Mr. Chairman, the hon. the Minister in replying to the Second Reading debate did not give a very clear explanation of why the increase of standard stock capital appears under a new subhead, viz. subhead 19, as operating expenditure in the estimates of the Department of Posts and Telecommunications. The explanation the hon. the Minister gave was that the Controller and Auditor-General said that that was the place where this should figure. I want to put it to the hon. the Minister: If he were to look at the balance sheet of the Post Office, he will notice that there is a reserve for standard stock, shown as capital employed in the balance sheet, and that there is also an item under the employment of capital in the balance sheet, viz. standard stock. The hon. the Minister told us yesterday that this figure was R23 million, that that was the reserve. It is not clear to me, and I do not think that it is clear to other members on this side of the House, whether this increase of standard stock capital is an increase of the reserve or whether it is actually an increase in regard to standard stock. In either event, whether it is an increase in the reserve or whether it is an increase in the standard stock, it is reflected in the balance sheet as a capital item. It would seem to me that if it is reflected in the balance sheet as a capital item, there must be a very good reason for now showing it in schedule No. 1 as operating expenditure.

The hon. the Minister said in his explanation in regard to this standard stock capital, when I asked what the exact difference was between standard stock capital of R4 million and the material, stores and maintenance services of R2 million, also shown as operating expenditure, that they were in fact the same thing. I do not have the hon. the Minister’s exact words before me, but my recollection is that the Minister said in regard to subhead 7—material, stores and maintenance services—that those were stores required in the operation of the Post Office’s telecommunication and other services. In regard to the increase of standard stock capital, he gave exactly the same explanation. It would seem to me that there must be a vast difference. I do not believe that subhead 7 as operating expenditure—material, stores and maintenance services—can be the same as the increase in standard stock capital. For that reason it appears to me that these have very different uses and that subhead 7—material, stores and maintenance services—is in fact regarded as an item which is to be used in regard to the operations of the department, whereas the standard stock capital is regarded as a stock item of a capital nature from which items can be drawn from time to time for use under subhead 7. The matter is rather more confused now than before the Minister gave his reply because of the reply he gave, viz. that both were to be used for the same purpose. It seems hardly likely that this is a correct explanation. That leads me to the following point. If in fact there is a difference—which I believe there should be—between these two items, viz. that material, stores and maintenance services require items for operating and that standard stock capital is rather long-term stock which is maintained for a longer period than is required in the material, stores and maintenance services, then that stock which is kept for a lengthy period should surely be stock of a capital nature.

Mr. Chairman, it should not appear under operating expenditure at all. It should appear under capital expenditure. I believe that my argument is correct because, if the hon. the Minister is correct in saying that the Controller and Auditor-General says that this must be shown as operating expenditure—I refer now to subhead 19, Increase of Standard Stock Capital, R4 million—it seems to me quite incongruous that, in drawing up the balance sheet, the Acting Controller and Auditor-General approved of a balance sheet which shows this item as a capital item in the balance sheet as at 31 March 1975. We find that on page 20 of the report of the Controller and Auditor-General.

I do believe that there is some simple explanation, but it makes a big difference. If I am correct and the hon. the Minister is wrong, then of course it is a capital item, and then operating expenditure is not going to contribute the whole of this amount of R4 million, but only approximately 50% of it. In other words, the other 50% will be contributed by loan funds. This will make quite a difference to the running of the department and it will make a great difference to the sort of tariffs that he is going to revise, probably with the introduction of his new budget. I believe that it is most important that we should have this position cleared up this afternoon as to where in fact this item resides. Should it be a capital item shown on the balance sheet as capital and should only half of the item then be funded by way of operating expenditure?

I believe that, when the balance sheet for 1976 is drawn, this item presently shown in the balance sheet as reserve for standard stock, will not be shown as R23 million, but will in fact be shown as R27 million. I believe that is what the hon. the Minister said yesterday. He said that we already had R23 million, and that we were adding to it. The only way one can add to it, is by adding capital to capital. One cannot add income to capital.

I believe therefore that my argument is correct, and that, when this balance sheet is drawn next year, we shall see that the reserve for standard stock has been increased from R23 million to R27 million. We shall probably also see that the item on the other side of the balance sheet—the employment of capital—which in the present balance sheet provides for standard stock of R21 086 743, will be an increased figure as well, bearing in mind the increase of R4 million. I would be very glad indeed if the hon. the Minister would explain exactly what we can expect in regard to this and how this is going to affect the operating expenditure and the operation of the department as a whole.

There were a few other matters to which the hon. the Minister did not reply, matters raised by me during the Second Reading debate. I would like to ask the hon. the Minister again if he would explain to me the increase in respect of transport. It will be remembered that I said I had expected the figure of R1,4 million to be very much more than was shown in schedule 1. I said that I believed that the reason for this amount being less than I expected it to be was that the actual services covered by transport had been curtailed. I would like the hon. the Minister to tell us in what way the services were curtailed. If they had not been curtailed, to what extent would this item have been increased in excess of what it is now? [Time expired.]

The hon. member for Wynberg built his argument around the question whether this standard stock should be brought into account under operating expenditure or capital expenditure. The point which he has raised is a very interesting one. I want to concede immediately that it is a point about which many differences exist or can exist. If he understood my reply to the Second Reading to mean that subhead 7 and subhead 9 cover the same field, I either expressed myself badly or he understood me wrongly, because they are in fact not the same. I tried to explain that under subhead 19 we are actually concerned with the standard stock capital which consist of approximately 23 000 different catalogue items of parts which are required for the maintenance and expansion of the telecommunications network over the whole country. I pointed out that the turnover of some of these parts is considerable, because there is a great demand for them, while for others the turnover is much less because the systems which we use and which are effective to a lesser or greater degree, are fairly outdated.

I also explained that the increase here was due to the price increases which occurred especially with respect to the more sophisticated parts and apparatus and that we now want to increase the R23 million, which is available for this, to R27 million. Subhead 7, on the other hand, deals with general stock, material and parts which are required for the maintenance of the telephone network in specific regional areas and for the execution of minor works not exceeding R1 000. While referring to this, I want to mention a few examples of works of this nature. The Post Office has many problems with the repositioning of telephone routes as a result of road and street deviations and extensions, and this causes expense. I also referred to the exceptional attempts made by the Post Office to undertake preventive maintenance work, especially in the metropolitan areas, and I also said that considerable success was achieved there. To come back to the essence of the hon. member’s question, I want to tell him that there is a considerable difference of opinion concerning the specific point he raised. In 1972 the Auditor-General accepted the standpoint that the standard stock capital should come under operating expenditure and this is still the position today. Of course, the Post Office must respect this.

Why is this capital?

Because it was the standpoint of the Controller and the Auditor-General at that time. I conceded that it is a standpoint about which there may be differences of opinion. Indeed, the Post Office differed with the Controller and Auditor-General at that time as far as this standpoint was concerned, but this is what the Auditor-General decided and the Post Office accepted it in this way. However, I would now like to suggest that this matter be taken further in the Select Committee. I think that this is the appropriate place to do so, because the Controller and Auditor-General is not present in this House to put his standpoint or gainsay us. The Select Committee for Posts and Telecommunications is however, in my opinion, the proper body to thrash out this matter. I hope that the hon. member will be content with this. At this stage I can merely tell him what the factual position is. As I have explained here, an instruction was received from the Controller and the Auditor-General, and I think the Select Committee is the place where the matter can best be settled.

The second point which the hon. member raised, is in connection with subhead 5—Transport. The cost of the conveyance of post by rail, by road, by air and by sea falls under this subhead. The conveyance of mail naturally takes place on agreement. The hon. member knows that an agreement was made with the Railways, the airlines and the shipping companies. Fixed terms have therefore been laid down. Furthermore this subhead provided for departmental motor transportation, i.e. the transportation of officials in service, for example on transfer, and also the transportation of departmental equipment and supplies, and so on. The hon. member specifically asked whether we had cut down and what the result of this was. I want to answer him in the affirmative, and this he will also see is in my reply to a question last week. In an attempt to economize, the Post Office had to curtail certain uneconomic and non-essential services in a sensible manner wherever possible. This we have in fact done. I also said in my reply that it is not possible to determine the exact result of this economizing campaign at this stage, but I can assure the hon. member that no essential services have been curtailed in this way. If the hon. member looks at subhead 2—Vehicles—in the Estimates of Additional Capital Expenditure, he will see that in spite of our economizing campaign we have an increase under that subhead. In other words, we bought additional vehicles. Obviously one cannot paralyse a developing service by curtailing necessary services and in this way actually undermining efficiency. I can therefore assure the hon. member that the cutting down which we have done, only applied to non-essential services, and to such a degree that it cannot be determined at this stage. I think this answers the two questions put by the hon. member.

Mr. Chairman, I welcome the hon. the Minister’s undertaking that the question of standard stock capital will be reconsidered after having been referred to the Select Committee. The very name of the heading is “Standard Stock Capital” or “Standaardvoorraadkapitaal”. It is obviously a capital item and the hon. the Minister will find that in the additional estimates on the Consolidated Revenue Fund, under two headings—one of which is Defence—this is reflected under the capital accounts, and rightly so. The Post Office is therefore out of line with what is done in the normal budget.

I wish to refer to subhead 3 in the Estimates of Additional Capital Expenditure. The hon. the Minister indicated that the amount of R2 193 000 was largely for mail-handling equipment. What I should like to know is why it is that although the whole programme of mechanized mail handling was planned well in advance and was well known, having been dealt with in some detail in last year’s annual report, the department did not know what the cost was going to be. Why do we have to vote an amount which is approximately 40% of the original estimate of R5,728 million under this subhead? It seems that somebody has slipped here, or else there is further information which can explain the situation. If that is so, I believe this Committee is entitled to that information.

Mr. Chairman, I am indebted to the hon. member for accepting the explanation in connection with the standard stock capital and being content that we shall take the matter further in the Select Committee.

As far as subhead 3 is concerned, I simply want to tell him that this was planned in a very thorough way, as he correctly said, and that this increase is actually not due to any error made by the department or any of its officials. What happened here, was that the equipment, especially the mail sorting machines, were delivered earlier than what we originally expected. As a result of this we had to meet these obligations. This is the explanation given to me for this increase. The Postmaster-General informs me that there was an escalation clause in the purchase contract which came into operation only after devaluation, and that we were only informed of the final price by the manufacturers last year. These are the reasons for this increase.

Mr. Chairman, the hon. the Minister said that it was the result of devaluation. However, devaluation took place in September 1975. As far as I know, the machines were already in operation before that date. If not, they were in any event being set up. How did it happen that payment only took place after devaluation? I remember seeing reports of the arrival of those machines earlier than September last year. I think that the hon. the Minister should make sure of his dates.

Mr. Chairman, according to information received from the Postmaster-General there was an escalation clause in the purchase contract which was put into effect only after devaluation. Furthermore, we were informed of the final price by the manufacturer only late last year. Perhaps this throws a little more light on the subject. The Budget date was March 1975, but devaluation was in September 1975 and payment was made in December 1975.

Schedules agreed to.

House Resumed:

Bill reported without amendment.

Third Reading

Mr. Speaker, I move, subject to Standing Order No. 56—

Mr. Speaker, the hon. the Minister’s explanation concerning the additional amount of R2 193 000 which is being asked for under subhead 3—Office, Electronic Data Processing, Mail Handling and Stores Equipment—is that the increase is due to the fact that adjustments had to be made as a result of price increases and that payment actually took place only after devaluation. I experienced some difficulty in accepting this. I see that under the Post Office Capital expenditure for last year, R2,6 million less than what was voted, was spent. The explanation for this saving is “delivery of automatic mail sorting machines postponed in expectation of alterations”. It therefore seems to me that this equipment was ordered last year, the year ending on 31 March 1975.

I therefore cannot understand why devaluation should affect an order which was made in the previous financial year. There was a saving as a result of the fact that the equipment concerned could not be delivered because the alterations to the buildings were not yet completed. It seems to me that there may be something behind this and that an additional sorting machine or machines has been purchased in the current financial year. This does not, however, explain what happened in connection with the orders which were placed in the previous financial year. Orders to the value of R2,6 million which were placed in the previous financial year, were not delivered. I think that the hon. the Minister must explain to us what happened to those orders which were placed in the previous financial year and were not carried out immediately, but only later. Why was the price R2,1 million higher then, while it is quite clear that the orders concerned were placed in the previous financial year? If this is not the case, I would like to know what happened to the machines which were ordered in the previous financial year, machines for which R1,2 million was spent and R2,6 million that has not yet been spent.

Mr. Speaker, I think the hon. member has lost sight of the fact that the contract makes provision for an escalation in price which may follow wage increases, higher steel prices, and so on, in the country where the equipment is manufactured—in this case Germany. Devaluation affects the final price and has nothing to do with the date of the order. I have already explained in my reply to the hon. member for Durban Point that this escalation clause came into effect only after devaluation. As I have indicated, it concerns the final price and not the date of the order.

Question agreed to.

Bill read a Third Time.

Mr. Chairman, I move the two amendments printed in my name on the Order Paper, as follows—

1. (1) On page 3, in lines 40 and 41, to omit “, or of an institution or portion of an institution”;
2. (2) on page 5, in line 1, to omit “(b) who” and to substitute “(iii)”.

I should like to say at the outset that although I do not want to repeat what I said during the Second Reading debate, we are totally and entirely opposed to this clause firstly because we believe that it is unnecessary to have these powers and, secondly, because if they are implemented, they will constitute a further curtailment of the freedom of the Press; in other words, the right of the public to have the facts to which they are entitled. However, since the hon. the Minister is obviously determined to press on with the Bill, I have moved these amendments in the hope that we shall at least reduce the mischief in this clause.

The first amendment seeks the omission of certain words in lines 40 and 41. The words which we propose should be omitted are “or of an institution or portion of an institution”. I accept and concede that there is a case, although I do not necessarily agree that it is necessary to legislate for it, against the publication of the pictures of inmates of mental institutions, whether those pictures are of individual inmates or of groups of inmates. I find it difficult to think of circumstances under which such photographs would normally be published, but let us accept that it is necessary to prohibit such publication. However, I cannot for the life of me see why there should be any prohibition on the publication of sketches or photographs of an institution or a portion of an institution. I do not know what the purpose of this is. Surely this is not protecting anybody. If there are institutions of this nature which ought not to be photographed, then they are probably in such a state that they are not fit for habitation. There may be some other explanation and I hope that the hon. the Minister will give us some kind of an explanation for specifically including institutions or portions of an institution. I just cannot see the reason for it at all.

