capital and the diminishing life of such capital, resulted in capital requirements which place an even greater burden on the corporation as well as on the State as a shareholder of the corporation, than was anticipated originally. This is a fact, and I do not apologize for it. This financing problem was further aggravated by the fact that the development programme, which has up till now been financed mainly from loan funds, created a debt ratio which further aggravates the raising of loans.

The hon. member for Walmer is quite correct. When someone wants to borrow money, his balance sheet is investigated. However, not only his profit and loss position is taken into account, but also his capital structure and his loan obligations as against his own capital. For that reason it is essential that Iscor’s loan bargaining position has to be strengthened. It is essential for Iscor’s capital position to be improved. Surely, hon. members know that this is so. Why should they enter into a debate with me on this matter?

It should have been in your introductory speech.

No, Sir, this matter has been discussed ad nauseam on previous occasions. I now want to deal with the hon. member for Walmer. He complained because he was unable to obtain information. He said: “I am being denied information.” In the same breath he says that it was the hon. member for Cape Town Gardens who really motivated this legislation, because he had all the facts available. I do not know why the hon. member for Cape Town Gardens was so prejudiced. Apparently he knows everything, while the hon. member for Walmer fumbles around in the dark. I think the explanation for his problem is that he would have been unable to use or understand the information in any case.

He is being too arrogant.

Mr. Speaker, see what else the hon. member had to say. You, Mr. Speaker, decided that certain questions from him are out of order. He then approached me with the same questions, and I replied to them. In spite of that he had the audacity to accuse us of withholding information from him.

That is disgraceful.

I believe it is a perfect example of ingratitude. The other word I have in mind, I am not allowed to use here.

Nonsense.

The placing of questions on the Order Paper is not my duty. The placing of questions of the Order Paper is a function, Mr. Speaker, which rests with you and not with me. I do not have any desire or ability to usurp that function either.

Make representations to Mr. Speaker.

Do you want to dictate to the Speaker now?

I have repeatedly indicated what the position is, and I think that was enough. In conclusion, I want to point out that as far as this matter is concerned Iscor appointed a team of experts who, in co-operation with myself, will repeatedly investigate the broad spectrum of all matters which are of real importance to the corporation, inter alia the price policy which is applied, the financing policy which is followed, Iscor’s effectiveness and efficiency and the question as to whether Iscor’s activities, measured against the law and national interest, are still in order, and whether some of the corporation’s activities could quite rightly be left to the private sector.

Therefore, there is no reason for hon. members to urge us to do certain things. We have already done so. The team of experts appointed on the initiative of Iscor and with my co-operation and which has been engaged in this task since last year, is under the leadership of Prof. C. W. I. Pistorius of the School of Business Management of the University of Pretoria. The other members are Mr. D. L. Keyes, an accountant and director of companies, Dr. J. C. du Plessis, who is attached to the Treasury, and Dr. H. J. J. Reynders, Director of the Federated Chambers of Commerce of South Africa. I venture to suggest that this is most probably one of the best teams of business economists we are able to launch. The composition of this investigating team was discussed with me beforehand. I specifically agreed for an official of the Treasury to be included in the team since Iscor wanted to obtain advice about the capital structure we referred to in this debate today, as well as the best method of adapting the ratio of its own capital to the ratio of loan funds. This is also a subject we discussed here today.

I believe it is important that we should take note of the terms of reference of the investigating team. I also believe it is important that we should take note of the fact that the terms of reference were initiated by Iscor. It is also important to know that this investigation is a process which is continuously taking place at Iscor. The terms of reference of the investigating team include an investigation into the management and operational efficiency of the corporation, the forming of an opinion on the price policy followed in the past, the making of recommendations pertaining to future actions and an investigation into the cost structure. For the sake of the hon. member for Johannesburg North, I also want to say that the investigating team was instructed to express an opinion on the financing policy which has been followed up till now and to make recommendations pertaining to future actions, to express an opinion on the efficiency of the financing department relating to the corporation’s spending and financial requirements and problems pertaining thereto. A further term of reference of the investigating team was to make recommendations with regard to methods which may be applied to balance available funds with expenditure.

The investigating team was also asked to express an opinion on the effectiveness of the department charged with investigating sustained efficiency and, in the last instance, to express an opinion in connection with the allegation that Iscor is operating over too broad a field, that Iscor is not concentrating exclusively on the primary objectives for which it was originally established. I also have to mention the fact that the committee has made considerable progress with its investigation and has already made available to us valuable interim information. I want to furnish you with this information at this stage, because, in doing so, I want to prove that we look with a critical eye at the State corporations and do not accept everything as far as their administration is concerned. This information also proves that Iscor is not complacent as far as its own achievements are concerned but that the corporation is prepared to subject itself to regular investigations of this nature.

I shall furnish hon. members with further information during the Third Reading of the Bill. At this stage I thank them for their support of the Bill. It is only ironic that they needed an hour of platitudes to prove this.

Question agreed to.

Bill read a Second Time.