As far as the second amendment is concerned, I am simply striving to do what the hon. the Minister himself did in the proposed section 66A(a)(i) and (ii), namely to exclude from the provisions all members of the Newspaper Press Union of South Africa; in other words, every single daily newspaper in this country as well as about 95% of the magazines and periodicals. I do not understand why, if they are exempt in (a), they should suddenly not be exempt in (b). I believe for a variety of reasons that this prohibition is unnecessary. One is that the law as it stands at the moment is adequate. What situations have changed now to introduce this restriction all of a sudden? I argued this during the Second Reading debate and I want to say again that the common law is perfectly capable of looking after a situation of this nature. The presumption in common law is such that it makes it possible to institute prosecutions successfully for malicious or false reports in articles. As I said earlier, articles of this nature are the complete exception and I think the hon. the Minister will agree with me. They occur so infrequently that it seems to me to be going to inordinate lengths, and that it is an overreaction to the activities of a certain very few—probably one or possible two—periodicals if such legislation is passed. If the common law is not regarded as being sufficient—apparently some lawyers will argue this—then I say that there is other machinery, for example the Press Council, which exists for precisely this kind of thing. The Press Council gives aggrieved persons or parties the right to be heard and to put their case. As the hon. the Minister knows, under the Press Council system as it operates at the moment, a newspaper is obliged to publish any correction if the Press Council has made such a finding.

As far as one can find out, the provision in the clause is aimed at the scientology movement and one other journal that has been named in the Second Reading debate. I should like to say that although I hold absolutely no brief for either the Scientology movement or this other journal, I feel as a citizen in a democratic society that I have the duty to defend their right to be heard, provided obviously that they operate within the four corners of the law. That is what the law is there for. It has been adequate all these years; in fact, it has been adequate for 50 years. If under these circumstances the Press Council does not work, then, as I say, the common law can be invoked.

*It really seems to me as though we are using a sledgehammer to kill the Bushveld mosquito. Why these excessive powers?

†My main reason for asking that NPU members should be excluded from this is, as I have already said, the very real difficulty—I want the hon. the Minister to accept this—which practising newspaper people have. There is no question of wanting newspapers to be able to publish false information; that is absolute nonsense. No decent newspaper wants to publish false information knowing it to be false. Such a suggestion would be simply crazy. However, there is in fact a very real practical problem, particularly in the area of which we are now talking, the area of mental health and the treatment of individuals or groups of people. It is not always possible to say what is false and what is true. There is a huge grey area in all these things which is open to wide interpretation. It seems to me that it is often impossible to distinguish. This was certainly our experience as newspaper people.

I say again that the exceptions are so few that it seems to me that we are going inordinately far just to cope with an evil which I believe can be coped with quite adequately under existing circumstances. I think it is utterly wrong for us to start from the assumption—this seems to me what this whole clause is based on—that newspapers or journals will publish false information if there is not a law to stop it. This inference which is drawn seems to me to be utterly unfair and unreasonable. If the Government is able to exclude newspapers which are members of the NPU from the provisions of the Publications Act, for instance, why is it not possible to do the same thing here? Why make an exception in this case? Why bring them in here? I would argue that this is really enshrining in law a vote of no confidence in the Press of South Africa, the same Press to which the hon. the Minister paid very eloquent tribute when he moved the Second Reading of this Bill.

I am arguing that the provisions of this clause are so illogical and so potentially mischievous and dangerous, that one really hopes that the hon. the Minister will accept these amendments. I am not happy with that which the amendments leave, but I maintain that it is better than what we have. I want him to accept these amendments. I believe that the provisions of the clause as it reads at the moment are dangerous because the Minister will be able to withhold from the public facts which it is necessary to publish in the interests of good government and administration. I say again that the provisions constitute an invasion on the rights of the individual and that is why I hope that the hon. the Minister will accept these amendments.

This is not a plea for licence on the part of the newspapers. The vast majority of our newspapers are completely and utterly responsible and they are capable of exercising the desired kind of self-discipline. In my view these provisions are enshrining, as I said earlier, a vote of no confidence in the entire Press of South Africa, which I think is totally unwarranted. I hope the hon. the Minister will consider and accept these amendments.

Mr. Chairman, as far as the first part of clause 2 is concerned, members of the Newspaper Press Union are exempted in any case. We assume that the responsible Press, to which I have already referred and in which I have great confidence, is exempted in any case when it comes to the publication of what can be regarded as ordinary information. However, the hon. member has put certain questions to me.

In the first place, the hon. member says that we should not take into account the fact that irresponsible persons could take photographs or make sketches of dilapidated buildings which are going to be demolished. However, we cannot do that. It is often the case that persons photographed dilapidated buildings which we are planning to demolish.

†These are mock-up photos which do not convey reality, and this is the problem. These mock-up photos are then distributed.

*In that way an irresponsible person can take photographs and make them public and create a completely false impression of the housing we establish for the mentally ill, and make this false impression public. That is what I am opposed to. It is not necessarily the Press alone which is guilty of this. Afterwards the authorities have to make statements and rectify the matter, but those statements never receive the attention that the original malicious information has received. The public information media in which we have confidence, are exempted in any case. In fact, very good provision has been made to ensure that the ordinary public Press will be allowed to take photographs, make sketches, etc. They may obtain permission from the Secretary for Health. Nor will permission arbitrarily be withheld from others. The purpose is to curb irresponsible publication in this regard. Therefore I am unable to accept the first proposal of the hon. member.

I found it really amusing that the hon. member, who is a seasoned newspaperman, a seasoned journalist and who is concerned about the Press, could move such an amendment as this.

†The hon. member is asking me to accept an amendment by which the Secretary of Health will be authorized to give somebody permission to publicize false information.

That is utter nonsense.

Has anyone ever heard anything like it in his life? I am not of so low an intelligence as to accept anything like that.

*Do see how the clause reads. No person may, without the permission of the Secretary for Health—

That is what it amounts to. If that is what the hon. member expects of me, he must definitely think that I am a fool, and I am not. If the hon. member is so concerned about the freedom of the Press, I would say that he should accept that we are acting quite correctly towards the Press. He should also accept that we have made exceptions as far as the Press is concerned, and that we are unable, as far as this aspect is concerned, to make an exception, for if we should allow the Secretary to give any other person, excluding the Press, the right to publish false information, it would be a reflection on the Press. Hon. members may interpret the words in whichever way they please, but that is what the result of the second amendment which the hon. member for Parktown moved will be. Therefore I cannot accept it.

Mr. Chairman, with all due respect I should like to say that I find it virtually impossible to advance any intelligent argument in view of the kind of arguments we are getting here this afternoon, which boils down to my asking that the Press of South Africa should be allowed to tell lies. With all respect, it is utter nonsense. If the hon. the Minister still does not understand my pleas, he will never understand them. I am sorry to have to say this, but it is of no avail to advance further arguments. Therefore, I shall leave it at that. The hon. the Minister said he is no fool, and I accept it. I do not, however, accept all the arguments of the hon. the Minister, for some of those arguments were foolish.

I should briefly like to discuss the dilapidated buildings which have been referred to. If the buildings are so dilapidated that sketches or photographs of them would create a false impression, why does the hon. the Minister not erect new buildings? Why does he allow people to live in such dilapidated buildings? Is the hon. the Minister ashamed of these buildings which are being used? If so, why does the hon. the Minister not erect new buildings? It is nonsense to say that the people who did it …

Mr. Chairman, may I ask the hon. member whether he was listening when I told him that mock-up photos of buildings like this have been published in this malicious campaign?

Mr. Chairman, if they are mock-up photos, then the hon. the Minister can take action against newspapers for misrepresentation. Why does he want a special law for this? The hon. the Minister now wants to place every newspaper in South Africa under this kind of restriction, because of the irresponsible action of a single individual. Can the hon. the Minister quote any other journal, except the one he has in mind, that has done this? If the hon. the Minister cannot, then he is now trying to place the entire Press under a restriction for the mis-demeanour of one obscure little journal which nobody would have heard of if the hon. the Minister had not come with this Bill. This seems to me to be absolute nonsense.

The hon. the Minister speaks about “toe-stemming”.

*The hon. the Minister is saying that newspapers may always obtain permission to take photographs and make sketches. We have just spoken about people who are foolish. Can anyone imagine a Public Servant giving permission for the publication of photographs of a dilapidated building of which they are themselves ashamed? It is nonsense, is it not? They are people like us, and of course they would not do it. It is precisely in such cases that newspapers should do it. They should do it when it is a question of dilapidated buildings in which people should not be living at all. The right should exist to publish the facts as well as photographs in this regard. The hon. the Minister, however, now wants to do away with this right. He says that permission may be granted for this, but under what circumstances will that happen? I am very sorry, but under those circumstances there is nothing that can be done about this matter.

On amendment (1),

Question put: That the words stand part of the Clause,

Upon which the Committee divided:

As fewer than 15 members (viz. 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, Mrs. H. Suzman and Messrs. H. E. J. van Rensburg and G. H. Waddell) appeared on one side,

Question declared affirmed and amendment dropped.

Amendment (2) negatived (Progressive Reform Party dissenting).

Clause agreed to.

House Resumed:

Bill reported without amendment.

Mr. Speaker, I move—

For historical reasons a large number of sawmills have been established in this country which are, in most cases, dependent on relatively limited supplies of timber from remote plantations. Naturally, this situation cannot continue indefinitely, and in the interests of more effective utilization of manpower, capital and raw materials, a rationalization of the country’s sawmill industry has become essential. The necessity for meaningful rationalization has not been overlooked and was realized a long time ago. Admittedly various steps in this direction have consequently been taken, but for the first time it is now being anticipated that the State and a private timber processing industry will act as partners to give effect to the rationalization concept.

The Weza State Sawmills, as well as the Clan Sawmills (Weza) of the Hans Merensky Foundation, are at present processing sawlogs from the Weza State forests in southern Natal. In addition to this, Clan Sawmills (Weza) purchases conifer sawlogs from private plantations adjoining the Weza State forest. The yields from these two timber-supplying plantations is insufficient to satisfy fully the intake capacity of the two separate sawmills, and at present there is no prospect of possibly increasing the yields to such an extent that both sawmills could be operated at full capacity, and consequently more advantageously. The consolidation of the activities of the two sawmills into a single enterprise, the processing capacity of which could be fully utilized is consequently being proposed.

This intention was preceded by exhaustive feasibility studies which indicated that a consolidated sawmill enterprise was not only likely to entail considerable savings in capital spending, but also to be capable of producing increased profits from the outset, with the potential of even better ultimate achievements as far as profitableness is concerned. Apart from this, a single sawmill unit has the added advantage that it will afford an opportunity for the selective utilization of timber—which would be beneficial to the timber grower as well as the timber processor. The increased combined permanent yield which will be available from the time-supplying plantations to a single processor will make it possible for timber to be utilized more selectively, because sufficient sawlogs of larger dimensions will be available for processing into sawn timber and veneer, while there will at the same time be an increased volume of small-sized wood which could be disposed of and utilized more advantageously as pulpwood than in the form of sawlogs of small dimensions—a situation which will undoubtedly lead to an increased percentage of high quality construction timber.

The Bill before this House therefore makes provision for the establishment of a timber processing company with a processing capacity of approximately 113 000 cubic metres of timber per annum. It will be known as the Weza Timber Company Limited in which the State, through its Department of Forestry—and the Hans Merensky Foundation, will have an equal share-holding.

The objectives and powers of the company to be established are comprehensively defined in clauses 3 and 4 of the Bill, and I do not think it will be taken amiss of me if I do not elaborate on those aspects. The only aspect to which I could perhaps draw attention here is that in clause 3(a) specific provision is being made for the supply of a certain percentage of the processed timber products, for State purposes. Hon. members are aware that the State sawmills act in the first place as suppliers to Government departments. The transfer of the Weza State Sawmill to the company will place a great burden on the remaining State sawmills to meet the State’s requirements for sawn timber, and to protect the State’s interests in this respect it is being deemed necessary for a portion of the production of the joint enterprise to be retained for State purposes.

The affairs of the company will, as hon. members will note from clauses 5 and 6, be managed and controlled by a board of directors, consisting of seven members, of whom three shall be officers of the Department of Forestry and three will be appointed by the Hans Merensky Foundation, while a further independent member, who shall not be associated with the Department of Forestry or the Hans Merensky Foundation, will act as chairman. It will be possible to ensure ability on the part of the board of directors of the company by means of the judicious selection of the members so that the necessity for a larger board of directors falls away. On the other hand, ability will probably be sacrificed if the board of directors has to consist of fewer than seven members.

Clauses 7 to 10 of the Bill refer exclusively to the term of office and remuneration of the members of the board of directors, the filling of vacancies on the board, the vacation of their office by members, meetings of the board and the procedure for meetings. These clauses are self-explanatory and in my opinion, therefore, require no further elucidation. A general manager, who need not necessarily be an individual, but may also be a juristic person if this would be to the advantage of the company, will be appointed in terms of clause 11 by the board of directors and remunerated from the funds of the company for his services. This general manager shall be entrusted with the carrying out, management and control of the work of the company, as well as with the exercising of supervision over the company’s employees, and will be directly responsible to the board of directors.

†As I have mentioned earlier, the State and Hans Merensky Foundation will enjoy equal shareholding in the company. The divisible profits, which shall in terms of clause 18 be appropriated on a pro rata basis, will consequently be divided equally between the two parties. Clause 12 of the Bill makes provision for the required share capital of the company, which has been calculated at R1,5 million and which shall, as ordinary shares, be subscribed at par equally by the two shareholders.

It is intended to transfer certain movable and immovable assets at the Weza State Sawmill and at the Clan Sawmills (Weza) to the company. The necessary provision in this regard appears in clause 21. The timber stocks at the two sawmills are, however, excluded and will be purchased by the company. The value—as determined by a sworn appraiser—of the assets which are transferred will be tendered as part payment for shares issued and the balance of the shares will be taken up and paid for in cash by the two parties. Shares held by the State shall, as hon. members will notice from clause 17, not be transferred except by legislation, and in such an event the shares shall in the first place be offered to the Hans Merensky Foundation. The Hans Merensky Foundation shall likewise first offer any shares it wishes to transfer, to the State. In order to provide the required working capital for the company, provision is made in clause 14 for the granting of loans to the company by the State and the Hans Meresky Foundation. Clause 16 authorizes the company to negotiate loans with the proviso that such loans shall not exceed 75% of the authorized share capital.

The amount for which the State will be liable in respect of cash payment for shares and the granting of a loan to the company will have to be defrayed out of the Consolidated Revenue Fund. The funds required for this purpose are appropriated by clause 15.

The intention is to establish the processing plant of the company on the site of the Weza State Sawmill. This site will after subdivision be purchased from the State by the company.

These, Mr. Speaker, are in broad outline the objects of the draft legislation before this House. The Bill contains a few other essential provisions which are customary, such as instructions in connection with the company’s accounts and the auditing thereof, the furnishing of certain information, and so forth, but I do not consider it necessary to elaborate thereon at this stage.

Since publication of the Bill certain reservations were expressed by sections of the private sawmilling industry. My department had discussions with the parties concerned and I shall move certain amendments in the Committee State to satisfy the misgivings expressed.

Mr. Speaker, this is the first Bill that the new Minister of Forestry has had to move in the House, and we welcome him to the post. This Department of Forestry is a considerably more important department than members of this House generally realize, and we welcome the hon. the Minister to the post. He is a person who has had considerable experience in his own constituency of timber and timber working, and we hope he will have a fruitful time as Minister of Forestry.

The question that has perturbed this side of the House more than anything else since the legislation was laid before us is the question as to whether in fact this was an extension of the principle of State intervention in the private sector, in this case the sawmilling industry of South Africa. We have taken the attitude on many occasions that we are against socialism and against State intervention in what we regard should be essentially the activities of the private sector. But when we went into the matter very carefully, we found that this was in fact an absolutely new kind of creature, a sort of hybrid creature, with the State on one side and private industry on the other, in this case the Merensky Interests at Weza and the State interests, and that it was limited only to the sawmilling interests and did not extend to the timber-growing side of their activities. We are reminded of the fact that this Department of Forestry in fact pioneered the timber industry in South Africa. They undertook tremendous expenditure and tremendous risks and a very long-term programme, and we feel that it is quite unwise and unreal to say that this activity, whereby a marriage is achieved between the State and the Merensky Interests, should be regarded as a socialistic step, when it is in fact moving a part of the State’s interests out into the private sector and acquiring a new slice of direction and a new capitalistic interest in this particular company. The question in our mind was also whether this created a precedent and whether the hon. the Minister and his department were now going to move out into other areas and other sectors, and whether other and perhaps smaller sawmilling interests would now find themselves threatened in some way by the State coming in and making them an offer, the kind of offer that the Godfather made, which they cannot refuse. But the Minister is moving an amendment which limits the application of this Act specifically to Alfred County and to Weza itself. We are therefore prepared to support the Second Reading of the Bill. The limitation of this to the Alfred County sector is welcomed by us, because it gives a specific interest to two sawmills which are operating, as the hon. the Minister said, inefficiently, because there is not sufficient timber there for them to utilize their capacity fully.

In regard to the question of the board of directors and the chairman of the board, etc., all this kind of thing we regard as mere technicalities. Clause 13 deals with the issue of shares. As I understand the position, the sawmilling activities are going to be concentrated now at the State mill at Weza, which means that the Merensky mill will either have to close down, or it will have to close down certain of its sawmilling activities and certain machinery will have to be moved or utilized somewhere else. This will then create an imbalance between the contribution which the State is making and which Merensky is making, because their mill will now not figure so largely in the contribution they are making towards the joint company. As I see it—and I hope the hon. the Minister will confirm this—the Merensky Foundation in fact are going to make a much larger cash contribution than the State is going to make, because the activities will be centred in the State sawmill.

In regard to clause 14, the Minister is moving an amendment to limit the amount that can be lent or raised by means of loans and we have no problem in that regard. In terms of clause 17, the shares may not be transferred except by resolution of this House or by Act of Parliament. We find it difficult to visualize a situation where the department will be willing to dispose of its shares. After all, this is going to be an activity which will be centred on the department’s mill and in the middle of the department’s forests, etc., and I cannot see a situation arising where the department will want to dispose of their shares and bring in what can only be another element of private enterprise. I hope the Minister will make some comment in that regard. Obviously you must have some provision for it to be done. It may arise at some time that the department will want to dispose of its shares, but I find it very difficult to conceive of any circumstances under which that will happen.

Clause 20 deals with State land which has been set aside by the State for the purpose of its sawmill. There is a whole village at Weza where the people dealing with the timber in the Weza plantation are housed, and I should like to know whether any of the housing there which might be presumed to be specific to the sawmill will be transferred to the company, because obviously the company will want to house its employees. This obviously will then again make up a portion of what the State is now transferring into this company, and will minimize its cash contribution which it will have to make. Then there is the exclusion of the stock. It seems to me a little odd that sawn timer, which is the timber stock in each of the yards, should now be excluded by the Bill from being transferred into the company. You have timber sawn in the yards belonging to the State and you have timber sawn in the yard belonging to Merensky Foundation. In order to acquire that timber which is going to be their stock in trade, they will have to buy it in now from two existing institutions which are being married, as it were, but they will get the money to buy the stock from moneys provided by the State and provided by the Merensky Foundation. It seems to be a rather roundabout way to get where they are going. There must be a reason for it. Whether it is a bookkeeping or accounting reason, I do not know, but I hope the Minister will clear up the matter.

In clause 23 there is provision for laying reports on the Table of the House. We would like the assurance that this matter is one which can be debated under the Minister’s Vote, because this is the first occasion I can think of that the State has undertaken an operation of this sort in such close co-operation with private enterprise, and we will obviously watch this with very great interest. I hope that when these matters are tabled in the House, we will be able to raise them under the Minister’s Vote.

There is a last matter I wish to ask the hon. the Minister about. I have discussed the matter with the department and it puzzled me. It is in regard to clause 25. Now I am not an accountant and I do not know what the reasons are. Most of us are “plat boere” and we do not understand anything about accountancy. But the Minister is taking power to exempt the company from certain of the provisions of the Companies Act. He is taking power to apply certain provisions of the Companies Act to this new company, and I want to ask him to tell us what he has in mind. Why was it necessary that the normal operation of the Companies Act should not apply in this particular case? He is now exempting himself from all those requirements by means of regulation or by notice in the Gazette. Can he tell us what he contemplates and what he has in mind to apply to this particular company? I think those are fair questions. They are indicative of our interest in the Bill. We will watch the operations of this company with the very greatest interest, and we will support the Second Reading of the Bill.

Mr. Speaker, the hon. member for Mooi River is pleased that there will be no further State intervention in the forestry industry. I think he is correct that this legislation will not take any further supplies of timber from the private sector and hand them over to the State. This has been the policy during the past number of years, that where the Government had certain sawmills under its control, it wanted to retain those sawmills so that it could exercise proper control over costs as well as the timber it needed for its own purposes. For that reason the Opposition need not be concerned that there is any deviation in policy. This concerns the rationalization in the timber industry. During the past number of years the tendency has been for smaller sawmills to amalgamate to form larger units. This leads to improved overall management and higher profits. But rationalization is required not only when one wants to make larger profits, but also when one wants improved utilization of the raw material one uses. This applies in this case. In the past softwood logs 12,5 cm (5 inches) in size were used for pulpwood and the larger logs for sawtimber. Sawmills were specifically designed to handle wood of that size. During the past number of years pulpwood became increasingly more important because particularly the paper industry is progressing. We find that 35% of all roundwood which is at present being exploited, is used for pulpwood as against only 34% in the sawmill industry. The demand for pulpwood increases at a rate of 6% per year, and the demand for saw wood at 2% per year.

In other words, we can expect a considerable shortage of pulpwood to arise in five or six years’ time. The logical solution for this problem would, of course, be to increase the minimum size of sawlogs used for sawtimber to, say, 18 cm (approximately 7 inches). Then more wood would be available for utilization as pulpwood. However, if this were done, the smaller sawmills would be deprived of a larger portion of their sawtimber. This would perhaps have been a good thing, because then the young excessively knotty logs which are not suitable for sawtimber, could be used for pulpwood. However, one cannot deprive the sawmills of the timber supplies they are used to and which have to be supplied to them in terms of contracts concluded with the State, and that reason rationalization would be a solution in this case, because if one combines two sawmills, it will lead to the better utilization of timber. During the past number of years yet another new trend manifested itself, i.e. the production of veneer—cutwood—and also this veneer-wood could also have an effect on the sawlogs and bring pressure to bear upon the sawmills which are used to receiving a certain quantity of sawtimber. For that reason rationalization will here mean the better utilization of raw materials and make available more pulpwood and veneer logs. At Weza, where there are two sawmills—a State sawmill and a private mill—which obtain timber from the same plantation, this rationalization will be best effected. A fixed minimum sized timber could then be sawn while the thinner logs could be used for veneer and pulp. This is the major advantage we would achieve here, because we would achieve better utilization of the raw materials and capital, because the largest and most modem sawmill would be retained to use sawlogs. Therefore, I am happy to support this Bill:

Mr. Speaker, I believe that this is an extremely important Bill which we have before the House this afternoon. Obviously the Bill will have far-reaching effects. Timber is the commodity which is in great demand not only in South Africa, but throughout the world, and is becoming more and more expensive too. In economics we have been taught that consolidation under normal circumstances and conditions is always desirable, and this is one of the reasons why we on this side of the House support the Bill. The amalgamation of the two sawmills will of course assist them in drawing from two plantations, it will facilitate and solve the many problems. I am happy that the profits from this company shall be divided equally, but sooner or later we shall have to decide between State interference or private enterprise. I accept that the Government is doing a lot in respect of research at experimental stations in the Border area and in the Eastern Cape. We are very grateful that the Government is doing research in this regard. On the other hand, we have always supported private enterprise, and we believe that private enterprise should be maintained as far as possible in the future. We should therefore not overlook this aspect. I have no more to say, except that I am happy to support this Bill.

Mr. Speaker, we on this side of the House appreciate the fact that this important piece of legislation, which is a particularly interesting piece of information, is supported by the Opposition. The hon. member for Mooi River described this as a “hybrid creation”, which it, in fact is. Half of it is company enterprise and half State enterprise—a concoction, therefore—and for that reason it is a very interesting enterprise on the part of the State. I, from my side, am looking forward to the results which are going to be achieved, bearing in mind that what is being done and created here, is indeed not a profit-making enterprise. What is being created here, is an enterprise which will be to the welfare and advantage of the industry and the country as a whole. On the one hand we have the State, which is indeed the largest grower of trees in the country and which therefore has a very real interest, not only because it is the State and is involved in the matter, but also in the interests of the development of the industry in South Africa. On the other hand we have the Merensky Foundation, which, in turn, is not a profitmaking enterprise in the true sense of the word either, but consists of an independent, selected group of people whose aim and ideal it is not so much to make a profit, but to devote their energies to research and the development of the industry. For that reason I believe it to be a very fine enterprise. We are gladly looking forward to the progress which will be made in future. The Bill is to my mind a fine and balanced one. Personally I have very little criticism to level at it. For that reason this side of the House supports the Bill.

Mr. Speaker, at the outset I want to state that our party is in favour of this Bill and will be supporting it. However, we would like to draw attention to a few of the provisions in the Bill, and state our attitude in that connection.

Firstly, with regard to clause 3(a), we would like the hon. the Minister to give us certain assurances as to some of the activities of the organization. This is in line with the objections and the reservations raised by the hon. member for Mooi River. In general one feels that there should not be too much scope for interference with private enterprise. In terms of clause 3(a) the company is given a very wide scope, a very wide field of activities in which it can participate, activities which may, in some respects, interfere with the rights of private enterprise.

In clause 3(b) there is the further provision “subject to the approval of the Minister, to undertake the manufacture of any product from any by-product arising in any of the company’s undertakings under paragraph (a), and the processing of any such by-product …”. A valid question which can be asked in this connection is why the Minister should have the final approval in a matter of this nature, and why provision is not made for the Minister to act in terms of recommendations made to him by the board which is to be appointed. In our communications with the industry it was brought to our attention that the industry had certain reservations in regard to the Bill as it was originally drafted, but that the present Bill, however, generally meets with the approval of the members of industry.

In clause 8(2) the provision is that “a member of the board appointed in terms of section 5(1)(a) or (b) may at any time be removed from office by the Minister if the Minister is of the opinion that there are good reasons for doing so.” It would appear as if the hon. the Minister is being given rather extraordinary rights to remove members of the board from office. We believe that the provision should provide that the hon. the Minister will act in concert with a majority of the members of the board in the removal of members of that board, and that it should not be the responsibility of the Minister alone.

Clause 23(3) reads as follows: “The board shall, as soon as practicable after the conclusion of every meeting of the board transmit to the Minister a copy of the minutes of the meeting.” In this connection I would like to ask the hon. the Minister what provision is being made for either the board or himself to table an annual report in Parliament on the activities of the company concerned, in view of the fact that it is a company which is financially sponsored in part by the Government.

Next I want to refer to clause 25(1), which has also been referred to by the hon. member for Mooi River. In this clause provision is made that the Weza Timber Company shall not be subject to the provisions of the Companies Act. This appears to be strange. Why should a fully-fledged company, which is partly private enterprise and partly State-owned, a company which is formed by an Act of Parliament, be exempted from any restraints which are applied by the Companies Act? There may be very good reasons for this, and we would like to hear from the hon. the Minister what the motivation for that particular provision is.

Mr. Speaker, I would like to ask the hon. the Minister certain questions. It is not quite clear what the import is of clause 14, particularly if it is seen in relation to clause 18. In terms of this Bill the authorized capital of the company is going to be R1,5 million, supplied equally by the foundation and by the Government. The hon. the Minister presumably holds the shares on behalf of the State President, or on behalf of the Government. Clause 14 deals with the granting of loans to the company and reads—

It means that the Minister in consultation with the Minister of Finance determines the amount of the loan, and presumably also the terms and conditions which will apply to it.

Clause 14(b) says the same with regard to the foundation. What interests me is that one can read those two subsections as providing that the State can make a loan to the company of a certain amount and the foundation can make a loan to the company of a different amount. As I read it, I interpret the intention of clause 14 to be that loans should be made in equal amounts, on equal terms and on equal conditions to the company from both partners. However, that is not the wording as it now stands.

Clause 16 says—

We know that the authorized share capital in full, as it is now determined, is R 1,5 million. I presume that, what the hon. the Minister and the department are doing here, is to try to give some flexibility for overdrafts and various other things. It is interesting though to note that clause 16 limits the total amount borrowed to 75% of the authorized share capital of the company at any particular point in time. However, no limit is placed on the amount of loans which can be made available to the company by the State and by the foundation, the two partners in terms of clause 14.

Clause 18 says—

Clause 19 goes on to say—

If one should leave out clause 19, there is no way in which the company can repay the capital amount of the loan, because it simply says “the divisible profits shall be divided pro rata between the holders of the shares’’. Obviously, interest comes before the profit.

One can therefore pay the servicing costs. However, I want to ask the hon. the Minister whether clause 19 simply provides for the establishment of a sinking fund as opposed to a reserve fund, so that the capital amount of any loan can also be repaid. If this is not so, the company will be incapable of repaying the principal amount of the loan.

Mr. Speaker, firstly I want to convey my appreciation to the hon. member for Mooi River for his words of congratulation. It makes one feel a little strange if a person congratulates you on a new position, and one is immediately confronted with legislation of this nature. Here I now have to start off with an entirely new task and a difficult problem. But I must say that hon. members did express their confidence in this legislation. I want to express my appreciation for their goodwill and understanding of the circumstances in our forestry industry. It was in fact a hundred years ago that the first forests were planted on a small scale by the State in this country. At present we realize the value of the forestry industry to the country, and here, through special legislation, the State and a private enterprise are now joining forces to be able to participate more effectively in the sawmilling industry. A few points have been raised in regard to this matter.

With reference to clause 13, the hon. member for Mooi River asked a question about the share capital. Both companies must of course make provision for the same amount, but valuations will be made—as indicated here—of the improvements and the equipment which is going to be used, and it is very clear that the Merensky Foundation will have to contribute considerably more in the form of cash than the Weza Sawmills will have to do. The precise amount will be determined by making a valuation of the utilizable improvements and the equipment of each of the two parties.

The hon. member for Mooi River also referred to housing. It will be possible to lease housing for the sawmills. The new company will have to lease most of its housing from the Department of Forestry. It is not possible to transfer a large area of land. I think that approximately 20 ha will be transferred, and the hon. member appreciates of course that it will not be possible to establish all the housing on that land. The State will consequently make housing available which the company will be able to lease.

The hon. member also referred to the remaining timber on the sites. The timber stocks on each of the sites on the day of take-over will of course have to be taken over by the new company. Each of the old establishments will of course have to sell their stocks to the new company. I hope this is clear to the hon. member.

The other problem which the hon. member had, was in connection with clause 25. This clause provides that the Companies Act is not applicable, but that the Minister may make some or other provision in the Companies Act or another Act applicable. I must concede that if one wants to understand something with simple arithmetic, it can become a little complicated. We see, however, that this company can function equally well under the Companies Act. But an exposition of all the particulars and provisions of the Companies Act will make this legislation too long. It is therefore being provided that the Companies Act is not applicable. In this legislation mention is only being made of the deed of foundation and then the further particulars which may be necessary—the constitution of the board of directors, the accounts, and so on. Everything which may be applicable is mentioned briefly and succinctly. However, if it should appear in the opinion of the Minister that there ought to be further provisions, the Minister may make other provisions of the Companies Act applicable. At present this is not being foreseen.

Would we be able to debate the matter here if it is necessary?

I do not know at the moment whether it will be done by way of legislation. It was asked whether the accounts will be tabled annually. Specific provision of course is being made for that in this legislation, and I think that problems of this kind could be discussed to good effect on the Select Committee on Public Accounts.

Perhaps under the Vote as well?

Yes, perhaps under the Vote as well. Then the Minister is present and it is possible to ask him specifically why certain things were permitted and others not. I think this is more or less the position in practice.

The hon. member for Bryanston raised the question of the redemption of loans. He said there was no assurance in the legislation with regard to the redemption of loans. I do not think it is necessary to indicate in legislation that a company which has raised a loan has to pay back that loan. It is accepted as normal, as part of any company’s activities, that if a loan is raised, certain financial obligations arise, and that such a loan will in due course have to be repaid. However it is not being stated specifically in this legislation that loans have to be repaid. I do not think I should elaborate any further on that. I think we could debate these particular points further during the Committee Stage, if hon. members feel they want greater certainty. The hon. member for Bryanston also asked for an assurance in regard to clause 3, but he is aware that I am going to substitute an amendment to the entire clause 3(a), in regard to which he has misgivings, during the Committee Stage and I think that with that, his problem will probably disappear. With reference to clause 23, the hon. member also discussed the statements. It is specifically mentioned here that the financial statements of the company will be made available.

The hon. member for Johannesburg North discussed the repayment of the loan, and had reservations concerning clause 16 and clause 18, which, according to him, allegedly contained contradictions. However, I think we could to greater effect debate the clauses on which hon. members still perhaps have reservations during the Committee Stage. I do not want to elaborate on them further at this stage. We should not, during the Second Reading, conduct a discussion of problems which could more suitably be discussed during the Committee Stage.

Mr. Speaker, I should like to know what is going to happen to the Government staff who are now going to be taken over by this new company. What is going to become of their pension privileges, for example?

I do not have the details in that regard now. I should prefer to reply subsequently to the hon. member’s question, because I am not certain how many staff members are going to be taken over, and so on. However, the hon. member may rest assured that the Government will take care of the pension benefits, etc., of those officials. However, I shall furnish the hon. member with information in this regard at a later stage.

In conclusion I should like to express my appreciation for the support I have received for this legislation. It is very important to the Department of Forestry, which also renders a very extensive service to the private entrepreneur, to be able, together with the private entrepreneur, to acquire knowledge of certain processing methods which they had nothing to do with in the past, and then to be able to convey that knowledge to new students. It is the Department of Forestry which is responsible for the training of professional officers, and it is consequently important that they should be able to acquire new skills in various spheres of the timber industry which would be of value to the private sector.

Question agreed to.

Bill read a Second Time.

Mr. Chairman, I move the amendment printed in my name on the Order Paper, as follows—

When we brought this matter to the hon. the Minister’s attention during the Second Reading debate, we mentioned that the reason why we would be moving this amendment was simply the fact that the loan requirements, both domestic and foreign, of the public and semi-public corporations have reached a size in the aggregate which is well known and that, therefore, from the hon. the Minister’s point of view and, indeed, more particularly from the point of view of the hon. the Minister of Finance, the hon. the Minister would want to have a degree of co-ordination in regard to these loans. In reply, the hon. the Minister said that in terms of Treasury regulations it was already mandatory for Iscor, when raising money in terms of this provision, to have the approval of the hon. the Minister of Finance. If that is indeed so in respect of both domestic and foreign loans, obviously the necessity for this amendment will fall away and we shall withdraw it. While we understand that Iscor, like any other corporation, certainly has to get permission to raise money overseas, I believe that that is not the case as far as Iscor’s domestic borrowings are concerned. At present Iscor is attempting to raise some R12 million under a highly complicated scheme underwritten by two of the merchant banks in Johannesburg. If the hon. the Minister agrees that Iscor has the right to raise money in the domestic South African capital market, and that the same applies to Escom and the other public and semi-public corporations, we would wish our amendment to stand. On the other hand, if it is indeed a fact that even in so far as the domestic scene is concerned Iscor has to get the approval of the Minister of Finance, we shall withdraw the amendment we have put forward.

Mr. Chairman, I have already indicated that I cannot accept the amendment of the hon. member for Johannesburg North, for two reasons. The first reason is that the amendment contained in clause 2 basically concerns the facilitation of the procedure. Therefore it is suggested that “approval of the State President’’ be substituted by “the approval of the Minister”, being the Minister of Economic Affairs. Should we accept the amendment of the hon. member for Johannesburg North, it would merely mean that “State President” would be replaced by “Minister of Finance”, which would defeat the purpose of the clause, i.e. to facilitate the procedure. In the second instance the hon. member now accepts that permission must in any event be obtained from the Treasury as far as foreign loans which are raised in the foreign capital and money market. All he wants to know now is what the position is in connection with loans on the local market. He said that if I could satisfy him that the Treasury regulations also hold with respect to the power to raise loans on the local capital or money market, his amendment would fall away. This is how I understood it. It seems to me that, apart from the other considerations I have mentioned, if Iscor went to the local capital market with issues, it would have to obtain permission from the Treasury for this, in terms of exchange control regulation No. 16.1.A., made in terms of the Currency and Exchanges Act. Therefore I want to repeat that the motivation for this clause is precisely to facilitate procedure for the purposes which I have tried to outline. I have already given my assurance to the hon. member and to the House that apart from any legal stipulations in this particular respect, the greatest co-ordination takes place concerning the loans which are raised by different State departments, such as the Railways, the Post Office and the Treasury, and also with respect to the loans which are raised by the State corporations which fall under my department, for example. In other words, I want to maintain that, in any opinion, the safeguards which the hon. member wants to include by means of his amendment already exist in the regulations and are already built into the financial procedure and structure which is followed in the public sector with respect to loans raised at home and abroad.

Amendment negatived.

Clause agreed to.

Clause 3:

Mr. Chairman, I move the amendment printed in my name on the Order Paper, as follows—

In the hon. the Minister’s Second Reading speech he said, in essence, that he did not want anything to stand in the way of Iscor as regards their flexibility and that he did not want Iscor to be prevented from having the same normal business practices that might be given to other corporations. We do not want to do that either. I gather from the hon. the Minister that this provision is partly aimed at giving the board the right to raise overdrafts for Iscor so that they can conduct their normal business. However, we have simply moved our amendment on the grounds that the hon. the Minister is asking in this clause that the board be given the right to—

Previously the section that is being amended by this clause contained two provisions. Firstly, it was necessary to obtain the approval of the State President and, secondly, they were entitled to borrow up to the whole amount of the issued share capital. What the hon. the Minister is asking us to do here, is to give the board the right in its opinion—do not forget that Iscor is using public money and is therefore responsible to the public—to borrow up to three-quarters of R325 million which amounts to approximately R244 million.

We honestly do not see that any reason has up to now been put forward by the hon. the Minister as to why this very large sum of money should be placed under the discretion of the board. We would be happy to leave it, as previously stated, at the point where the board, with the approval of the hon. the Minister and with the concurrence of the hon. the Minister of Finance, should be entitled to raise that amount, or even more. However, simply to give this power to the board without the Minister’s approval being required and without the Minister of Finance’s and the State President’s consent, does not meet with our approval. One must think in terms of R244 million. The hon. the Minister clearly would not have introduced this Bill if he did not intend increasing the issued capital of Iscor. In the end, if clause 1 is to be believed, the amount will be three-quarters of R994 million, i.e. R745 million.

The MINISTER OF ECONOMIC AFFAIRS. From what source do you get that figure?

I simply added on to the present issued capital. There is R325 million and if one goes through clause 1, one sees that 497 million shares can be issued, and those shares will be issued, otherwise the hon. the Minister would not have used the figure of 497 million shares. If you take that and then take three-quarters of R994 million, you arrive at R775 million. The hon. the Minister comes with this Bill and he wants to raise the Government’s ability to take shares up to 497 million. Clearly clause 1 covers this, because it will then be three-quarters of the issued share capital as and when the shares are ultimately issued. This has to be seen in proportion, because at the moment Iscor has had to reduce a loan debenture in its endeavours to raise money within South Africa. That debenture was reduced from R20 million to R12 million. The hon. the Minister, however, wants to give away the power of the State President, his power and that of the Minister of Finance to a certain extent, because subsection (2) comes into operation after the horse has been to the water, so to speak. The hon. the Minister wants to give those powers away and he wants to give to the board of Iscor the right to raise R244 million, as it now stands, and clearly an increased amount later on. In no circumstances can I see a business in South Africa at this point in time being allowed such wide power, and especially not a company which requires an overdraft of that nature and more particularly not when you take into account the ability to raise this money over and above the fixed-term loans of Iscor which are already outstanding. That is why we would say to the hon. the Minister that the board should be given the right to raise one-quarter—approximately R80 million—or three-quarters, provided that the sanction is put on the board to the extent that it has to get the approval which we have suggested.

Mr. Chairman, the hon. member for Johannesburg North is making certain basic mistakes. In the first place he argues that by accepting clause 1, we would be increasing the share capital of Iscor by bringing it up to 350 million plus 497 million. This is not the position, however. The 497 million replaces the 350 million. Therefore, the total authorized capital of Iscor after the clause has been agreed to will amount to 500 million shares of R2 each. This will then be the total authorized share capital. Another aspect about which the hon. member argued incorrectly in my opinion, concerns the existing section 11 of the Act. Clause 3 seeks to amend section 11. This does not require Iscor to obtain the permission of the Minister of Economic Affairs. All that is being changed fundamentally in section 11 of the Act by means of the proposed new section 11 is the fact that Iscor may obtain bridging finance or overdraft facilities irrespective of whether Iscor is envisaging other issues.

I want to explain this. The hon. member will notice that the existing section 11 stipulates that—

go and borrow certain sums as bridging facilities depending on the issues or the completion thereof. It is this qualifying part of section 11 for which we now want to substitute a new provision.

I want to go further. The existing section stipulates that Iscor can borrow up to an amount which is equal to the paid-up share capital. A restriction is now being imposed here, namely that Iscor may raise loans up to an amount not exceeding three-fourths of the paid-up share capital of the company. This is what the position will be if an amendment is accepted which I intend to move. Under these circumstances I want to ask the hon. member to understand that what we are aiming at here is merely to remove the qualifying part of the existing section which deals with the ability to raise loans, so that the borrowing of bridging money is not dependent on an already approved issue of shares or debentures by the State President. I want to say in all fairness that the question of the amount which will be borrowed by Iscor in terms of this authorization must depend on its credit-worthiness, just as in the case of any other company. The credit facilities which are extended to it will have to be justified by it in terms of its normal credit-worthiness with its banker. Therefore I really do not think we should worry about this. However, I have already conceded that the existing section 11(1) refers to Iscor’s “Paid-up share capital”. Clause 3, which seeks to amend section 11, contains a provision in terms of which the “paid-up share capital” will be replaced by “issued share capital”. I think that this is wrong and I therefore move as an amendment—

Mr. Chairman, let me try to clear up this confusion between the hon. the Minister and myself. He makes much of the fact that my calculations are based on what he considers to be erroneous figures. Now, clause 1, which he mentioned as the basis of the error, says simply that section 7 of the Iron and Steel Industry Act of 1928 is amended by the substitution in subsection (2) for the expression “350 000 000” of the expression “497 000 000”. Section 7(2) of the Act says that with the approval of the State President the board may increase the share capital of the corporation by the creation of additional ordinary B shares of R2 each not exceeding in number 350 million. This now becomes 497 million.

[Inaudible.]

No, I am quite clear about that. It is no less than 497 million and to be issued at not less than par. Therefore, when those 497 million have all been issued there will be R994 million worth of equity capital in Iscor under this heading. I am not adding anything further on to that. Does the hon. the Minister agree with me that the present issued and paid-up capital of Iscor is R325 200 000 as given in the annual report? Those are the two figures on which I base the figure of three-quarters of that. It is either R244 million or R775 million, rounded off to the nearest million. The figures are on such a scale that I simply find it difficult to believe that the Minister can sit there with equanimity, while he says that what he is concerned with is the credit-worthiness of Iscor. As we already know, Iscor’s fixed term loans are now R1 285 million. Now this Minister comes to the House and asks us to give Iscor this authority without the approval of the State President, the Minister of Economic Affairs or of the Minister of Finance. Yet under certain circumstances, as from now Iscor can raise another R244 million and in future could raise another R775 million. If they do that it would take Iscor’s borrowings to over R2 000 million. That would, I agree, be in relation to the increased capital, but still in all normal prudence that would be going too far. This is a public corporation using public money and therefore we ask the hon. the Minister to reconsider whether he will not accept the amendment that approval be required before the board can raise money on this scale, because the total borrowings of Iscor is clearly something which is of public concern.

Mr. Chairman, let me say at once that wherever provision is made for borrowing powers in the articles of association of any company, that surely does not mean that loans to the maximum amount will be raised without further ado. Let us now consider what the hon. member’s amendment means. In terms of the existing section 11, the Board of Iscor, subject to the conditions imposed, viz. that it must be in anticipation of the issue of shares or debentures, is empowered to raise a loan for bridging finance equal to its paid-up capital. In other words, if clause 1 is agreed to, then under the existing section 11 of its Act, Iscor would be entitled to borrow an amount equal to its paid-up capital. We now propose that section 11 be amended in two respects. Firstly that the borrowing power in section 11 not be linked to the envisaged issue of shares or debentures and that that part of the existing section 11 which applies to this proviso, should fall away. But then, in the second place, we propose that the amount which may be borrowed in terms of this borrowing power in the existing section 11, should not be equal to the paid-up capital, but to three-quarters of it. If we were to accept the hon. member’s amendment, it would mean that the borrowing power in terms of amounts which Iscor could borrow would be smaller than its present borrowing capacity. Does the hon. member agree with me? The total paid-up capital of Iscor, if all the shares were to be taken up in terms of section 1 as now amended, would be R1 000 million. If the hon. member’s amendment is accepted, Iscor can borrow a quarter of that under section 11, viz. R250 million.

†That is in terms of his amendment. But without amending section 11 at all Iscor can now borrow an amount equivalent to its paid-up capital. In other words, he wants to reduce Iscor’s capacity to borrow in terms of the existing section.

*Surely, Sir, this is totally impractical. Besides being impractical, it is also a retrogressive step as far as Iscor’s borrowing power are concerned. But with respect, Sir, I think that the hon. member is still arguing incorrectly. We introduced this legislation with the specific aim firstly, of enlarging the share capital so as to improve Iscor’s asset/liability ratio. That is the whole basis of the legislation we are now considering. In the second place, our aim in regard to the clause now under discussion is, to increase Iscor’s borrowing power by doing away with the condition linked to the issue of shares, and then to limit it by saying that it can no longer borrow an amount equal to its paid-up share capital, but only up to an amount equivalent to three-quarters of it. Lastly, the creditworthiness of any borrower of bridging or other facilities at a bank is determined, firstly, by his balance sheet, and secondly, of course, by his asset/liability ratio. Where the hon. member’s precautionary measure ought to apply is where the State itself is involved in such a loan or where the State acts as guarantor. That specific proviso is contained in section 11(2). In other words, if I want to guarantee a loan, I must obtain the approval of the Minister of Finance, because in that case we are binding the State. Under these circumstances, Sir, I repeat that I am unable to accept the hon. member’s amendment.

Mr. Chairman, the hon. the Minister says that in terms of section 11 Iscor has wider powers. I would dispute that, because previously the board’s power to borrow in terms of this section were in anticipation of the issue of any shares or debentures authorized to be issued under the Act. It could borrow from any other person or bank moneys not exceeding the amount of such debentures and shares, and may further from time to time borrow with the approval of the State President. Sir, that is a fairly close restriction, to allow it to borrow in advance of raising any money by debentures and in advance of capital being injected through the budget or to borrow with the approval of the State President. Each one of these three things now falls away and the only restriction imposed is that it must not exceed three-fourths of the paid-up capital, which is the subject of the Minister’s amendment, as opposed to the issued share capital, which in a numerical sense could be described as being larger and giving greater freedom. Against this background clearly a wider power is being given to the board even though it can only be three-quarters of the amount.

Quite frankly I do not understand the rationale behind the hon. the Minister’s amendment, because in the case of Iscor I cannot, to be quite truthful, see the difference between what is the paid-up and the issued capital, particularly when you look at the terms under which the capital shares may be issued. So we have no difficulty in accepting the hon. the Minister’s amendment, although I must say I was slightly curious to know why he put it in the sense of the difference between the paid-up share capital and the issued share capital.

But in so far as the prior argument is concerned, there is no doubt in our minds that the amendment of section 11(1) is giving much wider powers to the board of Iscor, and therefore our amendment must stand, because we would have thought that to give the board of Iscor the right to raise R244 million for the purposes which have been outlined, is more than sufficient, particularly when you look at it against the background of the normal rules of prudence in regard to public corporations, which demand their total borrowings should not exceed their paid-up capital plus reserves. In Iscor’s case this is nearly R663 million. It is a lot of money. It is the public’s money. However, against that Iscor has already borrowed R1 285 million and, therefore, we hold fast to not giving this power to the board of Iscor.

Mr. Chairman, I want to react very briefly to what the hon. member said. The point is specifically that we are amending the Act in order to improve Iscor’s asset/liability ratio. This means that fundamentally, we do not really have anything to argue about. That is why we all agreed that we should increase Iscor’s share capital. As regards its second source of capital, viz. loans, there are various ways in which Iscor can borrow money. This is covered by section 10 and by section 10bis. In these sections, Iscor’s borrowing power is defined. In terms of section 11 it is granted temporary borrowing power above and beyond the provisions of section 10. In terms of the existing section 11, there are two limiting factors with regard to its temporary borrowing power. The one is that a loan may not exceed the shares or debentures and it must take place in anticipation of such increase in shares or debentures. In other words, it must have already been approved. That is the first limitation.

There is a second measure relating to borrowing power, too. It is that the Board, with the State President’s approval, may borrow an additional amount. What this amounts to is that, taking the restriction into account, a total amount of not more than its authorized or issued share capital may be borrowed under that provision.

What are we doing now? As far as the first restriction is concerned, we are no longer linking the borrowing power in this section to an issue of shares or of debentures; that falls away. Secondly, we say that the utilization of the other power, viz. that relating to loans, is now limited to three quarters of its paid-up share capital. The section of the limitations which is being deleted is that relating to the State President. That is what is stated here.

Section 11(1) concerns money which may be regarded as temporary finance and is borrowed as such. The State is not bound by these loans. The State is only bound when it guarantees. If and when the State is asked to give a guarantee, then the permission of the Minister of Finance must be obtained.

In conclusion, I want to say that there is not one of us here who does not believe that for many reasons, and particularly with a view to sound business practice, Iscor’s asset/Iiability ratio is wrong and that we should do everything in our power to improve it. We have taken the first step by increasing its authorized capital. I have also said, in all fairness, that the Pistorius committee of investigation is engaged in examining inter alia the other source of capital formation within Iscor itself, and the price policy followed in regard to steel, in order to determine whether there should not be changes allowing Iscor to form capital within its own set-up. This could then be an addition to the share capital which would result in an improvement in its asset/liability ratio.

Mr. Chairman, we are still not satisfied on this point. The hon. the Minister makes out that this is purely a procedural measure. However, I think the hon. the Minister is getting close to the point of accepting that section 11, in the main, was utilized to allow temporary finance to be obtained until permanent finance, in terms of section 10, could be raised.

I said that.

That is exactly what the hon. the Minister said. However, in terms of section 11 permanent loan finance will now be able to be raised. There is no reason why it should not be. We are now talking about a public corporation taking on debts in the region of R700 million. This would be possible under this provision, where it was never possible before. Previously loans could be raised in anticipation of the issue of shares. Now we are going to have the situation where an enormous debt can be built up. The hon. the Minister has said that this is not healthy from a business point of view, and we agree with the hon. the Minister. We welcome the fact that he has said that something should be done about this. However, until something is done about it, the permanent debt—this is what it could be—could increase tremendously as against the equity. Unless something is done about it, the situation will deteriorate from what is now accepted as unhealthy, to an even unhealthier situation. We believe that the hon. member for Johannesburg North’s amendment is reasonable, and if the hon. the Minister wants Iscor to have this power to borrow up to three-quarters of its share capital we will go along with it provided it is done with the consent of the hon. the Minister so that, if things do go wrong, as they very well could, then the hon. the Minister, when he comes to the House, will have to explain why he gave his consent.

Amendment moved by Mr. G. H. Waddell negatived.

Amendment moved by the Minister of Economic Affairs agreed to.

Clause, as amended, agreed to.

House Resumed:

Bill reported with an amendment.

Mr. Speaker, I move—

In terms of the provisions of the present Electricity Act, 1958 (Act 40 of 1958), the Electricity Supply Commission (Escom) is authorized to supply electricity in bulk at any point on the borders of the Republic, but not beyond the borders of the Republic.

However, Escom is already supplying electricity within the territories of certain homelands, such as the Transkei. The proposed political emancipation of the homelands and especially the attainment of independence by the Transkei later this year will mean that provision will have to be made for Escom to be able to supply electricity to a territory outside the borders of the Republic. Since it will probably be quite some time before independent homeland governments are in a position to undertake an electricity supply function within their homelands themselves, the Government has deemed fit to amend the Act as proposed in clause 1 in order to enable Escom to generate and distribute electricity within such area at the request of such homeland government or with the prior approval of the Minister of Economic Affairs and on the conditions which the Minister may determine.

For the information of hon. members I may mention that such a request has already been made to the Central Government by the Government of the Transkei, which is to receive full independence later this year, and that Escom at present owns assets amounting to more than R20 million in transmission lines and other equipment in the Transkei.

†Escom has recorded its preparedness to render such services on request in territories outside the Republic provided that an indemnity against any losses it may incur consequent on any act or omission of the Government of such a territory is provided to Escom by the Government of the Republic.

Clause 1(4) provides for the issuing of such indemnities by the Minister of Economic Affairs with the concurrence of the Minister of Finance. In principle these indemnities can be compared with the existing statutory provision for the issuing of indemnities by the Government of the Republic in favour of industrialists who undertake the establishment of industries within the homelands.

In terms of the provisions of the present Act, no undertaker may generate or distribute electricity without a licence by the Electricity Control Board. As a newly established Government such as the Transkei may not immediately be in a position to appoint an Electricity Control Board, clause 2 provides that the Electricity Control Board of the Republic may, at the request of the Government of such territory, assist the Government concerned to exercise control over the generation and the provision of electricity by an undertaker including Escom within its territory.

Clause 3 contains the short title.

Mr. Speaker, in this particular regard, I wish to refer to the proposed amendment to clause 1 of the Bill, as printed in the name of the hon. member for Wonderboom. This proposed amendment improves the present wording of the proposed subsection 4A(1)(b) of the Act and I am prepared to accept it.

Mr. Speaker, I should like to say immediately that we on this side of the House will support the Second Reading of this Bill. If we have any reservations at all about this Bill, they would perhaps relate to the fact that this Bill is not yet able to go as far as we might wish in respect of the distribution of electricity not only in the territories of South Africa and its immediate homeland neighbours, but far wider afield. We have spoken in this House before of a concept of interdependence throughout the Southern African sub-continent and we believe that there is a potential in the whole of this sub-continent for the development of energy which will work for the benefit of all members of a greater community of nations and for the future stability of the countries of the subcontinent. This is the direction in which we would like to see things move. The Bill which is before us does not deal with all these matters, but maybe the time will come, before too many years, when we shall be able to draw up legislation in order to facilitate the development of these great schemes. For the time being, however, we believe that the Bill is adequate for its immediate purpose. We believe that the amendment, as proposed by the hon. member for Wonderboom, expands that function and we also have no objection to the acceptance of that amendment. I merely rise at this stage to say that we shall give passage to the Second Reading of this Bill.

Mr. Speaker, like the hon. member for Von Brandis, we in these benches have no objection to this Bill and shall support its Second Reading, primarily because we are in favour of the principle involved, which is a broadening of Escom’s activities. We are a trifle disappointed in one sense, namely that it is only concerned with the homelands, which are now defined as not being part of South Africa, because we would certainly be in favour of the principle of increasing trade further afield than that, in the case of Escom and other South African corporations. We have an amendment to this Bill, simply because it is a matter of public interest when negotiations take place or an agreement is reached with the Transkei or indeed with countries further afield. The only other matter we would ask the hon. the Minister to make reference to when he replies, is in the new section 4A(4) where it says—

I would have thought that if, for instance, Escom enters into such an agreement, either with the Government of the Transkei or with the Government of another country without the borders of South Africa as now understood, the Minister should be prepared to give that indemnity on a much broader basis, simply on the grounds that it is not only the Government or the administration of any territory which may cause losses to Escom. I wonder if the hon. the Minister could, when he replies, explain why the grant of such an indemnity should be restricted to a Government or to an administration. Escom could in the future, in terms of this Bill, supply power to Mozambique, or to Angola or to various other countries, and there are certain circumstances where I think Escom would want an indemnity on a much broader scale than simply in respect of the Government or administration of that specific territory. As I have said, we will support this Bill at Second Reading.

Mr. Speaker, I have simply risen to convey my thanks to hon. members on the Opposition side who support this legislation. When one is an engineer, one cannot help realizing, when one sees a power line, that it is loaded with energy and that where the power is going, there will be development and progress leading to prosperity. Where all these factors are available, peace and quiet are also assured. Looking at such a power line, one perceives that it is synonymous with the National Party, particularly if one looks at the prospects for the Transkei. There the National Party has furnished proof that over the 28 years of its régime it has created prosperity, development and peace through its legislation and policy. But in such a power line there is always an undesirable and a useless element, namely a leak …

What has that got to do with the Bill?

Mr. Speaker, I am only drawing a comparison between the power of the Government and the power in a power line, since this Bill will bring prosperity to the homelands.

Order! The hon. member could speak for an hour on that subject. He must confine himself to the Bill.

The leak in a power line reminds one of the Opposition parties, which are just as useless and undesirable.

Mr. Speaker, did I understand you to rule that he could talk for an hour on the strength of the Government?

I pointed out that if the hon. member took that theme as a text, he could continue indefinitely, but that it is not relevant to the Bill. I therefore requested him to come back to the Bill.

Since the concept of the supply of electricity, which arises from clause 1 of the Bill, was omitted by mistake from clause 2 of the Bill on page 5, I shall move in the Committee Stage that the Bill be amended in order to eliminate this deficiency. For the rest it is a splendid Bill and I should like to give it my wholehearted support.

Mr. Speaker, I subscribe to what was said by the hon. member for Wonderboom, and I too should like to express my appreciation to the hon. Opposition for their support of the Bill. In clause 1, of course, the contentious words “South West Africa” occur, and I am surprised at the fact that no one has found anything strange about them, especially since South West Africa is becoming conspicuous in the international forum today. I hope that when other aspects of South West Africa’s affairs are dealt with, the hon. Opposition will give similar support to them.

Over the years there has been a tremendous population increase in South West Africa, especially since contact was made with the White Western civilization. This applies to White as well as non-White, of course. Over the years the subsistence economy has become insufficient and a need has arisen for another form of economy. For that reason the Government decided at the time, in consequence of the recommendations of the Odendaal Commission, to take certain steps. At that time, mention had already been made of linking up the territory’s electrical network with that of the Republic. A recommendation was also made in regard to the development of the Ruacana scheme.

I hope, Mr. Speaker, that you will not rule me out of order if I refer to a recent statement regarding the generation of electricity in South West Africa, in which the allegation was made that the generation of electricity at Ruacana would affect the development pattern of South West Africa. The statement was made that since the electricity was being generated in Angola, the mines of South West Africa would suffer if the scheme were not completed. But the mines of South West Africa are not dependent on the hydro-electric power of the Ruacana scheme, but on electricity supplied by thermal power stations in Windhoek. There is the Van Eck power station where 90 megawatt is generated for domestic consumption in South West Africa. To this must be added the power which is generated by municipal power stations, such as those in Windhoek and Walvis Bay. In addition, there are reserve power stations which are not generating any power at the moment because power for the whole network is at present provided by the 90 megawatt power station at Windhoek. There is not a very great need for power from Ruacana for the mining industry at the moment. The development of the Ruacana scheme arises from the needs of the non-White areas in South West Africa, especially Owambo. The supply of electricity to South West Africa is a bread and butter matter. The idea of linking up South West Africa with the power network of South Africa holds great possibilities.

Where does it say that in the Bill?

Mr. Speaker, the hon. member for Mooi River never read the legislation and consequently he does not know what it is all about. Therefore he had better keep quiet. I foresee that we shall receive a stimulant here for further development in South West Africa, for further research in an economic direction which will offer our people in South West Africa more space in which to live and greater possibilities in life.

Mr. Speaker, I rise to thank hon. members for their support of this Bill. The hon. member for Von Brandis has indicated that he thought we could go much further in future. Once this Bill has become law, it will be possible for Escom to provide and distribute power in just about every country and every territory outside the Republic of South Africa. I support the hon. member’s line of thinking, because there are many common goals that South Africa and the other countries in southern Africa can attain and can achieve together. I think it is quite obvious and obligatory that we should accentuate those things that we have in common with countries and not always accentuate those things which we disagree on amongst ourselves.

*Let me emphasize that I do not have the slightest doubt that the Bill we are presently considering, in terms of the principles contained in it, very clearly sets us on the road of co-operation with other countries and other states in Southern Africa, in other fields than those obtaining today. It may be a good thing that the Transkei can be the motivating factor for enabling South Africa to provide electricity beyond the borders of our own country. I thank the hon. members for their support in this connection.

The hon. member for Johannesburg North asked me why the indemnity contained in subsection 4 of the clause was restricted to actions by the Governments or administrations concerned. In this particular regard I have to point out that this is the kind of risk against which Escom cannot insure itself. Allow me to give you a theoretical example. If Escom were to supply electricity to a particular country in terms of the powers conferred upon it by this legislation and the government of that country were to decide to nationalize Escom’s assets there, this would not be a risk which Escom should take upon itself as an entrepreneur. For this reason we grant it the indemnity which is similar in content and in wording to the indemnity granted to other industries as well. I indicated this in my Second Reading speech.

The other ordinary business and operating risks Escom has to take upon itself, and I want to add at once that Escom is in fact prepared to do so.

†I hope that in the light of this explanation the hon. member will accept the clause as it stands.

*I want to express my sincere thanks to the hon. member for Wonderboom for the contribution he made as well as for his amendment. I have already indicated that I shall accept it. The amendment improves the wording and the scope of the objects of the legislation. I thank the hon. member for this. To the hon. member for Etosha I want to say that I know that he is making an important contribution to the provision of electric power in South West Africa. I do not want to react in detail at this stage to the standpoint he adopted here. However, I just want to say that the responsibility for the provision of electricity in South West Africa is chiefly vested in the body which was created for this purpose, namely Swawec. The Industrial Development Corporation is the shareholder of Swawec and the work is done by Escom, which acts as an agent. I may just add that we have no intention of discontinuing our activities at the Ruacana scheme.

Mr. Speaker, with your permission I should like to say something more, something which I consider to be very important. Hon. members will know that Escom has had to undertake tremendous expansions in recent years. These expansions have involved extremely high capital and other costs. The said expansions were necessitated by the constantly increasing power consumption in the Republic. Because of various factors, such as the delayed supply of power from Cabora Bassa, and technical problems—I should like to emphasize this—which have been experienced with the highly sophisticated equipment there, and also because of a growth rate which is much higher than was originally predicted, the ability of Escom to meet the great demand during the coming winter will be tried to the utmost. If, because of the technical reasons I have referred to, the supply of power from Cabora Bassa should not be available during the forthcoming winter, and if we should have a cold winter, I want to warn even now that the electricity supply will have to be curtailed. In this connection I want to protest against the electricity which is wasted in our country every day. I want to allege in all seriousness that if there is one field in which each of us can make a contribution—to the combating of inflation as well—it is in the field of power conservation. Even if every individual contribution in this connection were to be modest, I believe that our collective contribution would assume proportions which we ourselves could not have believed possible.

Every member of every family.

Every member of every family, including the children. In order to prevent the curtailment of electricity, Escom and municipalities will have to make greater use of older and less economic power stations. This will inevitably involve higher costs. This is another reason for my appeal to be judicious and economical as far as power consumption is concerned.

It is quite clear to me that we waste electric power more than anything else. If we do not eliminate the wastage, Escom may be obliged to take radical steps, something which should rather be avoided. While making this appeal to individual consumers, I want to make the same appeal to municipalities, which are also large electricity consumers, to do everything in their power to avoid wasting electricity.

Last but not least, I should like to say something about the proposed amendment of the hon. member for Johannesburg North. The effect of his amendment is briefly that when Escom enters into an agreement with another country or another administration for the supply of electricity to the particular country or administration, the agreement between Escom and that particular country or administration is to be tabled in Parliament. I want to request the hon. member at once to give very serious consideration to withholding his amendment. I want to suggest to him that it may be in the national interest for agreements of this nature, as well as other agreements, not to be tabled. The hon. member for Johannesburg North and I were members of this House when provisions of which the wording was the same as that of the amendment which the hon. member is now moving were removed from other legislation because of the same considerations. For the same reasons I request him not to expect me to conduct any detailed argument on this matter. I want to draw his attention to the Customs and Excise Act, Act No. 91 of 1964. The hon. member need not write it down. I am only referring to it to illustrate my point. Section 52 of the Act—this section was repealed in 1974—provided for lateral and other trade agreements between South Africa and other countries to be tabled in Parliament. When this provision was repealed, I motivated this step in full to this hon. House. The reasons for the deletion of section 52 apply similarly to the non-insertion of the hon. member’s amendment into this legislation. I do not want to go into any greater detail, but I just want to request the hon. member not to move his amendment.

Finally, there is the amendment I want to move myself. It almost slipped my mind. This amendment is solely concerned with metrication. I intend moving that a new clause be inserted to follow clause 2, a clause which will read as follows—

whatever that may mean.

Question agreed to.

Bill read a Second Time.

Committee Stage

Clause 1:

Mr. Chairman, I move the amendment printed in my name on the Order Paper, as follows—

The amendment is merely consequential. When one looks at the proposed section 4A(1)(c), one sees that the concept of “distribution” is included, while in 4A(1)(b), reference is made only to “generate” and “supply”, and not to “distribute”.

I accept the amendment.

Mr. Chairman, I will not take long. I am sorry to say that I cannot accept the hon. the Minister’s appeal and I see no likelihood of his accepting the amendment of which I have given notice. In the circumstances of this Bill and what has been mentioned, I find it extremely difficult to see why the hon. the Minister should not come to Parliament within 14 days and table a report on the negotiations. We are dealing here with the generation of an electricity supply. There is nothing very sinister about that. It is difficult to see how it can be of such importance, even with the present position in South Africa, where, when an agreement is entered into by a public corporation, using public money, the proceedings cannot be tabled in Parliament. I leave this for the hon. the Minister’s consideration and now move the amendment printed in my name on the Order Paper, as follows—

Amendment moved by Mr. D. W. Steyn agreed to.

Amendment moved by Mr. G. H. Waddell negatived.

Clause, as amended, agreed to.

Clause 2:

Mr. Chairman, here, too, the concept of distribution has been omitted in connection with control. Provision is made only for control over generation and supply and not for distribution. Consequently, distribution simply has to be added. The English text does refer to the supply of electricity. Therefore I move as an amendment—

I accept the amendment.

Amendment agreed to.

Clause, as amended, agreed to.

New clause to follow clause 2:

Mr. Chairman, I refer to the amendment I mentioned in the Second Reading debate in connection with a new clause 3. I move—

New clause agreed to.

House Resumed:

Bill reported with amendments.

Bill read a Third Time.

Mr. Speaker, I move—

The Department of Industries at present have 52 posts for sea fisheries inspectors. The incumbents of the posts are responsible for carrying out of inspection services along the full length of the coast-line of the Republic and South West Africa, with a view to the application of the provisions and regulations of the Sea Fisheries Act, 1973 (Act 58 of 1973), which makes provision for the protection of and control over the exploitation of the marine resources of the Republic and South West Africa.

Hon. members will agree with me that this is a task of considerable magnitude to carry out with a limited number of inspectors, and my department has consequently investigated the possibilities of expanding the inspection services in question without employing additional staff.

It has been found that the nature conservation officers in the employ of the Administration of South West Africa, and possibly, too, those of the provinces of Natal and the Cape, will in the normal course of their duties be able to act to good effect as fisheries inspectors as well in terms of the Sea Fisheries Act, 1973. In this way the present number of inspectors could therefore be augmented to a considerable extent. An agreement has already been reached with the Administration of South West Africa in this regard, and similarly, consultations with the other provinces concerned will take place as and when necessary.

Were they not “nature conservationists”?

In the ordinance they are described as “officers”

†The amendment in clause 2 of the Bill, as well as the consequential amendment in clause 1, will therefore enable the Minister of Economic Affairs to authorize the nature conservation officials I have referred to, to act as sea fisheries inspectors in terms of the Sea Fisheries Act, 1973, and in so doing to strengthen the existing inspection service.

Furthermore, clause 2 will also enable the Secretary for Industries to delegate his powers with regard to the issuing of certificates of appointment, carried by sea fisheries inspectors for identification purposes, to officials designated by the Secretary.

In conclusion, I wish to refer to the amendment to clause 1 of the Bill, as printed in my name on page 103 of the Order Paper. It was brought to the attention of my department that nature conservation and tourism officials in South West Africa are appointed in terms of the Administration Employers Ordinance, 1957, of South West Africa. As this ordinance deals with personnel matters and does not “relate to nature conservation”, as stipulated by the present wording of the definition in clause 1 of the Bill, an amendment thereof is necessary to make possible the appointment also of these officers as sea fisheries inspectors, as originally intended.

Mr. Speaker, the hon. the Minister of Economic Affairs has explained very fully to the House what the underlying intentions of this Bill are. We on this side of the House supported the original Act in 1973. We believe that, with our tremendous coastline and our rich natural maritime resources, it is essential that we should at all times be conscious of the need to protect these resources from exploitation by persons who do not have the best interests of South Africa at heart. Therefore we have pleasure in supporting this Bill.

Mr. Speaker, there is an Arabian proverb which, I believe, may well be applied in dealing with the Bill now before the House. According to this proverb a fool may be known by three things. These are: Speech profit, change without progress, and putting trust in a stranger.

I believe that as far as sea fishing is concerned, there are certain strangers whom we cannot, and do not, trust. It is therefore necessary to provide for even more effective supervision of the sea around our coast and the exploitation thereof. Secondly, the proposed change, or amplification, of the present legislation is patently an improvement and therefore constitutes progress. Finally, as there does not seem to be any opposition to this measure, there is clearly no profit in further speech about it.

Sir, I gladly support this Bill.

Mr. Speaker, despite the comments of the hon. member for Mossel Bay, who feels that there may be no profit in any further talk about the matter, I intend stating the attitude of us in these benches. We welcome this Bill in that it is introducing into the Fisheries Act of 1973 the concept that a nature conservation officer is a person who should also interest himself in the conservation, regulation and control of our diminishing resources of fish, crayfish, mussel, oysters and other wealth of the sea. Any Bill that provides for an increase in the number of people who can put a stop to the numerous malpractices that occur around our shores, will have the support of the members on these benches.

Perhaps this Bill does not go far enough. Firstly, it appears that the hon. the Minister is introducing in this Bill the concept of a nature conservation officer without defining his powers. I can see nothing in the Bill that defines the powers of the nature conservation officer. The powers of other officers, such as the honorary fisheries officer, are defined, but those of the nature conservation officer are not defined. Surely there should be a consequential amendment to section 6 of the Act defining the powers also of such an officer. They should at least be given the powers of an honorary fisheries officer as defined in section 6(4). Possibly, they should be given even greater powers than that. This appears to have been an oversight on the part of the hon. the Minister. Perhaps he can explain in his reply exactly what the defined powers of the nature conservation officer are.

At this stage this Bill is especially welcome, because I do not believe we have enough officers at the present time to enforce regulations and restrictions designed to conserve our marine resources. There are not nearly enough officers to do a good job and as a result in certain areas along our coast there is very little control. I should like to ask the hon. the Minister just how many officers of the Department of Sea Fisheries operate in the False Bay area, for instance. Secondly, I would ask him how many officers are operating on the other side of Cape Point, i.e. on the Atlantic side. I ask these questions because I believe that the priorities as to the most important aspects of control are sometimes misdirected. There are officers who with a great deal of enthusiasm will report and act on crayfish poaching when some miserable offender has been caught with a few illegal crayfish. This is very necessary control, and must continue. It has done wonders for building up the crayfish population. However, I believe that many far greater evils exist, evils over which there is very little control indeed. We need more officers, because I believe that more must be done in certain areas. On the Simonstown side of False Bay I believe control is inadequate.

In what respect?

Just listen to what I am going to say. Perhaps the hon. the Minister can tell me how many trek licences have been issued for the area between Muizenberg and Macassar? From my own observations I would say that there are a great number. My information is that many of these netting operations are carried out with nets that are illegal. In fact, while walking along the beach the other day, I myself saw an illegal net being used. How many officers are in fact employed by the department in this area?

Another area which should receive attention by the department’s officers is the Agulhas area, off Struisbaai. I believe there is only one office, stationed at Arnison, controlling this area. I should think that if a proper job is to be done in this area, something like ten officers are required. I have information that a certain commercial fisherman was given permits to net tunny on an experimental basis in an area to the west of the Agulhas lighthouse. In all the time he has had this permit, this fisherman has hardly landed a single tunny. I am told that he has used his tunny permit as an excuse to net vast numbers of yellowtail illegally within the demarcated area of the Agulhas Bank, off Struisbaai. So far he has not been caught. If the hon. the Minister is interested in pursuing this matter, I am quite prepared to give him the name of the man concerned. I think that the whole question of the issuing of an experimental tunny permit should be reviewed from time to time and that this gentleman should be asked how many tunny he has caught since he has been given that permit.

Order! The hon. member must not go too far into the administration of the Act.

Mr. Speaker, I accept your ruling. The point I am making is that abuse of this nature cannot be allowed to continue and that one lone officer, stationed at Arniston, is not enough to do a proper job.

Many of the offenders, and especially commercial fishing boats, are not adequately controlled because there are not enough officers to do the work. Many of the commercial fishing boats have sophisticated radar equipment so that, when control vessels come into the area, they are detected straightaway and the boats have time to stop their illegal fishing. The point is, again, that there are not enough officers at the moment. I would go so far as to say that many of the problems that confront the people in the Arniston community are the result of illegal operations by boats netting in that area. There are just not enough officers to control it. I do not have to tell the hon. the Minister that these boats can bring in 40 tons of fish at a time and are; I believe, in fact doing so. It is sensible conservation policy to employ more law-enforcement officers in this area.

I should like to take this opportunity to suggest to the hon. the Minister that it would be a positive move on his part if he would appoint to the Fisheries Advisory Board independent conservation representatives to advise the council on matters of this nature. This would counter-balance vested interest, commercial fishing interests.

This is done in the United States of America. As a matter of fact, in that country the Fisheries Advisory Council also includes a representative of sport fishing, because they realize just what big business sport fishing is. I am certain that the hon. the Minister realizes just how important this aspect is to tourism. Fishing is an important attraction to tourists, but if there are no fish, there will also be no fishing tourists. Once again, more officers are needed to ensure that the tourist have something to catch.

That has nothing to do with the Bill.

This has a great deal to do with the Bill. [Interjections.] The hon. member for Mooi River …

Order! The hon. member must continue.

All in all, Sir, we welcome this amending Bill, and I hope that the hon. the Minister will see his way clear to tell us something more about these matters I have mentioned, specifically this question of the powers of the conservation officers.

Mr. Speaker, I am rising simply to express my thanks for the support for this legislation, even if the method of support is frequently incomprehensible. I just want to repeat that precisely because we have too few inspectors—you will recall that I indicated that we had 52—it is not physically possible for them to carry out a proper inspection service in all respects and exercise control properly, and that for this reason we want to make use of all the officers of the provinces whose work more or less corresponds to that of these inspectors in order to augment the inspection services. The hon. member for Mossel Bay referred very appropriately to an old saying in the Arab countries. I think that he as a lawyer, as I am, would best be able to appreciate the first part of that saying in particular, which is that one does not speak without payment. I appreciate the support.

I just want to reply to the hon. member for Orange Grove. Apart from designating specific inspectors to specific areas, we also designate additional inspectors when necessary and therefore I am not able to tell him how many inspectors have from time to time been allocated to the False Bay area or to the Atlantic portion around Cape Point. The inspectors are used where their services are required the most in terms of priority, and therefore they naturally move around. But I just want to indicate in this regard that a patrol boat is stationed at Gordons Bay. There is therefore an element of mobility with regard to the work of the inspectors. The second point to which I think I must reply is the hon. member’s problem in regard to the fact that nature conservation officers are not defined. He asked what the powers of such officers would be. Now I want to say at once that nature conservation officers are appointed in terms of the ordinances of the provinces, except in South West Africa, where this is done under another ordinance. There is, therefore, a definition of what a “nature conservation officer’’ is in the ordinances of the provinces. In other words, we know whom we are appointing, to begin with, but as soon as we have appointed him, he is appointed in terms of our own Act and he becomes an officer in terms of the Sea Fisheries Act, and his powers are the same as those of the officers of Sea Fisheries, in terms of section 6 of that Act. Therefore, just to reassure the hon. member: As and when the officials are appointed, they are appointed in terms of this Sea Fisheries Act of 1973.

May I ask the Minister whether section 6 of the Act in fact defines the powers of a conservation officer? There are many definitions there. I had a very close look at it, but I could not see the specific definition.

The position is as follows. The Bill before us has an enabling clause, amending the Sea Fisheries Act. The purpose of this enabling clause is to appoint officers of other bodies, such as the provinces or of the South West Africa Administration, as officers in terms of our Act. I am now amending clause 1, because in South West Africa they do not have a definition of a “nature conservation officer”. Hence the amendment standing in my name on the Order Paper. In the other provinces, however, the various ordinances define “nature conservation officers”.

There may be different definitions.

That does not make any difference. We want to identify the people whom we are going to appoint and we want the legal power to be able to appoint them. After they have been appointed, they will have the same powers as the inspectors.

The honorary inspectors or the others?

The others, but it will be possible, in terms of the Act, to qualify their powers.

Will it be possible to have different grades?

Yes. It will depend on the appointment of a particular officer. The power such an officer will have will be determined in terms of the Sea Fisheries Act. I hope that is clear to the hon. member.

Question agreed to.

Bill read a Second time.

Committee Stage

Clause 1:

Mr. Chairman, I move the amendment printed in my name on the Order Paper, as follows—

Amendment agreed to.

Clause, as amended, agreed to.

House Resumed:

Bill reported with an amendment.

Bill read a Third Time.

Mr. Speaker, I move—

One of the methods relied on in the South African national economy to ensure a fair distribution of wealth and prosperity is sound competition in trade and industry. The main instrument available to the Government with which to maintain and promote such competition is the Regulation of Monopolistic Conditions Act (Act No. 24 of 1955).

Last year I requested certain bodies, inter alia the Administration of South West Africa, to take steps relating to certain restrictive trade practices. However, the Regulation of Monopolistic Conditions Act of 1955 was not applicable to the territory of South West Africa and in view of my request, the Executive Committee of South West Africa asked that this Act be suitably amended to allow me to exercise the powers granted to me in terms of the Bill in South West Africa as well.

Consequently, the Bill at present before the House only provides for the application of this Act in the territory of South West Africa in accordance with the request by the Executive Committee of the territory, so that they in their turn may comply with my request and take due action against restrictive trade practices.

Mr. Speaker, we on this side of the House have on record our attitude towards the Regulation of Monopolistic Conditions Act. At times such as we are experiencing at the moment, when the consumer is showing deep concern about certain practices which are becoming apparent and which are detrimental to the consumers’ general welfare, we believe that the hon. the Minister has motivated his desire to assist South West Africa by extending the application of this Act to that territory. We are particularly impressed by the fact that the Executive Committee of South West Africa has in fact expressed its desire that this should be so. For this reason we support the Bill.

Mr. Speaker, we support the Second Reading of the Bill.

Mr. Speaker, I would just like to thank hon. members for their support and say, at this stage, that I knew I had to succeed at some time or other.

Question agreed to.

Bill read a Second Time.

Committee Stage taken without debate.

Bill read a Third Time.

Mr. Speaker, I move—

Last year the Sale of Land on Installments Act, No. 72 of 1971, was amended. During the debates in connection with the Bill before the House on that occasion, certain hon. members suggested that the Act should be further amended. At the time I promised that I would look at suggestions hon. members had made in this connection during the recess. However, it was not possible to find an acceptable solution in respect of all the suggestions concerned. In this connection I want to say that I intend repeatedly examining suggestions to which I was unable to find a solution for the purposes of the legislation under consideration at the moment. In future I shall not have the slightest hesitation in coming to the House with amendments of this legislation when it is deemed feasible for us to do so. Under the circumstances I deemed it advisable this year to move only a number of amendments which appear to be necessary as a result of the suggestions mentioned.

†However, I must once again assure hon. members that, although it has not been possible to introduce legislation this year which caters for all the suggestions for amendments to the Act received last year, I shall always be prepared to consider suggestions for amendments to an Act of such a technical nature as the one which is now under consideration if these amendments are reasonable and should, to my mind, be accepted.

I now propose to deal shortly with the principles embodied in the Bill before the House. In clause 1 of the Bill an amendment to section 11(9) of the Act is proposed. Under the existing provisions of the said section any purchaser who, in order to obtain transfer of land, pays transfer duty and costs which are payable by an intermediary or any predecessor of an intermediary, may sign on behalf of such intermediary or such predecessor all the documents required in connection with the payment of transfer duty or in connection with the actual transfer of the land. It would appear that the section, as it is presently phrased, opens the way to fraudulent actions.

*Accordingly, I considered it advisable and desirable to move that the provision concerned should be deleted. I want to emphasize that the present provision could lead to much abuse. The purchaser who is not able to take transfer because certain necessary documents required for the transfer of land are not signed, will, however, find himself in a difficult position. Therefore, in clause 3 of the amendment Bill, it is now proposed that section 17 of the Act be amended to make provision for a procedure according to which such a purchaser, in the event of his being unable to obtain the documents concerned because someone has not signed them, can obtain a court order in terms of which a deputy sheriff of the Supreme Court or a messenger of the Court is empowered to sign on behalf of an intermediary or any predecessor of the intermediary. A magistrate within whose area of jurisdiction the land in question is situated, will also be empowered to grant such an order. Furthermore it is suggested in clause 2 of the Bill that a proviso should be added to section 13(1) of the Act. At present, section 13(1) of the Act requires the seller to give the buyer of the land on installments 30 days’ notice, if the buyer should fail to pay his installments, before the seller can take legal action. It is alleged that buyers, because of this provision, regularly fail to pay their installments when they are due. The proposed proviso will now state clearly that a seller only has to give notice as prescribed in section 13(1) twice in one calendar year to a seller who fails to pay the installments when they are due. This means that when notice has been given twice and a buyer then still fails to meet his obligations, the notice required in terms of section 13(1) is no longer necessary. Should the buyer, after twice receiving notice still fail to pay his installments when due, the seller may in the calendar year in question, demand that the purchaser meet his obligation within seven days.

Mr. Speaker, I rise immediately to say that we are going to support the hon. the Minister in the Second Reading of the Bill. I think he will agree that when the original Act became law, the discussions that took place leading up to the passing of the Act indicated that there was a deep desire on all sides of the House that we should bring about accord in this somewhat difficult subject dealing with the sale of land on installments. It also became apparent that South Africans have their roots deep in the soil of South Africa and that every South African has a dream that, at some time or the other in his life, he will have the security which is represented by being a landowner, a shareholder in the land of South Africa. The Bill itself was a difficult one, and gave our legal fraternity considerable headaches. We appreciate the attitude of the hon. the Minister in having given an undertaking to the House that he would see what difficulties arose from the application of the Act and that he would come to this House with certain amendments, which were suggested by all parties in the House, including the Government itself. Therefore I have pleasure in supporting the Bill. Our legal experts will deal with the matter in greater detail in the Committee Stage.

Mr. Speaker, I should like to express my appreciation for the standpoint adopted by the hon. member for Cape Town Gardens. This amendment Bill before the House contains two important amendments which are exceptional improvements. The present position in an intermediary transaction is that the last purchaser is entitled to sign the documents needed to obtain transfer, himself, on behalf of an absent or vanished seller. In this way registration of transfer will be greatly facilitated and expedited. However, an abuse could develop, in that a final purchaser could allege that the intermediary was away, while he, the final purchaser, could possibly still owe money to the so-called vanished intermediary party. Actually, this person is then refusing, on these grounds, to sign documents for the purpose of transfer duty and the passing of transfer.

The concession as regards signing on behalf of an intermediary, is now being withdrawn by clause 1 of this Bill, and in terms of clause 3 it is required of the final purchaser to apply to the magistrate’s court in whose area of jurisdiction the land is situated, so as to appoint the deputy sheriff or the messenger of the court to sign the documents, subject to conditions in the court’s discretion. This amendment results in a definite improvement, and particularly control. Such an application certainly will not cost a final purchaser much, especially if one considers, on the other hand, that a property only has real value for a person if it is registered in his name.

The second amendment contained in this amendment Bill, results—I believe—from last year’s debate when this legislation was amended. At the moment a seller has to give 30 days’ written notice to a purchaser who fails to bring his obligations up to date, without limiting the number of times in a specific year that the buyer might fail to meet his obligations. In terms of the amendment the seller is now entitled, when the purchaser fails for a third time during a specific year to meet his payments or obligations, to recover such payments or obligations from the purchaser at seven days’ notice. This will prevent a troublesome person from postponing meeting his obligations time and again and putting the seller in an embarrassing position. In most transactions of purchase and sale the seller usually has a bond on his property at a building society or otherwise at a financial institution, and this action on the point of a purchaser could therefore cause great embarrassment and sometimes serious problems for a seller in that time and again he wilfully delays his payments, while still complying with the provisions of the law, by waiting to be given 30 days’ notice every time before bringing his obligations up to date. It is a pleasure to support the proposed legislation and I believe that it is a definite improvement.

Mr. Speaker, this subject was thoroughly debated last year, as the hon. the Minister remembers and as he has mentioned. The Opposition assisted him very materially in amending this Bill, and he accepted several amendments from this side of the House. There seems to be no doubt that as we put the Bill into practice in the years to come, the hon. the Minister will come with further amendments. This is basically consumer legislation, and we try to protect buyers in good faith. It also assists in providing guidelines to sellers, most of whom are reputable, and whose continued operations are dependent on the goodwill and service they generate amongst their buyers. In clauses 1 and 3 we deal with the rights of purchasers and I believe we should apply our minds to the protection of these purchasers against unscrupulous sellers. It is best illustrated by giving an example. A company with limited liability and a few R1 shares is formed. The company then buys a certain number of plots and makes a minimum deposit.

The company gambles on property appreciation and then, as an intermediary, sells the plots on deed of sale at a profit and obtains a small deposit. The company does not, however, fare too well, because it is not making a profit and because of the reverse cash flow, allow their company to go into liquidation. As the shareholders in the company have only limited liability and as their loss is negligible, they have no compunction about allowing this sort of company to go into liquidation and, of course, the purchasers lose everything. Buyers deserve protection against such unscrupulous operators and the way to bring these sellers to book is to make the shareholders of the selling company personally liable whether they are private individuals or whether they are a holding or an associated company. In effect it will mean that the real owners of the property will be on risk if they use a company with limited liability to legitimately take buyers for a ride.

I want to deal with a specific instance where this happened, and I want to know from the hon. member for Johannesburg North whether he agrees with what I have said up to now. I am going to deal with a company in which I believe he has some say. I want to quote from the Financial Mail of 14 November 1975 where it is reported that a company called Vantage Property Trust (Pty.) Limited went into liquidation because, according to the managing director, it had a negative cash flow. If the hon. member for Johannesburg North will listen very carefully, he will find that this company is associated with the Anglo American Group of companies, and I hope that the hon. member for Johannesburg North will be able to tell us that this article in the Financial Mail is false or incorrect in some respect. According to the article, Vantage Property Trust (Pty.) Limited is owned by one other and by Vantage Holdings (Pty.) Limited, a subsidiary of Anglo-American. It goes on to say that the company bought 32 stands on deed of sale. Vantage then resold these stands, also on deed of sale. Vantage suffered from a sharp fall in sales and was not able to continue its payments in respect of the land. The sellers of the land to Vantage therefore cancelled the deed of sale and Vantage forfeited its deposit on the installments. Some of the innocent and unsuspecting buyers who bought from Vantage also lost their money when Vantage went into liquidation. The original sellers to Vantage are now prepared to assist these people who bought from Vantage, subject to certain conditions of course.

If these facts are accurate I think it is a shocking state of affairs that a reputable company, like Anglo-American, can hide behind the skirts of a private limited liability company and let it go into liquidation merely because of a negative cash flow. A buyer dealing with Anglo-American is entitled to believe that they are dealing with a company that will accept responsibility in respect of all its obligations and that there is some substance in any company which is linked to Anglo-American. Surely, it cannot be expected of a buyer of land to go to the Registrar of Companies or check the financial accounts of Vantage or Anglo-American to make sure that the obligations will be met by those companies. If the hon. the Minister accepts my suggestion that liability should extend to the shareholders, then in this particular case Anglo-American will have a liability to the buyers of those properties. The hon. member for Johannesburg North is a supposed campaigner for civil rights. I hope he will also become a campaigner for the financial rights of the small man and that he will ensure that all these buyers who lost money, will be reimbursed for their losses. I see that this amendment encourages people to invest their hard-earned savings in land. I think therefore that it will be a pity for a company like Anglo-American to allow this sort of thing to happen, because people will lose confidence in investing in land.

Order! I think the hon. member must speak to the principles of the Bill. I do not think he ought to raise all the various examples of where things have gone wrong. The hon. member must limit himself to the principles of the Bill as far as possible and give illustrations only within those limits.

Mr. Speaker, I accept your ruling. I have made my point. I was dealing specifically with intermediaries as referred to in this Bill and I have said what I wanted to say. We can have all the legislation we like and we can have all the blueprints—it is of course good that we have those blueprints—but unless the buyer of property knows what he is doing, he is not going to do well. It is essential that a buyer of property, particularly under this Act, must know what he is doing, otherwise he is going to bum his fingers. To those buyers who are circumspect and have done their homework, there is a very good investment in property and there is a lot of money to be made in property, more especially now. I am afraid that many of these buyers do not understand this particular Act and they do not understand the ramifications of the Act. That is why they often lose money through lack of knowledge. I would like the hon. the Minister to consider whether it is not time to come out with a blueprint of guidelines for buyers who buy property under this Act. If the hon. the Minister’s department coordinates with the S.A. Property Association and with the law society and with the S.A. Institute of Estate Agents and that they thereafter come with guide-lines and with a blueprint, this would be distributed in commerce and industry and will assist buyers tremendously. Buying property is a most sophisticated industry and a small buyer is often at a loss through lack of understanding.

Mr. Speaker, may I first of all deal with the issues relevant to the Second Reading of this Bill. Another issue has been introduced and I would like to deal with that a little later. We are very grateful that the hon. the Minister has suggested certain amendments—which are necessary and arose in debate previously. I think it is perhaps even more important that he has said that other amendments are also under consideration, that he regards this as a non-political measure and that he will deal with this on its merits and perhaps suggest further amendments to this legislation. I appreciate that, and I think there are a great many people in South Africa who also appreciate it, because this Act requires certain further amendments. One does not however want to put him or his department under pressure in respect of those amendments, but look forward to having another debate on further amendments in this regard. If that is the spirit in which this type of legislation is approached, the consumer in South Africa can only benefit.

I want to deal with the consumer, because there is quite a lot of exploitation when it comes to the sale of land, of stands particularly. In particular I want to refer to the provision which relates to the forfeiture which we are now amending by reasons of the amendments of which notice have been given. One of the things which happens in South Africa at the moment is that there are people, and some of them tend to throw stones at other people, who actually make a living out of forfeitures which they employ in order to take back property. One of the things which we ought to look at, is whether people after having paid substantial amounts out of their savings for houses and stands, they may have to forfeit what they have paid by cancellation of those agreements without going to court or without even getting their written consent to it. Very often we have a situation that the poor man in times of a depression and hardship befalling his family, finds himself in a situation that he cannot pay although he has already paid a substantial amount of his savings on this. In these circumstances there is very real prejudice to the consumer. One of the things which I would like to ask the hon. the Minister to consider is whether in respect of the forfeiture and the cancellation of deeds of sale, or even in the case of mortgages, where a very substantial sum of money has already been paid, this type of forfeiture should be allowed without the matter coming before a court. In other words, in every case where he stands to forfeit substantial payments, the consumer should be protected in that at least a judicial officer looks at the matter. We have an example of this in the conventional penalties legislation where a discretion can be exercised. Some of the people who wax rich on this, are people who perhaps should look into their own hearts and their own consciences when they throw stones at other people.

Sir, I want to say here that I look upon the issue of property and on the issue of people investing, exactly in the same way as does the hon. member for Cape Town Gardens. I believe that it is important for a stable society that people should be allowed to invest in land and in their homes. Equally so, people who have put their savings into this kind of thing, should be protected in the manner in which I suggested.

Now, Sir, may I deal with the hon. member for Walmer? There is, I believe, a code of ethics that applies to members of Parliament, a code in terms of which they when they intend to throw stones at people, should warn those people so that they can prepare themselves in respect of the matters about which stones are going to be thrown.

[Inaudible.]

Mr. Speaker, the hon. member for Walmer asked the hon. member for Johannesburg North to come into the House but he gave him no indication as to what he was going to say, so that the hon. member could deal with it.

[Inaudible.]

The hon. member for Walmer, who is so courageous, who makes such a noise at the present moment, uses the cover of privilege in this House in order to seek to attack the hon. member.

Did you tell your voters you were going to turn Prog? [Interjections.]

And I want to … [Interjections.]

Order!

When it comes to the ability to talk people into buying things, the hon. member for Umhlanga is an expert. However, he will not be able to talk his voters into supporting him again. [Interjections.] On the next occasion, they will not even buy a new car from him, never mind a secondhand one. But let us get back to the point. I believe, with respect, that when a hon. member seeks to attack another hon. member, he should have the courtesy of telling him what the matter is about so that that hon. member can come to the House in order to defend himself. I know nothing about Vantage Property Trust. I know absolutely nothing about it and I am therefore not able to deal with the allegation. If, in fact, Vantage Property Trust have done wrong, they must be condemned and be dealt with in whatever way the law may provide. But what has this got to do with this piece of legislation? It is a smear which is not even relevant to this legislation.

They were an intermediary.

Order!

On his own case, Sir, it is not relevant.

They were an intermediary.

Sir, the hon. member …

They were an intermediary.

I do not know that there is … Will you not please try to cork it for a little bit, if you do not mind! I know that you are angry and I know that you … [Interjections.] Yes, I know that, because you yourself, in your own conscience …. [Interjections.] Mr. Speaker, the hon. member in his own conscience, should have a look at his own property dealings, in the private companies in which he is involved, and into what he has done, because let no one in this world cast the first stone. One never knows whether one is living in a glass house.

Mr. Speaker, on a point of order: The hon. member said that the hon. member for Walmer should look into his own conscience and into his own property dealings. Is he allowed to make insinuations of that nature? [Interjections.]

His insinuations were worse.

Order! What are the words the hon. member takes exception to?

The hon. member said the hon. member for Walmer should look into his own conscience in connection with his own dealings in property. I submit, Sir, that by saying the hon. member for Walmer should look into his conscience, the hon. member for Yeoville suggests there was dishonesty on the part of the hon. member for Walmer.

Do not start making accusations now.

Mr. Speaker, I asked the hon. member to look into his own conscience. If his conscience is clear, there should have been no reason for objection. [Interjections.]

Order! Does the hon. member for Yeoville impute any dishonesty to the hon. member for Walmer?

No, Sir, what I am imputing is that one must never be the first to cast a stone … [Interjections.]

Order! The hon. member may proceed.

Thank you, Sir. [Interjections.] Let us be realistic. If an assessment of the morality of either the hon. member for Johannesburg North or the hon. member for Walmer has to be made, I believe there is no question as to where such assessment will have to be made. [Interjections.]

Order! The hon. member must come back to the Bill now.

Sir, I want to draw attention to the fact that the issue which the hon. member for Walmer raised, is an issue which is not remotely connected with any provision of the piece of legislation that we have before us. [Interjections.]

Are you arguing with the Chair?

Now, Sir, with respect …

Order! The hon. member must please now come back to the Bill.

Sir, may I not reply to the other matters which the hon. member for Walmer raised? I want to demonstrate, if I may …

The hon. member has already said that he does not know too much about the matter. In the circumstances the hon. member must come back to the Bill and discuss the principles of the Bill.

Mr. Speaker, with respect, may I ask you whether I am entitled to demonstrate that what the hon. member for Walmer said, had no relevance to this piece of legislation?

No, the hon. member must deal with the Bill.

Then all I would like to say in conclusion, in respect of this matter … [Interjections.]

Order!

… in respect of this matter, Sir, is that, when one throws a stone and it hits a glass house … [Interjections.]

[Inaudible.]

Be careful! That hon. member’s house may be of more glass than the house of the other hon. member. He must therefore be careful. [Interjections.]

Order!

Sir, may I now deal with the provision of this Bill? [Interjections.] Sir, the first provision deals with the question … [Interjections.] … of a double purchase when the eventual purchaser may be prejudiced because the original purchaser has not paid the purchase price. In these circumstances we are now providing for it that the eventual purchaser can recover the amount, although he is no longer the one who can sign the documents on behalf of the original purchaser. Therefore I think that provision is correct. I think it is a proper one and we support it. However, the question that arises is whether this type of jurisdiction should in all cases be exercised by a magistrate’s court.

Not in all cases.

Not in all cases, but in cases where it is appropriate, and where that jurisdiction is exercised. Part of the difficulty that exists, is whether a special procedure should not be introduced in respect of this type of provision, in terms of which one can reduce the costs involved in order to get this signature. In other words, should it be necessary to get a court order, or should it not in these circumstances be possible, on the filing of an affidavit, to obtain the signature of the sheriff in order to effect this transfer?

Can it not be effected in terms of an ordinary application at that stage?

I think the difficulty is that the procedure may not allow this to be done on motion proceedings. This, I think, is part of the problem in regard to the increase in costs. What I am particularly interested in, is to ensure that the costs are kept to a minimum in order to avoid any increased burden on the parties involved.

The second amendment that I briefly want to deal with is the question in respect of notices, in terms of which one may end up having a multiplicity of notices. Here again I think we have to look at this provision to see whether it could not be short-circuited any further. Here again, I come back to the point I made earlier, that where there is to be a forfeiture, there should be no forfeiture outside the courts when certain limits have been exceeded. This is a provision which I particularly want to ask the hon. the Minister to consider.

Order! Before adjourning the House I want to inform hon. members that I shall in future be strict with regard to the discussion in this House of hon. members’ personal affairs or private business interests or activities.